Premier PBM saves hospital $1.5M+; employee satisfaction improves Last Updated: September 22, 2014
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Kaweah Delta Health Care District (KDH), Visalia, CA, provides a full spectrum of services including Tulare County’s only trauma center. Facilities include Kaweah Delta Hospital (the county’s largest acute care facility), Kaweah Delta Rehabilitation Hospital, Kaweah Delta Mental Health Hospital, The Lifestyle Center, Sequoia Imaging Center and Exeter Health Clinic.

Challenge

Employee healthcare is expensive even for those in the business of providing care. The prescription drug benefit is one of the largest expenses in employee health insurance plans. Managing drug expenses is the job for a pharmacy benefit manager (PBM). Kaweah Delta had used the same PBM for several years, but service had deteriorated while costs were increasing. Employees were not happy.

Solution

After careful evaluation, Kaweah Delta chose to partner with the Premier healthcare alliance and its new PBM program, administered by MedImpact, to manage the quality and cost-effectiveness of its employee prescription drug benefit, effective January 1, 2012. KDH was already a Premier GPO member as an affiliate of Adventist Health so working with Premier was not new.

Partnership objectives include improving the cost-effectiveness to both Kaweah Delta and its employees while enhancing service and quality of care. Kaweah Delta Human Resources and Pharmacy teams collaborated with Premier to implement a program that would increase prescription fulfillment at the Kaweah Delta Employee Pharmacy, increase use of generic drugs, improve the pricing for prescriptions dispensed at network pharmacies while improving care, lessening employee costs, and boosting employee satisfaction.

The plan includes no co-pay for generic drugs and no charge for drugs and supplies to treat diabetes when purchased at the KDH pharmacy only. The enhancement of KDH’s HealthyCare managed care program is designed to improve compliance and keep plan members out of the hospital.

Result

After only one quarter, the program is making significant progress.

  • Prescription generic use is up 10 percent
  • Dispensing by the district’s employee pharmacy is up more than 23 percent
  • The average cost per prescription is down more than 25 percent
  • Average plan member’s cost for a prescription is down more than 41 percent
  • Plan member’s cost as a percent of total prescription cost is down nearly 22 percent
  • Average cost for a branded drug is down 35 percent
  • Average cost of a general prescription is down 25 percent
  • The 6,381 prescriptions filled in the first quarter cost $732,784, a 35 percent savings ($383,951, or $1,535,804 on an annualized basis) over what the district would have spent with network retail pharmacies

“We had been with our former PBM for several years, but customer service had deteriorated and employees were frustrated,” Human Resources Analyst Yolanda Romero said. “With our broker’s help, we began to look for a new partner. After looking at a number of alternatives, we chose Premier. It’s been really, really positive. We’ve had good communication with our PBM account team, and they have been very responsive. Employees have been impressed and appreciative of how quickly their questions and concerns have been handled. It is such a change. It’s very positive.”