Why Choose Self-Funding

Better Control of Prescription Costs

Increasing Drug Usage & Expense

According to the latest study the Journal of the American Medical Association (JAMA) conducted on prescription usage, 59% of people ages 20 and older reported using prescription drugs in 2012. That’s up from 51% in 2000.

This increased volume in prescription usage is having a significant impact on the rising cost of health plans, especially in the case of high-cost, specialty drugs. With six out of 10 adults taking some sort of prescription, employers’ coverage expenditures are going up as more of these specialty drugs are being introduced to the market and prescribed by providers.

TPAs Helping Employers Save

Fortunately, one of the many advantages with self-funded health plans is that they encourage being proactive about monitoring prescription costs and finding ways to contain them. The third party administrators (TPAs) who administer these plans are known to work closely with employers/plan sponsors to implement savings solutions. Using the services of experienced prescription benefit managers (PBMs), all parties share a common goal of pairing members with the safest, most cost-effective drugs based on diagnosed conditions. Self-Funded health Plans accomplish these goals via a variety of methods, including discounted services and rebate programs to maximize savings as well as utilization reviews to analyze which drugs are being prescribed, how often and the duration of use.

Many savings opportunities are identified through comprehensive reporting and analysis. The prescription management solutions TPAs typically implement include the review of member data (in compliance with HIPAA privacy policies) as it relates to prescription usage and areas where costs can be further contained. For example, if a high volume of brand-name prescriptions is being filled and a generic alterative is available, an employer will be made aware of this trend and provided options about how to address it.

Educating Members on Cost Management

As far as involving members in the cost management process, patient education and coaching have become a major emphasis for self-funded plans. In many cases, employees are learning more about the drugs they are taking and how they work as well as the appropriate usage guidelines. PBMs are introducing innovative solutions that give employees access to this info online. Additionally, the latest technologies give employees a way to shop for the best prescription costs right from their smartphones. These mobile apps provide a comparison of drug costs among local pharmacies and may also offer discount codes/coupons.

This combination of education and resources can be very effective in helping employees realize the significant cost differences between specialty drugs, name brands and generics, while giving them the tools to make potentially cost-saving choices.

Keeping Prescription Costs in Check

Self-funding provides many opportunities for employers/plan sponsors to keep prescription costs under control as usage rates go up and more specialty drugs reach the market. TPAs work closely with employers to provide prescription management and data reporting services. They also encourage member education as another way to deal with rising costs.

For more information about how self-funded plans help employers save, check out this article: Savings that Stay with the Health Plan.