Biotechnology Healthcare - November/December 2008 - (Page 46) EMPLOYER TO EMPLOYER When a Negative Becomes a Positive: GIC Bucks the High-Cost Trend John Carroll, Senior Contributing Editor T he Massachusetts Group Insurance Commiswe were at 2.8 percent, which is still far less than average. sion (GIC) isn’t your average state benefits manAnd the year just ended was up 5.8 percent.” Those figager. While most big employers are trimming ures are based on per-member, per-month expenses. costs by shifting more of the bill to their workers, the GIC’s mission is to keep the financial load as light MANAGING THE BENEFIT as possible on employees while making sure they get the “I can tell you why we did so well,” he adds readily. “We therapeutics they need. manage the pharmacy benefit very intensively. We have Instead of higher copayments, more elaborate formunot wanted to manage the cost by just cost shifting onto laries, or coinsurance rules, GIC has focused on elimithe members. We have not increased copayments, put in nating waste and improving communication as its primary coinsurance, or designed such a restrictive formulary that approach to cost control. Faced with rising numbers of people might have problems getting access to their drugs. costly biologics, GIC cut the out-of-pocket expenses for Instead, we decided the way to keep costs down was to their most expensive group — retirees — and provided make sure that people got the most appropriate drugs.” To more assistance to guide their use of health care resources. ensure that, GIC instituted a number of drug utilization And it worked. management programs. “We’ve gone a couple of years with a negThe copayment structure for GIC’s threeative cost trend, which is really unheard of,” tier formulary is $7, $20, and $40 for genersays David Czekanski, GIC’s assistant direcics, preferred brand-name drugs, and nontor, who manages the drug programs for the preferred brands, respectively. “Twenty largest group among the 295,000 public emdollars is enough to make a difference,” he ployees, retirees, and dependents under the says of the top tiers. “And we have a mailMassachusetts GIC. The roster even includes order program that we strongly encourage use a smattering of people associated with differof. We have high mail-order utilization; 24.2 ent municipal groups. percent of all scripts go through mail order. Intensive management Altogether, six health plans contract with of the pharmacy benefit, “For years, we have been trying to direct the state. Five of them manage their own phar- rather than shifting people to mail order and generics,” Czekanski macy benefits, while GIC carved pharmacy costs to members, has adds. “According to our latest report, 71.3 out from the sixth plan — UniCare, a sub- enabled costs to stay percent of all scripts are generic.” Step thersidiary of WellPoint — and contracted it out down, says Massachuapy mandates have helped to drive generic setts GIC assistant dito Express Scripts. Across the six plans, the rector David Czekanski. utilization. “Say, for cholesterol, before Lipitor is covered they have to try a generic. state drug spend is about $300 million per “Also, if there is a generic equivalent of a brand drug, year. we essentially don’t cover the brand drug under any cirAbout 47 percent of GIC’s covered lives are in UniCare cumstances. The member has to pay the cost difference.” plans, but “65 percent of total drug costs are in those The key to controlling costs, says Czekanski, is stayplans. That’s where most of our retirees are.” ing flexible and finding new ways to shave expenses. The average age of all state beneficiaries is 44, says “One thing we did was [with respect to] the over-theCzekanski. But for the UniCare plans alone, the average counter version of Prilosec. As a prescription drug plan, age is 56. And with rising age comes rapidly rising prewe were not covering over-the-counter drugs. We decided scription drug use. “Eighty-five percent of retirees are in to cover OTC Prilosec and saved $3 million.” that particular health plan. We’re better served by carving But once new drug management programs are put in that out and administering it ourselves. place, there’s very little extra that GIC can do to blunt the “In terms of the Express Scripts carve-out, which is relentless force of healthcare inflation. what we’re directly managing, that has gone really well,” “When we put in the programs,” he says, “we’re essays Czekanski. “In fiscal year 2006, there was a negative sentially taking out the unnecessary utilization. But then trend of 0.5 percent in Express Scripts. The following year, 46 BIOTECHNOLOGY HEALTHCARE · NOVEMBER/DECEMBER 2008
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