Many companies have announced plans to share their tax reform windfall with their employees in the form of raises and/or bonuses. After many years of raises in the 1-2% range, this may be the first time in a decade or more since some workers have seen real wage growth.
Why have so many companies had to limit annual raises? A big part of the reason is due to runaway healthcare costs. Unbeknownst to most workers, their employer has been absorbing most (or all) of the annual increase in the cost of healthcare. In other words, their employer is using the money they might otherwise use for pay raises to fund the growing cost of healthcare.
Some employees might know and appreciate that their employer is absorbing the bulk of the increase in their healthcare costs. But, is it fair? Many employer groups are very hesitant to take any action to reduce pharmacy plan costs, even when they know their plan is paying far too much. They are hesitant to take any action to hold down costs, because they are afraid that their members might complain, or might be inconvenienced in some way.
The good news is that plan sponsors can, in fact, reduce Rx costs without causing too much disruption to their members. It is true, however, that in order to cut out waste, plans will need to exclude coverage for certain, low or no value drugs. They need effective prior authorization plans in place. When appropriate, they need their members to try first line therapies before the plan will pay for much higher cost drugs. And, they need to negotiate better contracts, and audit PBM performance to make sure these Rx providers are honoring their guarantees.
Taking the steps necessary to significantly reduce pharmacy costs rarely creates massive disruption for plan sponsors. In fact, in most cases only a very small fraction of members are impacted by these efforts. And, these efforts not only save money for the employer, they usually save money for the member, as well.
By better managing the pharmacy benefit program, employers save money not just in year one, but they save money every year, and reduce cost trend to a far more reasonable level. This money can be used to fund better raises; hire more employees; add additional benefits; or simply improve the bottom line.
The windfall is there just waiting for the taking. Crystal Clear Rx can help.