Managed Care Case Study

Current Trends and Issues in Managed Care

By Eun Lee

Introduction

The Pharmacy Benefit Management is an important solution to reduce health plan prescription cost while maintaining/ or improving the quality of prescription drug delivery in patient care. The In the United States, the health care costs have been dramatically increased during past decades as shown in the Figure 1. In 2011, the health care expenditure was $2.7 trillion and it is about 17.7% of the Gross Domestic Product (GDP). Moreover, it is expected that this expenditure will reach to $4.6 trillion, which is 19.8% of GDP by 2020.

In order to take a control over the soaring cost of the prescription medication costs, the employers have acted to expand employee cost sharing

This PBM companies started their business in the 1980’s in an effort to focus on pharmaceutical cost reduction. The definition of PBM is ‘a set of techniques used by or on behalf of purchasers of health care benefits to manage health care costs by influencing patient care decision-making through case-by-case assessments of the appropriateness of care prior to its provision’. (ref) This implies a complex interaction and partnership among the physicians, pharmacists, health plans, insurers, government, employees and employers. To offer a comprehensive administrative assistant, pharmacy benefit management companies have evolved and aggressively extended their business over the past decades. These PBM companies utilize the nationwide online networks and electronic data base system to manage various organizations such as managed care provider, claim processing firms, insurance firms and mail-order pharmacies. In order to achieve drug expense control and maximum quality healthcare service, the PBM companies provide following services;

In the mid 90’s, there have been approximately 40 PBM vendors and the number has been increased to more than 60 companies today. Pharmaceutical Care Management association reported that 215 million Americans (over 70% of the population) use PBM companies to manage their prescription drugs. In the beginning (80’s), due the rapid increase of prescription-drug spending, PBM companies mainly focused on reducing the costs of prescription drugs by means of efficient processing claims and home delivery pharmacy services. In 1990’s, as a result of wide use of on-line systems in many industries, PBM companies offered real-time electronic claim with pharmacy networks to provide discounted drugs. Since 2000, PBM companies keep developing unique and sophisticated programs to reduce the drug costs. In the following sections, we will discuss some of the details of these programs such as use of formularies, use of less-expensive generic drugs, drug therapy management, data analysis, patient compliance, efficient distribution services, and outcome