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IBC study shows that integrating medical and pharmacy benefits offers advantages

Purchasing together can lower employer costs and promote better health

Philadelphia, PA – A newly published Independence Blue Cross (IBC) study shows that by choosing integrated medical and pharmacy benefits for their employees, employers can lower their medical costs while helping employees enjoy better overall health. This information is especially helpful as many cost-conscious employers continue to seek ways to reduce medical expenses.

To save on benefits costs, some employers choose a “carve-out” model and work directly with a pharmacy benefits manager to provide prescription drug benefits to their employees, which they combine with medical benefits from a health insurance carrier. IBC’s study, published in the February 2012 issue of Benefits Magazine, shows that integrated medical and prescription drug benefits can provide significant medical savings to employers. IBC examined outcomes of clients who “carve out” pharmacy benefits for their employees and compared them to IBC’s customers who have integrated medical and prescription drug benefits.

The study’s findings indicate that an integrated approach to pharmacy and medical benefits results in lower use of hospital and emergency room services. The number of hospital admissions was 19 percent lower and the number of ER visits was 28.6 percent lower for plan participants who had integrated pharmacy and medical benefits compared to those members without integrated benefits.

“The findings of our study show that the integration of IBC’s medical and pharmacy benefits promotes better member health and lowers employers’ medical costs,” said Frank Ferry, M.D., IBC medical director. “By using the pharmacy claims data provided to us on a daily basis by our pharmacy benefits manager, FutureScripts, we are able to more quickly identify members who have chronic illnesses and provide those members and their doctors with information to help them more effectively and most efficiently manage those conditions.”

“Over three years, IBC’s integrated management of pharmacy services resulted in medical cost savings of $19.76 per member per month, which equates to more than $237,000 in medical cost savings per 1000 employees,” said Ginny Palmieri, IBC’s vice president of ancillary services. “That is significant for a business’s bottom line.”

Dr. Ferry explained that the costs of inpatient and emergency room admissions were 9.3 percent lower with customers who offered their employees IBC’s integrated program. Theoretically, these types of savings are achieved through IBC’s stronger care coordination and management of health care services and benefits when the benefits are integrated.

“The study supports the integrated approach to pharmacy and medical benefits, showing that lower use of health care services and higher medication compliance rates contribute to medical cost savings,” said Aaron Smith-McLallen, Ph.D., IBC researcher and author of the study.

Integrating pharmacy and medical benefits at IBC can also increase productivity at the workplace. The study, which examined claims from over 765,000 total members, shows that members with integrated pharmacy and medical benefits were more likely to be compliant with their drug therapy, meaning they were more apt to take their medication as directed by their doctors.

The value of an integrated benefit may be especially important for members with chronic conditions for whom the right care management relies on them adhering to appropriate medication regimens. Generally, healthier employees who have fewer hospital admissions and ER visits and who are compliant with their medication regimen are more productive at work than less healthy employees.

“Employers are advised to carefully evaluate all of their options when selecting the medical and pharmacy benefits plans for their employees,” said Palmieri. “It is clear that the choice to integrate pharmacy benefits with medical benefits offers substantial medical savings while also offering better health outcomes for employee wellness, based on the experience of our current customer groups over three years’ time.”

Palmieri also explained that IBC’s integrated program analyzes employers’ medical and prescription drug claims together to identify members with gaps in care, provide timely intervention, and perform targeted member outreach through disease management and wellness programs. The program also works to maximize the value of customers’ health care dollars by offering key cost savings controls such as a highly effective formulary program and other utilization management programs, as well as continued promotion of generic prescription drugs over brand name drugs.