R X S T E W A R D S H I P

Join us for a 14 week journey toward Strategic Rx Stewardship and Northwind’s approach to helping turn Rx spend into Rx investment. Each week, a new post will be shared reflecting the next letter on the way to R X S T E W A R D S H I P.

Introduction – Strategic Rx Stewardship

Week 1 – R is for Rx

Week 2 – X is for NeXus of Care

Week 3 – S is for Schools and Savings

Week 4 – T is for Team

Week 5 – E is for Engagement

Week 6 – W is for Webinar on Diabetes Care

Week 7 – A is for Analytics

Week 8 – R is for Results

Week 9 – D is for Diabetes

Week 10 – S is for Specialty

Week 11 – H is for Hidden Costs

Week 12 – I is for Influence

Week 13 – P is for Purpose

Week 1 – R X S T E W A R D S H I P

Moving Toward Strategic Rx Stewardship

The Rx symbol is thought to be an abbreviated form of the Latin word recipere, meaning “to take”, as in “take two and call me in the morning”. It is arguably the most common medical abbreviation and is easily recognized on store fronts, advertisements and literature regarding prescription medications.  At Northwind Pharmaceuticals, we recognize the universality of the symbol and have incorporated the Rx into our main offerings:  Rx@Work, Rx@Home and RxAdministration.

For self-funded employers, we fervently believe that your pharmaceutical spend is an investment in the health and well-being of your employees and that you should expect to maximize that investment with smart, cost-effective solutions. Because of this, we started a focused effort around Strategic Rx Stewardship.

Rx@Work is our health center dispensing and inventory management system, providing ready-to-dispense medications, dispensing software and an inventory tracking system to ensure your clinical needs are met while optimizing operational efficiency. We pride ourselves on delivering comprehensive on-site/near-site health center training and support to make certain medications are available for patients at the point of care. We also work diligently with our partners to ensure that the formulary offered is in alignment with the medical needs of the population being served. If your employees are located in a state that does not allow physician dispensing, we offer Rx@Retail, a customizable retail alternative that enables minimized out-of-pocket expenses for employees and maximized savings for employers. 

Rx@Home is a full-service pharmacy that delivers prescriptions right to the patient’s doorstep, maximizing medication adherence through timely refills and automated reminders. Our team of pharmacists are available for consultation, patient education and collaboration on a wide variety of clinical issues. We are licensed coast to coast and can interface with telemedicine vendors to offer a solution to patients who receive care virtually. Although Rx@Home can be a stand-alone service, it is also a perfect complement to Rx@Work and allows employers to manage ongoing maintenance or high dollar specialty medications in a way that saves time and money for all stakeholders. For medically complex patients, or for those who just need a little assistance in remembering how or when to take their medication, we offer alternative packaging methods to increase compliance. Clinical blueprints are available to our health center partners and provide targeted, step-by-step disease education and management programs (i.e., asthma, diabetes, migraine) aimed at delivering high-value impact through improved outcomes and overall health benefit cost efficiency.

RxAdministration provides pharmacy benefit solutions. In addition to the core offering of eligibility maintenance, claims adjudication, formulary management, specialty services and pharmacy network contracting, RxAdministration provides a simple cost-based pricing model as opposed to a matrixed discount-based model that is often confusing. Rebate contracting and aggregation allow for 100 percent of the rebates earned to be put back in the hands of self-funded employers – where they belong.

We welcome the opportunity to connect with you to answer questions and provide a complimentary consultative analysis of current pharmacy spend. Just “take two” and then let’s have a conversation!

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This post launches a 14 week series on Strategic Rx Stewardship. Over the course of the series, we’ll use the letters of R X S T E W A R D S H I P to introduce and explain a fundamentally different approach to managing the self-funded employer drug spend.

Our mission: help self-funded employers turn their Rx Spend into an Rx Investment. Northwind helps our clients become good stewards of their Rx Investment.

Self-funded employers have a drug problem and it isn’t just about costs. We want our money to be spent well. We want to know what it’s doing for us and for our employees. We want to monitor what we’re spending, optimize how it’s spent, use it to influence what it can, and then gauge its impact on desired objectives. Our problem isn’t the costs, it’s that we feel powerless to do anything about them or their results. When it comes to our investment in medications for our employees, ours is a problem of stewardship.

The current system of pharmacy benefit management is failing to meet the needs of the employers for which it was built to serve and the employees they seek to benefit. How so? The current PBM model simply pushes money around. It is an administrative function rather than a strategic function. Amid all of the distractions of formularies, re-pricings, claims, therapeutic interchange, step therapy, prior auths, brands, rebates, and specialty drugs is lost the ultimate objective: cost effectively supporting the health and welfare of the employee and his/her dependents to their benefit and to the benefit of the sponsoring employer. 

Today’s traditional PBM approach does not steward the employer’s drug investment well and has grown to be most effective at one thing: shifting margin into its own business model. Benefit administration has become an end unto itself and the key stakeholders are really just an afterthought. PBMs have gotten pretty good at administering plans but remain quite poor at making any meaningful difference for employers or employees.

A Different Approach

We need a way to steward our Rx investment strategically. A fundamentally different approach from traditional pharmacy benefit management. Strategic Rx Stewardship would encompass what our PBMs were originally built to do for us (provide access to meds, improve buying power, administer members and claims, and report on activity) but would add four critical ingredients: 1) real-time visibility into our active Rx investment, 2) actionable insights on key challenges and opportunities, 3) more influence over our investment as a real benefit to employees, and 4) mechanisms for ongoing monitoring and measurement of our Rx investment so adjustments can be made.

The answer is not pushing more drugs to more patients more efficiently, but to use the Rx investment as a mechanism to engage employees in employer sponsored healthcare while empowering them with access to more cost effectives medications. Today, PBMs represent an opaque world of competing incentives, hidden costs, and access restrictions rather than a mechanism that empowers good stewardship of our Rx investment.

Strategic Rx Stewardship

Strategic Rx Stewardship is comprised of three key elements:

  • Insights into drug spend, employee behaviors, and health outcomes.
  • Influence over employee health through access to cost-effective medications and coordinated medical programs delivered through sponsored health partners.
  • Impact measurement and real-time feedback on programs designed to improve outcomes.

Employer-sponsored health centers can be the lever to drive better Rx stewardship. A sponsored clinic should be the nexus of care and give the employer a hand in influencing the health of its employee population; not by involvement in clinical decisions but through implementation of targeted programs.

With insight into areas of opportunity and mechanisms for participation in, and influence over, clinical programs, the employer can dramatically increase its ability to steward its Rx investment appropriately. However, good stewardship is incomplete without effective measurement of outcomes. Real-time feedback on progress and effectiveness of money spent on medications for employees is the final piece of Strategic Rx Stewardship.

By understanding what money is being spent, what programs are being offered, the level of engagement in those programs, and clinical measurements or outcomes, the employer can determine if the Rx investment is meeting objectives or if adjustments need to be made. With real-time impact measurement, the employer can act in new ways to steward dollars invested most effectively.

The time has come to seize control over our drug investment and its results. The time has come to change how we approach that investment and what we expect from it. We don’t need pharmacy benefit management, we need Strategic Rx Stewardship.

Want to learn more?

What is the biggest issue self-funded employers have with their prescription benefit plan? Your first answer might be cost but that really isn’t the problem with medication benefits. Sure, we’d all like to get our prescriptions for free. Even accessing them for less would be nice. However, after hundreds of claims reviews showing significant cost savings opportunities of 20% or more on drug spend, we still watch employers struggle to evaluate options, discern truths, and implement change in their drug benefit plans. Why?

One might argue that it is resistance to change, a lack of good advisory services, competing priorities, or maybe even indifference. These things may be true in part across some situations but if cost was really the problem, wouldn’t employers jump at savings opportunities?

No, cost isn’t the primary problem. After all, employers are spending money on medications as a way to help employees get or stay healthy and ultimately increase productivity. Employers expect to spend something and get some kind of result.  An employer’s drug spend is a benefit to a group of people in which they have a vested interest and the intention is that it actually benefits them in the best way it possibly can.

The Problem

So, what is the self funded employer’s drug problem? Consider how an employer typically manages the pharmacy benefit. Once the decision is made to self-fund, employers are presented with options for overall health benefits for employees. For purposes of this discussion, there are two key elements of a self-funded health benefit: medical benefits and prescription benefits. The medical side of the benefit typically comprises about 75%-80% of the employers total healthcare spend and the pharmacy side of the benefit sits in the 25%-30% range.

From there, a broker or advisor pulls together cost and claims data to design an overall plan for the employer. Within the plan are recommendations for sharing costs with employees and selections for key pieces of plan fulfillment: third party administrators, medical networks, perhaps an onsite or near-site clinic, and myriad other options. The medical plan may or may not be administered by the same company administering the prescription plan. The employer evaluates options, recommendations, and assumptions while moving toward a decision based on information presented. Contracts are signed, the plan is implemented, and then life rolls on.

The employer gets periodic updates on plan costs throughout the year and possibly a more detailed report before the renewal process begins again in the fall. Around renewal time, the advisor or broker reappears, sets the tone with the message that plan costs will be going up and then navigates around the wailing and gnashing of teeth that follows.

The employer laments the rising costs but the real frustration lies with two primary issues: 1) clear visibility on what’s causing increases in cost and 2) the ability to do something about it. Costs themselves aren’t the issue. The real issues are: are we spending more than we should be? (rephrased as: are we getting as much as we can for our money?) and why can’t we have more control over what it accomplishes?

The annual death march toward renewals becomes a necessary evil that is endured every year because we’ve come to accept the inevitability of our own lack of control. Sometimes frustration sets-in, brokers get fired, vendors are changed, and the cycle begins anew but generally with little real impact. We feel better for a while thinking “It didn’t change much but at least I did something.”

Along the way, we get talked into shiny object solutions that promise results but end up being failed attempts to move the dial on costs, outcomes, or any sense of satisfaction for the efforts, and money thrown down the dark hole we call pharmacy benefits. We are literally throwing millions of dollars every year at something over which we have little influence other than restricting access in some fashion or choosing a new vendor.

Rx as an Investment

Why is the money spent on drugs for employees different than any other investment a company makes? If an organization purchases a piece of machinery it expects the equipment to produce something, right? If a company invests in a software project, it expects a clear result. If we hire someone, we believe they will perform a certain function for us that produces a measurable outcome. We see all of the above as investments and we monitor them, we manage them, and we adjust as needed to get what we expect out of them. Does the money a company invests in drugs for the benefit of employees have to be a mysterious sunk cost sitting beyond our reach or influence?

Employers have a drug problem and it isn’t just about costs. We want our money to be spent well. We want to know what it’s doing for us and for our employees. We want to monitor what we’re spending, optimize how it’s spent, use it to influence what it can, and then gauge its impact on desired objectives. Our problem isn’t the costs, it’s that we feel powerless to do anything about them or their results. When it comes to our investment in medications for our employees, ours is a problem of stewardship.

The current system of pharmacy benefit management is failing to meet the needs of the employers for which it was built to serve and the employees they seek to benefit. How so? The current PBM model simply pushes money around. It is an administrative function rather than a strategic function. Amid all of the distractions of formularies, re-pricings, claims, therapeutic interchange, step therapy, prior auths, brands, rebates, and specialty drugs is lost the ultimate objective: cost effectively supporting the health and welfare of the employee and his/her dependents to their benefit and to the benefit of the sponsoring employer. 

Today’s traditional PBM approach does not steward the employer’s drug investment well and has grown to be most effective at one thing: shifting margin into its own business model. Benefit administration has become an end unto itself and the key stakeholders are really just an afterthought. PBMs have gotten pretty good at administering plans but remain quite poor at making any real difference for employers or employees.

A Different Approach

We need a way to steward our Rx investment strategically. A fundamentally different approach from traditional pharmacy benefit management. Strategic Rx Stewardship would encompass what our PBMs were originally built to do for us (provide access to meds, improve buying power, administer members and claims, and report on activity) but would add four critical ingredients: 1) real-time visibility into our active Rx investment, 2) actionable insights on key challenges and opportunities, 3) some level of influence over the effectiveness of our investment as a real benefit to employees, and 4) mechanisms for ongoing monitoring and measurement of our Rx investment so adjustments can be made.

The answer is not pushing more drugs to more patients more efficiently, but to use the Rx investment as a mechanism to engage employees in employer sponsored healthcare while empowering them with access to more cost effectives medications. Today, PBMs represent an opaque world of competing incentives, hidden costs, and access restrictions rather than a mechanism that empowers good stewardship of our Rx investment.

Let’s explore a different approach to drug spend. Rather than getting lost in the arcane world of plans, networks, benefits-speak, and access restrictions, imagine having a straightforward service, a utility, that gives us real-time visibility over spend, insights into opportunities for improvements, the ability to take action on those insights, and the means to measure progress against objectives and external benchmarks.

In this world, the employer seizes the initiative on its investment in medications and proactively uses it to reduce costs while improving the lives, and productivity, of employees. Isn’t that why we offered a drug benefit in the first place?

Strategic Rx Stewardship

Strategic Rx Stewardship is comprised of four key elements:

  • Insights into drug spend, employee behaviors, and health outcomes.
  • Access to cost-effective Rx
  • Influence over employee health through coordinated Rx and medical programs delivered through sponsored health partners.
  • Impact measurement and real-time feedback on programs designed to improve outcomes.

Some might say that PBMs provide insights into spend and behavior but PBMs are notoriously secretive and protective of “their” data; data that is actually our data. Even when such data is obtained, what can we derive from it? Raw data is often meaningless and insights are difficult to identify and require statistical and clinical expertise to discern the signals from the noise. It is easy to see increases and decreases, it can be incredibly difficult to ascertain the reasons why. Good stewardship of the Rx investment begins with strategic insights that can be converted into action.

Prescription drugs are ubiquitous and access is not a problem. However, misaligned incentives, opaque contracts, many-layered distribution systems, and games with rebates make it difficult to obtain best-price options or assess cost effectiveness. We need a way to provide employees with access to health-supporting medications when needed, at the best possible price, and in a way that supports our stewardship efforts. Avoiding expensive, limited-access options, staying out of opaque PBM contracts, and accessing all available manufacturer rebates provides the best path to access, affordability, and effectiveness.

A Pathway to Influence

Employers today accept as fact that they can do very little to impact employee behavior or the care that employees receive. We have grown to accept that all we can do is pay the benefits bill and let it go from there. Or, we provide access to sponsored clinics hoping that the services help in some way. We need a way to understand available options to influence employee health behaviors and to participate more actively in their implementation and ongoing management. At the very least, we need visibility into targeted programs and the option of taking proactive steps to help employees.

Sponsored health centers can be the lever that employers need. A sponsored clinic should be the nexus of care and give the employer a hand in influencing the health of its employee population; not by involvement in clinical decisions but through implementation of targeted programs.

With insight into areas of opportunity and mechanisms for participation in, and influence over, clinical programs, the employer can dramatically increase its ability to steward its Rx investment appropriately. However, good stewardship is incomplete without effective measurement of outcomes. Real-time feedback on progress and effectiveness of money spent on medications for employees is the final piece of Strategic Rx Stewardship.

By understanding what money is being spent, what programs are being offered, the level of engagement in those programs, and clinical measurements or outcomes, the employer can determine if the Rx investment is meeting objectives or if adjustments need to be made. With real-time impact measurement, the employer can act in new ways to steward dollars invested most effectively.

The time has come to seize control over our drug investment and its results. The time has come to change how we approach that investment and what we expect from it. We don’t need pharmacy benefit management, we need Strategic Rx Stewardship.

In his 2014 book, Zero to One, Peter Thiel introduces an interview question he frequently asked as CEO of PayPal: “What important truth do very few people agree with you on?”

Scouring the headlines today, it has become de rigeur to conclude that the U.S. health system is broken. What exactly does it mean to be “broken”? Google defines broken as “having been fractured or damaged and no longer in one piece or working order.” In that sense, I disagree with the notion that our health system is broken.

The truth is that our health system is doing what it was designed to do.

We have a mass production, industrial complex health system built on economies of scale, static processes, entrenched financial interests, opaque incentives, byzantine delivery models, legacy conflicts of interest, an innovation stifling compliance blanket reflective of a massive Federal bureaucracy, and the necessary self-protectionism brought-on by a hyper-litigious legal system.

Our health system isn’t broken, it’s massively inefficient and that makes it massively expensive. What’s broken is how we’ve grown to accept the status quo of our health system and how those who pay for healthcare (employers, unions, and individuals) continue to engage with it. We accept entrenched mediocrity and our approach to the status quo is a brittle strategy. We’re debating it because we realize that we can longer afford the inefficiencies.

Our massive health system is actually a financial ecosystem feeding a multitude of dependents and the question at the heart of the matter comes down to profits, efficiencies, and outcomes. Middlemen organizations originally created to be advocates for those paying for healthcare (governments, unions, employers, and individuals) have evolved into entire industries unto themselves, busily building and feeding their own ecosystems with money siphoned from of their original stakeholders. Why do we keep paying them? Because healthcare is complex and difficult to navigate. We’ve moved from insuring against worst case scenarios into easy-button managed cost mechanisms that ultimately result in massively inefficient financing arrangements with little to no attention given to efficiency or effectiveness. The sheer scales hides the inefficiencies and misaligned incentives while the complexity ensures that it is incredibly difficult to sort fact from fiction.

In other words, we keep making the same mistakes because it is easier than the perceived effort to make meaningful changes and there is a universe of players who are dependent on keeping things static. That is all fine and good when there is excess cash sitting around. The reality is that all employers are in the business of healthcare and most of us can no longer afford to keep doing the same thing. The real battle over healthcare is about who keeps the money. If you are an employer or health consumer, I’m talking about your money.

Silver bullet? Sorry, not in this post. However, there is a pathway to manageable change:

  1. Adjust your healthcare worldview. Why do you offer health benefits to employees? Attraction? Retention? Productivity? Doing the right thing? Naturally, it’s “all of the above.” There are solid business reasons from a human capital perspective and from a humanity perspective. With its strategic human resource and financial implications, healthcare demands high-level attention. Step #1 is to make healthcare a strategic imperative for your organization and lead it that way.
  2. Understand the incentives. None of us make our healthcare decisions without outside input. Choose carefully. Brokers with massive bonuses attached to securing your business struggle to be objective in the guidance they give. Make no mistake, you will pay for the help you get in way or another. However, who pays for the counsel you get makes a difference. Be direct in asking how your advisers make their money. Look for financial disclosures in contracts and inform decisions you make with an understanding of the money trail. Remember, it’s your money.
  3. Educate yourself. Make sure that you have the internal expertise to gather and evaluate options. This means that you, or someone on your team, needs to invest the time to understand the complexities of how the system works and what doesn’t work for you. It can’t be just about dollars – pricing is a blunt instrument for assessing options. By digging-in on the nuances, you will be in a better position to evaluate your advisor, question your options, and navigate the byways of healthcare planning. In the healthcare benefits space, trust remains an issue and building your knowledge is one of the best ways to build confidence in others as well as in your ability to discern the options. Sorting through the noise can take time but it is worth the investment. With time, patterns, gaps, and opportunities will reveal themselves.
  4. Start with data but remember that it’s not enough. Understanding your data is a great place to start. However, it is only a starting point and you must remember that data can, and often is, manipulated. Data must be converted into useable information from which insights can be drawn. Often data is hard to obtain, keep pressing for it. Certain data points are often left out. Ask for them again. When you have others evaluate your data, they will almost always come back and tell you that they can save you money. Ask them how they will do it. Make sure you understand why their approach is better and how it differs. Data has to be kept in context and insights must be actionable. For example, most groups have a challenge with diabetes within their employee population. Few solutions are effective at changing that situation so ask the question: how is your approach different? why will it work when most don’t? If you are working with someone who doesn’t offer ideas for addressing problem areas, keep looking, they are out there.
  5. Look for strategic partners, not vendors. None of us can address our healthcare challenges in a vacuum but the universe of those offering advice seems infinite. The word “partner” is one of those expressions that has approached cliche status over the years as we suppliers have worked to position themselves as “high value.” Overused or not, it is an important reference point. Transactional relationships can add value but they will rarely provide ideas or approaches unique to your situation. A strategic partner takes the time to get to know your business, understand your priorities and challenges, and works to help you achieve objectives. The best strategic partners win when you win. The best relationships require a lot of time and effort to build. Almost everyone will claim a desire to “partner” with you. One way to assess options is to look for those who give value first. Who comes with ideas? Who asks fresh questions? Are they “all-in” on helping you achieve your objectives? Do they adjust their approach as they gather information to reflect an evolving understanding of your unique requirements? Can they save you money while increasing the value of the products or services you use?
  6. Size does not necessarily equal value. We all tend to make the mistake of assuming that the largest entities bring economies of scale and therefore low-cost, high value solutions. In the world of manufacturing, that is traditionally the case but not in the complex healthweb we inhabit. Big inefficient organizations are often built on siloed service areas that don’t coordinate, take a narrow view of client or patient, and have little incentive to worry about the collective whole of your relationship. Massive processors of claims do little to layer value in health transactions and mainly push money around while doing even less to help those who most need it navigate the complexities of their own healthcare experience. There are many reasons such massive organizations sit on top of the system but most of them will not improve your experience or save you money. If you are the biggest of the big employers, there may be reasons to engage the biggest of the big vendors, however, it is no guarantee of service, quality, or value. If you are not big enough to command the biggest, then you are likely paying more and getting less than you could with other options.
  7. Remember that status quo is a brittle strategy. I was recently told of an employer who, frustrated by their current health benefits plan, changed directions to save money and improve services. When it came time to draft a “plan document,” the employer asked, “Can’t we just use our old one?” If you want something to change, you’ve got to be willing to put in the work to change it. It doesn’t have to be painful or disruptive, but it does have to be different in the decisions you make and direction you take. One reason so many of us stick with status quo approaches is because we view departure as requiring a lot of effort and we are unwilling to do the work to change. Keep the end in mind. Not all change requires massive effort and, if it does, it is often very much worth it. Status quo approaches are often brittle because they cannot flex to the continually evolving needs of our businesses. This is why so many say that our healthcare system is broken when in actuality, it is simply too inflexible to give us what we want for what seems a reasonable price.

We’re not going solve the challenges in a brief blog post. However, we can begin to think about the problems in a different way. Creatively nimble and cost effective approaches are hidden by the monolithic shadow of a massive system built for entrenched mediocrity.  It takes effort and pluck to step into that shadow seeking workable alternatives that might solve seemingly intractable problems. For most, the apparent risk is too high. However, the rewards will go to the daring as they find pathways to lower costs and better health outcomes. 

In this digital age, we as consumers have become accustomed to the convenience of immediacy. Prior to the advent and widespread availability of the World Wide Web and soon thereafter mobile computing, the customer experience was inconsistent and became an exercise in patience. Today, with 2-day shipping, multi-channel communication updates, and over 70% of the U.S. having access to mobile service, customer expectation and customer patience have been moving in opposite directions. I’m sure you can figure out which one is going where.

Our own consumer experiences are shaped by what we have come to expect of our service providers. On-demand. Accurate. Actionable.

This consumer experience has slowly become the client expectation. All patients, providers, and clients who Northwind Pharmaceuticals serves have been influenced by their consumer experiences. These changes in consumer, patient, provider, and client expectations have materialized due to the effective leveraging of technology to answer questions and solve complex problems.

Whether we’re providing business leaders with financial data or clinicians with population health data, it is important that we let the data tell the story, but the story needs to be concise, directive, and provide a clear path to positive outcomes. Leveraging technology to assist us in this endeavor is the only way to effectively advance the discipline of improving quality of life.

So how is Northwind answering questions and complex problems as it pertains to the shift in expectations?

ON-DEMAND

  • The speed at which we deliver information can be the difference between a positive healthcare outcome and something disastrous.
  • Mobile solutions have become an expectation and having an “app for that” isn’t a differentiator any longer – it is a must.
  • Self-service must be an option – that includes access to data, payments, and client/patient support – no more “request and wait.”

ACCURATE

  • Northwind’s ability to accurately analyze gigabytes of data quickly converts that data into actionable information for our clients.
  • Accurately dispensing medications is priority 1 – ask us how we leverage automation and AI to ensure our patients medications are prepared quickly and error free.
  • Let us take supply chain, inventory, and formulary management off of your plate – our technical resources ensure you have what you need to serve your patients w/minimal overhead.

ACTIONABLE

  • “Great information! So what do we do with it?” – we understand what moves the needle and our use of technology is the connective tissue that removes obfuscation and produces clarity.
  • Our team of clinical experts and analysts will use data to customize a pharmaceutical management plan specific to each employer, clinic, or plan.
  • We use historical, current, and predictive analytics to enable continuous adjustment and improvement of your population health management programs.

Processes and systems at Northwind enable us to accurately analyze thousands of lines of data in order to assist business leaders, providers, and even patients with making informed decisions. The use of technology to enable the free and secure flow of data between our systems and those of our clients has been key in extending this ‘convenience of immediacy’ to decision-makers and healthcare professionals.

Northwind’s ultimate mission is to enable self-funded employers to control their pharmaceutical spend. Some of this is accomplished simply by applying hard work and experience. However, we show our real value when we can solve complex problems and answer difficult questions by leveraging technology.

Here we are at the beginning of the Fourth Quarter and the only October surprise that most employers are seeing is associated with their employee healthcare costs. Large employer’s surveyed by Business Group on Health (BGH) expect health plan costs to rise 5.3% in 2021. In projecting possible scenarios for 2021, consultancy PwC suggests the possibility that avoidance of care during the pandemic in 2020 could drive the medical cost trend up by 10%.

As we move through another season of renewals with increasing costs, we move into another cycle of “grin and bear it” while we look ahead to more of the same. Some advisors propose carve-outs, caps, cost shifts, and high deductible plans that either punt the issue down the road or directly into the employee’s hands. All the while, we wring our hands and point at health systems, insurers, PBM’s, and drug manufacturers as the root of all evil.

The 4th Quarter

Yeah, it’s the 4th Quarter, we’re down with time running out and asking ourselves once again: “Why do we continue to play the same game?”

Like it or not, as employers, we are in the healthcare game. And, in most cases, we continue to lose as costs rise, employee health (mental and physical) gets worse, and we feel powerless to affect either. We didn’t intend to be in the healthcare game but here we are, realizing just how challenging it really is. Again we ask: “Why do we continue to play the same game?”

Imagine what would happen if we approached our health plan costs like a market opportunity. First, we’d vet the opportunity. How big is the opportunity? What will it cost us to enter the market? Do we have a differentiated solution? What does the competition look like? How do we position against alternatives? Who do we put on the team to help us make it happen? Are there products or services out there that help us? What does the financial model look like? How do we win?

Necessary Evil or Opportunity?

The problem with an expense like healthcare is that we approach it as a necessary evil. We approach it as someone else’s game complete with rules of its own. We don’t really want to play but we have to, so we lace-up, jump-in, and do the best we can – knowing that we won’t win but must press-on regardless. Often, we find that we don’t even have the right equipment, right knowledge, right players, or right strategy to play it effectively. Every twelve months, we revisit it, hoping something changed but knowing the score before it even hits the board.

However, there are also opportunities in the healthcare game. We just need to make it our game. We need to take the same strategic view of it that we bring to any critical initiative. A longer term, strategic perspective demands a broad view of the challenges as well as an understanding of the opportunities. Then, it needs to be coupled with a multi-year approach complete with short-term and long-term tactics. We have to acknowledge that employee health is a long game, that we are in it, and that we can play it our way.

Consider this: according to the BGS survey referenced earlier, employer healthcare spending per employee for 2021 will be $10,850. In addition, the CDC estimates that productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year. Even aside from the direct financial impact, employee health is a major strategic factor for employers. It’s a game that we need to master.

A Long Game Approach

If employee health is strategic and healthcare is a game employers have to play, how do we go about approaching it differently than what we’re doing today? Here are a few ideas on how we, as employers, can change the game:

  • Understand your current state
    • Gather data
    • Know your population
    • Identify where direct costs are occurring today
    • Look for actionable insights – data by itself is not helpful unless it can lead to a decision or action that can make a difference.
    • Consider and quantify the implications of maintaining the status quo
  • Build a plan
    • Employee health is a long game – plan for the long game.
    • What is the vision for your game? What is your philosophy toward employee health: attraction, retention, productivity, and healthcare as a competitive weapon?
    • Set near and long term objectives. Cost savings, health measures, procedure/episode avoidance.
    • Determine options
      • Talk to experts. If they don’t bring new ideas, move on. Don’t outsource the process, find ways to leverage others’ bright ideas.
      • Invest in it appropriately. This needs to match the vision. Is employee health just a necessary expense or do you see a deeper purpose there? Start with the money that is currently being invested and work backwards. You should be able to get more for less.
      • Understand incentives. Behavior is driven by self-interest. That doesn’t mean that someone else’s self-interest can’t align with yours, you just need to understand where it does and where it doesn’t.
      • Look in new places. Don’t accept the fallacy of limited options. There are more options than ever.
    • Assign ownership. Make it strategic – just like other priority initiatives. Someone or a team needs to be accountable.
    • Recognize that the plan must be fluid. Accept the fact that things will change and anticipate it.
    • Expect it to be complex. There is no “easy” button for employee health. You will need creativity, endurance, and sophistication to make a difference. If this is too much, just accept the rising costs – your organization probably doesn’t have the will to change its healthcare game.
    • Anticipate complexity but don’t boil the ocean. Your plan must be creative but don’t expect it to answer every contingency. Walk the path. Plan it out. Don’t thrash here for too long. You need to execute.
  • Execute. An 80% plan aggressively executed in a timely fashion will outperform the 100% plan that never gets off the ground. 
    • Put some “doers” on the team. They are not always the ones who  built the plan. You know this game – it can’t be talk. It has to be action. You may need a couple of folks who are willing to break some glass. Make it happen. 
    • Manage to the milestones. Accountability is critical. Push down the path with focus and intention. Assess, adjust, and keep pushing.
    • Be prepared to pivot. Things will change. Give yourself enough time to assess but anticipate the need to adjust, frequently. To this end, look for relationships that give you flexibility. Multi-year contracts are designed to maintain status quo. Make sure they give you the ability to react and adjust when necessary.
    • Celebrate success. Whatever your measures, share the successes and highlight the progress. This is good for the healthcare mission as well as the culture. 
    • Sustain the effort. Long term plans are difficult to sustain. Continuity of leadership, persistence of effort, and commitment to the mission of change are critical. It’s ok to measure monthly, quarterly, or yearly successes or even setbacks, however, the longer mission horizon has to be kept in view.
  • Innovate. As important as it is to innovate in your core business, it is also important to innovate in your approach to employee health. You may find that this happens quite well within your team. More than likely, you’ll find that you need to continue to bring in new ideas from the outside. Be intentional with finding new ideas. 
  • Make healthcare a core competency. Over time, you will get good at healthcare. Great! Ultimately it needs to be a core competency. The rewards are significant. Helping your team members become the best version of themselves is simply good business. Helping them manage through the difficulties of life is also good business. Your organization will always be only as good as the team within it. 
  • Additional thoughts on changing the game:
    • Get closer to the point of care. Employers need clinic relationships to extend their influence. No, you won’t deliver care, however, as the primary payer, the employer needs to influence how that care is delivered.
    • Start with the high cost areas. Don’t accept “it is what it is.” Stratify patients and plan to address problem areas systematically.
    • Find partners who can help you identify and execute on actionable insights. If they shrug when you ask how they would recommend solving a problem, then move on.
    • Contract directly. Whenever you use someone else’s network, there is a layer of cost involved. Whenever someone else manages your money on your behalf, there is a layer of cost inserted. There are hospitals, medical providers, physical therapists, behavioral therapists, and pharmacy providers who will work directly with you. Own those relationships.
    • Don’t fall for the RFP approach. I recently heard a broker claim that she had vetted 20 different PBM’s for a particular client. That approach is counter productive. To evaluate multiple options, you have to develop a standard of measure. That standard of measure may help compare but it doesn’t help identify new ideas and only supports the status quo of “been there, done that.” It is great to explore options, just make sure you are getting new ideas in the process. Remember, these processes will almost always default to “status quo.” Inertia keeps vendors in place as well as stale ideas.
    • Get out of the artificial driver of annual renewals. The process itself drives toward a structured decision and only reinforces the RFP and standard features approach. This is the world of incremental gains (maybe) and doesn’t align with the need for a multi-year strategy. Get partners who will go the distance with you and adjust with you as ongoing changes demand. What has the process yielded for you recently? Probably 5-10% cost increases. Why do we need to invest so much effort in this process every year? Focus on the bigger issue: improving employee health rather thrashing in administrative processes.

Employee health is a long game. Who’s version will you play? The current status quo world of rising premiums, misaligned incentives, backroom commissions/rebates, and short-term, “easy button” health plan management continues to yield rising costs with little improvements in health or productivity. As the stewards of significant resources invested in our plans today, we have the responsibility and the opportunity to do more. Will we keep playing someone else’s game or will we rewrite our playbook and play our game?

In 2002, I joined a startup called MyDoc.com. The venture was Roche-backed and had the mission to enable patients to interact virtually with physicians via the internet. Patients could use an internet browser to connect to a system that would triage their condition and then enable a real-time chat with a physician that could lead to a diagnosis and potentially a prescription sent to a preferred pharmacy. Our solution was ahead of its time but foretold a future in which patients could use technology to improve access and, ultimately, outcomes.

Fast-forward to 2020 and telehealth is no longer pie-in-the-sky. With the onslaught of COVID-19, telehealth in general and the subset of telemedicine has become a necessary reality as the world has worked to slow the pandemic while still providing care to patients in need. Telehealth broadly refers to the use of technology in healthcare while telemedicine is a means of delivering medical professional services via electronic communication systems and software.

For employer-sponsored health centers, the implications are profound. Telemedicine provides patients enhanced access and convenience. And right now, a sense of safety. In a recent wellness panel discussion, an executive from a major clinic management company described their shift to a “virtual first” model and said that 80% of their patient encounters over the last few months were via telemedicine. Considering that they did not even have a formal telemedicine model prior to April, those numbers are staggering.

Though not as dramatic as the anecdote above, we’ve seen clinic groups move 33% or more of prescriptions dispensed at worksite clinics to home delivery facilitated through thousands of virtual visits. The rapid acceptance of telemedicine visits as “real care” and the need to reach patients wherever they are, has altered, and will continue to alter, the care delivery landscape.

Increasing Acceptance

According to an MDPI study published in January, 89% of patients accept telemedicine as a sufficient form of medical care. That pre-COVID number suggests wide acceptance before the pandemic hit the United States. Most younger patients (74% of millennials in one analysis) prefer virtual visits to in-person care. A recent study conducted by Neurology found that 93% of clinicians view telemedicine as “acceptable” and 60% view it as “very effective” for patient care. Telemedicine was headed toward broad acceptance and COVID-19 secured its place as a staple of patient care.

With virtual visits now standard practice out of sheer necessity, what will telemedicine adoption look like once the dust settles with COVID-19? Andre Zimiles of Doctor.com writes that “83% of patients expect to use telemedicine after the pandemic resolves.” For self funded employers and their clinic management partners, patient and provider acceptance of telemedicine reflects a “new normal” that is permanently changing how patient care is delivered.

Increasing Impact

With improved access come more opportunities to impact patient health. Telemedicine extends the reach of a traditional clinic and eliminates time and geography as limiters to care. Employees that don’t have practical access to an onsite or nearsite clinic can tap into the value of that benefit through the click of a mouse. Employees with access to an employer-sponsored clinic can choose the best access point based on their situation. In the article referenced above, Mr. Zimiles claims that patients using virtual care can save 100 minutes of time relative to an in-person visit. Even if the real number is half his claim, it is significant. Faster access = faster recovery = lower costs.

Impact opportunities also exist in a hybrid model in which in-person access and virtual access blend to provide enhanced services to patients. A 2020 study revealed that Veterans Administration virtual visits resulted in 25% fewer days spent in inpatient care and 19% fewer hospital admissions for veterans. At an average cost of nearly $4000 per day for a stay in the hospital, reducing inpatient days by a quarter is a substantial number. Whether virtual visits are improving communication, compliance, or the intervention, something powerful occurs with improved patient access to care.

Though the claim of reduced per visit costs (10%-15%) is meaningful, that number is small compared to the potential downstream impact of better care, better patient compliance, and better outcomes. Telemedicine appears to be quite effective in supporting all of the above.

Coming of Age

Telemedicine appears to be here to stay. A Ziegler white paper shows that 5% of practitioners used telemedicine in 2015 and 22% used it in 2019. Another 2020 survey showed that nearly half of all physicians are now using telemedicine. Meanwhile, consumer adoption of virtual visits in 2020 has jumped to 49% from 11% in 2019. (McKinsey) Technology has come a long way since MyDoc introduced virtual visits in 2002. More importantly, patient and provider attitudes toward virtual care have changed dramatically.

Telemedicine has definitely come of age and care delivery has improved because of it. The benefit trajectory of virtual visits portends good things ahead for patients and those who care for them. It also promises good things for those who help fund that care. That sounds like a win for all of us.

We Have a Problem

The worksite health space has exploded as employers have jumped at the opportunity to take control of many aspects of their healthcare expense and positively impact the health of their employees.  Occupational health, wellness, acute care, and primary care were put in place and we’ve been pretty effective at reducing some costs and improving access. Alas, the big costs sit downstream: episodic events, chronic disease, and Rx spend.

For the clinic, the challenge to demonstrate value has increased as costs continue to increase. For employers sponsoring onsite or nearsite clinics, it has become more and more difficult to justify the investment in the clinic itself.  

What Have You Done for Me Lately?

We are now entering the 4th wave in the evolution of the worksite clinic. If you are new to the clinic model, you’ll cross the initial value threshold. If you’ve been at it for a while, you may be in the 2nd, 3rd, or 4th renewal of your investment in a health center. With each passing year, the question: “What have you done for me lately?” emerges. Whether you sponsor the clinic or manage the clinic, it is the same. How do you show that it is continuing to be relevant in making a difference?

We Can’t Sit Still. We can’t Chase Everything.

We can’t keep doing the same things and expect improvement. Healthcare expenses continue to climb. The 2020 expected increase of 12% will likely grow dramatically due to COVID-19. What worked before remains necessary but it won’t increase the clinic’s value in the future nor help us move the dial on costs. We all know this.

In the pursuit of higher value for the clinics in which we’ve invested, we’ve turned to “shiny objects” and started sprinting after anything that looks new. ”Point solutions” have appeared and many of them may be decent programs. However, in the quest for new we’re now being “PEPM’d” to death and it is clear that we cannot afford everything on the menu. Often, these point solutions are hard to evaluate and difficult to validate.

What We Need

Through all of the challenges, we find an ongoing hunger for something better. For those of us serving these employers, we hear recurring laments about complexity and trust. Self-funded employers aren’t asking for too much, they just want:

  • More trust, less uncertainty.
  • More innovation, less me-too.
  • More insights, less obfuscation.
  • More impact, less excuses.

Relationships are shifting as employers look for new ideas and more options. They recognize that healthcare is not their business yet it has become strategic to their business. Everyone wants partnering relationships that help solve problems, save money, and make a difference. For providers of onsite and nearsite clinics, there is a tremendous opportunity to be a trusted advisor in your client’s search for value.

The Worksite Clinic Opportunity

What is the opportunity for worksite health centers? Properly implemented, the onsite/nearsite clinic can become a nexus of care for employees. As a nexus of care, the clinic then becomes a center of value. What does it mean to be a center of value? As a nexus of care, the health center can impact costs, outcomes, and the general wellbeing of the employees. The claim has been made for years but progressive clinic groups are just starting to bridge into the rare air of being a care nexus and for most, it remains an elusive objective.

As an organization that specializes in driving clinic value while improving patient outcomes, we see medications as the ideal vehicle for helping the worksite clinic transform into a nexus of care. How? Follow the money. Prescription spend for self-funded employers has grown to nearly 30% of overall healthcare expenses. The typical worksite clinic offering onsite dispensing impacts 5% of the total prescription spend. What happens if the clinic expands prescription influence to more of the overall spend?

Prescription access is one of the key draws for patients visiting an employer sponsored onsite/nearsite health center. When the clinic enables patients to access almost all of their prescriptions onsite or through home delivery, it moves itself closer to a nexus of care. Bringing High Impact Rx into the clinic value proposition increases ROI, decreases medication costs, improves patient medication adherence, improves outcomes, and enhances the employee experience. Here, the health center becomes a center of value.

High Impact Rx for Worksites

Offering access to more medications is a great start but it isn’t enough by itself. The clinic manager needs a comprehensive pharmacy solution that incorporates access to expensive brand or specialty products. The next step from there are targeted programs designed to impact the really large costs associated with chronic conditions. Today, most onsite/nearsite clinics have barely scratched the surface of their potential impact on their clients’ pharmacy spend and the promise of chronic care coordination. The opportunity is hiding in plain sight but it takes the right partner and solution to make it reality.

From what we are seeing in the market, self funded employers are done with:

  • the same old ideas and options
  • low value supplier relationships – “we need more than just a vendor”
  • siloed point solutions – “death by PEPM”
  • opaque incentive arrangements
  • one size fits all

Here’s what they really want:

  • trust, ideas, and innovation
  • broad views of options, including High Impact Rx
  • strategic partners “solutionizing”
  • integrated strategies and programs
  • clarity and transparency
  • help in beating the “rebate” game
  • custom, flexible solutions
  • true progress on improving outcomes

The time is right. The opportunity is now. There are powerful options for innovators looking to put a dent in their self-funded clients’ healthcare costs and make life better for patients. How do we know? We’re helping them do it.

We continue to experience an ongoing sense that things are headed off-the-rails. Pressure continues to build. What’s going to happen with our economy, with the pandemic, with the election, with the social unrest? Who knows. What we do know is that all of the above will retain a sense of uncertainty for the foreseeable future.

Though uncertain, business leaders do have a sense for our direction. Costs will rise. Absenteeism will rise. Pressure will increase. The urge to lockdown, stay put, and contract will only become stronger. All of which stems from fear. Many of us will live in this place in very real ways. Most will also try to maintain status quo as they navigate it but that will only result in contraction. There is uncertainty, yes, but we can still see the thematic direction clearly and it is not encouraging.

The Novel Coronavirus has created an urgent need for novel ideas and approaches.  Innovation is critical. Clearly, there is need for smart thinking on back-to-work strategies, employee safety, and broader risk mitigation efforts. However, in the fight to manage the urgent issues around COVID-19, we can’t lose sight of the very big, very expensive issues surrounding the total health of our employees.

Hiding in the Shadow of COVID

In the shadow of COVID-19, chronic health conditions still wreak havoc on the people with whom we work and medical costs continue to rise. COVID-19 will only accelerate both. We can no longer wait. We can’t keep hoping for the same old approaches to make a difference. The pace and scope of costs will only increase from here. 

What are we waiting for? Look around you. Who is showing up to help? Where is the work? The effort? The push? Where is the sense of urgency? What’s the plan? For those advising you, what new strategies are they advocating to help mitigate the risk of COVID-19 as well as the tsunami of pent-up medical demand sitting on the horizon? It would seem that “wait and see” is no longer a viable option.

For self-funded employers sponsoring onsite or nearsite clinics there can be no tolerance for me-too, wait and see, or “shrug” strategies when dealing with COVID-19 or the ongoing health needs of employees. You’ve got to have partners stepping up with solutions to the immediate health challenges as well as the equally urgent, and expensive, downstream impact points. Your investment in a clinic gives you a unique weapon in this ongoing war. Are you leveraging it properly?

The 4th Wave

COVID-19 is accelerating our evolution into the 4th Wave of employer sponsored health clinics. Key solution expectations should include:

  • Consultative approach to overall health spend – including overall pharmaceutical costs. Bring serious expertise and help us solve serious problems.
  • Comprehensive telemedicine options. Telehealth is now a permanent and necessary fixture in any comprehensive health solution.
  • Direct contracting whenever possible. Your partners should be guiding you toward the direct acquisition of products and services. Bundling for episodes of care, narrow networks, and wholesale pharmacy benefits are a good place to start.
  • Broad population health. Chronic care, behavioral health, weight and lifestyle medicine. What are you doing to improve access and remove barriers? Critical to this approach is actionable data, clarity, and transparency.
  • Comprehensive pharmacy solutions. At work, at home, and specialty. Fresh approaches exist if you’re willing to listen. 
  • The clinic should be moving toward a “nexus of care” model in which it plays trusted quarterback for the health of your employees. This includes close coordination with other care points, particularly pharmacy and specialists.
  • Targeted solutions for unique challenges. Mobile workforces, WFH (work from home) strategies, dispersed workforces with different points of healthcare access just to name a few.

Our world is going to dramatically contract this fall as schools open, Americans continue to push to get back to work, the election cycle intensifies, COVID cases rise, and the normal challenges of operating our enterprises: finding & keeping customers, managing expenses, dealing with compliance, etc. increase pressure on all aspects of our organizations. Smart leaders will hit the challenges head-on with new ideas, nimble approaches, and an embrace of innovation. Government programs will not be enough and no amount of cutting will offset our desperate need for change.

Looking Beyond the Obvious

For those of us living in the world of self-funded employer health, we must look beyond the known and obvious to something truly novel if we are going to effectively navigate the rapids ahead. If you’re not talking to them now, find the innovators. If you’re not reviewing proposals for new approaches, do it now. If you’re looking at vendors offering the same ideas for novel times, change-it-up right now and find strategic partners bringing fresh approaches. If you don’t know where to find them, let me know. This is your strategic imperative.

Then, you need to listen. If you don’t, the months ahead will hold more and more uncertainty and you will continue to fight a defensive battle rather than seizing the offensive initiative. The fever pitch of our current environment is going to intensify and your ability to move through it successfully will require something new. Good intentions aren’t enough. Deliberate, effective, and persistent action while executing on new ideas will be critical.

Do you have the will and vision your organization needs for the times ahead? We’ll soon find out.