How integrated pharmacy benefits help employers and their employees

You can’t put a price tag on your health. 

It’s true – good health is priceless. But there are price tags on health care. And that poses some significant challenges for all of us, including health insurers. Blue Cross and Blue Shield of North Carolina (Blue Cross NC) takes its role as a steward of health care dollars seriously. We are committed to making sure our members get value for consultations, tests, procedures, and medicines. 

Delivering value in health care isn’t simply a matter of arriving at the cheapest health care possible – it’s about balancing costs and benefits. It comes down to setting the right price for a given outcome. 

It’s wonderful to live in a time when new medicines are being created every day to treat conditions that would have doomed patients to a lifetime of illness not that long ago. But if the price tags on prescription drugs put them out of reach, what’s the point of medical progress? Is it really progress at all? 

Employers who provide health benefits to their employees are constantly faced with these questions, struggling to provide employees with comprehensive health benefits while keeping costs down and expenses under control. And that struggle is getting more intense.

Mercer’s annual health benefits survey showed a 5.2% increase among all employers in the cost of health benefits per employee in 2023. The increase was even steeper when you drill down to mid-size employers, who saw an increase of nearly 8% last year. 

Prescription drugs are a primary driver of employer health care costs, prices of prescription drugs climbing by 8.4% in 2023. That’s almost double the rate of increase from just four years earlier. 

What options do employers have to rein in health care costs? 

To combat the rising prices of prescription drugs, some employers choose to carve out pharmacy benefits from their employee health plans. But carve-outs are a significant gamble for an employer. 

A pharmacy carve-out is when an employer separates prescription drug coverage from their major medical plan, managing these benefits outside of a health insurance company.

The drawbacks to carve-outs include fragmented health care, a poor consumer experience, and higher long-term costs. As the costs of drugs continue to grow, integrated benefits ensure a coordinated strategy to reduce health care costs.

There may be some initial savings, but avoidable emergency department (ED) and hospital stays can wipe out years’ worth of savings and put a business in the red. We’ve heard from too many employers who learned the pitfalls of pharmacy carve-outs only after they saw their costs skyrocket.  

Typically, employers would shift a portion of health care cost increases to the workforce, hiking employee health care premiums or copays, for example. But a tight labor market has made it harder for companies to attract and retain talent.

Many organizations are trying to expand benefits rather than pull back. Employees are feeling the strain, too. According to a study from the Peterson-KFF Health System Tracker, more than 75% of US adults surveyed say prescription drugs are unaffordable, with nearly one-third saying they haven’t taken medications as prescribed due to the cost. 

Integrated benefits allow for real-time analysis of more clinical and pharmacy data all at once, providing insight on how to best optimize care management. From staying on top of chronic conditions and identifying at-risk employees, to closing gaps in care and safely monitoring drug use, data integration leads to higher-quality, more cost-effective care. 

Coordinated care management can also provide savings for employers. Care managers can help ensure employees are using the most clinically effective and safe prescriptions that promote employee health and reduce long-term costs. 

Blue Cross NC analyzed claims data from self-funded employer groups – also called Administrative Services Only (ASO) groups – to compare plans with integrated pharmacy benefits to plans with those benefits carved out.

Our analysis showed that in 2022, ASO groups with integrated pharmacy benefits had lower medical expenses by up to 12% when compared to ASO groups who had a separate prescription drug benefit. 

We also examined the health advantages of integrated pharmacy benefits and the results were equally impressive. Inpatient care and ED use were down for the population with integrated pharmacy benefits – inpatient care was lower by up to 28% and ED use was down by as much as 13%. 

Of course, the patient experience encompasses a range of factors beyond cost and outcomes. There are also the questions of convenience and access.

For employees with integrated pharmacy and medical benefits, getting the care and medicines they need is easier. This setup provides them with:

• a single member ID card 
• one point of contact for customer services
• holistic care management
• a convenient digital account
• easy mail-order pharmacy or retail pharmacy service

Blue Cross NC has on-staff pharmacists who help members with complex specialty health conditions to identify opportunities for savings on potentially high-cost medications. Using predictive data, we can quickly implement medical policies that can lower prices for members dealing with costly chronic conditions. 

Blue Cross NC is committed to helping our employer customers spend their health care dollars wisely and to improving the health of the workforce. We’re uniquely positioned to serve as a health care hub, integrating a range of insurance benefits for coordinated, personalized care. 

The research is clear: Integrated medical and pharmacy benefits make sense for employers. The best care is integrated care.