Regence Health Plans, Prime Therapeutics study shows significant improvements when integrating pharmacy and medical benefits
“Carve-in” model, where health plan and PBM are integrated, can potentially save members a trip to the ER or hospital, and lower medical expenses for employers
April 14, 2020
EAGAN, Minn. and PORTLAND, Ore. – Regence and Prime Therapeutics LLC (Prime) today released a peer-reviewed study demonstrating more evidence of associated cost savings and potential health benefits from integrating pharmacy benefits with medical benefits.
Referred to as “carve-in”, this model combines pharmacy and medical benefits under one plan offering, allowing for greater insights into total costs of care. The Journal of Managed Care & Specialty Pharmacy (JMCP), a peer-reviewed journal of the Academy of Managed Care Pharmacy, published the co-authored study titled “Medical Costs and Healthcare Utilization Among Self-insured Members with Carve-in versus Carve-out Pharmacy Benefits” online and it will appear in a future issue. Regence health plans operate in Oregon, Idaho, Utah and select counties in Washington, each an independent licensee of the Blue Cross and Blue Shield Association dedicated to making health care better, simpler and more affordable.
The study examined medical costs over 2017 and 2018 for Regence members whose pharmacy benefit services were either managed as carve-in or carve-out. These industry terms describe when an employer chooses to have prescription benefits managed by a pharmacy benefit manager (PBM) that is separate from and not affiliated with the health plan administering medical benefits (carve-out) or chooses an integrated solution with prescription benefits managed in conjunction with medical benefits provided by the health plan (carve-in).
Key results from the study regarding the benefits of carve-in vs. carve-out found that an integrated approach resulted in:
- Fifteen percent less likely that members would be hospitalized and seven percent less likely to have an emergency room visit than members with a separate PBM.
- Four percent lower annual medical costs, with an associated average medical costs savings of $148 per member per year, specifically $3,601 with carve-in versus $3,749 with carve-out or a separate pharmacy benefit.
The study also examined the total medical cost for members with certain chronic conditions, including asthma, depression, diabetes, chronic obstructive pulmonary disease (COPD) and coronary artery disease (CAD). It found 12% to 17% lower associated total costs for members with integrated, carve-in plans across all of these conditions. Additionally, the study found that members with integrated benefits had an associated 22% to 36% lower odds of hospitalization and 16% to 20% lower odds of an emergency room visit across the five chronic conditions.
“This study proves what we’ve long known: to most effectively support members on the road to good health, we need to have a full picture of their care and medications,” said Dr. Cheryl Pegus, Regence’s president of consumer health solutions and chief medical officer. “Regence’s experience and data demonstrates that when employers take a holistic approach and keep medical and pharmacy benefits with the same company, they save money and their employees benefit with better health outcomes.”
“The associated overall lower medical costs and events (i.e., hospitalizations and emergency department visits) found in this study are similar to other study findings, including the Blue Cross and Blue Shield Association study we conducted. In addition, the Regence study found associated lower medical costs and events in five common chronic conditions for which medications are integral to treatment (asthma, chronic obstructive pulmonary disease, coronary artery disease, diabetes mellitus, and depression) adding to our understanding of value from integrating pharmacy and medical benefits,” said Pat Gleason, PharmD, assistant vice president of Health Outcomes at Prime.
Gleason added, “As pharmaceutical spending becomes a bigger part of the health care dollar, and drugs are split across the pharmacy and medical benefits, it’s extremely important that employers understand that they can better control their expenses when they keep their pharmacy benefits with the health plan’s PBM. Only then can we see total cost of care and manage the member completely and effectively. Carving out only leads to disconnected data and management that results in waste and worse outcomes. This is an easy decision that can potentially save an employer nearly $150 per employee every year.”
The Regence and Prime authors received a platinum ribbon for their research from the Academy of Managed Care Pharmacy (AMCP). The award-winning research poster is included in the AMCP’s 2020 virtual learning event April 20-24.
Download AMCP research poster
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