Archive | March, 2010

Are You Using A Mystery Shopper / Caller Progam?

One of the programs we used very effectively at Express Scripts to test our call center was a “mystery shopper” program.  Much like the name implies and has been used in retail for years, this process had a person calling into the call center and asking a series of questions about plan design or other aspects.  This was a great way to see if training had worked and understand the experience that our members had. 

I honestly don’t remember exactly how we set this up to pass the authentication process, but I believe we probably created “dummy” members in the eligibility file with a name and member ID that could be used by the mystery shopper. 

Those calls were then ranked based on quality of response, consistency of response, first call resolution, and other aspects.  This testing process was continued until the quality scorecard passed a certain level. 

With the increasing complexity of plan design, this is something that everyone should look at.

Why Don’t All PBM Clients Save With Mail Order?

This is one of those questions that eludes many people so let me try to explain it here.  It’s one of the major constraints for PBMs in terms of driving mail order volume.  Most (all) PBMs select patients to target for retail to mail programs based on a win-win-win criteria.

  • Does the patient save money?
  • Does the plan sponsor save money?
  • Does the PBM make money (net of costs of acquisition)?

In most cases, the patient will save money since the default plan designs incent mail use.  Typically plans are set up to be roughly 2x the retail copay meaning that you get a 90-day supply for twice the cost of a 30-day retail supply.  The only time that this sometimes doesn’t work is on generics where the mail order price could be more than the retail price.  Which shouldn’t happen if you have a MAC (maximum allowable cost) list being used at both retail and mail.

BUT, the problem for clients is that over time as copays have gone up it’s possible that the copay savings they give to the patient as an incentive to choose mail could outweigh the savings they get from the PBM.  For example:

  • Let’s assume it’s a brand drug.
  • Let’s assume that the average cost for a 30-day supply is $100 (and therefore $300 for a 90-day mail order supply).
  • Let’s assume that the average discount at retail is 18% and the average mail order discount is 23%.  (i.e., the client pays $82 for a 30-day supply at retail and $231 for a 90-day supply at mail)
  • Let’s assume that the copays are $30 at retail for the brand drug and $60 at mail.  (i.e., the client is passing on $30 of their savings to the patient)
  • Therefore, in this case, the client is saving (pre-copay) $15 by moving a drug to mail order.  (5% incremental discount times the $300 drug cost)
  • The client saves $15, BUT they pass on a $30 copay savings to the consumer meaning that they pay an extra $15 for each of these brand scripts moved to mail.  PROBLEM!

So, the question is what to do here.  Well, first most PBMs or consultants should be recommending mail order copays that are 2.5x or more the retail copay.  AND, they should be recommending differences in the copay multiplier based on the tier and the actual discounts received to make sure that the plan sponsor is not upside down.

At this point, you should be saying “well this seems so easy”, BUT it’s not.  Plan sponsors don’t want to reduce the copay savings for consumers because it’s viewed as a takeaway or viewed as not being competitive.  They are stuck with this 33% savings framework that worked when copays were $10-15.  It’s a real issue which every account team within the PBMs should be focused on.

Now, on the final point…the PBM making money.  I’ve already talked about this many times.  The PBM makes money on generic medications at mail.  This margin underwrites all the other business which is often a loss leader.  [Or at least this was the model a few years ago as some people remind me.]

Communications Key To Mandatory Mail

I had an interesting question today about whether I thought mandatory mail would make a comeback.  I haven’t heard much lately about mandatory mail.  Rather than mandatory mail, I hear more people talking about restricted networks or programs like Maintenance Choice.  The follow-up to the question was why clients don’t implement mandatory mail.  It’s an easy question…they don’t implement mandatory mail because it’s disruptive.

So, how can clients make it less disruptive?  Use communications.  No one likes change.  But, people who understand change and why change is happening are less likely to be upset.  (BTW – You’ll never make everyone happy.)  So, why don’t people use communications with mandatory mail?  Because they see it as an unnecessary expense since those people will be forced to mail anyways.  That’s old school.

If you effectively communicate with members before the plan is implemented and each time they fill a prescription at retail, you can make it an easier process.  The goal should be to drive adoption of the plan and avoid point-of-sale (POS) rejects which might impact adherence.

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