Palo Verde College CTA

Tuesday, October 31, 2006

Change in Pharmacy Services

Folks:

Following up on Ms. Garcia’s information that you received last week, I wanted to send out something concerning the big changes in your pharmacy provider for your health insurance plans here at the College.

Here’s the big news about the big changes: mostly, you won’t even notice them. About all you’ll have to worry about, to begin with, is the fact that you’ll be getting new pharmacy cards in the mail around Dec. 1. After that, the changeover will take place in the dead of night, so that when you get up Jan 1, 2007, your pharmacy services will be provided my a new middleman, Express Scripts.

Other big changes: a) you should end up with better service; b) they offer a website at Express-Scripts.com that you can use for all sorts of things; c) they offer added support for people who need specialty drugs, through a service you’ll hear about called CuraScript; d) their costs will be significantly less, which will cut our insurance renewal rates.

YOUR COSTS, CO-PAYS, PRESCRIPTIONS, DOCTORS, ETC. WILL NOT CHANGE.

ALL THREE PHARMACIES IN TOWN ARE ALREADY SIGNED UP WITH THE GUYS.

ALL YOU SHOULD NEED TO DO IS PRESENT YOUR NEW CARD, STARTING Jan 1., 2007.

OK—SO WHY THE CHANGE?

Here’s the problem. We all know health insurance costs keep going up and up. Well, there are all sorts of reasons for this—including the fact that the costs of prescriptions keeps zooming even faster than the general cost of health insurance. So, everybody’s always looking for ways to cut costs—or at least keep the rise in costs down to a reasonable level.

One way to do this is to encourage competition among companies. So looking for something cheaper (with the same service at least) as our current pharmacy guys, Caremark PCS, Keenan and Associates (the administrators/lawyers/accountants for REEP) starting looking around in November of 2005.

Caremark made a good offer: savings of $486, 473. But as they looked through the Requests for Proposals (RFPs), they found that Caremark couldn’t make as good an offer as the new company, ExpressScripts.

Why? Basically, because ExpressScripts is bigger: economy of scale, the same reason that Price Co or Sam’s Club can buy cheaper, because they buy in bulk.

So, we are setting things up the same way DeltaDental is set up: REEP will get together with other purchasing coalitions like REEP, and, “provide pharmacy benefits at significantly lower costs than any individual client would be able to negotiate on their own.”

Here’s what they’re telling us:
a) ExpressScripts already has 1,743 client groups like ours, and around 55 million members;
b) They’ve never been owned by, and they don’t take, contributions from drug companies;
c) They work on cost-cutting at many levels, including generic drugs;
d) They have a very high customer satisfaction rate;
e) They project savings of $4 million (ten times Caremark) the first year, and $14 million during the length of their contract;
f) They promise distinct improvement in a lot of the support costs, such as dispensing fees;
g) No changes in plan designs, co-pays, etc.
h) No formulary required;
i) Smooth transition to the new provider;
j) Some new plan OPTIONS that cut costs further;
k) Blah blah, blah blah.

Three suggestions: if you have problems, contact either me or Ceci Garcia. Fill your prescriptions so that you’ve got a couple weeks leeway around Jan 1, 2007, just in case. And get on their website—I’ve got the keys to them, and so does Ms. Garcia—to take a look at some of their new services.

One warning (a pretty mild one, but still)—you will be getting some sales pitches about switching to generic drugs. THIS IS ONLY AN OPTION. To sell it, ExpressScripts will be offering a one-time, six-month waiver of all co-pays on one prescription, if you change over. But here’s their argument: a) generics are incredibly cheaper; b) a lot of important drugs are about to go off patent, which means that for the first time they can be offered in generic form. It’s up to you—but generics help cut costs, so they—and everybody else providing prescription services—is interested.

One good thing—ExpressScripts set a number of goals, and has put some money where their mouth is.
a) The plan design will be in their system by the agreed date, or it costs them $10,000;
b) The eligibility data will be entered by the dat, or it’s another $10K;
c) ID cards go out on time, or it’s another $10K;
d) The phone Call Center is up on time, or another $10K;
e) The implementation details get done, or $10K more.

Another good thing—their specialty pharmacy. They’re promising better service, and better patient education, and some of you may have already been contacted.

Drugs are expensive. I’m looking at the list for REEP, 2004-2005: here are some highlights.
a) Lipitor (cuts cholesterols): $106.82 per prescription, REEP paid out $523, 436.79 for it last year.
b) Humira (painkiller for rheumatoid arthritis): $2, 582.86 per Rx, REEP paid out $111, 063. 11 last year. To cover 43 people.
c) Xolair (anti-asthmatic): $6, 706. 89. Per prescription. To cover six (yes, 6) people, it cost $40, 241. 31.
So, we’re looking to keep the costs down. That’s why the changes.

I’m going to a strategic planning meeting all day, Wednesday—so if you have questions, let me know and I’ll see what I can find out. For now, thanks.

R.M. Robertson,
Faculty Rep to the Riverside County Employer-Employee Partnership for Benefits

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