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Through a rapid-fire assessment led by pharmacy and employee health experts, GE Healthcare Camden Group unearthed $3.4 million to $8.1 million in annual savings across this client’s health plan, employee pharmacy program, and hospital pharmacy operations, enabling the client to position itself for financial stability.

Background

This two-campus East Coast health system comprises 600 inpatient beds in two hospitals, an outpatient facility, and various primary and specialty care practices across the region. Accredited by The Joint Commission and a three-time recipient of Magnet status, the system possesses a solid reputation for quality patient care, innovations in professional nursing practice, and nursing excellence. In the face of increasing financial pressure, the client sought assistance in reviewing expenses across the organization. They specifically identified historical and anticipated future employee medical plan expenses as areas of concern. The increased plan costs were exacerbated by a decision to discontinue employee participation in the 340B program, which had a significant financial impact on the health plan. 

Our Approach

With a multi-disciplinary team comprising experts in pharmacy and employee benefits, we conducted a rapid-fire assessment that unearthed significant insight to help pinpoint specific opportunities. In reviewing the health plan, we found medical plan expenses totaling $20 million per year, with hospital proposed cost-shifting strategies that would not cover the estimated plan increases of 8.9%. In discussions with pharmacy personnel, we discovered opportunities to improve pharmacy operation and expansion of the 340B program outside the employee health plan. They also identified a number of cost-savings strategies for the health plan as well as pharmacy operations.

After the assessment, we worked collaboratively with departmental leaders and staff from the client to form recommendations that would enable the client to reduce costs and achieve its strategic goals.

Recommendations to reduce costs and improve the value of the employee health plan:

  • Provide revised pricing to the claims administrator for domestic claims to improve the ability to benchmark and monitor value of plan benefits
  • Adjust internal financial statements to capture domestic claims and all associated plan expenses
  • Develop a comprehensive strategy for short- and long-term cost containment
  • Align vendor services and rates to better meet the needs of the organization
  • Re-evaluate strategy of spousal surcharges and employer and employee contribution levels for spouses and dependents
  • Review plan differentials to maximize use of domestic resources
  • Utilize internal resources to implement robust, employee population health model

Recommendations to reduce costs and improve efficiency of the employee pharmacy program:

  • Implement a comprehensive strategy that maximizes 340B
  • Enhance formulary management and contracting opportunities

Recommendations to reduce costs and improve efficiency of the hospital pharmacy:

  • Develop and implement a strategic plan to maximize 340B benefits for all qualified outpatients
  • Qualify infusion services as part of 340B
  • Implement pharmacy cost-savings strategies, including indigent drug recovery, contract optimization and drug protocols

Results

  • $3.4M to $8.1MAnnual savings across the health plan, employee pharmacy program, and hospital pharmacy operations
  • ServiceImproved service levels to employees and patients
  • Strategies
    Creating a sustainable employee benefit program

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