According to recent study by Business Group on Health and the Kaiser Family Foundation, 90% of large employers believe that the cost of employee-sponsored healthcare and pharmacy benefits will become unsustainable within the next decade.
A major contributing factor is the cost of prescription drugs, which has risen 9% annually over the past ten years. For employers, this trend has increased the cost of healthcare for plans. For employees, it translates to higher deductibles and copays.
A Reality Check
As the healthcare marketplace continues to rapidly evolve, including rising costs, employers and benefit advisors are facing growing pressure to keep costs down while continuing to provide high-quality care to employees.
When it comes to controlling the cost of prescription drugs, pharmacy Benefit Managers (PBMs) have long been at the center of this challenge, but the traditional PBM model, often driven by profits, hasn’t always been in the best interest of member care or the employer’s bottom line.
This is where the fiduciary PBM model comes into play, offering a transformative solution that not only benefits the bottom line, but also prioritizes the well-being of members.
The Big Difference the ‘F’ Word Can Make
A fiduciary PBM is a one that is legally and ethically required to put the interests of its clients above all else, including its own profits. Unlike traditional PBMs, which may have conflicts of interest and profit incentives tied to formulary decisions, pricing, or rebates, fiduciary PBMs operate with complete transparency and a member-first philosophy, focusing solely on the best interest of the employer and plan members.
This means that there are no hidden rebates or kickbacks that benefit the PBM at the expense of plan nor any profits from dispensing medications. It’s about providing the most effective and affordable medications to employees and ensuring that they get them at the lowest possible cost. This typically results in a 30%-50% reduction in plan spend per member per month (PMPM)—with no change in benefit design—and a 30% (or more) reduction in out-of-pocket cost for plan enrollees.
Why is This Alignment with Member-First Principles So Important?
The importance of a member-first approach cannot be overstated. For employers, offering a benefits plan that focuses on the health and satisfaction of employees can improve workforce productivity, reduce absenteeism, and promote overall well-being.
In the long run, that means lower healthcare costs and a more engaged population.
Cost Savings and Transparency
One of the most significant advantages of the fiduciary PBM model is the level of transparency it offers based on ERISA defined terms. Traditional PBMs and many “transparent PBMs” often have hidden fees, kickbacks from drug manufacturers, dispensing profits, and opaque pricing structures that inflate the costs for employers and members. This can result in inflated drug prices, higher premiums, and a general lack of clarity around the true cost of medications. “Transparency” is not a legal term. “Fiduciary,” as defined by ERISA and embraced by US-Rx Care, is legally binding, which is why plan fiduciary status is not accepted by traditional and transparent PBMs. It can’t be without violating its core principles inherent in those conflicted PBM models.
On the other hand, Fiduciary PBMs—like US-Rx Care—offer full transparency in pricing and reimbursement, working directly with employers to ensure the lowest possible costs for prescription drugs while maintaining high-quality care. By eliminating conflicts of interest, fiduciary PBMs also pass 100% of savings directly onto employers and members. This means that employers can expect better value from their pharmacy benefits program, and employees will benefit from lower out-of-pocket costs and better access to the medications they need.
Impacts on Future Growth
The fiduciary PBM model isn’t just about saving money in the short term—it also sets the stage for sustainable, long-term growth for both employers and their members. By maintaining transparency and focusing on cost-effective solutions, employers are able to reinvest the savings into other areas of their business, whether it’s improving employee benefits or income, enhancing health programs, or even offering more comprehensive care options.
It’s truly a win-win!
By prioritizing the long-term needs of their clients and members, fiduciary PBMs are also better equipped to navigate the evolving healthcare landscape and provide solutions that can scale with the growth of the organization. This unique future-proof approach helps employers plan for tomorrow while addressing the needs of today.
The US-Rx Care Solution
Since our founding in 2007, US-Rx Care has built our fiduciary model around the core principles of ERISA-defined transparency and conflict-free accountability in the best interest of the plan and enrollees always. With no conflicts of interest, no misaligned profit incentives, no benefit constraints, and no waste, employer groups can trust that they’re getting the best deal and best outcomes possible.
If you’re ready to make the shift toward a fiduciary PBM solution that effectively mitigates risk while offering substantial savings and better long-term outcomes, let’s talk about what US-Rx Care can deliver for you.
In the meantime, click below to see how our model helped a multi-state hospital group save more than $10 million in annual drug costs!
Reach out to schedule a meeting: usrxcare.com/contact/