VIDEO: Value-Enhanced Pharmacy Networks

Mar 3, 2015
How smaller retail pharmacy networks deliver value and cost savings for members and payers.
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Is there a shortage of places to get a cup of coffee? What about grabbing a burger? With approximately 11,000 Starbucks stores and 14,000 McDonald’s locations across the United States, you don’t have to go far to get your fix.

By comparison, Express Scripts’ preferred retail pharmacy network, known as Express Advantage Network®, offers roughly double that – with 34,000 retail pharmacies available for member use.

How Smaller Retail Pharmacy Networks Deliver Greater Value

Express Scripts helps our clients meet their members’ diverse pharmacy needs by providing the best retail and home delivery pharmacy options to balance access and cost. Express Scripts home delivery offers safety, convenience and cost-savings for members taking maintenance medications. Acute medications needs, however, will always require the care of a nearby retail pharmacy.

This need is why Express Scripts works with clients to establish preferred retail pharmacy networks where members can get their acute medications at the lowest cost.

By encouraging a subset of pharmacies (out of 65,000 total) to compete on price, we lower copayments for members and decrease total costs for plan sponsors, all without sacrificing member choice, access or care.

In fact, Express Scripts research confirms preferred network pharmacies are, on average, nearly one mile closer to the member’s home than the member’s current pharmacy: the average member lives 2.6 miles from a preferred pharmacy and 3.4 miles from the pharmacy they most frequently used.

Best Practices

Preferred pharmacy networks clearly deliver better value. However, we know members may not initially see it this way; none of us likes perceived “limitations.”

This is why it’s so critical to consider the member experience when establishing your preferred network. For optimal success and member adoption, consider the following:

  • Geographic access requirements: Ensure members will not have to travel much farther to reach a preferred pharmacy.
  • Communications:  Share information with members early and often, highlighting the benefits of the new preferred pharmacy network and the true savings available.
  • Seamless transitions: Engage with retail providers in the network to ensure the member experience is easy and smooth.
  • Home Delivery: Highlight the additional savings and convenience available by moving long-term medications to Express Scripts Home Delivery Pharmacy.

In a recent example, to address our clients’ needs for cost savings, Express Scripts removed a major national pharmacy from a retail pharmacy network.  Following the best practices above, we ensured minimal member impact:  98% of our members who were utilizing one of these pharmacies were within three miles of an alternate, in-network pharmacy.

A Tried and True Strategy to Manage Healthcare Cost

The concept of requiring or encouraging members to use preferred providers to reap maximum cost savings is not new to healthcare. Physicians, dentists and hospitals all are routinely categorized as either preferred or non-preferred options – a strategy which aligns the best interests of the patient, the provider and the plan sponsor. This means without a preferred pharmacy strategy, plan sponsors and members are exposed in this area of their healthcare spend.

Express Scripts works with clients to offer a variety of options that provide a range of access and cost options to meet individual client benefit design needs. For example, the Express Advantage Network is a choice-based solution that allows members to choose among tiered retail networks and pay different copayments within each tier.

When clients and benefit providers take a strategic and proactive approach to implementing value-enhanced pharmacy networks, everyone benefits from lower costs, equivalent access and improved care.

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