The health care industry's Great Resignation: What employers can do

The Great Resignation has taken our country by storm, and there’s perhaps nowhere its effects are felt more acutely than the health care sector. Over the past two years, those in the health care industry have been overburdened and underappreciated, leading to increased rates of burnout and driving many out of the industry altogether.

While the increased stress on the health care labor market may not be something employers can solve, there are things they can do to stem the rate of resignation and ensure employees have the support and resource they need to make it through the pandemic. It all starts with a stellar benefits package.

One might think that a health care company has it all figured out, but employers in the health care sector face many of the same issues related to cost, access and quality as those in other industries. Becky Grant, director of business development for RxBenefits, recently shared some insights on how the health care industry can stem the tide of worker resignations.

What are the unique challenges facing hospitals in terms of employee health benefits?

Hospitals are both health care providers and employers, and as such, need to ensure that their staff is well protected. Hospital employees expect strong pharmacy benefits and utilize them at a higher rate than other industries. In addition, as health care staffing challenges and physician burnout continue to impact the industry, many hospitals are seeking to make their benefits packages richer in order to compete for candidates at every level.

However, making sure staff have the best health care benefits is becoming increasingly costly, as the prescription drug benefit within hospitals accounts for over 40% of their health care spend, and hospital margins are tightening due to multiple forces. For example, due to the COVID-19 pandemic, many hospitals are facing losses around $1 million per day. Hospitals are thus looking for cost-saving options wherever possible, but want to ensure that any changes they make are not disruptive to members.

Health care, and in particular pharmacy benefits, is a crucial offering that hospitals need to provide in order to recruit and retain talent. As hospitals continue to feel the effects of the COVID-19 pandemic and the Great Resignation, however, they need a way to provide rich benefits while keeping costs in check.

What are some common mistakes hospitals make when it comes to pharmacy benefits?

Applying a “one-size-fits-all” model to pharmacy benefits vs. customizing the plan based on member needs is a common mistake. Each hospital has specific goals and resources, and its members have unique needs. In order to optimize the pharmacy benefits plan, it’s important for hospitals to understand their employee demographic, health trends and prescription patterns.

By leveraging data analytics, hospitals can gain full visibility into their plan’s performance, utilization, and potential risks, so they can customize a plan that improves the health of their employee population at the lowest cost. In addition, by working with an independent third-party advocate to apply clinical expertise to this data, hospitals can implement hyper-targeted strategies to help address any potential issues, such as dose errors — which impact both the member and the employer. After all, the most wasteful drug is one that should never be taken in the first place. Clinical experts can help ensure the plan is directing members to the right drug, at the right dose, at the right time.

There is also a common misconception that making a change to pharmacy benefits will disrupt employees, so it’s better not to make a change at all — especially with employee retention being a primary focus for hospitals. But by maintaining the status quo, hospitals often miss out on significant prescription drug savings opportunities. Additionally, it’s important to note that the majority of pharmacy costs are being driven by an average of 0.5% of members — and thus, hospitals that choose to optimize their benefits plans can do so without disrupting a large portion of their membership.

Consultants can help hospitals make the most informed decisions about their benefits by helping them design a plan with the greatest financial savings that impacts the lowest percentage of their member population. Again, this comes back to applying data analytics and gaining visibility into the plan and drug utilization trends, among other factors. Ultimately, making changes to the pharmacy benefits plan will inevitably cause some disruption, but if it will result in lower costs, improved health outcomes, and a superior service experience and less everyday frustration for members, it’s worth examining.

Finally, many hospitals are not taking advantage of hospital-specific resources. In order to ensure that hospitals are receiving maximum value from their pharmacy benefits plans, it’s important for them to effectively leverage their own unique resources, in particular their onsite pharmacies. This means hospitals need to be in a self-funded, carved-out arrangement with a financially advantageous contract that enables them to fill high-cost specialty drugs at their own pharmacies. By encouraging members to utilize the on-site pharmacy, hospitals are able to optimize savings opportunities. The 340B program provides additional opportunities for cost savings, so it’s important for hospitals to have a partner or consultant that regularly evaluates their programs to ensure members who meet the necessary qualifications are receiving care under the plan.

How can hospitals balance finances with providing competitive benefits plans that attract and retain staff?

Implementing a highly restrictive pharmacy benefits plan is not an option ​​for hospitals, which play a dual role as both health care provider and payer. On average, 70% of hospital plan members take prescriptions each year, which is 25% higher utilization than the typical commercial plan.

A hospital’s prescription drug program should be carefully designed and managed to balance access and cost while ensuring a top service experience for hospital employees, who expect a rich benefit.

In order to accurately tailor the pharmacy benefit plan design and deploy customized clinical strategies, benefit advisors should work with hospitals to help them understand the exact utilization of the plan’s membership. This includes:

• Working with an independent benefits partner that understands the member population and uses hospital claims data to identify risk areas and how those are driving pharmacy costs
• Designing a plan that promotes hospital-owned fulfillment channels (i.e., the hospital’s on-site pharmacy) first, with frequent plan design evaluations
• Evaluating high-cost brands and specialty medications members are taking, and whether there are cheaper, generic options available, when appropriate
• Accessing Manufacturer Copay Assistance Programs (MCAP), when available, and 340B Drug Pricing Discounts, if eligible

Hospitals are looking for creative ways to cut the cost of benefits without disrupting their already burnt-out staff. What are some of the best strategies they can employ, and are there any they should avoid?

There are a few creative ways to help hospitals cut the cost of benefits without disrupting staff. The first way is to carve out pharmacy benefits, if this is not already done. Allowing the pharmacy benefit to remain bundled, or “carved in” with a medical carrier means hospitals are going to pay more than is necessary for the pharmacy benefit. By self-funding and carving out their pharmacy benefits, hospitals gain full control over selecting a pharmacy benefits partner, network, and stop-loss carrier that align with the hospital’s service needs and savings objectives. In all, carved-out arrangements, allow hospitals to:

• Negotiate a more transparent contract with competitive rates and rebates
• Access the most clinically appropriate medications at the lowest net cost
• Provide employees with service they will appreciate

It’s important to note that success in this effort depends on selecting a partner that is uniquely equipped to secure a more transparent contract with competitive rates and rebates, provide clinical oversight focused on drug appropriateness and cost, and deliver on a service experience that exceeds the employees’ expectations.

Do you have any other tips for how hospitals can provide pharmacy benefits that both support employees and improve the bottom line?

Another tip that can help hospitals provide pharmacy benefits that both support employees and improve the bottom line is employing a clinical utilization management strategy. Over the past 10 years, pharmacy benefits spending has changed dramatically, with high-cost specialty drugs now accounting for 40-50% of overall prescription drug spend. And for most employers, just 1% of their members are driving 40% or more of pharmacy benefits costs. Implementing a clinical utilization management strategy as part of a pharmacy benefits plan can help reduce costs for the employer. At the same time, it increases value and safety for members by addressing high-cost, low-value pharmacy claims.

In order to ensure that hospitals have an effective utilization management strategy, they should:

• Implement a process of reviewing high-cost pharmacy claims data and ensure members meet the FDA-approved criteria for receiving medications
• Optimize the medication dose, as many high-cost claims are for parity priced (same price for all strengths) or weight-based medications
• Establish regular communications with member cases to help to manage their case and make medication adjustments as needed. Member conditions can change and so can their response to therapy
• Conduct formulary reviews and updates on a regular basis to ensure all medications are clinically and financially responsible

Lastly, working with an independent advocate who can help align their PBM contract terms with the reimbursement model they desire, hospitals and health systems can optimize their pharmacy benefits by securing the most competitive rates and rebates year after year. Specifically, hospitals should look for an independent advocate with the goal of:

• Increasing the economic value of the hospital’s pharmacy investment by ensuring the plan is managed to the lowest net cost
• Improving the clinical value by implementing the right programs to maximize employee health
• Expanding the value for members by delivering an exceptional service experience that is unrivaled in the industry