Achieving a 12% Savings on a New PBM Contract

How Truveris Helped One Labor Union’s Health & Welfare Fund Stay True to its Members-First Philosophy
Bringing Transparency to Prescription Benefits
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Labor union health & welfare funds often face a tough challenge: to provide the most robust benefit plan available and still manage costs.

For one fund in particular, fulfilling this mission was becoming increasingly more difficult due to factors outside of its control, like rising drug costs. The fund’s leadership team wanted to avoid common pharmacy benefit alternatives which try to shift costs to members, exclude more expensive drugs, or stop providing specialty drugs altogether. With the help of Truveris, the fund was able to overcome a major financial setback as well as constantly increasing drug prices while maintaining its philosophy and commitment to its members’ quality of life.

The Cost-Savings Dilemma

A few years ago, the fund’s ability to remain true to its members-first mission was on shaky ground. “When we first started working with Truveris, we were running a deficit,” said one of the fund’s trustees.

The fund was trying to juggle the task of managing its reserves, member expectations, and ongoing negotiations. An arduous task that any labor union or government administrator knows seems almost impossible without having to shift costs elsewhere.

With a frozen contribution level and not having negotiated a new collective bargaining agreement in a number of years, the fund was facing the very real possibility of going out of business.

Clarity, Backed by Data & Analytics

The struggle to provide members with the best prescription drug coverage at a reasonable cost is becoming universal for prescription benefits plan
administrators. When union groups and employers are trying to balance maintaining reserves and at the same time provide a benefit plan that best upholds their members’ quality of life, there often comes a breaking point.

“For many of our members, because of their pharmacy benefit, they’ve had the ability to maintain their health and drug needs without any more money coming out of their pockets,”

Truveris’s main objective is to provide union groups and corporate employers with pricing transparency and a bill review process that helps them lower costs without impacting their members’ experience. At first, the fund’s team was skeptical about the efficacy of the Truveris reverse auction bidding process.

But when the Truveris team used its data and analytics capabilities to run the reverse auction, the trustee became a believer. The bidding process resulted in a new PBM contract with a savings of nearly 12% from the fund’s incumbent plan.

“Now, the Truveris team is who I depend on to provide guidance to sustain our fund going forward,” the trustee said.

Staying True to the Mission

 

From a considerable cost-savings with their new PBM and ensuring that they aren’t losing any more money through claims, the fund has been able to decrease its deficit while maintaining its members’ level of benefit. This has resulted in a direct impact on members’ lives.

“For many of our members, because of their pharmacy benefit, they’ve had the ability to maintain their health and drug needs without any more money coming out of their pockets,” said the trustee. Through the Truveris claims-monitoring program, the fund has been able to make sure its PBM is actually meeting performance guarantees. Over the past four months, the funds’ bills have been lower, allowing them to maintain cash flow and keep their reserves current.

Truveris is committed to helping solve sustainability issues, as experienced by this fund and other labor clients. Rising drug costs will continue to pose difficult  questions and will require prescription benefits plan administrators to strategically plan for the future. As a company, Truveris is looking forward to helping organizations efficiently manage rising prescription costs without the need to degrade member benefits.

PLAN PARTICIPANTS

12,000

ANNUAL SPEND

$40 million

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