New research provided by Blue Cross and Blue Shield of Minnesota highlights cost and health advantages for employer-based plans
Eagan, Minn. (July 17, 2023) — According to a new two-year analysis released by Blue Cross and Blue Shield of Minnesota (Blue Cross), employer-based health plans with fully integrated medical and pharmacy benefits can generate an average of more than $400 in annual savings on a per-member basis when compared to non-integrated options.
The analysis examined 2020 and 2021 data from more than 490,000 Blue Cross members enrolled in self-insured plans, in which an employer determines the overall coverage structure and specific benefits offered to its workforce.1 The group was then divided between Blue Cross members with integrated coverage utilizing Prime Therapeutics (Prime) as the integrated pharmacy benefit manager (PBM); and those in Blue Cross plans paired with separate vendor contracts to manage pharmacy benefits. The analysis utilized a member-matching algorithm to account for baseline population differences and severity of illness.
Results show that medical costs for members in the integrated model group with Prime as the PBM were nine percent lower than those in a non-integrated model, equating to an average of $422 in savings on a per-member per-year (PMPY) basis. When compared with other integrated options within the broader health insurance industry, the Blue Cross savings are nearly triple the PMPY savings cited earlier this year by another leading national insurer.
In addition to evaluating medical costs, the Blue Cross analysis compared the rate of hospitalizations and emergency room visits between the two member groups. Results showed a 17 percent lower hospitalization rate and 13 percent reduction in emergency room visits with the integrated model compared to non-integrated.
“This research validates the true value that members receive when their plan sponsors opt to integrate medical and pharmacy benefits instead of taking a siloed approach,” said Randy Hanna, vice president of pharmacy at Blue Cross. “The report also underscores why it makes such good sense for employers to have one point of contact when managing medical and pharmacy needs.”
Additional analysis took place using member data associated with at least one of ten chronic conditions2, including high blood pressure (hypertension), high cholesterol (hyperlipidemia) and rheumatoid arthritis. The conditions were then categorized as either specialty or non-specialty. The results consistently underscored the cost and health benefits of an integrated model.
“An integrated approach enables Blue Cross to see the whole person and coordinate coverage with a full view on optimizing health in the most effective and efficient ways,” said Hanna. “These are results worth celebrating.”
1 The analysis utilized a limited dataset of PMPY medical cost among 492,565 commercially insured members, divided between 232,894 carve-in members and 259,671 carve-out pharmacy benefit services, continuously enrolled during 2020 through 2021.
Comparisons were between two large self-funded administrative services only (ASO) groups of Blue Cross and Blue Shield of Minnesota: one with integrated (carve-in) pharmacy benefits through Prime Therapeutics and the other with separate (carve-out) pharmacy benefits.
Research excluded members with a major change in benefit design (change in medical benefits from or to a consumer directed health plan); a change in insured product type (preferred provider organization to a health maintenance organization); change in pharmacy coverage; or enrollment at any time in a government program (for example, Medicare, Medicaid) during 2020 through 2021.
Differences between groups remained statistically significant when excluding impact of high-cost members with $250,000 or more in annual covered costs.
2 Sub-analyses were performed separately and independently for a total of ten chronic conditions. The eight non-specialty drug conditions of asthma, coronary artery disease (CAD), chronic obstructive pulmonary disease (COPD), congestive heart failure (CHF), depression, Type 2 diabetes mellitus (DM), hypertension (HTN), and lipid storage disorders were assessed as one group. Members with a specialty drug condition of either rheumatoid arthritis (RA) or multiple sclerosis (MS) were assessed as a separate group.
An electronic copy of the full report is available upon request from the media contact at Blue Cross and Blue Shield of Minnesota.
About Blue Cross and Blue Shield of Minnesota
For 90 years, Blue Cross and Blue Shield of Minnesota (bluecrossmn.com) has supported the health, wellbeing and peace of mind of our members by striving to ensure equitable access to high quality care at an affordable price. Our 2.5 million members can be found in every Minnesota county, all 50 states and on four continents. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association.