"Business will take a leading role in systematizing healthcare, reducing waste and inefficiencies in the healthcare system in the way that mirrors what they have done in their own companies and industries," said Lee Scott, CEO of Wal-Mart, in a recent interview with The Wall Street Journal.
Scott's vision is proving to be a challenge for many employers. Facing double-digit premium hikes, they struggle to provide high-quality medical coverage at an affordable price. Typically, employers have used cost-shifting as a management tool to decrease their costs. Employers increasingly believe that cost-shifting has been overused and is affecting clinical outcomes. This has caused some employers—Pitney Bowes is one—to develop innovative programs that actually increase pharmaceutical costs, but anticipate a return on investment in the form of better overall healthcare outcomes. Instead of shifting costs to the employee, Pitney Bowes does the opposite. Its program waives out-of-pocket expenses for chronic medications, such as those used for diabetes. Rather than managing short-term costs, the company focuses on increased productivity through better health outcomesOther employers are simply slashing coverage. But whatever the strategy, employers see few alternatives to becoming more active in benefit design and healthcare management. They want more control over the programs that cover their employees and other beneficiaries. Although employers typically do not make therapy-specific decisions, their decisions directly affect the way pharmaceuticals are covered and costs are shared.
Pharmaceutical manufacturers need to recognize these new sentiments among employers, and use their expertise to help companies design benefit packages at a price that keeps their businesses competitive while ensuring that employees continue to receive high-quality medical care. For employers, this often means maintaining good enough health benefits to attract and retain high-quality workers. In many cases, when pharmaceutical sales reps call on employers, they fail to recognize the differences between these new customers and other, more familiar institutions like hospitals and insurers. To maximize the benefit of contacts with employers, manufacturers must understand employer attitudes toward healthcare as well as the ways they can shape coverage.
The interaction between employers and pharmaceutical manufacturers was a hot topic at both meetings. Representatives agreed that pharmaceutical manufacturers must improve their understanding of how employers function in the benefits arena. As employers become increasingly involved in coverage decisions, there will be significant opportunities for pharmaceutical manufacturers to work directly with employers to design drug coverage. However, employers will expect pharmaceutical manufacturers to focus on their needs, which differ from those of familiar pharma customers like managed care and providers.