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The 3.7 percent increase in 2006 is significantly lower than the 14percent increase reported nationally and compared favorably to other coalitionprograms, where reported increases for 2006 ranged from 4.4 percent to 5.6percent. The overall cost increase was less than 1 percent in 2005 and 4percent in 2004.
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PBGH is an employer-led coalition of more than 60 organizations. ItsPrescription Drug Program offers members of the group the opportunity topurchase prescription drug benefits in a carved-out, self-insured arrangementwith PBGH coalition discounts. Additionally, an audit of the Program for 2005and 2006 paid for by PBGH validated the coalition's financial and serviceguarantees for program participants.
Arxcel, an independent auditor of pharmacy benefit managers, found noerrors due to benefit designs when auditing the claims paid for the 26 memberemployers participating in the program. The Prescription Drug Program alsoprovides additional financial guarantees above the individual employercontractual provisions. The audit results revealed a missed guaranteeresulting in additional payments back to the participating organizations ofmore than $2.6 million.
"We work hard to meet our clients' plan goals and are committed toproviding programs that work to improve customer satisfaction and plansavings," said Howard McLure, president of Caremark Pharmacy Services, thepharmacy benefits manager for PBGH's Prescription Drug Program. "The resultsof the PBGH program demonstrate the value of our relationship, as well as ourcommitment to help develop opportunities."
Caremark received exceptional marks for its accurate administration ofclaims paid, with a less than 1/100th of a percent error ratio. The auditencompassed a financial and administrative review of 8.4 million paid claimsinvolving more than 200 plans, some with very complex benefit designs.
"The results of our program over the last three years have been veryimpressive and extremely consistent especially when you take into account that20 percent of the members covered under the program are over 65 years old,"said Christine Whipple, executive director of PBGH. "Working together witheach member company, the PBGH management team is proactive in analyzingexperience and presenting and implementing solutions that produce the resultsthe employers have recognized."
Even though the overall cost increase for 2006 was in the single digits,participating member organizations saw a 22 percent increase in the cost ofspecialty and biotech drugs. The increase has resulted in employers makingbenefit design changes to help manage this component.
To ensure its members continue to receive competitive financial andservice guarantees under the program, PBGH selected Caremark as its PBM forJanuary 1, 2008 through December 31, 2010 following a rigorous vendorselection process. Caremark's current agreement with PBGH is set to expire atthe end of 2007. The new agreement provides improved financial terms alongwith multiple networks and Specialty Pharmacy management options.
About the Pittsburgh Business Group on Health
Founded in 1981, the Pittsburgh Business Group on Health (PBGH) is a non-profit organization and business-only coalition representing 64 memberorganizations, more than 1 million employees, dependents and retirees, andover $3 billion in health care expenditures. The organization strives toimprove the delivery, cost and quality of health care through implementing andsupporting quality initiatives, analyzing health care data and resources, andproviding forums
