1. Unique & Creative Plan Design Suggestions to Help Control Costs
Our Pharmacy Director:
Armand Dilanchian, R.Ph., President, Integrated Health Concepts
Our Medical Director:
David Rearick, DO, MBA, VP of Medical Management , SBS
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network 1

2. Prescription Drug Benefit Update
Armand Dilanchian, R.Ph.
President
Integrated Health Concepts
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network 2

3. Topics Traditional Rx Benefit Design
Rx Benefit Design and Clinical Management
Consumer Driven Rx Benefit Design
Specialty Drug Benefit Design
Value Based Rx Benefit Design
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

4. Traditional Rx Benefit Design
Member Cost Share
Significance
Design informed by client’s utilization data
Common Design Structure
Co-payment
Co-insurance
Deductible
Distribution point (Retail vs. Mail)
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

5. Design with Data
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Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

6. Common Design Elements
Copayment
Two tier vs. three tier
Spread between tiers
Co-insurance
Minimums and maximums
High cost drugs
Deductible
Individual, Family, Retail and Mail
Retail vs. Mail
Mail incentive vs. mandatory
Spread between retail and mail
$4 generic drug programs
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

7. Rx Benefit Design and Clinical Management
Clinical programs as management tools
Prior authorization
Step therapy
Quantity limitations
Controlled substances monitoring
Drug utilization review
Benefit design to promote appropriate utilization
Generics
Second tier
Chronic drug adherence (value-based)
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

8. Consumer-Driven Rx Benefit Design
Deductibles integrated with medical
PBM/Carrier connectivity
Preventive drug list
Open to interpretation
Not consistent among PBMs/Carriers
Cost share designs for preventive drugs
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

9. Specialty Drug Benefit Design
Retail vs. Traditional Mail vs. Specialty Pharmacy
Days supply limits (just-in-time inventory)
Copay/Co-insurance
Prescription benefit vs. medical benefit
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10. Value Based Rx Benefit Design
How it works
A design to encourage adherence to medications when clinical benefits exceed the cost
Built-in incentives to reduce barrier to medication use
Common errors in design
Zero cost share or significant reduction
Adoption of design without evaluating adherence data
Adoption of design where evidence is weak
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11. Summary
Effective benefit design can reduce plan costs and promote appropriate drug utilization
Rx benefits should be based on client-specific data
All designs should incorporate clinical management
Cost share must be balanced
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12. Questions ?
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Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network 12

13. Value Based Insurance Designs
Presented by:
David A. Rearick, DO, MBA, CPE
Armand Dilanchian, PharmD
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Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network 13

14. David A. Rearick, DO, MBA BAN Medical Director
VP of Medical Management for SBS
30+ years Physician Executive
Host of Good Health Is Good Business radio show (
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

15. Value Based Insurance Design - Why?
Drive Behavior Change
End Entitlement Culture
Improve Quality of Care
Clinically Approach to Employee Cost
Based on Healthcare Value vs. Cost
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

16. Value Based Benefit Design Value Based Formulary
What’s in a Name
Value Based Benefit Design
Value Based Formulary
Biometric Based Insurance Design
Evidence Based Design
Benefit Based Co-Pays
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

17. How is VBID done? Medication therapy is the most common
Goal is to increase adherence with medications and hence improve health outcomes and reduce overall health care cost
Focused primarily on a few therapeutic areas: diabetes, cardiovascular, respiratory, depression
Coupled with disease management programs and other corporate wellness initiatives
Drive evidence-based interventions with proven value
Annual eye exams in patients with diabetes
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

18. Unlimited Different Benefit Designs
Which conditions or drug classes?
Diabetes
Cardiovascular: All conditions or a subset
Asthma: All drugs or only long-term controllers
Other
For whom?
All members taking a drug in a therapeutic class
All members enrolled in a disease or wellness program taking a drug in the identified therapeutic class
Members with a particular diagnosis
What’s the change in co-pay?
All drugs in the class are lowered to the same co-pay
generic or $0
A differential is kept between preferred and non-preferred brands & between generic and preferred brands
Some non-essential medications may be up-tiered
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

19. MEDCO’s Experience
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Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

20. MEDCO’s Experience
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

21. Examples of Value Based Benefits
Client
Channel
Co-pay Change
Decrease in member cost
Client A
Retail
All drugs at generic co-pay
47% - 70%
Mail
All drugs at $0 co-pay
Client B
Generic and formulary brands at generic co-pay
2% - 29%
Non-formulary, slight decrease
Client C
Generics at $0
30% - 56%
Formulary brands, slight decrease
No change
Client D
Generics at $0 co-pay
12% - 30%
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22. Medication Adherence 1/1/08 – 6/10/08
Therapeutic Resource Center
Medication Class
PBM Adherence Programs
Retail Adherence
Relative Difference
Diabetes
75.6%
46.6%
62.2%
Blood Pressure
81.3%
53.4%
52.2%
Lipid Lowering
76.5%
52.0%
47.1%
Cardiovascular
Anti-platelet
88.6%
73.9%
19.9%
80.3%
54.6%
76.0%
42.3%

23. Medication Adherence - 4 clients
Change in medication possession ratio, MPR compared with control
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

24. Plan and Do the Data Analytics
Look at where are the dollars being spent, for pharmacy costs, and where available, total healthcare costs (medical and pharmacy).
Review adherence in the targeted classes and compare with peer data and national benchmarks
Evaluate current co-pay and cost-share from the member’s perspective
Model the financial impact of various plan designs
Consider additional ways to increase compliance and improve outcomes
Member education of medication effects, expectations and ways to manage
Education and awareness, especially for management of chronic conditions
Facilitate medication filling from the most effective channel
Automated reminders to members to fill scripts; automatic refills of chronic medications
Online tools to influence member behavior
Promote a culture of health in the workplace
Coordination across all health benefits
Disease management programs
Wellness and disease prevention programs
Cost-sharing is just one piece of the puzzle
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

25. Observations From Four Case Studies
Structure of the VBPD determines member savings and plan cost increases
Not all plan designs are providing clear savings to members
Total as well as plan drug trend and spend increase
Increase in compliance, is not guaranteed, and is usually small
0% - 6%
What is the impact of this level of increased compliance on overall medical spend?
For diabetes, for each 20% increase in compliance there can be a decrease of ~$1,000 in overall healthcare spend.*
*Sokol et al. Medical Care 43: , 2005
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network
Contents are proprietary and confidential. Copyright 2009 Benefits Advisor Network

26. Questions ?
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