Hospitals have been faced with several challenges over the past decade. As the payer mix has changed and reimbursement has transitioned from a pay-for-procedure to a pay-for-performance model, many hospitals have been challenged with tight profit margins and have experienced increased compression in the market. This has led to over 500 hospital mergers and acquisitions since 2008, and this trend is not slowing. Rural hospitals and health systems have been impacted significantly, with over 170 having to close their doors since 2005 due to financial duress.
Now you couple that with the COVID-19 pandemic where systems have had to cancel elective surgeries, which they rely on for profitability. They’re now facing some critical cash shortages. All of this has led them to look for cost-savings opportunities within every area of their organization.
While they’re being tasked to find these cost-savings strategies, we also know that healthcare benefits are a crucial offering they need to provide to recruit top talent and retain employees. The prescription drug program specifically is used more than any other benefit; however, it also accounts for over 40% of their healthcare spend. With 70% of members filling a script each year, 1 in 6 of those members is also taking maintenance medication.
Hospitals also are in a unique position. Their members are both the providers and the utilizers, and so the experience they receive is crucial. With the directive to provide optimal benefits and cap costs, now is the perfect time to reevaluate your hospital clients’ PBM contract.
Watch our on-demand webinar, Optimizing Pharmacy Benefits for Hospitals, to find out how hospitals are addressing their financial challenges using pharmacy benefits strategies that leverage the hospital’s unique resources.