by Joanne Wojcik
A new survey of customer satisfaction with prescription benefit managers suggests that large employers are generally satisfied with PBM service but would like PBMs to do more to manage drug costs.
The survey also found that two smaller PBMs-Eckerd Health Services and Walgreens Health Initiatives, whose parent companies operate retail drugstore chains-led the pack in satisfaction with overall service and performance and in delivering promised savings. By contrast, Medco Health Solutions Inc.-the nation's largest PBM-was rated lowest by employers among the seven PBMs judged.
The findings are from the "2003 Pharmacy Benefit Manager Customer Satisfaction Report," the eighth annual survey of large employers conducted by the Pharmacy Benefit Management Institute, an independent research and consulting organization in Tempe, Ariz. A total of 468 large employers representing more than 10 million health plan members participated in the recently published survey, which was conducted in June 2003. They were asked to rate seven PBMs: Advance PCS, Caremark Prescription Service, Eckerd Health Services, Express Scripts Inc., Medco Health Solutions, Systemed and Walgreens Health Initiatives.
Overall, the report found that employers were more satisfied with core PBM services. On a scale of 1 to 10, respondents' average score for PBM retail pharmacy networks was 8.8; administrative functions, such as claims processing, rated 8.1 on average; and identification cards, 8.0. Lower average scores were given for service functions linked to cost containment, such as delivering promised cost savings, which was rated 7.2 on average, and formulary management and rebates, which was rated 7.0 on average.
"If there's an employer discontent, it appears that it is with PBMs' control of pharmacy costs and trends," observed Paul Wernick, senior consultant at Watson Wyatt Worldwide Inc. in Minneapolis. "They are less satisfied with that than with networks, customer service and account management."
But employers also might be unhappy with the savings because they didn't establish benchmarks in their PBM performance contracts, suggested Bridget Eber, pharmacy practice leader at Hewitt Associates Inc. in Lincolnshire, Ill.
"Employers really need to be focused on their cost management strategies," she said.
Indeed, the survey found that employers were more likely to be satisfied with the performance of PBMs that are aggressive in managing drug benefits.
Employers reporting their PBMs had a "very aggressive" level of intervention in benefit management gave PBMs an average rating of 8.2 on overall service and performance, while those who said their PBMs had only minimal intervention rated their PBMs an average of 7.0.
When surveyed employers were asked to list the services they thought PBMs needed to improve most, 28% listed disease management programs, followed by formulary management and rebates, cited by 24%.
"Employers are clearly really looking toward managing trend. It's been out of control for a while," Ivy Silver, president of the Commonwealth Consulting Group, a benefit consultant based in Philadelphia, said, referring to health care inflation.
She added that PBMs are in the best position for drug cost containment because they are in contact with members when prescriptions are filled, whereas health plans often don't receive information about a patient's prescribed drug treatment until after processing a claim, which can be weeks or even months later.
Interestingly, the two PBMs owned by retail drugstore chains scored the highest of the seven PBMs in several areas, with ratings of 8.0 and higher. Eckerd received the highest score for delivering promised savings, with an average rating of 8.3, while Walgreens scored 8.0 in this category.
At the other end of the spectrum, Medco was rated lowest in nearly every category, the survey found. Medco's lowest ratings were for delivering promised savings, where it scored an average of 6.8, and disease management services, where it received an average of 6.5.
Michael Deskin, PBMI president, said he was not surprised that Eckerd was the leader in the 2003 survey. The Pittsburgh-based company has scored consistently well in the past five PBMI customer satisfaction surveys, he said.
"It's somewhat easier for small PBMs to provide consistently high service than large PBMs," he said. "The larger PBMs, they have a different view of the marketplace. They may go out and chase certain blocks of business, but they're not as concerned about maintaining those as they are their other blocks. As such, they've developed classes of care, and some clients get less attention than others."
"We grew up as a company out of retail, where service is pre-eminent. Otherwise, people don't walk through your door anymore," said Lloyd McDonald, vp-marketing and product development at Eckerd Health Services in Pittsburgh. "We are very execution- and operationally oriented. We do what we say we are going to do."
In response to the survey findings, a spokeswoman for Medco said that company executives did not think the PBMI survey was representative "of our thousands of clients who endorse our services every day by virtue of our extraordinary 95% client retention rate."
"We have just had a historic contract renewal with UnitedHealth Group, and we ranked first in most criteria, including service and quality in network, mail order and administrative capabilities in the Commonwealth of Virginia's search for a PBM," she added.
Sean Brandle, a vp at The Segal Co. in New York, also was skeptical that the PBMI survey provided an accurate picture of PBM performance. "I see one survey, with two PBMs scoring well. But they aren't leaders in terms of responses," he said, pointing to the number of employers that rated Eckerd and Walgreens.
Thirty-eight employers representing 535,000 plan members enrolled in Eckerd's PBM, and just 15 employers representing 219,000 members enrolled in Walgreens' plans participated in the survey. This compares with 80 employers representing almost 1.9 million members in Medco's PBM.
Ralph Kimmich, director of benefits and compensation at Southwest Airlines in Dallas, also criticized the survey, saying it's difficult to easily quantify the effectiveness of PBMs because there are so many variables.
"We don't know what the contract terms were" for these employers, Mr. Kimmich said. As for cost savings, "we found that the price of ingredients is the slowest-growing portion of drug costs. It's utilization, new drugs and an aging workforce" that are contributing to higher prescription benefit costs, he said.
Copies of the "2003 Pharmacy Benefit Manager Customer Satisfaction Report" are available from the Pharmacy Benefit Management Institute for $150 each. They can be ordered online at www.pbmi.com.
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