Total Cost of Care
Drive greater value and better outcomes through integrated pharmacy and medical benefits
With pharmacy costs projected to significantly increase over the next several years, many employers continue to look for ways to control costs and create better employee experiences. Learn why an integrated pharmacy and medical benefits strategy could be just what the doctor ordered.
Managing Total Cost of Care
Total Cost of Care (TCOC) refers to the total amount an organization spends on healthcare and health benefits for employees and their dependents. While the concept is straightforward, understanding and managing the variables that impact your organization’s health plan costs can be significantly more complex.
Overall healthcare costs are estimated to rise about 7% in 2024, with approximately 16% of these costs stemming from costly prescription drugs and gene therapies.1 As pharmacy costs increase, organizations need proven strategies and solutions to keep costs in check — as well as keep their employees healthy.
According to a recent study, 99% of large employers said they were concerned about prescription drug trends.2
In recent years, prescription drugs accounted for about 21% of employers’ healthcare costs, with more than half of pharmacy spending going to specialty medications.2
Without a stronger focus on improved care management for your employees, effectively controlling costs for your organization may become increasingly difficult.
Accessing pharmacy data can help
In an effort to reduce costs, many organizations have opted to carve out pharmacy benefits. However, our experience shows that separating medical and pharmacy benefits often causes fragmented care, a negative employee experience, and higher long-term healthcare expenses.
By carving out pharmacy benefits, your health plan lacks timely access to important prescribing data needed to appropriately manage your employees’ care. That’s why an integrated pharmacy and medical benefits strategy can benefit the health of your workforce and your organization.
In 2022, pharmaceutical expenses in the U.S. grew 9.4% compared to 2021, totaling $633.5B. This increase was driven by a 5.9% increase in utilization, a 1.7% increase in price, and 1.8% increase in new drugs.3
Data shows pharmacy integration can lower costs and enhance care quality4
Average industry savings of
- $148 PMPY (per member per year)
- 15% lower hospitalization rates
- 7% fewer emergency room visits
Some Anthem clients who also have our integrated pharmacy solution, CarelonRx, see savings of up to $368 PMPY.
The advantages of integration
An integrated pharmacy strategy can have a positive impact on TCOC. It’s also clear that lower healthcare costs are just one of the many potential benefits.
Here’s how an integrated pharmacy and medical benefits strategy can add significant value for you and your employees.
4 key benefits
- Improved health
- Greater savings
- Seamless employee experiences
- Meaningful value for you
Integrated benefits offer the advantage of analyzing both clinical and pharmacy data in real-time, providing valuable insights for optimizing care management and delivering higher-quality care. This includes effectively monitoring chronic conditions, identifying at-risk employees, closing care gaps, and ensuring safe medication usage.
Better care management can also lead to increased savings. Through evidence-based medications and opioid management best practices, care managers can help ensure your employees are using the most clinically effective and safe prescriptions. These efforts support overall employee health and help lower long-term costs, making healthcare more affordable for both your workforce and your organization. For employees who need costly specialty drugs, centers of excellence and intensive care management also produce meaningful savings.
Seamless employee experiences
Besides benefiting your organization, an integrated and well-coordinated plan also simplifies things for your employees. They get a single member ID card, one customer service contact, comprehensive care management, a single digital account, and easy mail-order and retail pharmacy services. These all serve to foster a positive and simplified experience for your workforce.
Meaningful value for you
When medical and pharmacy benefits and data are integrated, you work with one carrier — making plan administration less complex for your organization, too.
Here’s how pharmacy integration can impact your employees
Anthony is diagnosed with diabetes and prescribed a new drug. He picks up his new prescription at the pharmacy.