Tuesday, April 24, 2012

Dig Deeper: Don't be Fooled by Fancy Titles and Terms

Simply put, panflation refers to the devaluation of everything.  Stay with me here.  I'm going to make some specific points that relate to your everyday life. Then I'll bring it home with some very specific references to the pharmacy benefit management industry.  Panflation is influencing plan sponsor behavior.

Take the rarely reported issue of  "name inflation."  There was a time when a platinum credit card meant something.  You were someone who always paid bills on time, made a bit more money then the average consumer and had proven it over time.  It made you feel special. That you were being rewarded for your diligence. Now, even if one has bad credit he/she can qualify for a platinum credit card. The exclusivity of the platinum credit card has been devalued, but some consumers have yet to recognize this trend.  The travel industry is notorious for such hyperbole.

Many hotels no longer offer standard rooms, but instead offer deluxe rooms. How many times have you booked a superior or deluxe room at a hotel only to be disappointed upon check-in?  You walk into the hotel room and the view is of a brick wall. There is hair in the sink and the room smells like cigarette smoke. Webster's dictionary clearly states that superior means, "above the average in excellence or of higher grade and quality."  Inflating terms is a tool the travel industry utilizes to lure unsuspecting customers into making a purchasing decision.  The travel industry is not the only participant in this plague.

Next, let's look at the rarely reported problem of "title inflation." It seems as though everyone today is an expert, consultant or specialist.  When confronted with an important decision most of us tend to rely on these so called experts to help guide us through difficult processes. Sometimes we rely too heavily on people based solely upon a title. In most professions, excluding the obvious like a physician or lawyer, there is no special training required in order to be labeled as an expert or consultant. The PBM industry is notorious for this sort of title inflation.

I recently spoke with a benefit consultant from a reputable consulting company not to long ago. Our business together involved a client of hers seeking to reduce prescription drug expenses. Upon conclusion of our re-pricing analysis the results were presented and the savings substantial.  She proceeded to ask,"how am I able to determine if a PBM is fully transparent?"

When she posed this question I was both befuddled and disturbed at the same time. Her client is relatively large at almost 60,000 scripts per year and was grossly overpaying for its pharmacy benefit. They are relying on you [firm] to protect them, but you can't even though you're an "expert."

Plan sponsors must make sure to have a basic understanding of pharmacy benefit management.  It takes some time, but not much.  Participate in webinars and read a blog or two for the most recent industry best practices. Then hold your PBM and its employees accountable by testing them.  If they don't have the requisite knowledge why are you retaining them? In the healthcare industry, digging a bit deeper than all the hyperbole being offered on the surface may very well save your company quite a bit of money and time.

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