In August of 2023, Blue Shield of California unveiled a new Pharmacy Care Reimagined initiative to improve prescription drug access while reducing costs.
The initiative includes partnerships with five companies, each of whom will manage a specific part of the prescription process. They are:
- Amazon Pharmacy – Will provide fast and free prescription delivery with 24/7 access to pharmacists.
- Mark Cuban Cost Plus Drug Company – Will create a transparent pricing model.
- Abarca – Will pay prescription drug claims.
- Prime Therapeutics – Will manage negotiations with manufacturers.
- CVS Caremark – The incumbent pharmacy benefit manager (PBM) for Blue Shield of California will provide specialty pharmacy services.
Blue Shield of California will implement this strategy over several years but aims to save up to $500 million in annual drug costs with its multi-vendor approach.
The approach is unique because most health insurance providers contract with one pharmacy benefit manager. Blue Shield of California designed the Pharmacy Care Reimagined program to partner with multiple PBMs who are best-in-breed at specific aspects of the pharmacy management process. They hope the result saves money and leads to a better member experience.
The Trend
This decoupling of commonly bundled prescription services portends a growing trend among health insurers. Insurers are turning away from all-in-one technology solutions in favor of best-in-class solutions integrated into a better whole.
Why? All-in-one solutions were in favor when it was challenging to integrate data from multiple technology platforms. The vast majority of technology vendors have extensive integration experience using vendor-specific data exchanges or standards like FHIR. As a result, insurers are better able to select best-of-breed point solutions.
The Future of Core Administration Technology is Modular
Blue Shield of California hopes to prove its Pharmacy Care Reimagined initiative can meld point solutions to save money. Unbundling core administration technology and procuring distinct claims, enrollment, and premium billing platforms can save money and improve outcomes.
Generally, managing claims is significantly different than managing enrollment data or generating billing transactions. As a result, insurers that leverage all-in-one core admin solutions likely have more manual work and rework to correct inaccurate data.
Consider the ACA individual market. Some enrollees’ variable income causes them to shift from Medicaid to the individual market frequently. But many core admin solutions – because of their design – see any enrollment as a new individual, not an individual terminated and then re-enrolled. That can cause downstream issues – for example, if the individual has a balance remaining.
Because most core admin systems focus on managing claims, they may lack time-saving features that improve the member experience. For example, many core admin billing modules don’t include an integrated payment portal. As a result, the plan needs to build its own or purchase a solution from another vendor, driving up costs.
Or core admin systems lack automated delinquency management. In some cases, like the upcoming Medicare Prescription Payment Plan, regulations require specific delinquency communications. Integrated, rules-based delinquency management functionality makes it easy to manage those mandated communications.
Specialty Markets or Unique Requirements
Modular technology construction can also benefit those with specialty lines of business and unique needs. Care and utilization management, processing value-based payments, designing, configuring, pricing, and managing products and analytics and reporting can be distinct, best-of-breed solutions instead of less robust modules in your claims management system.
Not only can that modular technology composition improve efficiency, but it also makes it easy to remove underperforming technology. Instead of a multi-year core admin replacement project, you can replace your enrollment platform in months and gain immediate benefits.
In embracing the Pharmacy Care Reimagined initiative, Blue Shield of California has taken a significant step towards revolutionizing prescription drug access and affordability. This trend of decoupling bundled services and embracing best-in-class solutions promises substantial savings and hints at the future direction of core administration technology. As the industry shifts towards modular technology construction, insurers are poised to achieve greater efficiency, improved member experiences, and the flexibility to address unique needs and challenges. This innovative approach by Blue Shield of California could potentially reshape the landscape of health insurance administration for years to come.
Certifi’s health insurance premium billing and payment solutions help payers improve member satisfaction while reducing administrative costs.
