Video Blog

Harnessing Healthcare Trends: Unveiling the Surge in Pharmacy Spend

Gain insights into the rapid rise of pharmacy spend in 2023 compared to medical costs, and explore actionable strategies to manage healthcare expenditures effectively. Learn from industry experts about trend drivers, high-cost claimant demographics, and key considerations for optimizing your healthcare strategy.

Unmasking the Ongoing Trend Drivers of PMPM & Rx Spend

"Looking back on our book of business since 2020, pharmacy spend has increased almost twice as fast as medical and estimated to be up 11.3% per member per month for 2023. I only say estimated here because we still need a few more months of run out claims for 2023 to be complete. Medical is projected to increase again after being roughly flat last year, up 3.8%. And then overall, we expect the 2023 trend to come in at 5.7%.

As we explore some more of the specific categories driving the most recent trend increase, looking at the hart, on the left side is your PMPM from our prior period, and all the way on the right is the PMPM from the current period, and in the middle are all the components that make up the difference. Those are our trend drivers. Typically when looking at trend drivers, we use our mutually exclusive service classifications to look at what employers are spending their healthcare dollars on.

When looking at these components of trend, we see that the drivers are all about pharmacy spend. We have a full and complete run out claims for the 2022 calendar year shown here, and 2023 data are pretty much the same. So the top three drivers of trend are specialty pharmacy, brand name prescription drugs, and on the medical side, surgical procedures." - Chris Gagen, Senior Director, Analytic and Strategic Consulting

Want to know how the demographics of high-cost claimants differ and what you should consider for that? Get the full report.

"To round out this section, and with each of the subsequent sections, we have an employer's roadmap. There is much more detail to these road maps and additional action items in the full Employee Health Trends, but we want highlight just a couple pieces here for employers about how you can evaluate and take action:

It's most important to really establish a baseline for your costs. In this particular example, as that relates to both brand name and specialty drugs.

Understand, historically, where that spend is and then where that stands today so that when you're making changes or putting various programs in place, you can track the impact and effects of those particular types of programs.

It's important to understand your PBM contract, but where we really see the greatest impact is by addressing and managing the chronic conditions in your population.

We specifically highlighted diabetes and obesity, but knowing the full makeup of your population is imperative to developing the overall strategy. And, if your members can be better engaged can improve the health, but also the risk and ongoing costs." - Jennifer Jones, Vice President, Strategic Partnerships & Population Health Practice Leader

To access the on-demand webinar and download a copy of the report, complete the form below.