A Transformative Partnership

Frank Pacetti

When Kenosha City Administrator and Business Health Care Group (BHCG) Executive Steering Committee member Frank Pacetti first heard a presentation by Wisconsin-based pharmacy benefit management (PBM) company Navitus Health Solutions about how they do business, he recalls “it was like a cool splash of water over your face.” He remembers thinking, “This is the way it should have been all along.”

Pacetti was not alone. In a confusing “black box” world of rebates, pharmacy spread pricing, formulary choices and ever increasing costs, many BHCG member employers had searched in vain for transparency from their PBMs. What exactly were they paying for and who was getting the financial benefit from pharmaceutical manufacturer rebates and pharmacy spread pricing? 

Seeking a next generation solution

After searching to find a simpler pharmacy solution that would benefit both employers and plan participants and have the potential to lower employers’ growing pharmacy spend, BHCG was introduced to Navitus Health Solutions. And they really liked what they heard.

Explains Pacetti, “BHCG is continually striving to find new programs and methods to impact medical cost trend and drive up the quality of health care services. Obviously, pharmacy is a significant component of health care, but there doesn’t seem to be a lot of transparency and there seems to be a lot of confusion. Trying to work through those issues, we found Navitus. They seem to be the antidote to what ails you in pharmacy.”

Navitus has revolutionized the industry as a full pass through PBM that features complete financial transparency and uses a lowest net cost strategy. BHCG leaders were particularly impressed that Navitus does not retain any rebates or any other direct financial benefits from drug manufacturers or pharmacies, but instead pays them out to the client. Navitus’ only revenue comes from per member per month (PMPM) administrative fees.

When Navitus negotiates more favorable rates with drug manufacturers, pharmacies or any other entity in the drug supply-chain, the improved pricing gets passed through to the employer and its employees immediately – another clear advantage of working with Navitus. In traditional PBM contracts, an employer must wait until its PBM contract expires – in some cases waiting years before the better pricing works to the benefit of the employer and its employees. During that time, the PBM pockets the improved pharmacy discounts.

In addition, Navitus owns its own specialty pharmacy, Lumicera, which features a unique first-in, first-out cost plus pricing model. It backs it all up with unfettered access to all data down to the member level, so employers have robust reporting to manage their benefit plans.

Most importantly, the model is working. Navitus’ five-year cumulative impact on PMPM pharmacy benefit costs is leading the industry. In 2017 Navitus’ average PMPM of $76 was 15.5% lower than the national average of $90 PMPM for other PBMs. 

A winning partnership

The first Navitus presentation BHCG leaders heard evolved into a recently announced BHCG/Navitus partnership. Employers now have access to a game changing PBM solution at preferred prices that completely aligns with their needs. The BHCG/Navitus pharmacy benefit offering is available to employers and their plan participants, both locally and nationally and also offers employers add-on Navitus products, such as retrospective review, at no charge.

The BHCG/Navitus pharmacy benefit offering also includes:

  • Best in class pricing that improves as BHCG adds new member employers
  • A negotiated services agreement template
  • Evidence-based formulary management to maximize cost effectiveness and quality of care
  • Best in class emerging drug oversight and disease state management
  • Industry-leading, high touch customer service
  • Unrestricted audit rights; and
  • Complete employer/member access to claim level data.

Recognizing their own and the market’s need for a transformative, cost effective PBM solution, BHCG employer members like the City of Kenosha and Baird see great value in the partnership with Navitus. Among other employers, both are implementing the BHCG/Navitus pharmacy benefit offering effective January 1, 2019.

Says BHCG Executive Steering Committee member and Baird Director of Total Rewards Lisa Mrozinski, “With pharmacy’s increasing impact on our total cost of care, we dug into the details. We needed to understand the true cost of meds and if – with a high deductible plan – our associates were getting the best deal. We found it is really hard to know what the true costs are. Working with Navitus is an opportunity to really do that and benefit Baird – and have a direct impact on our associates.”

Lisa Mrozinski

Lisa Mrozinski

As an organization in fast growth mode, Navitus immediately recognized the potential of a BHCG partnership. Says Navitus President & CEO Terry Seligman, “For 15 years we have been successful in winning a number of lines of business. We are looking for partners we can win with that understand our model and how it works to give you better costs and service. The BHCG partnership strengthens our footprint in the Midwest and beyond – where we can jointly sell the solution and make an impact.

“As we continue to grow, we can leverage our strength to get even better financial results – which will have a meaningful and immediate positive result for our employer clients and their members.”

A smoother transition

There will always be concerns with any benefit change, but Navitus gets high marks for its high touch implementation process and customer care, resulting in industry-leading implementation and member satisfaction rates. Both Pacetti and Mrozinski cite their confidence in the collaborative process Navitus undertakes to prepare for PBM transition.

Navitus’ approach to implementation is proactive rather than reactive. Since most disruption comes from formulary change, care is taken to design an evidence-based formulary based on a lowest net cost strategy.

Explains Seligman, “Navitus is recognized for the care it provides member employers and patients. We first look at higher quality outcomes to make decisions.

With a lowest net cost approach, we have no hidden agendas with drug choice on the formulary.”

Says Mrozinski, “Right out of the gate, we felt very comfortable about our involvement in the decision process. We have identified people affected by the transition and will communicate with them individually. Understanding the relationship with our associates, Navitus has made recommendations specific to us.”

Pacetti is anticipating a successful transition to Navitus, given its 100 percent overall implementation satisfaction rate. “Navitus has such attention to detail and transparency and they offer extensive tools and resources through their member portal to engage employees. I have confidence they will be able to work out whatever issues might arise.”

Future expectations

When asked about expectations for the Navitus transition, both Pacetti and Mrozinski are optimistic about potential successes. Says Pacetti, “My expectations are that Navitus will perform as they say they will. We hope they continue to innovate as they have and grow stronger with a larger base – we are looking forward to being part of that growth,” adds Pacetti. “With full implementation, we are expecting savings of approximately 20 percent.”

Mrozinski stresses they are in it for the long haul, “We wanted a long-term strategy – not just to save money this year but lowering total cost for ourselves and our employees, rather than chasing discounts.”

Navitus has high hopes for the partnership as well. “As a result of our partnership, we expect employers will find out about a better way of doing business with a high touch client-centric model to realize savings, have a great experience and grow the coalition,” says Seligman.

With an eye to the future and access to a “treasure trove of information,” as Seligman puts it, BHCG is planning future initiatives to bring added value to the partnership. For example, with business in more than 40 states, Navitus has agreed to provide BHCG with pharmacy benchmarking information to help determine what employers can do to mirror the more successful employers as identified by the data.

“As we get further into this, we’ve made a commitment to give BHCG provider information – in a way that’s palatable– to help physicians make better decisions and our clients make better decisions,” adds Seligman.

As a final thought, Mrozinski waxes philosophical – and most likely speaks for many other employers who have made or are planning to make a transition to the BHCG/Navitus pharmacy solution. “The Navitus model helps us as a company to get back to our core strategy to make health care simpler. We’ve made it such a complex process and we are looking for how we can get back to simple, integrated results-driven solutions.”