Pharmacy Benefits Management (PBM)

Subject: Health Care
Type: Analytical Essay
Pages: 5
Word count: 1325
Topics: Pharmacy, Finance, Health, Management, Medicine

Applied Policy. (2015). Concerns regarding the pharmacy benefit management industry. 

Pharmacy benefit managers play the role of helping facilitate financial transactions between pharmacies writing prescriptions and the sponsors. In Applied Policy (2015) article, a report is made on the main issues affecting the pharmacy benefits management industry in an effort to bring to the fore the need for enhanced transparency in the PBM transactions. The article reflects on the importance and accuracy in PBM operations, possible conflicts of interests in the execution of PBM activities and the generic drug pricing in addition to the maximum allowable cost-payment calculations. Applied Policy (2015) provides a clear presentation of the roles of pharmacy benefit managers in addition to documenting how PBMs make money from pharmaceutical manufacturers. The article helps in highlighting the role of PBMs in the prescription drug chain in addition to providing information about some leading PBM service providers in the US. The article is highly detailed and helps enhance one’s knowledge about PBMs. 

Siracuse, M. (2017). Is the pharmacy benefit manager truly transparent? Trust but verify. Pharmacy Management Benefits, 1-4. R

Siracuse (2017)’s article about pharmacy benefit management delves into an analysis of what is entailed in PBM. The article defines PBM and explains its role in the healthcare sector. According to the article, PBM serves an important role of linking sponsors with pharmacies that make prescriptions. The article explains how spread pricing takes place between what is billed by the sponsors and what is actually paid to the pharmacies. The article raises an issue about the transparency of the process in addition to noting where a conflict of interest hampers the efficiency of the PBM process. According to Siracuse (2017), some challenges exist in the process of providing PBM services and as a result, the article provides some possible solutions. The article is written concisely and helps enhance knowledge about PBM.  

Accenture. (2016). Insight driven health: Risk based. Data driven. The new face of utilization management. 

Accenture (2016) provides an accurate highlight about the dynamics of modern utilization management practices. According to the article, the new face of utilization management is risk based and data driven, hence a shift from the past when it was largely disease-centric. The new risk-based and data driven model is considered efficient in helping enhance the efficiency of utilization management practices through focusing on practice patterns. Accenture (2016) notes that the new utilization model saves medical and administrative costs in addition to reducing provider burden as well as improving consumer satisfaction. The article notes that reliance on the past models of utilization management is inefficient in modern practice and goes ahead to recommend the risk based network-centric model to all healthcare organizations. 

Bailit, H. & Sennett, C. (1992). Utilization management as a cost-containment strategy. Health Care Financial Revision, 1991(Suppli), 87-93. 

Bailit and Sennett (1992) provide a detailed analysis of utilization management right from the 1970s. According to the scholars, utilization management came into being as a tool enhancing cost management in healthcare practices. The article notes that the utilization management in the 1990s was still patient centered with a major focus on reducing patient days and hospital costs. According to the article, the patient-centered model was inefficient in reducing hospital costs because of the emergence of unmanaged costs that increased the overall costs. The report observes that utilization management could be enhanced with the emergence of the internet which could enhance the acceptability of utilization management to both providers and patients. 

Summary of Pharmacy Benefits Management

The PBM is illustrated as a critical player providing connections between pharmacies and players such as the sponsors. As indicated in both articles, PBM helps ensure seamless interactions between the pharmacies that draft prescriptions and sponsors. Transparency in the pricing spread of the pharmacy benefit managers is a matter of special focus in both articles as issues emerge on the quantity of money that reaches the Pharmaceuticals after the being remitted by the sponsors. According to the articles, conflicts of interests hamper the realization of transparency in the execution of PBM services. The roles of pharmacy benefits managers also come to the fore in the analysis of PBMs in this articles and this help enhance the public understanding of the essence and importance of PBM. 

Summary of Utilization Management

Utilization management is considered an important process of helping reduce costs in the provision of healthcare services. The past models of utilization management pegged their focus on patient issues in their attempts to reduce hospital costs while the modern utilization management models are internet-centered and effective. The past models were regarded inefficient because they failed to capture emerging service costs in as much as they targeted at reducing hospital costs through reduced hospital-bed stay. The modern internet-centered utilization model is risk-based and data driven, hence, captures all cost centered areas with enhanced efficiency. The information in both articles brings to the fore the evolution of management models in addition to highlighting their important roles in reducing hospital costs. 

Drug benefit programs have undergone lots of transformations in the past fifteen years with the advancement of technology. The systems of calculating costs of transactions and pharmaceutical prescriptions keep evolving with the advancements in technology, leading to increased efficiency and transparency. Leading pharmaceutical management companies endeavor to set the pace in the provision of efficient intermediary services between the prescribing pharmacies and the sponsors. The enhancements in technology have helped ensure increased transparency in the calculation of rebated incomes in addition to helping enhance the understanding of the procedures of preparing price spreads across different pharmacy benefit management companies. 

Utilization management embraces various approaches with the network-centric approach being the most recent and efficient technique of facilitating utilization management within healthcare organizations. According to Accenture (2016), the network centric approach of utilization management helps reduce administrative costs and brings about up to 80% cost savings in healthcare facilities. The approach is risk and data driven but efficient in helping enhance the entry of data and reducing several sorts of costs within health care settings. The network-centric approach anchors on automation of services, which makes it easy to execute very services with much ease and phenomenal speeds. 

The modern utilization management models are user-friendly and provide efficient communication services, hence helping bring about some elements of management by exception. The modern approaches in utilization management continue enjoying enhanced efficiency because of their ability to undergo continuous monitoring throughout their operations. Continuous monitoring helps note areas of inefficiency in time to help seal the emerging loopholes. The network-centric approach is thus important and efficient in helping both public and private healthcare facilities realize increased levels of efficiency. 

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The future of utilization management depends on the prudent use of data and technology. The efficiency being realized today in utilization management practices in healthcare settings is as a result of the emergence of the internet which shifted costs savings focus from the disease-centric model to the network centric model. Through technological innovations, utilization management is bound to undergo further modifications in its reliance on data to help enhance improved costs savings across various healthcare facilities. The future models are bound to bring about better communication with improved predictive elements to help healthcare facilities anticipate different cost cycles in the process of undertaking their activities. There is an expected reduction in confusions and enhanced transparency levels in healthcare settings in the future due to increased developments on the network-centric utilization management models of various organizations. Thus, the future of utilization management is overly bright and efficient, in particular with the continued realizations of significant innovations. 

Did you like this sample?
  1. Accenture. (2016). Insight driven health: Risk based. Data driven. The new face of utilization management. 
  2. Applied Policy. (2015). Concerns regarding the pharmacy benefit management industry. 
  3. Bailit, H. & Sennett, C. (1992). Utilization management as a cost-containment strategy. Health Care Financial Revision, 1991(Suppli), 87-93.
  4. Siracuse, M. (2017). Is the pharmacy benefit manager truly transparent? Trust but verify. Pharmacy Management Benefits, 1-4. 
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