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Not long ago, the Health Care Cost Management Corporation of Alaska (HCCMCA) was dissatisfied with their pharmacy benefit management (PBM) contract, even though the business coalition purchases health care on behalf of 50,000 employees and dependents. So they turned to WisconsinRx and its national subsidiary, National CooperativeRx, to meet their prescription benefit needs. Upon joining, HCCMCA received improved pricing and access to cutting-edge clinical programs, analytics and reporting, independent audits as well as access to an entire team of specialists to help navigate pharmaceutical benefit management. And they are not alone; hundreds of companies are joining the ranks of WisconsinRx and realizing the same benefits.

Greg Horstman, CEO of WisconsinRx, explains the origins of the pharmacy benefit cooperative. “WisconsinRx was born when employers and employer coalitions came together to solve a common problem. Their vision was to control their overall drug spend, make better decisions with better data and gain access to transparent information about their pharmacy management,” Horstman says. “Like other purchasing cooperatives, WisconsinRx was created by buyers when they couldn’t find what they were looking for in the existing market.”

The Wisconsin Association of Independent Colleges and Universities Benefits Consortium joined WisconsinRx in 2006. “It was impressive discounts and rebates that got us in the door, initially lowering our overall prescription cost by 10 percent,” says Executive Director Jim Malicki. “But WisconsinRx’s clout in the PBM market and its ability to negotiate aggressively continues to pay off for us, plus we know we’re getting the discounts and rebates we deserve because of the co-op’s oversight and staff expertise.”

Horstman says the credit belongs to his member employers. “Our ability to lower members’ drug trend would not be possible without the exponential growth of the cooperative over the past six years, and its ability to attract employers and coalitions of all sizes, from many states and diverse industries.” he says. “Our members may seem like they have little in common, but they all share a strong desire to collectively tackle the ‘black box’ of prescription financing and administration and increasing costs,” Horstman says.

A complex industry
The drug industry is extremely complex with moving parts that are constantly shifting. As a result, the pharmaceutical benefits industry has changed considerably since 2003 when WisconsinRx was founded—now prescription medicine is a huge chunk of the health care dollar.

“Literally 10 years ago drug spend was a couple percentage points for employers, now it’s often ten-fold that,” Horstman says.

Unless a business can dedicate a considerable amount of manpower to stay ahead of the curve, it is very difficult for them to achieve value in their drug spend. That is especially true when you add clinical programs aimed at cost containment and employee wellness to the mix. Horstman adds, “New drugs are always being developed and the world is fraught with direct-to-consumer advertising. If physicians have a hard time keeping up with it, how are employers going to be able to stay on the cutting edge?

“Our board has directed us to manage these complex issues on behalf of our members, to be their watchdog,” Horstman says. “In addition to our experienced staff, we work with auditors and outside experts to ensure our contract is best in class and that employers are getting everything they deserve.”

Cooperative model
One reason for WisconsinRx’s success can be attributed to the cooperative model. Simply put, cooperatives are member-owned, member-governed businesses. Members pool their resources to bring about economic results unobtainable by one entity alone. In fact, cooperatives have been in existence for hundreds of years, with Benjamin Franklin establishing the first U.S. cooperative in 1752. Today, Congress views cooperatives as a potential solution for creating affordable health insurance options for Americans, and one that has the support of both Democrats and Republicans.

“WisconsinRx does a number of things very well,” says Mark E. Mason, a broker with Robertson, Ryan and Associates, the largest privately held insurance brokerage in Wisconsin. “The financial aspects of the purchasing cooperative really push the market – they have very competitive pricing and the rebates are a real eye opener for my clients. But the education, the updates and clinical programs are really appreciated once they become members.”

So who can join WisconsinRx and National CooperativeRx? Any business that can carve out drug spending is eligible. The groups that have joined WisconsinRx have generally saved well in excess of 10 percent on their drug spend plus the added value of delegating to specialists the responsibility for pharmacy benefit management. But the real impact is the clinical programs that help to ensure employees are taking the right drug for the right reason at the right dispenser at the right time for the right cost.

“Our clinical programs add real financial value to employers’ bottom lines, and employees are healthier too,” Horstman says. Being a member-owned cooperative demands that WisconsinRx operate under the mantra of service first. “What we do has to be in complete alignment with what our employer members are trying to achieve,” Horstman says.

Take Life Time Fitness, for example. “We were seeking the clout that comes from working with a recognized PBM leader, yet we also wanted a partner who would respond to our needs,” says Jeff Young, benefits manager at Life Time Fitness in Chanhassen, Minn. “National CooperativeRx provides negotiating power, while the emphasis on customer service and personalized reporting allows us to get the best results for our company and our employees.”

WisconsinRx programs are aimed at getting consumers to take the right drug (meaning the most effective at the best price) and then adhering to it if they have a chronic condition. The firm offers a continuum of clinical programs, ranging from low disruption but effective to more aggressive programs that have a bigger return on investment. “We help employers customize these tools according to their appetite for employee wellness and cost containment,” Horstman says. “We have a diverse membership and do not believe that one size fits all.”

The company’s iBenefits Report from their partner, Caremark, is a good example of a direct-to-consumer tool that is easy to use and effective. It provides employees and dependents with a personalized breakdown of what drugs they used and where they were dispensed and then illustrates all the ways that person could have saved money.
As a broker, Mason places a high value on the regular, independent audits he receives through WisconsinRx that guarantee employers receive the negotiated drug pricing set forth in the contract. “It gives me confidence the contract terms are being fulfilled,” he says. “I would urge any employer not getting that reassurance from their PBM to look into what WisconsinRx has to offer.”

What the future holds
WisconsinRx’s success is evident in the continued growth of the coalition, month after month. “It’s testimony to the value,” Horstman says. “Employers usually join us because of our great discounts and rebates, but once they’re a member they see the added value of our other programs and services. We’ve built and maintained tremendous momentum. The proof is in the pudding; we very seldom lose a member and we continue to grow in an extremely competitive market.”

The vision for the future of WisconsinRx can be summed up by two goals that are complimentary to each other: “We continue to grow our membership, and we continue to grow the value to our member employers,” Horstman says. “Both of those will help the other.”

More Information about WisconsinRx can be found at http://www.wisrx.com/.

By Maura Keller

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