For the answer, I turned to Pharmacy Benefit Management Institute (PBMI) 2016 Pharmacy Benefit Manager Customer Satisfaction Report (available for purchase.) It rates 11 PBMs based on feedback from more than 500 plan sponsor customers.
The data show a strong association between a PBM’s perceived transparency and a plan sponsor’s satisfaction. As you will see in the charts below, plan sponsors are more satisfied with PBMs that are more transparent.
Yet the causality of this relationship isn’t entirely clear. Smaller plan sponsors tend to work with smaller PBMs, which are rated more highly on transparency and alignment of goals. Are more transparent PBMs truly better? Or, are we observing a selection effect, whereby plan sponsors with fewer internal resources choose PBMs with different business and profit models? And if PBM transparency is so wonderful, why don’t all plan sponsors insist on it?
SATISFY MY DATA
The PBMI report is based on survey responses from 507 plan sponsors, representing an estimated 54.7 million covered lives. Employers accounted for 68% of the respondents, followed by health plans (21%) and union groups (5%).
PBMI measured plan sponsors’ satisfaction on a simple scale of 1 to 10, in which 1 equaled “highly dissatisfied” and 10 equaled “highly satisfied.” Respondents answered separate questions about satisfaction with their PBM’s services, functions, transparency, specialty benefit management, and more.
The report provides (a) aggregated results, (b) results for PBMs with more than 20 million members and those with less than 20 million members, and (c) detailed responses for 11 individual PBMs. The PBMs included are: Aetna, Benecard BPF, Cigna, CVS Health, Express Scripts, MagellanRx, MedImpact, Navitus, OptumRx, Prime Therapeutics; and Serve You.
Consequently, the report contains a mind-numbing and somewhat bewildering array of bar charts and data tables. Below, I highlight a very small subset of the overall results. If you’re interested in the customer’s point of view on PBMs, I recommend that you purchase the entire report. As far as I know, the PBMI report is the only public source for PBM satisfaction information.
PLEASE DON’T YOU ROCK MY BOAT
Plan sponsors’ average overall satisfaction with their PBMs was 7.8 (out of 10), which is … OK? It’s not great, but it’s not horrible. Overall satisfaction ratings for the 11 PBMs ranged from 7.3 to a perfect 10.
Satisfaction varied significantly with plan sponsors’ perceptions of transparency. Plan sponsors characterized the transparency of their PBM relationship: Completely transparent; Somewhat transparent; and Not at all transparent. At my request, PBMI was kind enough to compute the overall satisfaction rating based on degree of transparency.
The chart below shows the results. As you can see, satisfaction was strongly correlated with the perceived degree of transparency. Plan sponsors using PBMs that were “not at all transparent” got a satisfaction rating that averaged at 5.8 (out of 10). That compares with an 8.7 rating for plan sponsors with a “completely transparent” relationship. I suppose that makes them happy inside all of the time.
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This result reflects a significant difference in business strategy between larger PBMs compared with smaller PBMs. The chart below compares the data shown on pages 17 and 22 of the report. It shows that smaller PBMs are perceived to more transparent. Nearly two-thirds of plan sponsors that worked with a smaller PBM rated their relationship as “completely transparent,” compared with less than one-third of plan sponsors utilizing a larger PBM.
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CAUSE I DON'T WANT MY BOAT TO BE ROCKIN'
The PBM-specific results showed highly varied satisfaction ratings with various PBM services and aspects of the relationship. Every little action, there’s a reaction.
To complement the transparency results, consider how plan sponsors rated their PBMs on the subject of “No conflict of interest issues.” Consistent with the results above, the smaller PBMs (blue bars) were generally rated more highly.
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FEEL LIKE A SWEEPSTAKE WINNER?
For some bizarre reason, pharmacy owners have become the self-appointed guardians of plan sponsors’ PBM relationships. Almost seven years ago, I asked: Why do pharmacy owners care about PBM transparency? As I see it, the answer has to do with the pharmacy owners’ self-interest, not with market efficiency.
Many pharmacy owners also seem blind to the fact that transparent PBM relationships do not magically translate into more money for pharmacy owners. (See my 2011 article Pharmacy Profits in Preferred Networks with PBM Transparency.) I’ll examine the troubled state of independent pharmacy economics next week. But pharmacies should not expect to rub a magic lamp and have the transparency genie make their profits rise.
Plan sponsors are big boys and girls. They can make their own choices—wise or not. If a plan sponsor wants a transparent and presumably more satisfying PBM relationship, the marketplace will oblige. But as the second chart shows, many relationships are not completely transparent.
So, here’s the real question: Why don’t more plan sponsors demand transparent relationships?
THE PBMI STAFF JAMMIN'
Here’s an exclusive video of the PBMI staff celebrating after they finished tabulating the data. (Is that Shelly Carey and Sharon Frazee singing backup vocals?) Click here if you can’t see the video.
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