Historically, pharmacy benefit program providers have found the small groups, emerging markets, the under-served, and other non-typical populations to be difficult to
accommodate for a variety of technical, sociological and political reasons, and have therefore avoided them.
By their nature, emerging and under-served market segments are disaggregated and lack established central access channels for promotion, enrollment management and fee
collection. As a result, the commercial attributes of these segments have been hallmarked by high cost, low margins, and therefore not considered economically viable
so their constituents remain underserved. They have higher rates of illness and co-morbidities, higher case mix index ratings upon hospital admission, higher emergency
department utilization, greater readmission rates, and ultimately higher overall medical costs.
Barriers to entry have been and are significant impediments to traditional providers. However, for Health Plan Partners, they create an opportunity to serve a deserving
market. Unlike traditional PBMs and other pharmaceutical providers, HPP was engineered for this purpose, and is uniquely positioned for success in this area.
The market segments HPP targets are defined below:
- Unfunded Market Segment – individuals or persons who are associated with a sponsoring organization, employer, or other group which does not contribute
to the cost of purchasing prescription medications. In the absence of a prescription savings program, members of this market segment pay full retail price for
- HSA Market Segment – this rapidly growing segment is a subset of the Unfunded Segment. It is composed of individuals who have opened and funded Health
Savings Accounts (HSAs) at financial institutions, and who have purchased high deductible insurance. The first corridor of financial risk is borne by the HSA,
usually $5,000 to $10,000; the second risk corridor is covered by insurance. The high deductible lowers the cost of insurance, and all contributions to fund the
HSA are tax deductible. HSA participants are incented to be prudent purchasers of health care products and services by saving their HSA dollars through the HPP
prescription savings program.
- Shared Cost Market Segment – individuals who are beneficiaries of a large organization responsible for funding to some degree their health care. Examples
of this segment include individuals who are patients of teaching hospitals which have contracted with HPP for comprehensive PBM and / or pharmacy program and
- Funded Market Segment – individuals who are associated with (or employed by) an entity (employer or insurer) which does financially contribute to the cost
of prescription medications purchased by its group members. Members of this market segment are responsible for “co-payments” when purchasing prescription drugs.
Most often these amounts are $10, $15 or $25, with the employer or insurance company paying the balance of the discounted drug cost. Examples include a self-funded
employer’s ERISA plan, or a traditional group health insurance product. Today’s programs usually have significant limits and restrictions applicable to drugs.