Priority Health’s Hybrid Model Integrates Rx, Medical Benefit

From RADAR on Drug Benefits

With stand-alone PBMs becoming less common, Priority Health’s hybrid model might offer a promising approach for health insurers that want to handle PBM operations in-house.

Priority Health manages its formulary internally and contracts with Express Scripts Holding Co. for help with its pharmacy network. The real value of Priority Health’s hybrid model is that it allows the insurer to integrate medical and pharmacy benefits, says the insurer’s chief medical officer, James Forshee, M.D.

Using pharmacy data in its care management program for patients with complex diseases, Priority Health has found that using such data allows it to identify 38% more chronic diseases than it otherwise would have.

Forshee adds that integrating pharmacy and medical benefits also presents opportunities for better patient education. This integration gives the insurer an edge when vying for employers’ business — of the insurer’s 775,375 members, 226,945 are in the large group market, and 94,953 are in the small group market, according to AIS’s Directory of Health Plans.

Yet the majority of large, self-insured employers that are members of the National Business Group on Health contract with a PBM separately to manage their prescription drug plans, says Ellen Kelsay, chief strategic officer of the organization.

"I think over time, the pharmacy benefit managers have a focused effort on prescription drug costs, clinical effectiveness and rigor around utilization, formulary management [and] prior-authorization programs to help employers and their covered members really ensure that they’re getting the most optimal arrangement for prescription drugs — whether it be from a purchasing perspective or most importantly, from the clinical effectiveness perspective," she says.

To Forshee, though, Priority Health’s whole-person view of members — which includes not only their medical care but also social determinants of health — is an argument for carving in, rather than carving out, all pharmacy benefits.

"I think that we as health plans really understand the entire patient much better than when you try to look at a person or an individual from just their pharmacy [usage]," he says.

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