Episode 15 – Account Management and Employer Challenges in 2020

Mike Stull (0:09)

Hi everyone, this is Mike Stull and welcome to this month’s episode of the Employers Health HR Benecast, your source for expert commentary and insights on current health benefits related news and strategies. I hope everyone had a happy Thanksgiving and is looking forward to an excellent holiday season.

If you haven’t already, I encourage you to listen to our last episode where I was joined by Dave Uldricks, Vice President of PBM Contracting and Strategy here at Employers Health.

He shared his unique insight on the Employer’s Health market check and pricing improvement process. We had a number of entries into our listener drawing from that episode and Delane Flomer from the University of Idaho was our winner. Delane submitted the correct word results and will receive a $50 Visa gift card.

Be sure to listen for the keyword in this episode and enter for your chance to win. I’ll share the keyword later in the show or even during the interview, so be sure to listen closely.

On today’s episode, I’m talking with Zach Hostetler, Vice President of Account Management at Employers Health.

He leads the EH account management team that works as an extension of our client’s benefits team to help in providing high quality health benefits at a sustainable cost. He’s here today to share what we’re hearing from member organizations, including what they are focused on and challenges they are anticipating in 2020 and beyond. He’ll also provide an update on our growing account management team and the resources they provide to our clients.

So, let’s jump into the interview. Welcome, Zach.

Zach Hostetler (1:43)

Thanks, Mike.

Mike Stull (1:45)

So, 2019 was a busy year and as we look back on that year, can you share some of the account management successes that we had with our team?

Zach Hostetler (1:55)

Yeah, Mike, it was a very busy year. We had 28 new implementations, adding 173,000 new lives to our collective PBM programs, which is just over $200 million in new drug spend. So that makes this time of year very busy for our account management team, managing all of those implementations to make sure that we have a great 1.1 start for all of those groups.

But even with the busyness of all of that, we’ve continued to provide high levels of service that our clients have come to expect year over year. So we did our annual survey to our clients and this year we ended up having a 4.73 out of 5 as the overall client satisfaction. So we’re always shooting for at least 4.6 and the reason we’ve chosen that number is that means that we received more fives than fours from our clients.

And I don’t remember the exact percentage, but I know we did have over 50% of our clients provide feedback in that survey. I’ll also mention that this year we had a couple of other instances where we would have, whether it’s consultants or clients, reach out individually and on a one-off basis outside of a survey to provide feedback on one of the account management team members doing a great job, whether it’s in a meeting or providing issue resolution. So I think it’s always great to receive good feedback when it’s part of a survey, but I think it speaks volumes to the value that someone is providing when someone goes out of their way to provide good feedback on what someone has done for them.

Mike Stull (3:29)

And just to piggyback on that, we also had a situation this year that was an existing client that combined with another organization that basically doubled itself in size. That company put all of its benefits out to bid and through that bid process we were able to get one of our largest clients to actually proactively make a reference call to the benefits lead at this organization because she was new. You know, it’s hard enough to get employers and clients to take a reference call and serve as a reference, but to be proactive about it and actually initiate the call out to say, hey, I understand you’re looking at Employers Health and you’re new to the organization.

Let me tell you, you know, this has been a great experience for me and here’s why. I think that says a lot about the relationships that we’ve been able to build and the value we’ve been able to deliver to our clients.

Zach Hostetler (4:36)

Absolutely.

I think that the account management team over the last year, as evidenced by the survey result, is getting more and more engaged with our clients and our clients are now starting to take advantage of some of the offerings of the coalition that didn’t always see the most participation in the past. So, we offer a member survey opportunity. So, if there’s something related to benefits that one of our clients is wondering how they stack up against the rest of the coalition membership, we’re always willing to send out a survey to our clients to see what other employers or plan sponsors are doing in that space.

I know this year we had a lot of requests for things to be added to those surveys, whether it was point of sale rebates, paternity leave, or EAP utilization. So, that’s something that I think will continue to be used more and more by our members the more that we’re putting those out there and the more value that we’re providing based on the results of those surveys. We’ve also seen a lot of growth on the account management team over the last few years.

I remember when I started about five years ago that the account management team was comprised of three individuals, and they were managing our entire book of business. That team has grown by a factor of five over the last five years. So, we’re up to almost 15 account managers in the account management team.

They’ve been growing both in size and in knowledge. We have most of the members of the team currently pursuing either an MBA or a CEBS or in a couple of instances both. So, they’ve been really working to expand their knowledge to be able to provide as much value as possible.

With the growth of the account management team, it’s become even more important to make sure that they are highly engaged with our vendor partners to ensure that we’re providing the best service level possible. So, we have started working to have in-person meetings with our account management counterparts at both of our largest PBM collectives. So, that would be CVS Health and OptumRx.

We have a full-day strategy meeting here at our headquarters in Canton, Ohio where we bring in their account management teams. We bring in the Employers Health account management team as well as our clinical team, our analytics team, as well as a handful of other individuals for just a full day of training and collaboration so that our team can become more familiar with the offerings from our different vendors so that when something comes up, we know how to navigate it and can provide the best resolution possible.

Mike Stull (7:14)

And I think that’s key.

A lot of people will say, well, you know, why would you meet with, you know, the team at CVS or the team at OptumRx? You know, I think too often we think of, you know, vendor management or supplier management as, you know, making threats like either fix this or else. And one of the big differences that I know our clients appreciate is we have developed among our team members a real technical knowledge or a technical working knowledge of how things actually work within our big supplier partners. So it’s not just a, you know, get on the phone and bark out some orders, but it’s get on the phone, get the right people on the phone from either CVS or Optum and suggest ways that the issue can be resolved to the satisfaction of everybody.

So, I think these types of meetings definitely help us build relationships so that when these issues come up, we know who to call and we’ve built rapport with the person so that, you know, we can make suggestions or propose solutions and work with them as they work internally to get the right teams involved in the issues resolved. So as we think ahead, what’s the most common issue that you’re hearing from employers and, you know, what do they seem most concerned about as we go into 2020?

Zach Hostetler (8:59)

Well, I don’t think the answer would surprise anyone. And the thing that they’re most concerned about is cost.

So that cost is spread over a couple of different areas. And probably the one that’s on top of everyone’s mind right now is specialty. And it has been that way for the last couple of years.

The specialty pipeline continues to grow almost daily with new drugs going through testing or being added to the marketplace and all of them coming with very high price tags. So I think that that’s something that will continue to be top of everyone’s mind going forward. Unfortunately, there really isn’t a silver bullet that anyone can offer in the marketplace that’s just going to eliminate specialty spend.

Mike Stull (9:44)

Drug importation?

Zach Hostetler (9:46)

No. Well, I guess I’m… So, I’m an attorney and I’m going to advocate for legal means of procuring your drugs. And right now that isn’t.

But yeah, I suppose that is. Load up the station wagon with some drugs in the back.

Mike Stull (10:01)

It’s interesting.

We were talking about this and not to digress, but just a little bit of commentary. So we spoke about this at our recent roundtable and one of our members who is also an attorney, she said she gets into these arguments with people about the legality of it and she says it’s not enforced. It’s still illegal.

And obviously the Trump administration is talking about ways to potentially make drug importation legal. But at the end of the day, it is a short-term strategy. Individuals who go and purchase these medications in Canada or in Mexico, you see the anecdotal evidence that they can save a lot of money.

But in terms of the entire system saving, it’s not a feasible solution. I think I saw where Canada has somewhere around 2% of the drug supply in the world and the United States uses 40%. So it’s just not scalable.

It’s not going to be a long-term solution. So, I say that with a little bit of proposing that with a little bit of sarcasm, but definitely something that we’re hearing a lot about and just wanted

to make sure we addressed it.

Zach Hostetler (11:26)

Yeah.

Thanks, Mike. I would say that probably the next thing that our clients are coming to us and bringing up when we’re out there meeting with them is looking for more of a holistic approach to health care, whether that’s high-cost chronic condition management or just some additional integrations between vendors. A few of our clients are really starting to take a step beyond just looking for the lowest net cost and trying to start to implement programs or incentives that will drive their population to just be healthier overall.

Because while not every condition can be impacted by diet and exercise, there certainly are those ones that can be. And if you take a condition like diabetes, which is the highest cost for a therapeutic class for most of our clients, as well as the CVS Health Employer Book of Business, that’s one that definitely can be impacted if you can find a way to start influencing those behaviors and help someone pick a salad at lunchtime when they go to the cafeteria as opposed to the hamburger, even though the hamburger is often cheaper than the salad would be. And most people would enjoy the hamburger a little bit more.

Starting to incentivize people and make individuals understand how that impacts their health and how they can be healthier and happier as a result of making those good choices. I think the other thing that we’re seeing a lot is the high costs of medical. So obviously, we spend the majority of our time in the PBM space, but you can’t really look at your benefits in a silo.

They all impact each other. And pharmacy spend right now is roughly a third of overall health care spend. So obviously, you’re going to really focus in on what is costing the most money right now.

Our clients are becoming more acutely aware of the high cost of specialty drugs that are running through the medical plan. And I think that they’re becoming more aware of some of the reporting, whether it’s J codes or otherwise, that they can request from their medical carrier in order to see what drugs are processing through the medical plan and then make a determination whether it should continue to go through the medical plan or whether the lowest net cost option would be through the pharmacy plan. And I know that that’s something that Matt Harman on our clinical team helped a number of clients within the past of determining which vendor makes the most sense to process a particular drug through.

And then I would say just as kind of a wrap up to all of that is that our HR and benefit professionals that we work with on a day-to-day basis are receiving a lot of pressure internally to reduce costs by all means necessary. But with the caveat that they have to do that with as little disruption or employee noise as possible. And that’s the most difficult one to accomplish because there aren’t really good opportunities to save a lot of money if you’re not willing or not able to make any plan changes.

So for those groups that are already taking advantage of our market check and our improved pricing year over year, it becomes really difficult to make any kind of meaningful change to reduce costs that isn’t going to impact the member. Whether that’s a new clinical program where you’re adding a PA to a certain drug or changing your copay structure, premium contributions, whatever it is. And most of those things ultimately result in some level of employee dissatisfaction.

So that balancing between what’s an acceptable level of employee dissatisfaction versus cost savings is really key. Becomes even more compounded when we’re in a job market like we have in 2019 where it’s an employee market and they can go and get really good pay and other benefits from other employers and employee turnover continues to rise. So offering competitive benefits continues to be a differentiator beyond just offering high salary or a great workplace culture.

Mike Stull (15:51)

To the point about balancing cost with disruption, I think the clearest example of that today is just the value formulary and even some of the custom clinical solutions that we’ve offered clients to get rid of some of the low value, high-cost drugs out of a client’s mix. Value formulary, we hear every conference I go to, every person I tend to talk to or webinar I get on, it’s all about lowest net cost, lowest net cost, lowest net cost. Yeah, and usually they do a pretty good job of bashing the big three PBMs for chasing rebate, yet all three of them have a value formulary.

It has lower rebates, but it also doesn’t cover a lot of these low value, high-cost drugs. And so I’m always interested to see, well, how many employers are actually utilizing these types of formularies. And I know for our book of business, it was zero up until maybe this year.

I think we have, what, one, two?

Zach Hostetler (17:02)

We have two.

Mike Stull (17:03)

We have two now that are on the value formulary. And even with our clinical solutions, our edit for Duexis and Vomovo on the CVS side, every meeting I’m in, someone’s going to bring up Duexis and Vomovo because it’s just become the poster child of low value, high-cost drugs.

And they do, they have huge rebates on them. And for those clients that are picking their PBM based on the size of the rebate guarantee, they can put into the consultant spreadsheet. That’s how the PBMs are going to meet those guarantees.

And it’s still only about, what, 50% of our groups, I think, have that edit turned on. Again, it gets back to what are you trying to accomplish and how do you balance the whole financial cost savings with participant disruption. So I started to tease a little bit into the next question, mentioning different formularies, clinical solutions that we have.

But can you share how else your team is working to solve these issues and even how you’re working with the analytics and clinical teams here internally to help our clients achieve their goals?

Zach Hostetler (18:24)

As I mentioned before, I think that one of the best ways that we’ve been able to improve our ability to work to issue resolution is through the ongoing dialogue, and I’m going to call it partnership, with our vendor suppliers. As you mentioned earlier, everyone uses the term vendor management, but I think that a better way to qualify it is vendor partnership. Because if we can work together to the client’s ultimate satisfaction, then everyone is happy.

And it doesn’t always have to be the ultimatum when you go to them with an issue. So those constant meetings and touch bases between our teams I think is really key to understand the processes from the vendors, because PBMs are massive organizations and they’re very complex in how they function and operate and what may seem like a simple resolution from the outside via their processes requires multiple people from multiple departments that have never met each other before to get to the ultimate resolution. So the more that we understand that on our side, the better we can resolve it and more quickly resolve it.

And I think it also is important that we continue to build good relationships with our client’s consultants to really understand what is the goal, whether it’s for a new plan design or when there is an issue that has come up, understanding that when the client is too busy to take five minutes and talk about it and the consultant is just as well versed is very important for getting to the ultimate best case scenario for the client.

Mike Stull (20:03)

And I think that’s one of the achievements that I’m most proud of from our team is it’s so rewarding when you get a new client or you start working with a new consultant and you build that relationship, like you said, not just with the supplier, the PBM, but you can also work with the consultant on it because ultimately it’s typically a client telling the consultant, hey, this is a mess, clean it up and then you build a relationship where the consultant will come to you because they trust that you can help them achieve or bring the issue to resolution or to clarity in a way that’s acceptable to the client. So I always think that watching those relationships progress is definitely one of the highlights or one of the more rewarding things in this role.

Zach Hostetler (21:02)

I think it’s also important that by having these ongoing touch bases and the dialogue that the team is constantly learning and hearing from each other about different scenarios that have happened with another client so that even if it’s something that one particular account manager on my team hasn’t encountered before, they have the value and the benefit of the collective wisdom of the team to say, oh, that’s nothing, I’ve encountered that before, here’s the person you need to call. You call that person and then it’s resolved. Doesn’t always work quite that easily, but there are certainly those instances that by having those ongoing touch bases, you really get to a resolution faster.

I think the other thing that the account management team is doing on an ongoing basis, and this is in conjunction with the clinical team, is continuing to watch high-cost claims reporting that we get on a weekly basis from our PBM partners so that when there is something that is an outlier, one, a client can be prepared that an invoice may be higher than what they are typically used to seeing, or if it’s a drug that shouldn’t be covered for one reason or another, we can work as quickly as possible to put management in place to avoid that drug from hitting the plan again in the future. And that goes into some of the strategic recommendations that the account management team brings out to our clients every year at an annual review, mid-year review, or whatever the frequency is. A lot of those are developed by our clinical team here at Employers Health.

They’re clinical programs that are unique to the Employers Health book of business. The interesting thing there, and we’ve put together a slide that most will probably see during your next review or annual review that is a timeline of the Employers Health clinical programs and when those were developed. And then it also shows at the very end in 2019 where those programs were ultimately adopted by the broader CVS book of business.

So, our clients over the last three years have had access to clinical programs that CVS is now agreeing are in the best interest of its clients generally and is starting to offer those as the lowest cost options for its clients.

Mike Stull (23:29)

And our clients basically got a couple-year head start with getting some of the utilization of these drugs off of their plans.

Zach Hostetler (23:38)

Yeah, I know of a couple of clients that they were very excited to see that slide because and they ripped it out of the deck so that they wouldn’t lose it so that they could take it to their boss’s office and mark next to each one of those clinical programs when they implemented that program to show that, hey, I’m effective in managing our benefit plans.

Here’s what I did three years ago to start lowering our costs that CVS as a broader entity is just now catching up with.

Mike Stull (24:06)

And I think that’s another point, you know, in the industry I hear a lot of, you know, individuals who aren’t as familiar with Employers Health and what we do here, they’ll talk about, well, if you really want to get to lowest net cost, you got to go outside of the big three PBMs and you got to do this. And I always just kind of sit there and shake my head and say, no, you don’t have to do that.

That is one of the benefits of being part of a large purchasing group like ours with people on board who know what they’re doing and have the expertise and the background to be able to put together some of these issues and then work with CVS to basically allow us to do it. So you get the buying power of the coalition, you get the leverage that CVS has in the marketplace, and you get more flexibility because of our size and scale than you otherwise would get in the marketplace. So it’s one of those things that I think just is misunderstood in the marketplace unless you are already in the program.

Zach Hostetler (25:12)

I think the other thing that the account management team is doing now as a result of the team growing significantly in size and having the ability to provide a more custom and tailored approach to each client is that we don’t have to provide clinical recommendations or any kind of recommendations to the broader client base and we can take a more tailored approach to each client and understand what their goals and objectives are and provide recommendations that fit within that construct. So if it’s a group that’s highly concerned about disruption and not as concerned about cost, we don’t have to or we’re not going to recommend a program that is going to impact a quarter of your overall membership and only save a percent. So I think that that’s something that we’re able to do much better now that our team is managing fewer groups and able to take more individualistic approach to each client.

I think also related to some of the history of some of our clinical programs, it’s also important that we’re also starting to go out now with more historical reporting. So typically in an annual or mid-year review, you’re looking at that time period versus the previous time period. But that only shows a very small amount of time and shows if you went up or went down but doesn’t really tell the story of how the plan is performing overall over a longer period of time.

We all know that certain things that happen in the marketplace can impact one year, whether it’s the new hep C drug or what have you, that can really tell a bad story for one year or tell a really good story the following year when your trend has come down. But that’s just because everyone’s been treated, they’re now not on the drug and your trend just looks good as a result. So what we did this year in conjunction with our clinical team is developed a managing spend and trend slide that we’re presenting at annual reviews that shows more historical data that shows the trend over a three-to-four-year period to help our clients really see the value of the ongoing coalition membership.

I know that one of my favorite slides that we present when we’re out prospecting is a slide that shows that the value of the coalition is not at any one point in time, but it’s the value of the coalition in keeping your costs in check over a longer period of time and not just in the years that you go out to RFP.

Mike Stull (27:58)

I have that slide hanging on my fridge at home.

Zach Hostetler (28:02)

You should be very proud of it.

Mike Stull (28:03)

It’s my masterpiece.

Zach Hostetler (28:04)

A lot of the things that I just pointed out and mentioned wouldn’t be possible without the clinical team that is out there always looking at the drugs that are hitting our plans, developing new clinical recommendations as a result of that, as well as our analytics team that we’ve grown over the last year. We’ve added two actuaries to our analytics team.

So what they’re doing today is really focusing in on the analytics that we’ve typically provided and that our clients have become accustomed to and then looking forward into 2020 and beyond, they’re really looking at what are some unique things that we can do with all of this data that we have access to through CVS or OptumRx that we’re not getting reporting on today and we’re not necessarily having something that’s actionable as a result of all of that information. How can we compile it or arrange it in a manner that’s useful to HR and benefits professionals?

Mike Stull (29:08)

So hopefully, part of the takeaway is as it relates to our account management team, we’re not trying to replicate what the PBMs are already doing. It very much is meant to be additive value to the client and its consultant.

We’re also not a mail forwarding center. So meaning that we’re not just sitting in the middle of a conversation where you call us, and we call the PBM and the PBM calls us back and then we call you back. There is a lot that goes on both, you know, real time and behind the scenes when issues come up and we try to be very proactive in terms of, hey, CVS is going to come out with a new program or CVS is going to change something or Optum is going to send out this communication. We do a lot of work behind the scenes making sure that, you know, we’ve positioned these changes in a way that is going to resonate best with our clients and their consultants.

So again, it is a different model than I think what a lot of a lot of people are used to seeing out in the marketplace when it comes to coalitions like ourselves. And it’s definitely one of those values that I think, you know, people recognize once they’re here, but from a sales perspective, it’s a lot of times hard to quantify or even put some structure around what the real value looks like. So certainly appreciative of the work that your team is doing.

I guess I should ask, you know, what does a team look like, you know, going into 2020? What are the plans for continuing to grow the team?

Zach Hostetler (31:13)

I think going forward, the goal is to just continue to engage with our clients. I know some of our best relationships are the ones that we’ve had for a very long time. So going back to our roots, we started in Stark County, Ohio, where our headquarters is.

So we have some clients here that have been members of the coalition for over 20 years, trying to replicate those relationships with individuals who are further removed from where our team is based and getting out and spending more time with our clients and truly getting that understanding of what’s important and how we can provide value to that specific client is going to be the focus going forward.

Mike Stull (31:59)

Great. Well, thank you, Zach, for joining us today.

And I hope everyone enjoyed the conversation. It’s always nice to take a step back and see the achievements of the Employers Health team and its member organizations and what we’ve accomplished together.

Before we move on to some of the exciting things we have going on at Employers Health, I want to share the keyword for this episode.

And that keyword is engagement. So if you’d like to be considered for the $50 Visa gift card, please submit the code word engagement along with your name and email address using the link on the landing page of the website.

We’ve got a full agenda for our 2020 events.

We’ll be kicking off our PBM trend series in Nashville on January 16th. I’d encourage you to visit employershealthco.com/events to view the full schedule of PBM roundtables. And I’d encourage you to join us at a location near you to learn about a number of topics, including the market forces impacting pharmacy trends, strategies to manage specialty pharmacy, changes in the supply chain affecting plan sponsors, and more.

There’s also more of a roundtable feel to the presentations this year, so a lot more discussing with your peers’ what solutions you’ve seen from the marketplace, maybe what types of interventions you’ve put into place, and then also what the results have been.

Also be sure to save the date for our PBM conference, which will be held March 18th, 2020, and a new location this year. So it’ll be at the Hilton at Polaris in Columbus, Ohio.

The PBM conference is in its third year, and the conference brings together the best and brightest professionals in pharmacy benefits management to cover value-based strategies that help employers develop, innovate, and deliver comprehensive yet affordable benefits.

We encourage you to join us May 13th for the Innovations and Benefits Conference in Canton, Ohio, where you’ll hear from national benefits experts on the latest trends in employee benefits, pharmacy benefit management, and more. And at that meeting, we’ll announce the 2020 Excellence in Benefits Award winner.

Nominations are now open. Only benefits professionals from Employers Health member organizations are eligible to win, but nominations can be submitted by anyone. Visit BenefitsAward.com to learn more and submit your nomination today.

And don’t forget to submit your questions regarding HR benefits and the value of membership in an employer-led coalition. You can do so by completing the field on the landing page or clicking the link titled Submit Your Questions Here and be sure to tune in to our next episode in January to hear answers to your questions. There’s always something new happening at Employer Health, so be sure to follow us on our social media accounts, including LinkedIn and Twitter.

And that’ll conclude today’s show. Thank you to Zach for joining us, and thank you, our listeners, for taking the time out of your day to tune in. But more importantly, thank you for your continued participation and interest in Employer Health.

Again, don’t forget to submit your questions so that we can answer them in upcoming editions of our podcast. We hope everyone has a happy and safe holiday season.

Be well, and we’ll see you soon.