With Dr. Lynne Nowak, M.D., Medical Director for Express Scripts Lab
Managing Your Healthcare Costs
Lynne Nowak, internal medicine MD and Medical Director for Express Scripts Lab, a pharmacy benefit management service, joins Steve to talk about getting a better handle on your healthcare costs, pharmacy benefits, and new information technology that empowers patients. Steve mentions a recent survey which demonstrated that 50% of consumers don’t know how to predict their own out-of-pocket healthcare costs, either presently or in the future. It also found that dealing with costs is the most stressful and difficult aspect of managing their healthcare. Furthermore, only 25% of those surveyed had any money saved for healthcare for next year. Dr. Nowak’s first piece of advice for people suffering from this kind of uncertainty, lack of information, and fear of out-of-control costs is to delve into their insurance benefits, especially their pharmacy plans since those can be both consistent and expensive. Pharmacy plans can vary a lot, even person by person, so you need to understand the rules in your plan.
Preferred Pharmacy: Lower Drug Costs, Home Delivery
Diving deeper into the prescription drug issue, Dr. Nowak notes that most plans have a pharmacy network and, oftentimes, a preferred pharmacy that the insurer has negotiated better terms with for their customers’ benefit. Co-pays through that preferred pharmacy can be significantly cheaper than those that can be found by shopping around at retail pharmacies. Some pharmacy plans offer home delivery, which is not only convenient but also less expensive. Co-pays are again cheaper with this option and a 90-day supply of medication can be delivered instead of the typical 30-day supply. Dr. Nowak mentions that the cost savings are found on both the insurer and patient sides, and home delivery is safer to boot. Speaking of her own company Express Scripts, she adds that the home delivery option doesn’t deny patients the ability to shop retail pharmacies.
Despite there being more healthcare information online and through providers, almost half of US consumers have not even logged onto their insurance company’s web portal or called in for basic information. Steve wonders whether a near majority of insurance plan holders are in denial about their lack of knowledge of their healthcare benefits. Dr. Nowak argues that it’s less about denial than it is about patients not understanding what advantage they can gain from insurers websites and mobile apps. As an example, she describes how the Express Scripts app, which many of their clients (insurers) offer to their customers, allows one to look up the price of a medication before it’s filled. Comparative prices are shown, and, if the plan works with a preferred pharmacy, the prices/co-pays for that pharmacy are shown as well. Information about generic versions of drugs and their costs are offered in the app as well. Patients would do well to look up this information before their next doctor visit and bring these generic alternatives to the attention of their doctors because it can save them a lot of money. Unsurprisingly, not all apps have the same features and plan agnostic ones like GoodRX only provide retail price comparisons, while those provided by an insurer or pharmacy benefit management service like Express Scripts are able to drill down into pharmacy networks and specific benefits.
Pharmaceutical Companies and Drug Pricing
Steve brings up the topic of certain drug companies charging exorbitant prices for their drugs and wonders how that affects managers of pharmacy benefits. Dr. Nowak explains that instances of blatant profiteering are luckily not as common as one might think but acknowledges that it certainly is a concern for Express Scripts. Her company has a research department dedicated to spotting price hikes and uses different tools like the leverage of competitive pressure to negotiate lower prices without suppressing innovation.
Drawing their talk to a close, Steve remarks that, for individuals, one of the more effective ways of keeping drug costs down is to see the doctor before you get sick. Dr. Nowak enthusiastically agrees, arguing that preventative medicine—getting ahead of problems before they arise or become debilitating—and managing your health care with regular check-ups is key to saving money, lowering stress, and enhancing health itself.
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Steve Pomeranz: Getting a handle on your medical costs is a tough thing to do these days. However, there may be some things you can do regarding prescription drugs that can help you get your costs under control. In that vein, I’ve invited Dr. Lynne Nowak, she’s a medical director for Express Grips Lab, to join me today to help us get our arms around the issue. Welcome, Dr. Nowak.
Dr. Lynne Nowak: Thank you.
Steve Pomeranz: There was a recent survey that was done that found that half of consumers don’t know how to predict current or future out-of-pocket healthcare costs and even more say that managing these costs is the most stressful and challenging aspect of managing their healthcare. What’s operating here?
Dr. Lynne Nowak: Well, I would say the first thing that can really help a patient know how to really take charge of their own healthcare costs, especially as it relates to pharmacy and their prescription costs, is to really have a good understanding of your pharmacy plan. Those can be very different from patient to patient, so really getting to know your plan and knowing what the different aspects and maybe the different rules within your plan might be, is just really a part of keeping yourself informed to make those better choices.
Steve Pomeranz: Especially when you say, “Know your plan,” what are some of the aspects of those plans we should know.
Dr. Lynne Nowak: Sure, and, admittedly, these plans can be very complex, so a few things that it’s really important for a consumer to take a look at. Number one would be your pharmacy network. Different plans may have a preferred pharmacy that you can get lower copays and really direct the care to those pharmacies to save money that way. Another thing to check would be to see if your plan offers a home delivery option. For example, the Express Grips plans offer a mail order option where patients can save money on that medication; possibly there’s a lower copay at home delivery. It also then has that added benefit of usually getting a 90-day supply rather maybe the typical 30-day, so there’s a convenience factor there. Then the home delivery option also allows just that convenience of getting it delivered to your home, which a lot of people appreciate. But, again, usually, the home delivery option will save the patients money.
Steve Pomeranz: Is that something that the insurance company likes to use, the home delivery option? Is that less expensive for them and for the patient?
Dr. Lynne Nowak: Usually, it is, and it’s largely because it is safer and more effective and more cost efficient for the patient, so it really saves the plan money, but it also saves the patients money. Many of our plan sponsors really like to have that home delivery option in the plan.
Steve Pomeranz: Well, does it take out the pharmacy … Let’s say it’s a Walgreens or a CVS, are they out of the picture in terms of a cost basis when the medications are being sent directly to you?
Dr. Lynne Nowak: Not necessarily. Many of the Express Grips plans actually offer retail options as well. It really allows that convenience for whichever the patient prefers and still continues to let the patients have that choice, so there maybe be options to get your medications at retail. Maybe get the 30-days, but often times, you can still get the 90-days supply at retail as well.
Steve Pomeranz: Most consumers, based on the survey, say that they fear future medical expenses but only a quarter of us save beyond the current year for these future medical expenses. We say that we want more control of our healthcare expenses, but 40% of us have actually never visited their health account portal online or called a toll-free number or done anything like that. I mean, it seemed … actually, the title of the survey was something about a state of denial. Are we in denial about all of this?
Dr. Lynne Nowak: I don’t know if we’re in denial, but I think it’s really about, again, being informed; and you mentioned a great asset that not enough people take advance; which is the mobile apps or the websites that a lot of plans offer. I know Express Grips, for many of our clients, we have their patients enrolled in our website and our mobile app. It’s not so much denial, it’s just; I think; the lack of information that patients have not taken advantage of. For example, on most websites and mobile apps, you can check to see how much a medication is going to cost before you get it filled. You can look for alternative medication options. One thing to that point, I would say, don’t be afraid to consider using a generic medication, because … check with your doctor if that’s appropriate for you. Those drugs are safe, they’re FDA approved and, in nearly all cases, those generic medications are going to be cheaper, so that’s a really great way to save some money on the meds.
Then, also, our mobile app will also help guide our patients on which pharmacy. I mentioned earlier on the pharmacy networks. If your plan has a different network preference that can allow you to have a lower copay, the mobile app will often show you the different costs at the different pharmacies, and you can use that to guide your choices and hopefully save some money as well.
Steve Pomeranz: I’ve noticed that there is an app by the name of GoodRX. Are you familiar with that?
Dr. Lynne Nowak: I am.
Steve Pomeranz: I’ve gone on that app numerous times to try to compare prices around town for certain medications I’ve been getting, and I find that the prices are pretty much the same. They’re really within a few bucks of each other or not enough to make a big difference. Is there some certain kind of monopoly type pricing in the prescription drug area?
Dr. Lynne Nowak: Well, I wouldn’t call it monopoly pricing. I think the reason the Good app is maybe an okay guide… to give you a general idea, but keep in mind the Good app is not going to give the specifics to that individual patient. Your plan may have preferred pricing based on the way your employer or your pharmacy benefit manager, like Express Grips, has negotiated those prices on your behalf, so the Good app doesn’t reflect that. That’s really more of just a general retail price if someone would go in and pay cash. It’s really more about how well does your plan get those prices negotiated down and that may be different pharmacy to pharmacy.
Steve Pomeranz: My guest is Dr. Lynne Nowak medical director for Express Grips Lab, and we’re talking about pharmacy prices, and she’s helping us get an understanding about how we can better control our medical care buying and how the system really works. To find out more about Dr. Nowak and to hear this interview again, don’t forget to join the conversation at stevepomeranz.com. I would think that if you have this app handy and you’re in the doctor’s office, that would be a very good time to put the name of the prescription in the app and to right then and there see if there’s any other alternatives available. How would that work?
Dr. Lynne Nowak: You’re absolutely right, and that’s really where the value of that app comes in because when you plug that in, at least in the Express Grips app, it will show you exactly how much that medication is going to cost you within your plan and then you can have that conversation with your physician if you can afford that medicine. And, if not, it will help show those alternative medications that you can have a conversation with your doctor, to see if one of those more affordable medications might be a good option for you.
Steve Pomeranz: There have been some notable cases of prescription companies raising prices dramatically on existing medications or also coming out with new medications at very high prices. Is this something we’re seeing a lot in the prescription world or are one-offs that get the media’s attention.
Dr. Lynne Nowak: I would say, fortunately, we’re not seeing it a lot, but we’re seeing it enough that it clearly is a problem, and it definitely is getting not only the media’s attention but certainly politicians and certainly the attention of my company, who really works to keep those prices down. I would say it’s not widespread, but it is definitely happening enough and in significant enough amounts that Express Grips is very focused on these situations and really pressing back on those manufacturers who do that.
Steve Pomeranz: You know, it’s an interesting problem as far as I can see. You have some companies coming out that are actually curing diseases that, heretofore, have been incurable and have been chronic and will lead in the future, if remaining uncured, to much higher expenses. And these companies today are curing these diseases, and they’re charging very high prices at the moment. I don’t know if a company like Express Grips can decide, “Hey, our costs would have been X, but now they’re Y, and they’re expensive today but it’ll be cheaper in the future.” Can you give me a little insight into that?
Dr. Lynne Nowak: Sure. We have an extensive research department that really follows these kinds of trends to as best we can predict where prices are going and really then again put measures in place to help keep those prices down, using the different tools that we have as a pharmacy benefit manager, to work with the different manufacturers to really use competition as a very strong lever to keep the innovation going, but also use that competition to keep those prices down when we’re negotiating with the manufacturers on pricing.
Steve Pomeranz: I guess a final piece of advice that you give to keep prescription costs down, don’t wait until you’re too sick to go see the doctor.
Dr. Lynne Nowak: Absolutely. As an internal medicine physician, I can tell you time and time again, I saw patients in my office who would just wait too long to go to the doctor or hadn’t been to a doctor in far too long. Really seeking out that preventative care, getting in front of problems before they happen, and really making sure you’re managing your care on a regular basis is the best way to either stay off of medications or make sure you’re really managing those diseases as effective and as cost efficiently as you can, with prevention as well.
Steve Pomeranz: To get more information, to hear this conversation again, don’t forget to go to stevepomeranz.com and consult your pharmacy plan like Dr. Nowak says. Dr. Nowak, thank you so much for joining us today.
Dr. Lynne Nowak: Thank you for having me.