Blue Shield of CA has a new PBM prescription for their 4.8M members – “flipping that (the current pharmacy supply chain) on its head.” according to CEO Paul Markovich.
The health insurer announced a move away from CVS as their PBM and is instead replacing it with multiple partners:
In a recent interview with The Wall Street Journal, Blue Shield's CEO, Paul Markovich, highlighted the challenges within the current pharmacy supply chain, characterizing it as a complex and opaque structure designed to maximize profits for its participants. “The current pharmacy supply chain is a forest of opacity and profit,” said Paul Markovich, Blue Shield’s chief executive officer “It is overwhelmingly complex, it is designed to maximize the earnings of the participants.” His company’s new setup, he said, will be “flipping that on its head.”
Blue Shield has unveiled a groundbreaking initiative that aims to bring greater transparency and efficiency to their pharmacy benefit management strategy.
Key highlights of Blue Shield's new setup include:
Why would Blue CA move this direction?
By breaking apart the components, the new approach can provide more transparency into the cost of each part of the pharmacy benefit. Wall Street analysts don’t believe other large organizations will follow suit in the short term but will be watching closely to see if the new decentralized approach can be executed appropriately and is delivering on the projected savings.
What could this mean for employers?
It will be difficult for most employers to replicate this exact model. However, some smaller PBMs have taken the approach to outsource different components themselves. For example, they may own the adjudication platform but outsource the network, rebates, and specialty pharmacy. Some employers like this model as they believe the costs are more transparent and it reduces conflicts of interest between the PBM and the plan sponsor.
Lockton Pharmacy Point of View:
We are generally supportive of this approach and have implemented similar structures / components with some health plans clients. By breaking up the sole PBM, there is greater transparency for the cost associated with each component of the pharmacy benefit. Employers can select the best of each vendor to perform these functions. This strategy more likely to be effective for larger, more forward leaning groups. We don't see it working for smaller clients (at least not for right now).
Some operational questions
Adam Fein wrote a great article on this move on his Drug Channels blog "A Reality Check on That Blue Shield of California Announcement"
Watch Part 1 and Part 2 of our videos to learn...
What's Really Driving Employer Health Plan Costs?
According to the National Cancer Institute, 39.5% of men and women will be diagnosed with cancer at some point during their lifetimes.
The uptick in cancer rates nationwide is one of the reasons why Lockton partners with Dana-Farber to help manage access, treatment, patient / family support and costs of cancer.
On June 20th, we will present the details of how we're teaming up to fight cancer. Dana-Farber will review their employer focused programs and Lockton will lay out our Complex Claims / Centers of Distinction approach for self-funded companies.
Meeting will be held from 12:00 to 2:00pm. Lunch will be provided and a parking voucher will be available. A tour of Dana-Farber will take place following the meeting for those interested.
Location - 44 Binney St, Boston, Massachusetts 02115
Guests will learn about Dana-Farber's Direct Connect Program. Designed for employers, Dana-Farber Direct Connect is a free direct access and navigation program that improves access to our worldleading oncologists and specialized care.
Lockton will present our Complex Claims Specialty and Centers of Distinction for self-funded clients. These services include
Lockton has established streamlined direct referral relationships with some of the country's top institutions including Dana-Farber, Cleveland Clinic and Mayo Clinic to facilitate reviews of cases where members appear to be having difficulty getting the right diagnoses and/or best-fit treatment recommendations.
To learn more or register for our event, please email email@example.com
Mental health and emotional well-being were consistent themes throughout Lockton’s 2023 Global Benefits Forum hosted in San Diego. We kicked off Day 1 with a terrific keynote speaker, Eric Potterat, Ph.D., who addressed us on “Learned Excellence: The Key Performance Optimization Factors of High Performing Individuals and Teams”. The key traits he presented (Grit, Mindset, Adversity Tolerance and Balance / Recovery) will help me.
Eric knows a thing or 2 about high performance having spent his career helping elite organizations—from the Navy SEALS to the World Series Champion Los Angeles Dodgers—develop the personal traits that drive elite performance.
Eric has also worked with hundreds of business executives, NASA, firefighting organizations, and world-class athletes from every sport, including gold medalist Nathan Chen and the U.S. Women’s Soccer team.
He began by asking us, “What is mental toughness?” It seems like a simple question—until we try to define it. He explained that even though we all know mental toughness when we see it (pictures of super achievers and heroes like Sully Sullenberger flashed on the screen), we can’t always explain what it is. Pressed to define it, most of us will describe mental toughness as poise under pressure, stress tolerance, or the ability to limit distractions and stay confident and composed. The reality is those are all end states. And with life now in a state of uncertainty, the question now becomes, how do we reach those end states and stay there?
The key traits shared by all high performers are Grit, Mindset, Adversity Tolerance, and Balance / Recovery For each trait, he explained the science and insights that make them such important differentiators and then synthesized the core of each trait with clear takeaways.
How to increase your Grit? “The foundation of becoming grittier is working outside of your comfort bubble.” In other words, get comfortable being uncomfortable. When we identify true motivators, and determine our passions / purpose, we are orders of magnitude closer to meeting our goals. Key attributes include the ability to delay gratification as well as see setbacks as opportunities.
What does having a growth Mindset really look like? “The hallmark of elite performers is a thirst for useful feedback.” Carl Dweck defined for the world a Growth vs. Fixed Mindset. Folks with Growth Mindsets see challenges vs. threats and obstacles / setbacks as a chance to learn, stretch and grow.
In speaking about Adversity Tolerance, Eric highlighted the fact that the most foundational aspect of these elite performers — their ability to stay cool and focused in high-stress moments — is not hereditary; it’s learned. The best-of-the-best performers focus on their mindset during high-stress moments because it’s dead-center within their sphere of control. “The rest is outside of your control. So, try to stay in that circle. The elite performers are focusing where they can affect change” Attitude, effort and action are the only 3 things humans can control 100% of the time.
And why is it important to make sure your relationships, your health, and the other pillars of your life are strong and in Balance? “The beach house with the most pillars is going to withstand the storm.” There are different mindsets for different roles. Imagine bringing the tenacity of a competitive athlete when interacting with our family, friends and communities. “The healthiest and best performers are able to separate WHO they are from WHAT THEY DO.”
There is promising work and research being done regarding resilience accelerators including drinking tart cherry juice to promote deeper sleep and brain neuroplasticity, float / sensory deprivation tanks, metadata and physiology / surveillance apps and “forest bathing” i.e., go for a walk in nature.
Eric’s work is proprietary and he’s finishing an upcoming book covering the core aspects of elite performance and it is expected in early 2024. I can't wait to read it.
Back in Hanover on a textbook winter afternoon - flurries mixed with sleet and a balmy 27 degrees. I was back in town as Lockton sponsored the 2023 Tuck Center for Private Equity & Venture Capital Conference. And in keeping with my 2023 well-being routine, I headed across the Green for a loop around Occum Pond, up Webster Ave, stopped by Phi Delt and back to The Inn.
Here are my thoughts on the Conference with more details on the speakers, sessions and content below.
Thursday evening, we had cocktails, conversations and dinner at the Hanover Inn. Dune Thorne D’98 enthusiastically spoke about today’s PE environment and go forward issues. She sees uncertainty (the main through theme for the event) as well as opportunities, is focused on DEI / ESG and states that returns from private investments are 6-8x higher than public returns.
Friday morning, another lap around Occum (half walking / half skidding) was in store through the mystic morning Hanover fog.
Jim Davidson kicked off the broader conference with his stories of how Silver Lake started and early wins even if the LPs weren’t immediately convinced (spoiler alert – they ended up very happy)
His observations covered
It was now time for the conference’s first panel discussion, “The Decision to Sell: Continuation Funds & Long-Term Holds
GP led secondary/ continuation deals went from 10% to more than half in the last few years. The continuation market is undercapitalized - big opportunity and high velocity in secondary deals
Some considerations and areas of focus for secondary funds
Ultimately, Private Equity wants to strategically transform a business into the potential of what could be - build something special
We then had our first of 2 unstructured panel discussions where the group asked questions of ourselves and commented on a theme – ours was Implications of ChatGPT or other AI tools for the PEVC industry
To say our discussion was wide ranging would be an understatement. The net – the AI genie is out of the bottle with lots of concerns over control, bias and privacy. In advance of the panel, our Tuck student moderator had asked CHATGPT for what 9 topics we should discuss. We covered all 9 in 45 minutes.
Lunch was good. I downed a sandwich along with 3 Tuck students from Beijing, Hong Kong and Mumbai sharing stories of our backgrounds, ideas and times at Dartmouth / Tuck. I relayed my tale of delivering kegs through a raging Nor’Easter in Stinson’s F150.
My second break out panel was “Role of Consulting Firms for VCPE Firms and Portfolio Companies”
Lots of dry powder in the market - $1trillion estimate
I had to leave midway through the final panel “Investment Opportunities in Technology” but I was leaving the room, a panelist said twice “In Private Equity, the goal is to get rich slowly” (echoes of build something special)
Walking back up Tuck Drive to The Inn, the clouds started to part and we were in for a glorious Hanover sunset. A sign perhaps? Only time will tell.
Always energizing to be back in Hanover, meet new people (in-person) and see some familiar faces. I look forward to the 2024 conference.
All multinational companies face complex challenges to ensure that employees are protected, have access to care, and understand how to access and optimally use their employee benefits
Lockton's global benefits team in London created this document that includes the basics through current trends, usage statistics and strategies.
Inside you will find...
Click the image below for access to the presentation
We are excited to welcome you to join us at our 2023 Global Benefits Forum hosted by Lockton People Solutions in San Diego, California on April 17 - 19!
This event is recognized as an experience unparalleled in the industry, bringing together Human Resources (HR) professionals from around the globe to network, share, and learn from fellow industry experts.
Click here to learn more and register
We'll hear from global experts (not Ron Burgundy...)
The Internal Revenue Service (IRS) and the U.S. Department of Labor (DOL), the two federal agencies with primary jurisdiction over COBRA issues, have not issued any meaningful guidance on how COBRA applies to expatriates, inpatriates and third-country nationals (TCNs) on U.S. and foreign health plans. The scant guidance leaves many questions unanswered that we address in our whitepaper.
Click the image above to access our whitepaper
As the conflict involving Ukraine, Russia and Belarus progresses, a number of questions regarding its insurance, risk, regulatory, socioeconomic and geopolitical implications continue to arise for our clients. Lockton is closely monitoring this evolving situation and engaging with our business leaders globally to ensure we are providing clients with the best advice and guidance.
Here are the top issues in today's alert
New law bars Russian insurers from transacting with insurers, reinsurers and brokers of or controlled by "unfriendly states". US fits that category.
Broad sanctions against Russia complicate most insurance transactions (paying premiums, claims, binding coverage, etc.).
Impact to organizations with operations in Ukraine and Russia (wheat, energy, minerals, etc.)
Currency devaluation effect on global insurance programs
Lockton's affiliations in Russia (Lockton does not do business with the Russian government or affiliated entities. Lockton does not and has never had a shared or owned interest in any broker intermediary in Russia.)
Not legal advice: Nothing in this alert should be construed as legal advice. We recommend consultation with your own legal advisors and local / global rokers.
Many employers are concerned about by the situation in Ukraine as they strive to ensure the safety, health, welfare and well-being of employees in the region. Global benefit professionals are facing several volatile issues related to the unfolding Russia-Ukraine conflict.
To support our HR colleagues, we are providing the information below concerning key considerations along with the attached Ukraine Client Alert.
As a result of this conflict, needs will emerge in the coming days, months, and perhaps even years. Ongoing monitoring, continued planning and collaboration across the enterprise will be critical to providing the support employees need now and in the future. Lockton will continue to monitor and update these situations as they develop.
Not legal advice: Nothing in this alert should be construed as legal advice.
Mike Smith - trying to put my history degree to good use through research and writing . Mom would be proud but she still wanted me to study business.