Pharmacy Network Segmentation for Cost Management
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Solution Overview
Problem
Pharmacy benefit managers face challenges in managing vast provider networks, leading to increased costs and reduced benefits for clients and members due to the complexity of identifying and utilizing restricted pharmacy networks, which often have fewer locations and higher costs compared to broader networks.
Innovation Solution
A mobile device-based system that communicates with a network manager device to direct users to preferred pharmacies within a restricted network, utilizing a mobile application that accesses pharmacy data and location information to provide users with a list or map of nearby pharmacies, distinguishing between preferred and non-preferred pharmacies based on pricing and network associations.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of energy
If a restricted pharmacy network is used, then cost management is improved, but the number of pharmacy locations decreases
Solution Approach 1:
The pharmacy network is segmented into multiple categories (preferred pharmacies, participating pharmacies, non-participating pharmacies) with different levels of preference and cost effectiveness. This segmentation allows the system to guide members to specific segments that optimize cost management while still providing access to multiple locations within each segment.
Solution Approach 2:
Different pharmacies within the network are assigned different qualities or preferences based on their cost effectiveness, contract terms, and performance metrics. The system applies local quality by recommending specific pharmacies based on the member's location, prescription type, and cost optimization goals, rather than treating all pharmacies uniformly.
2Loss of energy
If a restricted pharmacy network is used, then cost management is improved, but ease of operation deteriorates
Solution Approach 1:
A mobile device-based system acts as an intermediary between members and the pharmacy network. This intermediary automatically retrieves network information, calculates preferred pharmacies based on multiple criteria, and presents the information in an easy-to-use format, eliminating the complexity of manually navigating restricted network requirements.
Solution Approach 2:
The system enables members to independently identify and locate preferred pharmacies through their mobile devices without requiring assistance from pharmacists, insurance officials, or other intermediaries. The automated system performs all the work of network verification, location calculation, and preference determination.
3Ease of operation
If a vast provider network is used, then ease of operation is improved, but cost management deteriorates
Solution Approach 1:
The system incorporates feedback mechanisms that continuously evaluate pharmacy performance, cost effectiveness, and member satisfaction. This feedback is used to dynamically adjust pharmacy preferences and recommendations, ensuring that members are consistently directed to the most cost-effective options while maintaining ease of access.
Data Source
AI summary
Methods and systems for pharmacy location are described. In one embodiment, a plurality of pharmacy network associations of a member is determined. The pharmacy network associations are associated with a drug benefit plan of the member. A pharmacy within a pharmacy network association of the plurality of pharmacy network associations is capable of fulfilling a prescription for a prescription drug. A location associated with the member is accessed. A display is generated based on the determination of the pharmacy network associations and the location of the member. The display includes a first indicator and a second indicator. A first network pharmacy of a first pharmacy network association is associated with the first indicator on the display. A second network pharmacy of a second pharmacy network association is associated with the second indicator on the display. Additional methods and systems are disclosed.