The College will partner with CVS Caremark to implement a new "pharmacy benefit management program" effective Jan. 1 in order to reduce employee health care costs, Assistant Vice President for Finance Tricia Spellman said in an interview with The Dartmouth. The new partnership which will not affect employees' current access to prescription medication is expected to save the College and beneficiaries a combined $900,000 annually by negotiating with drug companies for lower prescription drug prices, Spellman said.
Following a bidding process during which the College Benefits Council considered four pharmacy services providers including the College's previous pharmacy services provider Anthem Blue Cross Blue Shield the council selected CVS Caremark for a three-year contract, according to Spellman. The new provider will save the College almost 10 percent of the $10 million it currently spends annually on prescription drugs for its approximately 8,800 employee beneficiaries, 1,000 of whom are retirees and their spouses, Spellman said.
The savings will provide the College with additional disposable income, Justin Anderson, director of media relations for the College, said in an interview with The Dartmouth.
"The bottom line is that the College is saving almost a million dollars," Anderson said. "By spending less money on health care, we hope we can spend more money on other things."
While 75 percent of the savings will go to the College, 25 percent will help reduce the cost of constituents' health care premiums, Spellman said. Although premiums are still expected to rise by 5 percent in 2012, this increase is lower than the predicted average national increase of 9 percent, according to a letter to all employees posted on the Office of Human Resources' website on Oct. 26.
Apart from the cost savings, current beneficiaries will be "minimally impacted" by the new partnership, Spellman said. While employees will have to obtain a new health card, they will still be able to obtain prescriptions from any pharmacy and copays for almost all generic, preferred prescriptions. Any prescription drugs that employees previously had will remain unchanged, she said.
Approximately 4 percent of prescription drugs will be offered at a lower copay cost than under the current plan, while 1 percent of prescriptions will cost more, according to the letter. Approximately 250 individuals will pay increased copays, but will receive their prescriptions at the previous cost for a grace period of six months so that they have time to consider alternative options, the letter said.
The 8 percent of beneficiaries who currently receive their medication via mail will have to update their information for the new health care provider, Spellman said. These individuals have already been notified of the change, she said.
While the new pharmacy benefits plan will not apply to students on the Dartmouth Student Group Health Plan, the College Benefits Committee is currently examining the possibility of implementing a similar cost-saving plan for students, Anderson said. The bidding process for this plan is scheduled to start in September 2012, he said.
A revision to students' health care plans could reduce costs for the College and undergraduates, but is unlikely to save as much as the new employee benefits plan, according to Spellman.
"We'll expect to see some savings but they won't be as significant as for the employee health plan simply because students don't need as many prescriptions," she said.
