Drug plans: the new rules of engagement

What employer doesn’t want more engaged employees and cost savings on their benefit plans?

At the Face-to-Face Drug Plan Management Conference in Toronto on Dec. 2, John Law, global director, benefits, and director, total rewards, Canada and Latin Americas for Pitney Bowes Inc., told his company’s experience with revamping its benefits plan.

“This is primarily a story about communication,” said Law. “Ours is a conversation about how to talk to your employees and some of the challenges associated with that.”

Pitney Bowes, a major provider of hardware and software solutions in global commerce, recently began an ambitious benefits revamp to create what Law called a “culture of wellness and health.” But, he conceded, the road to benefits buy-in wasn’t easy. “Especially for an organization as old as ours, a lot of apathy sets in. People have an expectation, they have an entitlement, they have a belief. What we had to effectively do is turn that on its ear.”

One catalyst for the company’s decision to make amendments to its existing plan was a finding in industry-wide surveys indicating that only 26% of employees believe their benefits plans are relevant to them. Pitney Bowes’ own internal research had revealed that the nearly 200 mix-and-match combination options it offered to employees had largely confused them. As a result, many failed to make choices and ended up in the company’s default plan with minimal coverage.

The new plan had to have two things: cost savings and a way to encourage and incentivize wellness. To generate those savings, “We needed to integrate benefits more effectively in the total value proposition,” said Law. That included ramping up generic substitution.

But the plan still had to encourage and incentivize wellness. If plan members were forgoing preventive eye exams and dental checkups because of cost constraints, for example, “we wanted to be able to address that,” said Law.

Pitney Bowes settled on a dynamic therapeutic formulary with mandatory generic drug substitutions. “Drugs can be added while other drugs can be removed,” said Law. “[But the] drugs have to be both effective and cost effective.” If a patient wants to change a medication, a doctor has to sign off on the switch. However, to make the process as smooth as possible for employees, drugs can be delivered directly to a plan member’s home through the plan’s pharmacy services component.

Law conceded that the biggest obstacle to the new plan’s success was how to communicate it effectively to staffers. To do so, Pitney Bowes embarked on a multimedia education campaign, using online videos to allow staffers to learn about the new plan on their own time. Online enrolment tools also tracked rates of staff interest. The company found that “people liked getting their information in this fashion,” Law said. Further, “the communication plan was structured to deliver a little bit of information at a time,” he said, citing the need to not overwhelm employees.

“Unfortunately, this was not accepted readily by some people.”

Knowing there would always be employees who wouldn’t be happy about the new plan, Pitney Bowes organized a manager-driven education session to allow those unhappy with the plan switch to voice their concerns. What came out of it? “They said, ‘We want to be part of that communication,’” said Law.

Luckily, the company had anticipated this outcome and proceeded to include employee feedback in the delivery of education and communication materials that had already been created in advance.

The end result has been a rousing success. “At the end of the enrolment period, we achieved 98.3% enrolled,” said Law. And, within three months, Pitney Bowes “identified potential interchangeable DTF savings of over 69%.

“That’s a big, big number and a very good outcome for us,” said Law.