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Due Diligence Decoded – Unlocking the Secrets to Smart Business Decisions

Due Diligence Decoded – Unlocking the Secrets to Smart Business Decisions

by Iga VonGeyso | Jul 15, 2024 | Case Study

Client Situation Buying a home can be one of life’s most stressful purchases. Before committing to an offer, buyers want to know the good, the bad, (and hopefully not the ugly) to ensure they’re getting the best deal available. The same principles apply for our...
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PBM Tailored Retail Network Contracting

We help our clients better manage their business efficiency through a combination of contract design, benchmarking analysis, and near real-time performance dashboard.

Client Situation

PBMs experience constant change throughout the year, including sizable network performance fluctuations impacting client guarantees, and financial planning.

In this instance, a PBM’s current retail network contract did not represent a viable long-term response to its needs for pricing competitiveness, flexible management, and predictable outcomes. The PBM sought improved results from within the industry aligning available solutions to its specific size and scale.

Opportunities/Actionable Items

The PBM required solutions catered to strengthening its operational efficiency and bolstering its economics while continuing to support its client-facing business model. Within the network contracting market, there are several pathways that lead to accomplishing these goals, but few that afford the required level of transparency and value maximization.

The Proper team conducted a benchmarking analysis of the PBM’s current retail network contract economics and terms against industry competition. Faced with contract pricing that was lagging in the market, along with obsolete definitions and caveats, Proper recommended seeking competitive bids from several vendors.

Upon selection of a new vendor, the Proper team was engaged in validating, reviewing, and negotiating the proposed agreement’s financial savings estimates, terms and conditions, and functional requirements. The new agreement necessitated significant business process enhancements in conjunction with its strong financial benefits. The Proper team facilitated the creation of repeatable, efficient processes leveraging existing data structures to measure and interpret improved performance and associated value as well as adherence to contractual obligations.

Results

  • The Proper team’s involvement in the PBM’s retail network contracting efforts bore measurable improvements. With new market-aligned economics, the PBM was able to grow annual retail network margins by over 110%.
  • By implementing near-real time dashboards to monitor and track key performance indicators, Proper allowed the PBM increased clarity into its day-to-day operations and the ability to minimize risk by anticipating potential future variabilities in performance.

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PBM Image

PBM Network Management

We assist our clients by simplifying their network management methods and intricate data structures through centralizing pricing and client contracts and creating versatile
data sets.

Client Situation

PBMs experience constant change throughout the year, including sizable network performance fluctuations impacting client guarantees, and financial planning.

In this instance, a PBM’s current retail network contract did not represent a viable long-term response to its needs for pricing competitiveness, flexible management, and predictable outcomes. The PBM sought improved results from within the industry aligning available solutions to its specific size and scale.

Opportunities/Actionable Items

Proper partners with the PBM to identify inadequacies within their network and pricing management. After conducting a diagnostic, Proper can determine and offer the following solutions depending on client specific situation:

  • Develop a complete repository of all network pharmacy and client contracts
  • Build a centralized data warehouse as a signal-source of truth with daily claims updates
  • Create automated dataset and dashboards to reconcile client and pharmacy contracts in near-real time
  • Collaborate with the client’s Plan Build configuration team to reconfigure the adjudication system in a manner to efficiently manage client and pharmacy side pricing
  • Implement network pharmacy and client specific pricing changes

Results

Proper’s network management engagement with just one of their PBM clients resulted in both quantifiable and qualitive improvements including:

  • $10M+ in annual margin improvement
  • Accurate client pricing
  • Minimal member impact
  • Funded investment in new client wins
  • Automated near real-time reporting

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