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Common Disparities in Health Care and How PBMs Can Help Address Them

April 05, 2021

By Julie Gould

Karthik Ganesh, CEO, EmpiRx HealthKarthik Ganesh, CEO, EmpiRx Health, discusses disparities in health care and breaks down how EmpiRx Health's unique PBM model can address these disparities to add more value to the health care ecosystem and advises how other health care leaders can lean in to addressing disparities.

What are some common disparities that are often experienced in the health care world? How do these disparities impact health systems and the care provided? 

The greatest disparity in health care continues to be the targeting of clinical strategies towards the patient’s most dominant condition such as diabetes, chronic heart failure or obesity. What is missing is the complete picture of the patient’s health, as health equity related disparities are also primarily driven by underlying comorbidities. These comorbidities have a greater impact on a patient’s clinical and financial risk profile beyond just the most dominant condition. 

While the trigger for health equity might be socioeconomic such as income, education or employment, the health care disparities manifest themselves as comorbidities, which are largely ignored when looking at just the dominant condition. Looking at a patient’s risk holistically vs. based on the most dominant condition has had tremendous success in bending or plateauing the cost curve. 

For example, an EmpiRx Health member with diabetes mellitus and a benign adrenal lesion presented with high blood glucose caused by high cortisol level. Their physician prescribed Korlym, which is typically reserved as a treatment for Cushing’s syndrome patients who have failed or cannot have surgery.

When our pharmacists reviewed the member’s chart, it became evident that they did not have definitive Cushing’s syndrome, but rather a subclinical symptom due to adrenal adenoma. In this case, taking a step back to look at the whole patient beyond the apparent condition, resulted in a better prescription to manage the member’s diabetes. It also resulted in a plan savings of $165,216 per year.   

In the 1990s when HMO plans were stronger players in the health care system, primary care physicians had the ability to effectively quarterback care and understand the patient’s complete health picture. Because of this, HMOs at this time held health care spend as a fraction of the GDP constant and with minimal fluctuation.

Since their demise, condition-oriented clinical programs have been in effect and deployed by health services organizations for the last 20 years or more. Now, the overt focus on the dominant condition has resulted in an uncontrolled trend line across all aspects of health care spend – medical and pharmacy.  

We need to get back to assessing the whole person, including their comorbidities - not just the acute issues. If we do this, we can begin to address the underlying health disparities that exist in our system.  

Can you discuss the structure of EmpiRx Health’s PBM model and how it differs from others?

EmpiRx Health is the industry’s only value-based pharmacy benefits manager (PBM). We understand that health care value comes from aligning with our members’ needs.  

We take a clinical-first approach to safeguarding our members’ health and wellness. Our unique, tech-enabled, population health solution enables our pharmacists to tailor clinically appropriate strategies based on unique risk profiles. Our unique approach to pharmacy benefits helps us to uncover therapies that look at the whole patient, optimize utilization and improve health outcomes—all while bending the pharmacy cost curve.  

Other PBMs today operate with a traditional or pass though model. Both are not only volume-based and antiquated, but they have also driven an unsustainable cost trajectory.  

At EmpiRx Health, we operate with a pay-for-performance model. We don’t make money until our clients - the plan sponsor - saves money. This framework provides the incentive to achieve cost savings and having to stand behind a financial guarantee motivates pay-for-performance PBMs to optimize pharmacy benefits, not just churn out more prescriptions. 

Can you talk a little about how PBMs can address disparities in care in order to add more value to the health care ecosystem?

We are experiencing a crisis when it comes to the rising costs of health care and benefits. Employers realize that their health care costs, which were already surging before COVID, are approaching the brink of unsustainability. However, we can utilize this as an immense opportunity to address the challenges by refocusing on delivering value.

In my opinion, PBMs have acted for far too long as if they are divorced from the health care continuum. They are regularly referred to as “middlemen” because they have positioned themselves as the czars of drug pricing arbitrage, as opposed to behaving like health care providers whose goals need to be to produce health and financial outcomes.

If PBMs pivot and start to behave like service companies that are focused on true patient care, they can add value back to the health care ecosystem. A few ways that the PBM industry can work towards adding more value to the health care ecosystem include:

  • As a starting point, we need to move away from volume-based orientation– more drugs doesn’t equate to better health care.
  • Retiring one-size-fit-all clinical strategies and understanding that from a clinical risk profile standpoint that the needs of different employee populations will vary. For example, the employee population in Ames, Iowa is going to look very different from another in Trenton, New Jersey.
  • Understanding that health equity can only be addressed when clinical strategies are tailored to employer populations and their inherent nuances.
  • Adopting population health based clinical strategies vs. condition-oriented ones.
  • Breaking through the artificial cost and access dichotomy and educating employers to understand that value can be attained with lower cost and improved access.

What advice do you have for other health care leaders who are addressing disparities in their organizations?  

The reimagining of health care and the addressing of disparities in a post-COVID era is going to require health care leaders to challenge the status quo both externally in terms of their service and care models, and internally with a strong emphasis on diversity, equity and inclusion.  

The adage “customer satisfaction starts with employee satisfaction” is 100 percent true and needs to be a focal area for leaders. There’s a reason staff satisfaction is considered the fourth aim of the Quadruple Aim. Creating a sense of belonging for the staff within an organization is the greatest task that stands in front of our health care leaders. Organizations are living organisms that reflect the values of their leadership and workers who feel like they belong and are comfortable in their own skin, will provide the greatest levels of patient care, therefore adding value.  

Is there anything else you would like to add?  

COVID-19 has exposed significant flaws in the operation of the public health system at large, but it has also showcased one of our greatest strengths as a country: the dedication of our health care workers. Health care, which has been bashed for the last 10-15 years as a financially-motivated industry is once again being seen for what it is – taking care of patients. There is no better time than the present to drive a complete reimagining of how health care should work in our country.

About Karthik Ganesh

Mr Ganesh is the CEO at EmpiRx Health, the industry’s only value-based PBM, with a clinically focused and tech-enabled approach to bending the Rx cost curve.

EmpiRx Health is a category creator in the PBM space, with the only risk-bearing pay-for-performance model, powered by a unique Rx-driven population health management solution, and delivered with a boutique white-glove service experience. He joined the company in 2018 and have since worked with incredible teams to grow EmpiRx Health into an Inc 5000 company, while transforming it into a high-growth and high-innovation engine. 

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