Retirees may see lower drug costs



Yale’s retirees could soon see lower prescription drug costs if a nearly-completed deal between the University and Medco Health Solutions is finalized, Chief Human Resources Officer Rob Schwartz said Thursday.

Medco, one of the nation’s largest pharmacy benefit management corporations, is set to provide Yale’s retirees with health cards guaranteeing discounts at local pharmacies and automatically charging 80 percent of their prescription costs to the University — less a $100 deductible — per the retirees’ contracts, Schwartz said.

“With the card, when they go to their local CVS, they will only have to pay their local co-payment amount,” Schwartz said. “The old approach was you went to the pharmacy, you paid your money, you submitted your claim form, and you got reimbursed.”

Since she has not discussed the particulars of the Medco agreement, Doris Rogan, the president of the Yale Unions Retirees Association, said it was premature for the 1,100-member group to evaluate the benefits of the deal.

Human Resources Technology and Decision Support Director Chuck Paul said he expects an almost immediate retiree savings of 25 percent on current prescription drug costs. The bargaining power of Medco, which represents tens of millions of customers nationwide, offers benefits to both parties, he said.

“For the retirees, they just save money, period, and from the University’s point of view, there’s also a significant savings, because the 80 percent we pay is now a much smaller number,” Paul said. “It’s cliche, but it really is a win-win — It was the best remaining financial option in the benefits area without making somebody pay more.”

The agreement with Medco, which has been in the works since July, is the product of a retiree health subcommittee established in spring 2003 to address the problem of skyrocketing prescription drug costs, Paul said.

Rogan said she hopes University human resources officers share more information with the retirees association before signing with Medco.

“We did receive something in the mail, and we were sketchily given an outline, but that’s about it,” Rogan said. “They’ve told us there’s going to be a change in the billing process, and that’s all.”

Rogan said a retiree committee is scheduled to meet with Yale officials Dec. 9 to discuss the policy in more detail. She said she thought simplification of the billing process would be a positive step for retirees, citing past claims problems with laboratories, but there are no guarantees, she added.

Since the Medco program would include non-union retirees as well as those in the retirees association, human resources officials plan to send individual notices to all retirees before the end of the year, Schwartz said.

Although the benefits offered by Medco are not currently set to apply to students or active employees, Paul said human resources may consider extending them to more than 2,500 active employees who are outside the Yale Health Plan by 2006, depending on the success of the current initiative.

Deputy Health Services Director Chris Kielt said his department intends to incorporate the Medco benefits alongside comparable Yale programs.

“From a health plan perspective, we were interested in making sure there was the ability to integrate our services with the vendor selected and from a pricing perspective, to make sure that no one involved was left disadvantaged,” Kielt said.

Participants in the University’s general health plan would be the last to gain the Medco benefits if at all because their payments on the top 150 prescription drugs sold are already comparable to those of the Medco program, Paul said.

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