PBM 'Digital Formularies' Promote Healthier Habits with Vetted Apps

Pharmacy benefit managers can be intermediaries for apps as well as for medications

By Greg Goth October 12, 2020
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Woman doing yoga by following app on her tablet.

The COVID-19 pandemic has focused employers' attention on digital health tools. One way to discern the best-quality health and wellness apps is to take advantage of "digital formularies" overseen by a pharmacy benefit manager (PBM).

PBMs administer prescription drug plans for more than 270 million people in the U.S. who have health insurance from commercial health plans, self-insured employer plans or other types of coverage. They maintain drug formularies, which are continually updated lists of prescription drugs whose price the PBM negotiates with pharmaceutical makers, and which the PBM then approves for reimbursement by payers, such as insurers.

Digital Formularies for Health Apps

Like prescription drug formularies, the PBM can also select products and negotiate prices to create digital health formularies. The formularies are updated as new apps become available and replace older tools, or as prices are renegotiated.

Two of the nation's most prominent PBMs have already launched digital formularies:

  • Express Scripts' Digital Health Formulary has 15 apps, including remote monitoring services and digital therapeutics that aid in the management of eight of the most common chronic conditions: diabetes, prediabetes, hypertension, asthma, pulmonary disease, depression, anxiety and insomnia.
  • CVS Health's Point Solutions Management helps employers to simplify contracting, secure the lowest price and monitor ongoing performance of 10 health apps, including digital programs to reduce stress, control high blood pressure, provide access to virtual physical therapy, lose weight and improve sleep habits, for example.

These two programs are in the vanguard, said Chantell Sell, national pharmacy practice clinical leader at consulting firm Willis Towers Watson in Springfield, Pa.

"For most of these solutions, it's an inherent value-add" provided by the PBM, Sell said. "They evaluate the clinical merits and extract whatever financial value they can" from the app vendors—tasks that employers would likely lack the resources to do internally without a dedicated team, she noted.

Andrew Rebhan is an expert partner for digital health intelligence at The Advisory Board in Portland, Ore., which uses research and data to help health care organizations improve performance. He also sees merit in PBMs offering digital formularies, not only for health management but also for plan administration.

"The estimate is that there are at least 300,000 mobile health apps, [and the actual number] could be far greater," he said. "It's far more manageable to say, 'Here are 15, 20, or 30 digital health apps that can simplify contracting, streamline pricing and ease administrative workflow.' It can give a greater sense of predictability in what insurers and employers can offer members or employees. For the vendors, it serves as a stamp of approval."

'Digital formularies can simplify contracting, streamline pricing and ease administrative workflow.'

Noora Garnett is director of benefits at Hubbell Inc., a Shelton, Conn.-based manufacturer of electrical and electronic products and a CVS Health client. The PBM's digital formulary simplifies the process of evaluating and selecting health apps, she said. While Hubbell's benefits team evaluates digital tools on its own, receiving the blessing of the company's PBM gives "that little extra credibility," she noted.

PBM's Vetting Criteria

CVS Health said it selects digital tools for its formulary using the following method:

  • Evaluators use aggregate claims data to rank clinical conditions among client employees by medical and pharmacy costs, highlighting areas of the largest health care spending.
  • They reprioritize the ranking based on additional areas of need—and the biggest health care challenges—identified by a representative set of clients.
  • They then map the availability of health apps against each area of need, noting where they could have the greatest positive effect on health and well-being outcomes.

Candace Jodice, CVS Health's vice president of benefits, said the PBM takes seriously its responsibility to provide high-quality apps. "We spend a lot of time vetting the [app vendor] and tool," she said. "We want to see that people have had results" using it.

Clients Select Apps for Their Workforce

Hubbell's Garnett said her team opted to offer Livongo, a diabetes-monitoring platform, through CVS Health, and it proved beneficial to employees. "We did very little advertising [among our employees] for Livongo when it was launched," she said. "Just by offering it through CVS, we immediately got about 25 percent of our eligible population to sign up."

Hubbell now also offers sleep improvement app Sleepio to employees through CVS. "Having this experience [with Livongo] made us feel very comfortable offering Sleepio through the same channel," Garnett said.

She said partnering with a PBM for its vetted digital tools is a matter of calculating exactly how much value the PBM provides over self-managing relationships with app vendors or other health and wellness program partners, and how to fit those pieces into an overall digital health strategy. For example, Hubbell's employee assistance program provides access to the mindfulness platform Whil, which is also available through CVS Health's digital formulary, so she saw no need to add Whil through the CVS program.

ROI Metrics Still in Their Infancy

In the larger digital health tool ecosystem, any sort of "industry standard"—beyond vetting by either a company's own HR team or by a PBM—does not seem to be imminent. Especially lacking at present is a standardized return on investment (ROI) metric for health-related apps.

CVS Health's Jodice said those metrics are often "soft" for some categories, while others, such as diabetes-monitoring tools, offer more empirical evidence.

In the case of the Sleepio app, she said, "We felt pretty confident the way [the app vendor] calculated the ROI was actually going to result in an improvement in productivity at work because people are going to get better sleep."

She added, "We want to see participation levels go up, obviously. We hold vendors accountable for engaging our employees. We have dropped programs if employees are not engaged."

While it can be difficult to pin overall improvements in employees' health on any one source, "you have to cover all the bases" when it comes to helping employees take care of their health, Jodice said.

The Advisory Board's Rebhan said investing in tools that may not provide a quickly quantified ROI may still be worthwhile.

"It's hard to discount the impact of a happier mood for your staff" resulting from providing health apps, he said. "They will be more engaged and motivated" when they feel that the company cares about its employees' well-being.

Greg Goth is a freelance health and technology writer based in Oakville, Conn.

Related SHRM Article:

Mental Health Apps Offer New Ways to Support Employees, SHRM Online, May 2020

Employers' Dream of Controlling Health Costs Turns to Workers' Sleep, SHRM Online, February 2020

Virtual Physical Therapy Could Be Telehealth's Sweet Spot, SHRM Online, November 2019


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