Challenge: Drug Cost Containment
The client, a large mechanical contractor with a self-funded health plan, was experiencing rising costs due to high-dollar specialty medications. In 2023, a single prescription entered the plan with an annual cost exceeding $120,000, prompting leadership to conclude that this level of exposure was unsustainable for both the company and the Plan.
Client: Nationwide Mechanical Contractor
Engagement Start: 2022
Services Provided: Executive Oversight of Health and Welfare Insurance
Solution:
KBIC Consulting, serving as the client’s Vice President of Health & Welfare Insurance, led a strategic redesign of the prescription benefit to attain drug cost containment. In collaboration with the client’s leadership team, plan broker, legal counsel, and PBM, KBIC implemented targeted plan modifications to manage catastrophic drug costs while preserving member access. This approach successfully limited the plan’s financial exposure while maintaining broad access to necessary medications and ensuring long-term affordability for both members and the Plan.
Because the formulary change affected an employee actively using the high-cost medication, KBIC took a proactive, member-first approach. The team directly engaged the individual and helped access the medication at a lower cost point than before, while ensuring continuity of care.
To further enhance this strategy, the client amended its overall compensation structure, which is available to all employees, designed to ease the financial burden of changes to the health plan.
The result was not only a better-aligned plan design but also a net plan savings of $110,000, even after accounting for the additional costs to ensure continuity of care.
Why KBIC:
KBIC’s fiduciary-first approach balances plan-level cost containment with individual access to care. In this case, KBIC didn’t simply exclude a medication, it created a compliant and parallel access strategy, safeguarded member outcomes, and implemented a repeatable model for future specialty drug risk.
Client Feedback:
“KBIC’s Team has been a tremendous addition to our Team. We have known of KBIC for a while. In the past, we chose not to utilize their services, thinking we could achieve the results on our own with our broker relationships. We found that not to be the case through many trials and tribulations. In 2022, we hired KBIC to manage our insurance process and have re-upped for another year. They truly act as a fractional chief insurance officer and are a part of our team. Their experience and service in this realm are top-notch, and their fiduciary approach is like nothing I have experienced in managing insurance. As CFO, I can now review data, provide input, direction, and vision, and then KBIC handles the rest. Oh, and I almost forgot they save us money too!”
— Chief Financial Officer, Nationwide Mechanical Contractor in the Indianapolis Area
Impact:
- Capped drug spend at $75,000 per prescription annually
- Avoided $120,000+ in recurring pharmacy liability
- Achieved $110,000 in net plan savings
- Maintained employee access to care
- Introduced a compensation structure redesign available to all employees
- Enabled a sustainable strategy for managing high-cost drugs
- Future guardrails on medication costs