As a small business advocate for over 45 years, these past two years, without a doubt, have ranked as some of the most difficult. Small businesses have been forced to navigate California’s pandemic policies and faced supply chain issues, staffing shortages, inflation, and rising healthcare costs.
Many small business owners have sat sidelined to countless debates, repeatedly watching as well-intended policies fall short and costs continue to rise. And now, Congress’ latest debate is threatening one of the only tools employers have left to combat healthcare costs. Small business owners have no choice now but to speak up and urge lawmakers to consider the victims of the policies they are pursuing.
Pharmacy Benefit Managers (PBM) are shouldering the blame for rising healthcare costs, despite their proven ability to cut costs. However, Congress needs to understand that PBMs are the business community’s advocates in the drug marketplace. They make the job easier and help small business owners offer and provide maximum benefits for their employees.
Small business employees have faced hardships, and small business owners take pride in rewarding their loyalty with high-quality, affordable healthcare. However, as more of our resources are poured into higher premiums, we are left with less to invest in our business operations.
PBMs are one of employers’ few resources to protect from rising healthcare costs. That’s why 93% of employers report they are happy with their PBM partnerships. Small business owners partner with PBMs because they advocate on their behalf to do what they could otherwise not do. By pooling their purchasing power, they can negotiate with big Pharma and drive down costs.
Studies reveal that for every $1 spent on healthcare services, PBMs save $10, with patients benefiting directly from those savings. In addition, payers see an average savings of nearly $1,000 each year due to the advocacy of PBMs.
Another way PBMs leverage their large size is by building high-quality pharmacy networks and connecting small business employees. Because of their ability to drive patients to preferred pharmacies, PBMs can negotiate significant value-based contracts with those pharmacies at lower reimbursement rates and established quality standards. As a result, most employers sleep better knowing their teams are getting excellent care from trusted pharmacies.
PBMs also keep small business employees safe from harmful drug interactions. Their teams of in-house pharmacists and doctors help identify questionable claims and confront waste, fraud,
and abuse that’s pervasive in our healthcare system. Annually, PBMs prevent nearly 500,000 heart failures, nearly 250,000 kidney failures, and 180,000 strokes using this review process. Unfortunately, up to half of all healthcare spending is considered waste, fraud, or abuse in this country—and small business owners don’t want their employees to fall victim to our healthcare industry’s failings.
So why are policymakers looking to remove a proven tool to drive down healthcare costs and help promote patient safety? Especially when that tool is widely embraced by employers and is projected to save consumers more than $1 trillion on prescriptions over ten years.
As a small business advocate watching small businesses struggling to make ends meet, I have to wonder who these politicians are trying to help by making these changes. But I know that small businesses shouldn’t become victims of these policies. They have enough to worry about already!
As inflation and the challenging business environment continue, small business owners cannot afford to lose access to PBMs or have disruptive policies that limit the ability of PBMs to serve them. Therefore, as an advocate for small businesses, I strongly request policymakers to prioritize small businesses as they consider legislation that will make it even harder for owners to keep their doors open and their employees insured with maximum benefits.
Earl “Skip” Cooper II is the chairman of the Board and president emeritus of the Black Business Association. He served on the Los Angeles Advisory Council of the Small Business Administration Region IX from 1978 to 1992.