Cincinnati Enquirer
Dec. 26, 2004 12:00 AM
Toyota Motor Manufacturing
has come up with an unusual approach to saving on health care
costs: building its own employee pharmacies.
The company pharmacies - to be expanded from one opened more than two years ago at its Georgetown, Ky., plant to its North American headquarters in Erlanger, Ohio, and other U.S. manufacturing sites - are part of an overhauled pharmacy benefit plan that takes effect Jan. 1.
"This is the biggest benefits change we've made since we started making cars in the United States," Ford Brewer of Toyota said.
The company will require employees on maintenance medications for chronic conditions to stop using retail pharmacies after three refills. Workers will be expected to use the company pharmacy or mail-order services.
It will pay all costs for several low-priced, generic medications, while requiring as much as 20 percent co-payments for competing, more expensive, brand-name drugs.
Previously, the company required co-payments of $3 or $5 a prescription.
Toyota also will encourage employees to participate in a "half-tablet" program. For some medications, such as the cholesterol drugs Lipitor and Zocor, it's cheaper to buy a higher dose and split the pill, Brewer said.
Soaring health care costs are a nationwide problem. Many employers are increasing paycheck deductions, raising co-payments, limiting coverage for non-employees and reducing covered services.
Such changes are occurring even though overall cost increases for employers have slowed from 14.7 percent in 2002 to 10.1 percent in 2003 and to 7.5 percent this year, according to the Mercer human resource consulting company. Benefit costs are projected to increase 6.6 percent in 2005.
Counting employees and family members, Toyota provides coverage to about 40,000 at its U.S. operations.
Brewer would not say how much Toyota spends on prescription drugs, but the amount has been in the millions and has more than tripled since 1998 with another 15 percent increase projected for 2004.
About 88 percent of prescriptions for Toyota workers are filled through retail pharmacies - the most expensive method, Brewer said.
Toyota hopes to slash pharmacy use to 25 percent, with about 40 percent of prescriptions filled through company-run pharmacies and the rest through mail-order services.
The company pharmacies - to be expanded from one opened more than two years ago at its Georgetown, Ky., plant to its North American headquarters in Erlanger, Ohio, and other U.S. manufacturing sites - are part of an overhauled pharmacy benefit plan that takes effect Jan. 1.
"This is the biggest benefits change we've made since we started making cars in the United States," Ford Brewer of Toyota said.
The company will require employees on maintenance medications for chronic conditions to stop using retail pharmacies after three refills. Workers will be expected to use the company pharmacy or mail-order services.
It will pay all costs for several low-priced, generic medications, while requiring as much as 20 percent co-payments for competing, more expensive, brand-name drugs.
Previously, the company required co-payments of $3 or $5 a prescription.
Toyota also will encourage employees to participate in a "half-tablet" program. For some medications, such as the cholesterol drugs Lipitor and Zocor, it's cheaper to buy a higher dose and split the pill, Brewer said.
Soaring health care costs are a nationwide problem. Many employers are increasing paycheck deductions, raising co-payments, limiting coverage for non-employees and reducing covered services.
Such changes are occurring even though overall cost increases for employers have slowed from 14.7 percent in 2002 to 10.1 percent in 2003 and to 7.5 percent this year, according to the Mercer human resource consulting company. Benefit costs are projected to increase 6.6 percent in 2005.
Counting employees and family members, Toyota provides coverage to about 40,000 at its U.S. operations.
Brewer would not say how much Toyota spends on prescription drugs, but the amount has been in the millions and has more than tripled since 1998 with another 15 percent increase projected for 2004.
About 88 percent of prescriptions for Toyota workers are filled through retail pharmacies - the most expensive method, Brewer said.
Toyota hopes to slash pharmacy use to 25 percent, with about 40 percent of prescriptions filled through company-run pharmacies and the rest through mail-order services.