Adding Value to Pharmacy Benefit Management Through Lean Principles

It is estimated that service industries, such as health and pharmacy benefits, spend 30% to 80% in added costs from waste and non-value-added activities.[1] Most organizations are continually looking for ways to be more efficient and add value and have begun implementing Lean activities to do just that.

Lean is a management principle developed in the U.S. in the 1980s that focuses on reducing waste in the form of non-value-added actions. It is a team-focused approach that includes employees directly involved in activities to get at the root cause of issues in order to increase productivity, and thus, reduce costs.

For the past year, Elixir, along with our parent company, Rite Aid, has been utilizing Lean principles as part of our RxEvolution, a transformative process to help our customers and members get healthy and get thriving. It began with our rebranding to Elixir, which integrated the legacy EnvisionRxOptions companies. This has been more than just a name change. It is bringing the best of our programs to the forefront, combining operations and improving efficiencies. And we have been continuing with Lean projects throughout the organization, from our Client Services team reorganization to better align with client needs, to improving the efficiency of Elixir Mail Order Pharmacy, to our call center and formularies. Throughout the organization, we are conducting Lean initiatives to provide the best solutions for our clients and members.

The Solution to a Smoother Implementation: Lean Leads to 67% Improvement

Switching to a new pharmacy benefit manager (PBM) can be a daunting task, so Elixir set out to make it a smoother process using Lean. It’s normal to have errors when you go live with a new benefits system, including a new PBM. These can occur for a variety of reasons from simple data entry mistakes to miscommunications. While Elixir has an aligned and referenceable implementation process, we believed there was room for improvement.

Using PDCA (Plan, Do, Check, Act), a key Lean problem-solving methodology that identifies and prioritizes critical problems to solve in order to improve performance, we set a goal of reducing the number of plan design configuration errors within the first 10 days after go-live by 60% or more.

After mapping out the implementation process to identify any gaps or waste, we made the following key improvements:

On January 1, 2021, after incorporating these improvements, Elixir implemented its new clients with only two plan design errors, a 67% improvement over last year. Two of the errors were found and corrected during our validation efforts and had zero member impact. We have now standardized this process and are continuing the PDCA cycle to find additional improvements.

While this is an example of Lean in implementation, there are many Lean initiatives ongoing at Elixir that will continue to improve our processes, lower costs and provide even more value to our clients and their members. Elixir is excited to continue our RxEvolution and Lean initiatives, improving our processes so we can help our customers and members thrive.