OBJECTIVES : The purpose of this research is to evaluate the medical health care utilization and spending for companies that Carve-Out their pharmacy benefits (outside their medical plan) versus those companies that offer their employees a fully integrated health care solution – “Carve-In” (both medical and pharmacy services from one vendor).

METHODS : The study population included all BCBSLA members with continuous medical coverage from October 1, 2014 to September 30, 2018. All study participants were primary members whereby their companies contracted Administrative Services Only (ASO) through BCBSLA. Additional inclusion requirements were that members had to be continuously enrolled for four consecutive years in either a Carve-In or Carve-Out program. Outcomes of interest include: per member per month (PMPM) annual expenditures, emergency room visits and inpatient hospitalizations. Patient demographics (age, gender, region), comorbidities (Asthma, COPD, Diabetes, Hypertension and Mental illness) and annual DxCG risk severity category (Healthy, Stable, At Risk, Struggling, In Crisis) were evaluated for each year across the four consecutive years for the two cohorts.

RESULTS : The Carve-Out participants (20,731) versus the Carve-In participants (49,855) were more female (60% versus 52%) with the majority (53%) residing in New Orleans. Average age, the distribution of comorbidities and risk severity categories were fairly consistent across the two groups. Initial findings show consistent year over year higher average annual costs for the Carve-Out patients (difference > $13.77PMPM) with these results becoming even more pronounced (difference > $36.90PMPM) in members with chronic diseases.

CONCLUSIONS : Removing a critical component of the health plan (pharmacy benefits) from the clinical, medical information chain appears to drive up member costs over time. Since most companies spend more on medical costs than they do on drug costs, Carve-Out programs may not in fact offer long term cost benefits.