PBM Growth Strategy Strengthens Blue Cross Business

SITUATION

Sometimes expanding business within a large client infrastructure can be just as challenging as building pipeline for small startups. Such was the case with a national PBM, that sought to expand its business presence at Blue Cross Blue Shield plans through a range of new product offerings. In this case study, we discuss how strategic planning and execution helped the PBM stand up a new profit and loss center (P&L) specifically for Blues accounts, creating a focused strategy to better serve the client and patients.

CHALLENGE

While Blue clients represented 25% of the PBM’s total revenue, no strategy or supporting structure was in place to grow business within this key client base. As a result, the organization experience high turnover and missed commitments, resulting in lost growth opportunities in its highly competitive market. Having launched walk-in clinics in retail stores, and completed acquisitions in Rx benefits and disease management, the PBM planned to leverage these new platforms to increase overall revenue.

APPROACH

To better support the Blue business, a dedicated P&L business was launched within the PBM to “land and expand” new business within the Blues nationwide. This required completely re-defining the business model, evaluating staffing requirements and roles for the Blue-centric pharmacy benefit services (PBM), Specialty Pharmacy and Retail business, as well as the sales, marketing and account management functions. The Blue team was recruited from within the PBM, engaging human resources (HR) and recruiters to supplement as needed.

RESULTS

Within the first six months of launching the new business unit, revenue velocity increased by 14%. Just as important, the PBM experienced a 20% increase in covered employee lives and 100% client retention.