New Coalition Led by UK Saving Millions in Employee Health Costs

LEXINGTON, Ky. (July 12, 2011) — The University of Kentucky (UK), the University of Louisville (U of L) and Eastern Kentucky University (EKU) are joining forces to help university, college and public sector employers save money on prescription benefits provided to their employees and retirees. On July 1, 2011, the three universities launched the Kentucky Rx (KYRX) Coalition, a purchasing collaborative. Because savings occur through volume purchasing discounts, member organizations realize financial savings without necessarily changing benefits provided to employees and retirees.

In joining the coalition led by UK, U of L and EKU will realize significant savings. The coalition’s newest member (effective Jan. 1, 2012), the Kentucky Teachers’ Retirement System (KTRS), anticipates annual savings of $11 million and a $400 million reduction in the long-term financial liability associated with its health plan for retirees age 65 and over.

For new UK President Eli Capilouto, the coalition enables the University of Kentucky to share the benefit of lower-cost prescriptions in a way that helps fulfill its core mission to the state and its citizens.

“It is a great privilege for the University of Kentucky to help lead the way in expanding the availability of low-cost prescription medicine. As the state’s flagship, land-grant institution, we have a responsibility to leverage our advanced pharmaceutical sciences and medical services to provide a healthy future for the people of Kentucky. We are fortunate to be joined in the Kentucky Rx Coalition by our key partners, the University of Louisville and Eastern Kentucky University — two institutions equally committed to improving the lives of all Kentucky citizens. I look forward to seeing this program grow in the years to come.”

According to University of Kentucky Chief Human Resources Officer and KYRX Coalition Board Chair Kim Wilson, the coalition offers both financial and public health benefits. “By providing market-driven solutions to lower costs and opportunities to collaborate with other employers on best practices in health plan management, we are helping fulfill the University of Kentucky’s outreach mission to the Commonwealth,” Wilson said.

Founding organizations cite cost savings and continuity among the advantages offered by the coalition:

•           “We're constantly looking for new ways to save money.  This new agreement does just that and is another example of Kentucky universities working together for the betterment of our state and its people."

- James R. Ramsey, president, University of Louisville

•           “Every university in the state is working to find ways to operate more efficiently and cut costs while maintaining services. Efforts like this one involve cooperative ventures among institutions.   This project saves money and maintains the benefit we provide our faculty and staff.   I am pleased we have the opportunity to participate in this with the University of Kentucky and the University of Louisville.”

-  Doug Whitlock, president, Eastern Kentucky University

The coalition is managed by administrators, pharmacists and support staff at the University of Kentucky. Prescription benefits for member organizations will be administered by Express Scripts, a company providing pharmacy benefit management services. The Kentucky Rx Coalition is modeled after a similar organization in Ohio, the Rx Ohio Collaborative (RxOC), which is led by The Ohio State University.

While founding members of the coalition are among the state’s larger employers, smaller colleges, universities and municipalities may benefit as the group expands. “Because all member organizations receive the same pricing discounts regardless of size, smaller employers in government and higher education may see significant benefits by joining the coalition,” said Joey Payne, director of University of Kentucky employee benefits and executive director of the Kentucky Rx Coalition. The coalition also expects to see pricing discounts improve further as the size of the coalition grows.

KTRS Executive Secretary Gary L. Harbin cites another benefit offered by the coalition. “An added advantage for our health plan members will be the availability of UK pharmacists, who are available to field prescription questions and, where appropriate, help find lower-cost generic equivalent drugs.”

Individuals covered by coalition members’ health plans may contact a UK pharmacist directly by phone with medication-related questions or for advice on lowering out-of-pocket prescription costs.  This program was based on a “Copay Counseling” service available to UK employees, which was originally developed through a partnership between UK’s College of Pharmacy and Human Resources division.

Overall, Payne sees the pharmacist counseling service as one of many ways the coalition may help both member organizations, their employees and retirees manage health care costs more effectively. “The coalition is ultimately about employers working together toward a common goal and, because our organizations provide benefits to so many Kentuckians, sharing the best ideas to promote good health across the Commonwealth,” Payne said.

For more information on the RXKY Coalition, visit the website at www.kyrx.org.