Key Players in Self-Funded US Healthcare Plans: Who Could Own the Value-Based Drug Contract?

Erin L. Albert
9 min readMar 13, 2022



Over the past 2 years now, I’ve been a student of commercial healthcare plans through my day job at Apex Benefits, and mainly, one of two kinds of healthcare plans — self-funded plans. This is basically the health plan ecosystem that employers provide to their members/employees in companies in the US.

Before I get started — a fair warning — it’s complicated.

To step back, there are two major kinds of commercial healthcare plans by employers in the US. The first is fully-insured healthcare plans. I’m not going to address those today. The second kind, however — self-funded plans — is what I’m going to discuss today. And, technically, these will be semi-self-funded plans, because I’m assuming that all the self-funded plans carry stop-loss or reinsurance. (True self-funded plans might not carry stop-loss insurance. Technically there’s also a third kind — level-funded plans, but I’m not going to talk about those either.)

(See what I mean? It’s complicated.)

Anyway, I’ve been studying value-based drug contracts (VBCs) for a year-long leadership program with the Diplomat, American Society for Pharmacy Law, DASPL program this year in 2022.

Through this post, I’m going to roll through the key vendors/players on self-funded healthcare plans here and try to analyze which player(s) might be best positioned to own the Value-Based Drug Contract process. In theory, any player could own the process, but in reality, that’s not possible.

Also, further complicating matters, of the 20,000 or so prescription drugs on the market at any time — not all plans may benefit with a VBC on every drug. Knowing which drugs are best for a VBC is a product of clinical expertise and fiscal stewardship. Not every drug needs a VBC either. Right now, globally, there are ~850 VBCs available — and not all are available in the US either. Europe and many countries where the government negotiates drug prices are and have been way ahead of the US in establishing these contracts.

To complete this analysis, first, I had to create a list of the vendors surrounding a self-funded healthcare plan in my mind for this article, which is illustrated above. And believe it or not — this is not a list in its entirety. There could be even other and more vendors than listed above, but I’m considering them as de minimus for this article’s focus.

Let’s go around the clock, counterclockwise, in the image above to look at each of the players.

Who could be best positioned to own the VBC?

The Pharmaceutical Manufacturer — I didn’t include them as a player in the above, because they don’t typically contract with health plans directly in the self-funded space. While they’re certainly a key player in the space, there is no way they can own the entire process. However, I wanted to include them because but for them, a VBC might not even exist in the first place on a drug or therapy.

Medical Carriers — Medical carriers are those carriers that handle medical claims, and medical drug claims. These are your United Healthcare, Aetna, Humana, and Cignas of the world. Technically, the medical carrier could and sometimes does own a value-based drug contract. However, the counterargument here is that many medical carriers like to keep providers happy, and therefore, medical carriers may have a vested interest in NOT owning the VBC process, in order to allow providers to charge what they like for high dollar maintenance infused drugs (drugs and therapies ripe for a VBC) instead of holding anyone (including the provider) accountable for patient outcomes. Let’s just say that there is a conflict of interest here, potentially, and that may not lead to good faith & fair dealing of any contract, including a VBC.

Providers — I would like to think that providers have the best interest of their patients at heart, and most do. However, I also know that providers, like anyone else, need to be paid for their services. By the provider or provider’s healthcare system owning the VBC, it again could have some conflicts of interest built-in, if the provider’s healthcare system is making significant money off of the deal without a VBC in place on a high dollar therapy. The larger healthcare systems out there (large academic hospitals, specialty care hospitals like oncology or children’s hospitals) are not necessarily incentivized to put in place VBCs either, because they get paid less if there’s less efficacy with a drug under a VBC and therefore smaller reimbursement levels on a drug. Moving onward…

PBMs — How about pharmacy benefit managers? Some pharmacy benefit managers do have VBCs in place; however, for the majority of high cost/high touch drugs, like orphan drugs, or ongoing infused drugs by a medical provider (and inside the medical benefit), most PBMs do not have the ability to reach these drugs and claims data in the supply chain, let alone monitor the patients’ outcomes for these drugs. And, just like medical carriers and providers, the PBMs have a vested interest in keeping the costs high, especially if they own a specialty pharmacy that is dispensing or shipping the drugs to providers. This carrier too has a potential conflict of interest.

3rd Party Advocacy Rx Vendors — What about 3rd party advocacy Rx vendors? While these organizations provide a valuable service to many self-funded plans to maximize patient advocacy programs for high-cost drugs, the overwhelming majority of them do not have clinicians, let alone the sophistication needed for clinical monitoring of patient outcomes on some very complex VBCs. While in theory they have the incentive to get the costs of the drugs down for plans and members, they don’t have the clinical knowledge necessary.

Stop Loss or Reinsurance Carriers — If you’re unfamiliar, stop loss or reinsurance is another type of insurance that many self-funded plans purchase in order to cover what we call “shock claims” or ultra-high dollar claims on health plans. This offers another level of protection for the plan against a lot of high-cost claims that may happen in a patient population over a plan year. What’s interesting is that now many drugs are so high cost that the drugs instead of procedures or hospitalizations are causing shock claims to plans. Stop-loss picks up the tab on these high-cost claims, so they definitely have the interest to ensure that the drugs are actually working for a patient and if not, demand drugs or therapies at a lower cost. However, what many stop-loss carriers lack is the clinical knowledge to again monitor for patient outcomes. I know of no stop-loss carriers that employ physicians and/or pharmacists to monitor clinical outcomes down at the plan level. If they did, however, they’d have the motive and the opportunity to administer VBCs, potentially.

3rd Party Savings/Recovery Vendors — Just like there are 3rd party advocacy vendors for prescription drugs out there, there are also 3rd party savings/recovery vendors on the medical benefit as well. I only know of one that actually employs a pharmacist that we work with, and again, while they have the incentive to get costs down, I think they often enter too late in the game, where they negotiate down claims costs AFTER they’ve been billed. VBCs need to be put into place earlier in the process in order to measure patient outcomes over time. Therefore, I don’t believe this type of firm is optimally positioned to own the VBCs either.

Ancillary Carriers — These are your dental, vision, and other vendor carriers on any benefits on your health plan. They are specialized in their own areas of practice, so they are too narrow in scope to own the VBC process overall. In theory, if there’s a drug/therapy that falls into one of these ancillary benefits, it could be owned by the ancillary carrier if they have clinical staff on board who can properly monitor patient outcomes, but it would be narrow in scope. For example, a carrier for an organ transplant policy might be able to handle a VBC on a high-cost immunosuppressant drug IF they have the clinical expertise in place to manage it, but that’s a handful of drugs.

Data Analytics Platforms — I love data. Every self-funded employer’s data tells a story. That and, data analytics platforms generally do a decent job of tracking and warehousing clinical data at the claims level. However, while they may be getting to the place where they can warehouse even more data beyond claim lines, most data analytics platforms’ “clinical teams” are not clinicians either. Most data analytics platforms are managed and developed by tech/programming professionals, who are NOT clinicians. Therefore, they, too, lack the clinical insight and sophistication for monitoring patient outcomes in a VBC. (I hope that all data analytics platforms reading this, BTW, consider hiring healthcare clinicians for a competitive advantage AND for better customer service moving forward, regardless of my analysis for VBCs.)

HSA Vendor — Healthcare Savings Programs (HSAs) come with high deductible health plans (HDHPs) — think of them as a savings account for your out-of-pocket healthcare expenses. These are mainly banks and credit unions that may understand the world of finance, but again, lack clinical.

3rd Party Concierge Vendors — I like the idea of these types of firms; helping the patient/member access and optimize their healthcare benefit is a noble task, especially considering the complexities of the US commercial healthcare system. However, most of these vendors that I’ve run into in the past several years also seriously lack any clinical sophistication whatsoever. They overcharge (gouge?) plans, and do not deliver on even basic services. That, and they exist in theory for plan members to navigate the healthcare system, not the plan itself. So no, they do not offer good ownership of a VBC.

Broker/Advisor — Broker/advisors are hired by self-funded plans to help them shop the marketplace for healthcare benefit solutions. Who does the benefits advisor work for? The plan. So, there’s a benefit to the plan — the broker/advisor has the plan’s best interest at heart. Second — does the broker/advisor have a clinical team to oversee and monitor clinical outcomes on a VBC? I’ll straight-up admit it here — most do not. However, some do — like Apex Benefits. Also, there is no one else involved in the plan that can bring ALL the players together for a VBC like a broker/advisor can and often does.

Any VBC training and education will note that all players need to be brought together in order to run a successful VBC — the provider, the carriers, the plan itself — who else could do that better than a broker/advisor? I honestly cannot think of one. And, the broker/advisor has the best interest of the plan and the member here, whereas all other players have a potential conflict of interest, except perhaps the stop-loss carrier I mentioned above.

If the broker/advisor has a clinical team, and perhaps a big enough book of business to actively pursue VBCs are two very important issues for broker/advisors to consider when pursuing VBCs. But, with the proper data analytics, clinical team, and ability to bring the players together, I personally believe that it is the broker/advisor who could best own the management and accountability of a VBC.

Am I biased? Probably. But I know that at Apex Benefits, we have a clinical team that could actually handle measuring clinical outcomes and holding providers and carriers accountable. Not every broker/advisor can — and I’d say the majority cannot at present time. We can.

In the end, the VBC will be more common in the next 5–7 years, IMHO, because more and more high-cost therapies are coming to the marketplace, and when self-funded plans are laying out millions of dollars PER CLAIM, they’re going to want to make sure the therapies work for their patient members — it may even become part of their fiduciary duty in the future…?


Dr. Erin L. Albert is Kinetiq Health Pharmacy Benefits Practice Leader at Apex Benefits and President of the American Society for Pharmacy Law. Opinions in this article, however, are her own, and not necessarily those of her employer or any of her affiliations.



Erin L. Albert

Pharmacist, author, lawyer, intrapreneur. Opining is my own.