Pharmacy Cost Containment Strategy Saves Nonprofit Over $400,000
March 3, 2026
Utilizing a pharmacy cost containment strategy, a Sarasota, FL based foster care agency saved over $400,000, reducing overall program costs
Utilizing a pharmacy cost containment strategy, a Sarasota, FL based foster care agency saved over $400,000, reducing overall program costs
A foster care and adoption agency based in Sarasota, FL, was operating under a self-funded health plan model. As a mission-driven organization, they needed an affordable and sustainable benefits program to support their employees. However, the agency faced significant challenges, including high pharmacy claims, volatile renewal rates, and a lack of a proactive cost containment strategy. Stabilizing renewals and ensuring affordability for employees became a top priority for the CEO.
The agency’s health plan was burdened by hidden costs and inefficiencies. High pharmacy claims and unpredictable renewal rates created financial strain, while the absence of a proactive cost containment strategy left the organization vulnerable to escalating expenses. These issues threatened the affordability and sustainability of the benefits program, putting both employees and the agency’s mission at risk.
To address these challenges, The Miller Group conducted a comprehensive review of the Pharmacy Benefit Management (PBM) contract, the top 10 drug spend, and overall claims performance. The analysis uncovered $70,000 in hidden PBM fees and identified a potential savings of over $400,000 on high-cost medications. Strategic actions included changing the PBM provider, shifting to annual contract terms, implementing proactive pharmacy analysis, and addressing high-cost medications. These measures were designed to stabilize costs and create a sustainable benefits program.
The year-end results were transformative. Pharmacy spend decreased by 56.3%, saving the agency $424,000 through the pharmacy program. Employees benefited from $1,900 per employee per year (PEPY) savings, while the agency achieved a $319,400 surplus for claims funding. Fixed cost renewals remained flat, and stop-loss rates saw significant decreases (13.4% for aggregate and 11.9% for individual). For the first time in a decade, premium rates were held flat, contributing to an overall program cost reduction of 14.1%. These outcomes delivered financial stability, employee savings, and long-term sustainability, ensuring the agency could continue its mission and support its community.