Costco intent on improving health care price transparency

Mike Troy
Editorial Director
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Costco has invested an undisclosed sum in a health care provider with an innovative approach to service and pricing that aligns with the warehouse club operator's longstanding value proposition for members.

Costco purchased purchased a minority equity interest in the pharmacy benefit management (PBM) company, Navitus Health Solutions, including Lumicera Health Services, its specialty pharmacy subsidiary owned by SSM Health.

“Navitus shares our long-term commitment to transparency and our philosophy of reducing costs and passing savings on to our members. Included in that mission is lowering the health care spend for patients at our pharmacy, optical and hearing aid departments,” said Craig Jelinek, president and CEO of Costco. “We look forward to working together, to expanding our support of the Navitus relationship and to enabling more people to receive the quality care they need at an affordable price.”

SSM Health is a Catholic, not-for-profit health system serving the health needs of communities across the Midwest through a network of 23 hospitals, more than 290 physician offices and other outpatient and virtual care services, as well as 10 post-acute facilities. SSM has nearly 40,000 employees and 11,000 providers who the company says are, “committed to providing exceptional health care services and revealing God’s healing presence to everyone they serve.”

In a joint statement, SSM Health and Costco said they share a commitment to cost transparency, superior customer service, and a focus on providing the highest-quality products and services at the lowest cost. Costco’s investment and expertise will enable the not-for-profit Catholic health system to more rapidly expand its disruptive PBM model to benefit more people.

“Navitus is an industry-leader in transparency with a demonstrated ability to lower overall pharmacy costs for clients,” said Laura S. Kaiser, FACHE, president and CEO of SSM Health. “We are thrilled to strengthen our relationship with Costco, a global organization, and to expand our reach and help millions more individuals and families have access to affordable prescription drug coverage.”

What make Navitus unique in the PBM world is it operates as on a 100% pass-through basis so that every dollar in rebates, fees and incentives from drug manufacturers is passed through to clients, along with all network discounts. Navitus maintains this approach fully aligns it with client goals, resulting in significantly lower overall pharmacy costs.