Opportunity Costs
Hey, again!
On my last message, we talked about doing the right math. But doing the math often means facing a decision point that requires a clear analysis of both the benefits of change and the opportunity costs of staying put. It’s easy to focus on potential switching costs —implementation headaches, short-term disruptions, and effort—but what about the cost of inertia? What about the dollars, flexibility, satisfaction and patient outcomes slipping through your fingers every day you choose the status quo?
Let’s Dive In!
Imagine you're standing at a crossroads. One path leads to a modern, optimized pharmacy benefits model (Prodigy)—cost control, transparency, and better outcomes. The other? A well-worn trail of escalating costs, hidden fees, and misaligned incentives. The only problem? Many payers are frozen at the fork, afraid to move. Read article on sunk cost fallacy.
But here’s the reality: Not switching your PBM isn’t a neutral decision—it’s an expensive one. It’s like refusing to upgrade from dial-up internet to high-speed fiber because "the old way still works.” Meanwhile, your competitors are streaming in 4K while you're stuck buffering, losing time, efficiency, and cost savings with every passing moment.
Let’s talk about the opportunity cost of staying put.
Hidden Fees (The Slow Leak in the Boat)
Many legacy PBMs operate like old insurance policies—you think you’re covered, but the fine print is bleeding you dry. Spread pricing, rebate traps, and arbitrary markups siphon money out of your plan. Staying with a legacy PBM is like patching up a sinking boat with duct tape while watching competitors sail past with high-performance engines. Every month you delay switching, you’re funding someone gross margin.
The Cost of Inflexibility (The Rusted Lock on the Toolbox)
Innovative PBM models offer dynamic pricing, cost-plus agreements, and real-time data transparency. But if you stick with a rigid, outdated PBM, you’re effectively locking your toolbox and throwing away the key. They limit your ability to adapt to market shifts, new therapies, and employer demands. In the dynamic pharmacy landscape of the future, agility wins. Standing still? That’s just slow-motion failure.
The Patient Experience Cost (The Slow Lane of Healthcare)
Every payer talks about patient outcomes, but an opaque, old school PBM operating model puts profits ahead of patients.That means higher payer costs, restricted access, and unnecessary barriers to care. Imagine running a rideshare company but forcing passengers to take the longest, most expensive route every time. It takes longer and costs more. That’s what sticking with the wrong PBM feels like for patients (and payers alike). A smarter, more aligned PBM puts the patient in the fast lane—with cost-effective, clinically appropriate access to care.
The Fork in the Road
We’ve talked before about fuzzy logic how decisions—or indecisions—can sabotage your program success and how leaders get trapped in the sunk-cost fallacy. This is one of those moments. The cost of switching PBMs may feel daunting, but the cost of inaction is worse. Every day you delay, you’re leaving money, flexibility, and patient trust on the table.
The best leaders know when to pivot. Are you ready to make the right turn?
Bottom Line:
Escaping the status quo isn’t just about making a change—it’s about making a smarter move. If you have any doubts, let’s take five minutes to do the right math on your switching costs vs the opportunity costs of staying keeping your current PBM. As I have said before, if you don’t walk away with valuable insights, the next coffee’s on me. But if I’m right, you’ll be one step closer to cutting through the noise and making a decision that will have your whole team thanking you.
Let’s chat.
