Although Hallberg was up against publicly traded corporate giants, his faith in his business model never wavered and his company, MemberHealth, experienced a growth rate of 9,354 percent between 2000 and 2004.
Hallberg’s business model is based on a concept he calls transparency. Transparency removes the confusion associated with prescription drug benefits and allows the consumer to build and maintain a relationship with their pharmacist.
“PBMs have figured out ways, essentially, to make money without looking like they’re making money, which of course is the opposite of transparency,” Hallberg says. “... There developed a number of ways for PBMs to generate revenues without charging the client for that administrative cost. One of the ways is through rebates. Another way is through arbitrage, where they charge the plan one rate, but pay the retail pharmacy a smaller rate. We don’t do any of that. We are both the insurance company, and we are the PBM.”
Despite the fact that many PBMs favor certain drug manufacturers in order to make more money, Hallberg says that if you don’t have consumers’ interests at heart, then your business won’t really be a success.
“If you take care of the beneficiary, then everything else will follow,” Hallberg says.
At the end of 2005, Welsh, Carson, Anderson & Stowe acquired a major interest in MemberHealth, which will allow the company to continue to grow at a rapid pace. Despite the acquisition, Hallberg says the company will still operate under full transparency with consumers’ best interests in mind. Today, Hallberg’s dream of creating a leading PBM has come true, as MemberHealth ranked third out of 10 national plans in enrollments in the Medicare Part D arena.
How to reach: MemberHealth, (440) 248-8448 or www.mhrx.com