Cover Story – Elixir for growth

Posted on Aug 1, 2015 :: Cover Story
Posted by , Insight on Business Staff Writer
Debbie Ludka

Debbie Ludka

Debbie Ludka is used to the question by now.

When people ask where she works or see she’s wearing her Navitus Health Solutions shirt or badge, they respond: “Navitus — that’s the big building off of 41— what do you do there, anyway?”

Ludka answers quickly, saying Navitus is a pharmacy benefit manager that administers prescription drug plans for insurers, government plans and self-insured businesses. “I get a lot of blank stares when I say pharmacy benefit manager — people don’t know what that means,” she says.

Ludka, senior vice president of customer operations and chief compliance officer, can expect to get a lot more questions in the months to come as Navitus breaks ground this fall on a second building along Interstate 41 in Appleton.

The company, which is headquartered in Madison but has a large presence in Appleton with more than 300 employees, has grown tremendously in the past few years as businesses, insurance companies, administrative fee plus the cost of the drugs,” he says. “There are no hidden costs. We also pride ourselves on meeting enrollees’ needs by giving them great customer service.

When you call Navitus, you get a person — not a phone tree. It’s those personal touches that matter and make a difference.”

Since Navitus was formed in 2003, it has grown to serve more than 300 clients and administer prescription drug plans for more than 4.2 million people. The key to the company’s growth is being able to meet clients’ needs by providing great customer service while also lowering their overall drug costs, says Navitus CEO and President Terry Seligman.

Terry Seligman

Terry Seligman

“We are a completely transparent company. Our clients pay us a flat administrative fee plus the cost of the drugs,” he says. “There are no hidden costs. We also pride ourselves on meeting enrollees’ needs by giving them great customer service.

When you call Navitus, you get a person — not a phone tree. It’s those personal touches that matter and make a difference.”

It’s been a huge difference for Navitus’ clients, who have been able to save money on their prescription drug plans and are reassured their enrollees’ needs are being met.

“Navitus is a great partner. They are excellent at communicating with us if there’s a better, lower-cost drug alternative for our enrollees, for example,” says Shane McPeak, employee benefits manager with Trek Bicycle Corp., who has used the company to administer its prescription drug plan for the past several years. “All the way around, from working with our employees to administering the plan, they do a fantastic job.”

Navitus was created when the leaders of Appleton’s Touchpoint Plan (which was operated by ThedaCare) and Dean Health Plan in Madison decided to spin off their prescription drug plans into a new company. Four years later, Dean Health purchased Touchpoint’s shares, becoming Navitus’ sole owner. Dean Health is owned by SSM Health, which operates 19 hospitals in four states.

Courtesy: Navitus

Navitus has already outgrown the three-story, 70,000-square-foot building it built two years ago along Interstate 41 in Appteton. It plans to begin construction of another building on the same campus this fall. Courtesy: Navitus

Navitus originally operated locally out of Touchpoint’s building in Grand Chute across Bluemound Road from Fox Valley Technical College, but as the company grew it became obvious more space was needed. The company opened its three-story, 70,000-square-foot building — which has high visibility to drivers on Interstate 41 — two years ago.

“But we’re growing out of this space, so we decided to go ahead and build the companion building to it — which was always part of the plan — but we’re doing it sooner than expected,” Ludka says.

The new building will be about the same size as the original, and the two will be connected.

Appleton isn’t the only place Navitus is growing. The company plans to add more than 5,000 square feet to its Madison headquarters and also has regional offices in Austin, Texas and Phoenix. Seligman says the regional offices allow the company to be more responsive to its clients in those parts of the country. Navitus, for example, handles the prescription benefit for LA Care Health Plan, the nation’s largest publicly-operated health plan that serves 1.5 million people in Los Algeles County.

While Navitus started out growing slowly – in 2007 the company had 20 clients, which climbed to 100 by 2011 – it has seen explosive growth in the past couple of years.

“Today, we have 300 clients, and there’s no slowing down,” Seligman says. “Word-of-mouth about our transarency as well as great customer service are leading to the growth.”

Julie Herschleb, director of total rewards at Johnsonville Sausage, says Navitus’ reputation as a straight-shooter led the Sheboygan Falls company to choose it to manage its pharmacy benefits plan in 2009. “We were very intrigued with Navitus’ transparent business model. THere are no hidden costs. They pass 100 percent of discounts and rebates through to plan sponsors,” she says. “Johnsonville and its members have experienced lower pharmacy costs and excellent customer service since working with Navitus.”

Navitus’ customer service has helped rank the company among the top pharmacy benefit managers in the country serving 20 million or fewer members for the past four years.

That survey, which was done by the Pharmacy Benefit Management Institute, also gave Navitus a 9.5 out of 10 of “likelihood to recommend” the company to others.

Ludka says understanding what the customer needs is an integral part of Navitus’ success.

“It’s not just slick marketing. We’re there to work with customers on their needs and new customers come to us because they want support — for their enrollees as well as on the account management side,” she says.

As clients are added, Navitus has added to its workforce. The company originally started out with about 30 employees, Ludka estimates, but now employs 500 company-wide with plans to add more. The call center in Appleton, which has 318 employees, is always searching for qualified help. Navitus hires its call center employees on a temp-to-hire program and they must complete a month’s worth of training before taking that first call.

“We’re an employer of choice for those who work in call centers. They’ve heard about how we’re all about meeting customers’ needs and that we’re not trying to push them off the phones to get a higher call volume,” Ludka says. “We want to make sure our clients’ needs are met on that first call.”

Transparency is the word both Navitus leaders and clients use to define how the company is different from other pharmacy benefit managers. Seligman says allowing customers to see exactly where every dollar is going is unheard of in the industry.

“We’re an open book. People know what they are spending and why. Trends show us people are spending less year over year because they utilize our service,” he says. “Clients are charged for the cost of the drugs — and receive all discounts and rebates — plus an administrative fee. It sounds so simple, but that’s not usually how it’s done.”

Due to its scale, Navitus is able to get discounts from drug manufacturers, which are then passed on to customers.

Clinical expertise in putting together formularies — that’s the list of drugs an insurer will cover — also plays a role in keeping costs down, Seligman says. The company employs a lot of pharmacists — including Seligman, who worked as a pharmacist earlier in his career — to look at the available options.

“You would think it’s simple, but the systems and decisions in place are quite complex and require multiple decisions being made when it comes to putting the formularies together,” he says.

Pharmacists are also available to approve pre- authorizations, too. Pharmacy expertise isn’t limited to the people putting together the formularies. Many employees in Navitus’ call center have pharmacy tech training so they are better informed to help answer customers’ questions, Seligman says.

Ludka says the call center — which is based in Appleton, although there is a smaller one in Austin — plays a vital role in the company’s success. Calls come in from pharmacies with questions about a customer’s benefits as well as from customers asking about coverage or maybe a particular medication.

“Customer service is our cornerstone. When people call, we want a real person to be on the other end of the line. We also want any issues resolved with that first call so people don’t have to call back,” she says. “When the call ends, we want the person on the other end of the line to feel like we’ve met all of their needs.”

That’s a part of the service Audra Bloom, employee benefits coordinator for the City of La Crosse, a Navitus client, says her employees enjoy the most.

“Our members consistently mention the personalized service they receive from Navitus Customer Care. Of particular note is Navitus’ accessibility. You always speak to a live person — and you can count on thorough and prompt follow-through,” she says.

Navitus’ wholly-owned subsidiary — Lumicera Health Services — is an example of responding to customer needs.

Lumicera is a stand-alone specialty pharmacy that follows Navitus’ transparency lead.

“We went down that path since we had clients come to us several years in a row asking for these types of services,” Seligman says. “Specialty drugs are an area they really struggle with cost-wise. We looked at the issue and decided we could do it ourselves. It allows us to be more specialized and it’s strongly integrated with what we do already.These are an expensive class of drugs and our clients really appreciate that we’re in this market.”

Compliance is another big issue for clients — especially those running government prescription plans, Ludka says.

“We’ve heard from a lot of our clients that previous plans weren’t compliant. Timelines and accuracy are very important to government clients,” she says. “It used to be clients made decisions only based on cost. That’s not the case anymore. They want better customer service — both on the account management side and for their enrollees — and they want everything to be compliant with the government regulations.”

As with everything else in the health care and insurance industries, change is a constant. Seligman says Navitus is a nimble company that can easily adjust to rule and industry changes. Through it all, the focus remains on the customer and delivering them the best possible value, he says.

“We’re a true part of health care reform since we are helping people deal with rising costs and providing them too with high-quality results,” he says.

A closer look

» Navitus Health Solutions
» Company leadership: Terry Seligman, president and chief executive officer
» Founded: 2003
» Headquarters: Madison, with a large operational facility in Appleton and regional offices in Phoenix and Austin, Texas
» Number of employees: 500, including 318 at its Appleton campus
» On the web:

About the name

Like many companies, Navitus has an original name. Debbie Ludka, who was one of the original employees with Navitus and is now the top local corporate leader, recalls that a handful of employees met as the company was forming to think of an appropriate name. She said they decided on Navitus because it “evoked the word ‘navigate’ and spoke to the company’s forward-thinking business model in the industry.” After trademarks were checked, the name was finalized.

What is a Pharmacy Benefit Manager?

Pharmacy benefit managers like Navitus work behind the scenes to administer prescription drug plans for insurance companies, self-insured businesses, government programs and third-party administrators. They handle negotiations on drug costs, answer questions from pharmacies about coverage, respond to enrollees’ questions and also print and mail out insurance cards.

“We’re definitely behind the scenes. An enrollee will look down at his card and see the employer’s name, not ours,” says Debbie Ludka, senior vice president of customer operations and chief compliance officer.