FPGEE for National Association of Boards of Pharmacy (NABP) Practice Exam 2025 - Free NABP Practice Questions and Study Guide

The PMPM cost ratio, which stands for "Per Member Per Month," is a financial metric commonly used to analyze the costs incurred by a Pharmacy Benefits Manager (PBM) related to the management of prescription drug benefits for a population. Its primary purpose is to evaluate the overall financial performance of the PBM by assessing how much is being spent on average for each member on a monthly basis. This allows the PBM to understand its cost efficiency and make comparisons with industry benchmarks or historical performance, aiding in strategic planning and budgeting.

In contrast, patient satisfaction, which is essential for healthcare services, does not get evaluated through PMPM costs, as this metric focuses strictly on financial expenditures rather than patient experiences. Determining the cost per patient could relate to individual patient expenditures, but PMPM reflects an average across a population rather than a singular patient perspective. Assessing quality of care is also outside the scope of PMPM, which centers on financial metrics rather than clinical outcomes or satisfaction indices. Thus, the focus of PMPM firmly positions it as a tool for evaluating the financial performance of a PBM.