Transcript These materials have been prepared by Kelly Porterfield, Eric

APRIL 3-6, 2013, LONG BEACH, CA
Session ID:
Session Title:
FIN14
Health Care Savings In Tight Budget Times
These materials have been prepared by Kelly Porterfield, Eric Fiedler and Doug Richesin. They have not been
reviewed by State CASBO for approval, so therefore are not an official statement of CASBO.
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Agenda:
• Who has the greatest impact on health
insurance cost?
• How can we implement cost containment
strategies?
• What are the common areas that have the
greatest impact on health insurance cost?
• Q&A
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Let’s Engage in Conversation
Who’s Responsible?
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Doctors
Attorneys
Hospitals
Drug Companies
Insurance Companies
Individuals
© 2013 Blue Cross and Blue Shield of North Carolina is an independent licensee of Blue Cross and Blue Shield
Association. All rights reserved
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Who has the greatest impact on the health insurance cost?
$700B in waste across U.S. system
Key sources of waste1
% of total medical cost
that is waste
Admin and system inefficiencies
4-6%
Provider inefficiencies and errors
3-4%
Lack of care coordination
1-2%
Unwarranted use
11-21%
Preventable conditions and avoidable care
1-2%
Fraud and abuse
5-8%
-30%
1 Thomson Reuters, 2009 White Paper, Where Can $700 Billion In Waste Be
Cut From the US Healthcare System
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
First Step to Cost Containment
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Water meter effect!
Must have accountability
Must have buy in by all stakeholders
Best mechanism is by implementing a Health
Insurance Committee
• Must include mgmt., collective bargaining
leadership, retirees and health insurance
expert.
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Plan Modification (Cost Shift?)
• Changes to Benefit Plan Design
– Increasing Deductibles
– Increasing Coinsurance
– Copay Adjustments
– Carve outs
Medical
Professionals
Employer
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Rate Tier Options
Composite
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One rate billed for everyone
Families are partially subsidized by
Singles
No incentive to enroll in secondary
coverage and make wise decisions
3-Tiered
• Employee Only
• Employee + 1
• Employee + Family
• Creates Consumer Decisions
• Offers more cost effective approach
for single coverage
4-Tiered
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Employee Only
Employee + Children or Children
Employee + Spouse
Employee + Family
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Significant flexibility
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Cost Containment
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Eligibility Audits (Children, Ex’s, Grandchildren)
Routine Examination of Medical Trends
Referenced based pricing
Multi-year Agreements
Separate costs for Actives vs. Retirees
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Cost Containment
• Referenced based pricing
• Narrow Networks
– Anthem Select Network
• Prescription Formulary tightening
• Case Management
– Chronic/Rare Disease Management
Programs
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Controlling Pharmacy Costs
• Focus on Generics
– DAW (Dispense as Written Penalties)
– Step Therapy
– Maintenance Medication Savings
• Tiered Copayments
• Mail Order Savings
• Strict Quantity Oversight
• Specialty Drug Management
• Coordination with Disease Management
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Cost Containment
Wellness Strategies
• PPO/HMO Wellness Plans
• Preventive Screenings
• Health Risk Assessments
• Coaching Programs
• Maternity Management
• Focus on Chronic Conditions
• Generic Copay Reductions
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Cost Containment
Wellness Strategies
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Walking Campaigns
On-site Flu Clinics
Biometric Screenings
Health Fairs
Guest Speakers
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Consumer Decisions
• The largest ability to impact costs
• Influencing these decisions are critical to managing costs
• Education of Employees and Family
• How to use their PPO Plan
• Where are the lowest costing services
• Analyzing their EOB’s
• Prevention measures
• Promoting Wellness at work
• Tools (Anthem Compare)
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Value of a Large Risk Pool
• Reinsurance
• Pooled Large Claims
• Admin Fee Leverage with
Carriers
• Rate Stabilization
• Professionally Managed
Oversight
• Lower Administration Fees
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Value of Self Insurance
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Detailed Claims
– Diagnosis & Prognosis of Plan participants
Tailor Benefits Specific to Your Employees
Reduced Plan Fixed Costs
Limit Risk through Specific & Aggregate Contracts
Flexible Cash Flow
– Pay Claims as they are incurred
Instant Savings by implementing Specialty Programs
– Wellness, Disease & Case Management Programs
Pharmacy Rebates paid directly to the District’s Plan
Retail, Mail & Specialty Drugs
No Renewal Surprises
– Monthly Executive Summary Claims Reports
Establish an Insurance Committee to communicate how the plan is performing
– Reduces District vs Union benefit issues
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO
Q&A
2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO