Transcript Digital Engine Update

4th Annual Investor Conference
HEALTH PLANS DIVISION
Panel Discussion: Contributing Value to Cost of Care
May 16, 2001
4th Annual Investor Conference
HEALTH PLANS DIVISION
Medical Management Strategies & Capabilities
Tim Moore, M.D.
Senior Vice President & Chief Medical Officer
May 16, 2001
How Health Net Provides Value in Medical Management
 Improve Outcomes
 Assist Members in Self-care
 Help Providers Give Best Care
 Avoid Being Unduly Intrusive
 Contain Costs by Promoting Quality
 Measure and Improve Whatever We Do
 Link Activities to Product Design
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Population Health Management
% of
Population
Complex Case
Management
Disease
Management
Demand
Management
% of
Resource
Consumption
Intense
• Very sick
• Specialists
• Case Mgmt.
Chronic Diseases
•
•
•
•
Stable
Minimize disease progression
Coordinate care
Secondary prevention
Well & Acute Care
•
•
•
•
Access to information
Preventive care guidelines
Tools for self-care
How to access care
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Predictor Model Challenges
 What % of this year’s top 3% were in last year’s top 3%?
3%
2000
Top 3% Utilizers
3%
2001
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Predictor Model Challenges: Regression of Top 3%
Utilizers
 80% of this year’s top 3% were NOT in the top 3% last year
20%
3%
3%
80%
2000
2001
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Profiling Examples
# Patients: 181
# Services: 728
Total Cost: $28,482
PHYSICIANS, PEDIATRICS
6/30/99 -7/1/00
# Challenges: 53
Challenge Cost:
$1,844
Challenge Rate: 7.3%
EXAMPLE
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Profiling Examples
# Patients: 50
# Services: 1,150
Total Cost: $45,639
PHYSICIANS, PEDIATRICS
6/30/99 -7/1/00
# Challenges: 727
Challenge Cost:
$23,510
Challenge Rate: 63.2%
EXAMPLE
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4th Annual Investor Conference
HEALTH PLANS DIVISION
National Pharmacy Strategies & Trends
Neil Higashida, Pharm.D.
Vice President, Strategy & Integration, Health Net Pharmaceutical Services
May 16, 2001
Pharmacy Cost Management
 Continued Success in Pharmacy Cost
Management Well Below Industry Trends
 Three-Tier Prescription Drug Benefits Becoming
the Standard Plan Design
 Successful Pharmacy Utilization and Unit Cost
Management Strategies
 Excellent Rebate Performance
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Pharmacy Cost Trends
 1999 to 2000 Trend = 9%
 Q1 2001 v. Q1 2000 = 9%
 Expected 2001 Trend = 11% to 13%
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Prescription Drug Benefit Designs
Current Penetration of the Three-Tier Benefit Design:
 West (CA, AZ, OR)
60%
 Northeast (CT, NJ, NY, PA)
47%
 Health Plans Division
57%
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Pharmacy Cost Management Strategy
 Continue Penetration With Cost-Savings Plan
Design Such as the Three-Tier Plan Benefit
 Develop and Administer New Plan Designs
 Implement Cost Management “Best Practices”
Enterprise-Wide
– Utilization Management of Target High Cost
Medications
– Market Share Management of High Cost Medications
– Electronic Prescribing Tools
– Physician Prescribing Profiles
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4th Annual Investor Conference
HEALTH PLANS DIVISION
Managing the Risk Shift in California
Jenni Vargas
Senior Vice President & General Manager, Northern California
May 16, 2001
Well-Managed Provider Groups Continue to Receive Capitation
 95% of HMO Members Are in Groups With
Capitated Physicians
 41% of HMO Members Are in Groups With
Capitated Physicians and Hospitals
 Increased Scrutiny and Technical Support of
Providers Receiving Capitation
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Risk Shift  Focused Enhanced Medical Management
Hospital
 On-Site Concurrent Review
 20 Medical Directors and 42 Nursing Staff
Overseeing Length of Stay and Discharge
Planning
 Specialty Review
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Risk Shift  Focused Enhanced Medical Management
Physician
 Outpatient Referral Management
 Physician Profiling and Visits by Medical
Director and Pharmacist
 Fee Schedule and Claims Management
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Large Delegated Groups Have Turned the Corner
Financially
 Improving Relationships Leading to Joint
Innovation and Better Definition of Risk Services
 Product Development to Feature High Quality,
Delegated Groups
 Driving “Code of Conduct” for Health Plan and
Provider Relations
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4th Annual Investor Conference
HEALTH PLANS DIVISION
National Health Plan Structure
Judi Irving
President, Health Net of Arizona
May 16, 2001
National Health Plan Structure Creates Synergies
 Operations Aligned Across Health Plans
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–
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Common Goals
Aligned Incentives
Opportunities to Share and Develop Staff
Identification of Best Practices
 Centralized Network Contracting
– Leverage Volume
– Rx, Lab, Disease Management
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National Health Plan Structure Creates Synergies (Cont.)
 Operational Efficiencies
– Centralize Front-end Claims Processing
– Out-of-Network Fee Negotiation Unit
– National PPO Contracting
 National Practice Sales Leaders
– National Accounts
– Labor & Trust
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National Health Plan Structure Creates Synergies (Cont.)
 Product Development
 Medical Management Strategy
 Branding and Advertising Materials
Meet Local Market Needs With National Focus
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