AFFORDABLE CARE, MEDICAL HOMES, AND OTHER COST CONTAINMENT STRATEGIES MAY 4, 2016 PREPARED FOR: 2016 TMHRA ANNUAL CONFERENCE
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A Day in the Life of a Healthcare Dollar LIFE IMPACT LEVERS • Submitted Claims Clinical Wellness USE • minus Ineligible Claims Audits/Edits • Eligible Claims Eligibility Strategy • Pricing Schemes Eligible Claims • x PRICE Population Health minus “Discount” • ACOs Allowed Amount • Coalition • Allowed Amount Plan Change Model • minus Member Cost Share Contribution Strategies = COST • Payable Amount Dynamic Modeling Member/City Contributions 3
ACA Coverage Expansion Cost Net Cost of ACA coverage expansion ACA coverage $1,156 Billion expansion new spending $1,658 ACA Revenue Billion $502 Billion Taxes, fees, penalties 4
ACA Coverage Expansion Cost Employee ACA Medicare Hospitals Employer $1.2 T $1.2 T New Medicare Taxes $.5 T Taxes, Fees & Penalties 5
Revenue Source Revenue Profit / Loss Government $1,610,407,000 (7.5%) Private Payer $948,940,000 90% Uncompensated Care $170,251,000 (7.5%) Other Non-Patient $62,402,000 20% Revenue Total Revenue $2,791,000,000 100% of Medicare $2,476,000,000 6 Total Profit $315,000,000 NTX Coalition CONFIDENTIAL 6 Source – Actual medical facility in NTX
TODAY’S REALITY PERSPECTIVE ISSUE EFFECT STOP LOSS FREQUENCY OF 1,000% INCREASE IN (Employer) LARGE CLAIMS $1M CLAIMANTS MEDICAL CARRIERS INPATIENT MEDICAL BCBS - 27% Increase SPEND Medicare - 6% increase HOSPITAL HIDDEN PROVISIONS When billed amount for IN CONTRACTS claims reach and/or exceed hospital stop loss amounts, discounts disappear. 7
HOSPITAL STOP LOSS EXPOSURE A. Negotiated Per Diem $2,000 B. Days in Hospital 21 C. Billed Charges $210,000 D. Contract Threshold $100,000 E. Stop Loss Discount 45% F. Payable @ Per Diem A x B $42,000 G. Payable @ Stop Loss C x (1-E) $115,000 8
TODAY’S REALITY PERSPECTIVE ISSUE EFFECT EMPLOYER FINITE SOURCES OF Cities forced to shift FUNDS funds internally to fund increases in healthcare EMPLOYER HIDDEN COST IN Shared Savings ADMIN CONTRACTS formulas can result in $5 - $30 PEPM increase in administrative cost EMPLOYEES OUT OF POCKET Employees are shielded MAXIMUM LIMITS from the true cost of services. 9
CARRIER VS. PROVIDER BY MARKET $140,000 DRG 470 Price Variability by Market $120,000 10th Percentile 25th Percentile $100,000 Median 75th Percentile $80,000 90th Percentile $60,000 $49,827 $33,586 $40,000 $20,000 $- Iowa Chicago Atlanta N Tx 10
CARRIER VS. PROVIDER BY MARKET $140,000 DRG 470 Price Variability by Market $120,000 10th Percentile 25th Percentile $100,000 Median 75th Percentile $75,524 90th Percentile $80,000 $60,000 $49,827 $44,067 $33,586 $40,000 $20,000 $- Iowa Chicago Atlanta N Tx 11
CARRIER VS. PROVIDER BY MARKET $140,000 DRG 470 Price Variability by Market $120,000 10th Percentile 25th Percentile $100,000 Median $90,199 75th Percentile $75,524 90th Percentile $80,000 $60,000 $49,827 $44,067 $33,586 $40,000 $29,797 $20,000 $- Iowa Chicago Atlanta N Tx 12
CARRIER VS. PROVIDER BY MARKET $140,000 $128,085 DRG 470 Price Variability by Market $120,000 10th Percentile 25th Percentile $100,000 Median $90,199 75th Percentile $75,524 90th Percentile $80,000 $60,000 $49,827 $44,067 $37,053 $33,586 $40,000 $29,797 $20,000 $- Iowa Chicago Atlanta N Tx 13
The 5-50 Principle MIGRATION OF HEALTHCARE SPENDING Claimants 4% of the claimants drive the majority of paid claims each plan year. Majority of next year’s “Red” group will come Claims from those with $$ 14 low $ claim history
SHIFT IN FOCUS MAJOR MEDICAL INDEMNITY PPO POS HMO HIGH DEDUCTIBLE HEALTH PLANS ACO/PCMH 15
SHIFT IN FOCUS MANAGING HEALTH POPULATION PATENT-CENTRIC HEALTH HEALTH (EMBEDDED PCMH) 16
PATIENT CENTERED MEDICAL HOME PROMOTES A MODEL OF CARE STRENGTHENS CLINICIAN – PATIENT RELATIONSHIP FOCUSING ON COORDINATED CARE OF PATIENT PRIMARY CARE ANCHORED IN A PCMH MEDICAL HOMES CAN LEAD TO QUALITY IMPROVEMENT AND COST REDUCTIONS 17
ACO DEFINITIONS ACCOUNTABLE CARE ORGANIZATION (ACO) HOSPTIALS AND PHYSIANS WORKING TOGETHER TO DELIVER HIGH-QUALITY, COST-EFFECTIVE, VALUE-BASED CARE THROUGH CLINICAL INTEGRATION CLINICAL INTEGRATION – REDUCE WASTE AND REDUNDANCY USING HEALTH INFORMATION TECHNOLOGY HEALTH INFORMATION TECHNOLGY – UTILIZING ELECTRONIC MEDICAL RECORD AND DATA ANALYTICS TO MANAGE CARE ACROSS THE CARE CONTINUUM CARE CONTINUUM – UTILIZING ELECTRONIC MEDICAL RECORD AND DATA ANALYTICS TO MANAGE CARE ACROSS THE CARE CONTINUUM SAY WHAT? 18
ACO TRIPLE AIM PROVIDERS ARE FOCUSED ON: IMPROVING QUALITY ENHANCING PATIENT EXPERIENCE REDUCING PER CAPITA HEALTH CARE COSTS 19
NOW WHAT? 20
EMPLOYEE EMPLOYER PAYOR BROKER / CONSULTANT CARRIER/TPA REP CARRIER / CARRIER/TPA TPA PROVIDER RELATIONS FACILITIES PHYSICIANS OTHER PROVIDER INDEPENDENT PROVIDERS 21
Any Questions? 22
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