Best Practices in Benefits APRIL 2020 Our mission: To serve our - - PowerPoint PPT Presentation

APRIL 2020

▪ Consulting Capabilities ▪ Market Trends ▪ Best Practices in Benefits

Our mission:

To serve our clients to protect the health and financial well-being of people everywhere.

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About Milliman

▪ Largest privately-held actuarial and consulting firm ▪ Over $1 Billion in annual revenue ▪ Providing consulting and actuarial expertise for more than 70 years ▪ 3,500+ employees operating in over 60 principal cities worldwide ▪ Over 1,400 credentialled actuaries and consultants ▪ Subject matter experts across the full spectrum of benefits ▪ Our primary customers include: − Employers and Other Plan Sponsors − Insurance Carriers, PBMs and other Health Plans − Health Care Providers

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Data and Technology Drive Our Solutions and Inform Strategy

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OVER

$12 MILLION

Total technology spend of $70 million is 7% of gross revenue, putting us at the top of the Gartner IT

Spend Index for professional services firms.

One of the largest Azure Cloud customers

with Microsoft from a data processing perspective.

Healthcare database hosts 9 billion records for

• ver 80 million members, some of the largest health care

data sets in the U.S.

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Capabilities: Our Data Analytics Tools & Resources

Tools designed to proactively address employer challenges with data, quality, and analytic proficiency.

# Solutions / Tools Objective Cost Efficiency Quality

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Health Cost Guidelines (HCG)

Utilization and costs benchmarks across 80 million members by detailed service categories

✓ ✓

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Milliman Advanced Risk Adjuster (MARA)

Utilize the risk adjustor for predictive modeling and patent health improvement.

✓ ✓

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Rising Risk

Identify members whose claim cost are expected to increase next year

✓ ✓

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Chronic Condition Hierarchal Groups

Understand the chronic conditions of your population that are driving costs and utilization trends

✓ ✓

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Quality Measures (Evidence Based Measures)

Measures plan and provider quality measures compliance

✓

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Medical and Pharmacy Network Evaluations

Identify the most optimal vendor partners for your plan based on financial reimbursements and employee satisfaction

✓ ✓ ✓

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Health Waste Calculator

Measure health waste based on Choosing Wisely and Physician Specialty panel guidelines

✓ ✓ ✓

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Predictive Analytics

Predictive modeling using advanced machine learning techniques to avoid potentially avoidable expenses

✓ ✓ ✓

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Analytics & Benchmarking Pro

Analyze and benchmark your medical and pharmacy utilization and cost

✓ ✓ ✓

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Benchmarking Survey (free)

Compare your cost against Milliman’s HCG - the industry leading cost and utilization benchmarks

✓ ✓

Key: ✓ Impacted value driver

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Capabilities: How is our Actuarial Approach Different?

Predictive Analytics and Socio-Economic Modeling

Medical & Pharmacy Claim Predictive Modeling

• Incomplete view of

patient/member

• Often reactionary to health

events that have already

• ccurred

Socio-Economic Modeling

• Additional non-claims

based insight

• Identify health events

before they happen

The Need for a Different Approach

• Medical care determines only 10% of overall health
• Social, economic & environmental factors

determine an additional 20% of overall health

• At least 25 cents of every health care dollar is

spent on treatment of conditions resulting from potentially changeable behaviors (AMA)

Target Results of Milliman’s approach:

• Identifies hidden trends and costs
• Improves health risk model accuracy
• Proactively addresses population health

Integration

Example: Using Predictive Analytics and Socio-Economic Modeling to Drive Behavior

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New Members – Immediate Insight Current Members – Expand & Supplement

Capabilities: Providing Total Rewards Consulting Support

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Rewards Optimization

• Assess compensation, benefits,

and overall employee engagement

• Workforce optimization/

restructuring / timing and cost

• Impact of change-in-control

programs

• Harmonization of reward

programs with focus on employee communication

• Support evaluation of

candidates for key roles

Health & Welfare Benefits

• Focus on medical and pharmacy

expense, disability, ancillary products, long-term care and

• ther forms of health insurance
• Integrated absence, workers

compensation, and health care holistically with integrated data

Retirement Benefits

• Assess costs & risks of

retirement plans globally

• Pension plan valuation
• Defined Contribution plan

management

• Pension administration
• DC plan administration

Communication

• Communication strategy and

design

• Media assessment
• Employee surveys
• Enrollment communications
• Microsites
• Year-round key messaging
• Total rewards statements

Capabilities: Health & Group Benefits Consulting Services

Approaches designed to proactively address employer challenges with data, quality, and analytic proficiency.

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Market Trends: Healthcare Costs

Indicators show the pace of healthcare cost has slowed. So why don’t we feel it?

▪ For the third year in a row, the MMI trend is under 5% annually. ▪ Prescription drug trends continue to come down with last year’s cost increase at 6%. ▪ Still, the MMI has increased over $100 per month for the past 10 years. ▪ Health cost is outpacing inflation and the U.S. leads the highest per capital health care spend worldwide.

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Milliman Medical Index (MMI)

Market Trends: Employee Cost Share Grows Faster

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▪ Employees continue to foot more of the healthcare bill with their costs rising 5.9% compared to employer costs increasing at 3.5%. ▪ Our higher costs are not leading to better outcomes (at all). The accelerating cost pressures continue to be coupled with poor care quality among preventative health, acute, and chronic care. ▪ Spousal surcharges are increasing/ACA encourages significant tobacco surcharges. ▪ Trends compounding disruption include:

Wellness expands to improve engagement Consumerism changes employee behavior Balancing priorities by generational preferences Technology and analytics personalize the experience Regulatory changes are spurring delivery options Election impact will be felt by all stakeholders

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Best Practice: Milliman’s COVID19 Cost Impact Modeler

COVID-19 – What does it mean for your population and your 2020 budget Milliman is closely monitoring the pandemic and has developed a Micro and Macro model to help businesses assess the financial risk to its overall benefit programs

Milliman’s Model Considerations

▪

Increase services due to COVID-19 diagnosis (screening and admissions)

▪

Deferred services (e.g. elective procedures)

▪

Current infection rates (by geography)

▪

Infection spread rate / doubling rate

▪

Inflection date

▪

Resource capacity: ventilators, staffing, hospital beds

▪

Severity by age group (level 1 – 6)

▪

Medical cost by top procedures / services at the geographic level

▪

Company intervention programs (e.g. work from home, staggered shifts, etc.)

Best Practice – More Focused Vendor Management

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Financial Impact

• Identify financial

impact due to network changes

• Review and negotiate

contracts with carriers Employee Impact

• Provide impact to

employees through Disruption and GeoAccess analysis

Recent Client Savings: Current market trends:

Increase in Value Based Payments New Network Offerings Digital Solutions & Integration Health Advocacy & Concierge Programs

0% 5% 10% 15% 20% 25% 0-2.5% 2.5-5% 5%-7.5% 7.5%-10% 10-15% 15%+

Percentage of Clients Claim Cost Savings

Client Savings - Due to Medical Vendor Change* * Claim savings based on clients who changed vendor / network.

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Best Practice: Financial Benchmarks & Cost Driver Analytics

Benchmarking

• Compare historical claims data against robust data sets to

determine savings opportunities based on utilization, unit cost, or other claims metrics.

• Claims databases represent data from over 80 million

member lives

• Results shown on a total allowed basis or a percent of

Medicare basis. Cost Driver Analysis

• Determine key drivers
• Uses advanced analytics to identify overall trends in

utilization, unit cost, and/or total allowed costs.

• Deep dive into historical claims data to determine specific

service categories, procedures, or providers driving costs.

• Consultative insight into strategies to control and maintain

costs through proactive measures and monitoring of both leading and lagging indicators.

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Best Practice: Financial Benchmarks - Assessment Opportunity

Financial Benchmark Assessment Benchmark against 80M members Industry gold standard for cost and utilization benchmarks Normalized for geography, age/gender, and plan design Spectrum of well managed to loosely managed

employerconsulting@milliman.com

Email us to participate in Milliman’s Benchmark Survey

Best Practice: Milliman Waste Calculator

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Developed as a way to assess and identify the amount of healthcare waste occurring within a population as a result of over-utilization, unnecessary procedures and other systemic issues within the healthcare delivery system.

The Waste Calculator is a collaboration between Milliman and V-BID Health – the organization recognized as setting the national standard of appropriate care by the medical community. ▪ Measures 47 potentially unnecessary services ▪ Analyze cost savings potential ▪ Generates actionable reports and summaries

Case Study: Commonwealth of Virginia

Why Milliman?

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Thank you

Paul.sakhrani@milliman.com Garry.simmons@Milliman.com

Paul Sakhrani Garry Simmons