Commercial Insurer Primary Care Spending Data through October 2013 - - PowerPoint PPT Presentation

Commercial Insurer Primary Care Spending

Data through October 2013

Presentation to Health Insurance Advisory Council | January 21, 2014

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Agenda

I. Background & Highlights II. Primary Care Spending: Total Market III. Primary Care Spending: By Company IV. Non-FFS Primary Care Spending V. Primary Care investment projections

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

About These Data

¤ This presentation details the primary care spending, though October 2013, for Rhode Island’s three largest commercial health insurers: Blue Cross Blue Shield of Rhode Island (BCBSRI), United Healthcare (United), and Tufts Health Plan (Tufts). All data are submitted to OHIC on a quarterly basis. ¤ The first of OHIC’s four Affordability Standards requires insurers to increase primary care’s share of total medical payments by one percentage point per year from 2010 to 2014.

¤ It also requires insurers to increase the percent of non-fee-for-service primary care spending by 5 percentage points per year. ¤ This spending cannot result in higher premiums and cannot increase overall medical expenses ¤ Note that Tufts is currently exempt from these requirements due to their small market position

¤ The standard compliments OHIC’s commitment to payment reform by ensuring the foundation of our health care system remains a funding focus. It encourages efficient, affordable health care through

• rganizational innovations in care delivery and payment reform.

¤ For more on the Affordability Standards and these data, please see the report on OHIC’s website:

Highlights from this Presentation

• 1. Insurers are hitting their targets

and project to do so for 2013 and 2014

• 2. Primary care spending rose by

37% between 2008 and 2012 while total medical spending fell by 14%.

• 3. Non fee-for-service (non-FFS)

investments continue to increase Patient Centered Medical Homes is the largest non-FFS investment

• 4. The future of primary care in

Rhode Island looks promising The Affordability Standards have added about $64m of primary care dollars to Rhode Island’s delivery

• system. Investments in primary care

continue to grow and OHIC will likely extend modified versions of the standards to 2018

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Agenda

I. Background & Highlights II. Primary Care Spending: Total Market III. Primary Care Spending: By Company IV. Non-FFS Primary Care Spending V. Primary Care investment projections

9.1% of total medical spending went to Primary Care in 2012. Carriers project further growth through 2014.

• For all three commercial insures, spending on primary care is rising.
• In 2012, insurers spent 9.1 cents of every fully insured commercial medical dollar on primary

care services, an increase of nearly 3.5 cents from 2008. The share of spending on primary care is projected to rise to 10.1% ($67m) in 2013 and 10.5% ($73m) in 2014.

• If these projections are realized, the share of primary care spending will have grown by 84%

between 2008 and 2014.

$47 $50 $53 $58 $65 $67 $73 5.7% 6.3% 7.1% 8.0% 9.1% 10.1% 10.5%

$0 $10 $20 $30 $40 $50 $60 $70 $80 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

2008 2009 2010 2011 2012 2013 (Proj) 2014 (Proj)

Total Primary Care Spending in Millions

Primary Care Spending, Total and as Percent of Total Spending 2009-2012 Actual | 2013-2014 Projections

Primary Care Spending % of Total Spending

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Since 2008, primary care spending has risen (+37%) while total medical spending has fallen (-14%).

• Total medical spending for the commercial market has fallen for a number or reasons

including innovative benefit designs, transformative care practices, falling population, a national recession experienced acutely in RI, and rising out-of-pocket contributions.

• Primary care spending would have otherwise declined along with total spending

without the Affordability Standards’ incentives and requirements

$47 $50 $53 $58 $65 $67 $74 $823 $787 $749 $731 $707 $661 $704 $- $100 $200 $300 $400 $500 $600 $700 $800 $900 $- $10 $20 $30 $40 $50 $60 $70 $80 2008 2009 2010 2011 2012 2013 (Proj) 2014 (Proj) Total Medical Spending In Millions Primary Care Spending in Millions

Total Medical Spending and Total Primary Care Spending 2008-2012 Actual | 2013 & 2014 Projections

Total Medical Spending

P r i m a r y C a re S p e n d i n g

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Agenda

I. Background & Highlights II. Primary Care Spending: Total Market III. Primary Care Spending: By Company IV. Non-FFS Primary Care Spending V. Primary Care investment projections

Spending on primary care has grown for each carrier since 2008 and the OHIC targets help ensure smooth growth.

• Each company has steadily increased the portion of their premium dollars they dedicate to

primary care since 2008.

• From 2011 to 2012, BCBSRI’s spending on primary care grew 1.2 percentage points, United’s

by 1.0 and Tufts, a recent market entrant, by 1.4, in line with the other insurers.

• Tufts’ results are more uneven than BCBSRI or UHC in part because of their small, but

growing, membership in Rhode Island

5.8%

7.2%

8.2% 9.4% 10.6% 6.4% 8.0% 7.0% 8.2% 7.9% 5.5% 6.0% 6.5%

7.5%

8.5% 9.5% 2008 2009 2010 2011 2012 2013 (Projected) BCBSRI Tufts

Primary Care Spending as Percent of Total Medical Spending by Company 2008-2012 Actual | 2013 Projections

United

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Agenda

I. Background & Highlights II. Primary Care Spending: Total Market III. Primary Care Spending: By Company IV. Non-FFS Primary Care Spending V. Primary Care investment projections

Spending on non-FFS projects are growing and led by investments in patient centered medical homes (PCMHs)

• Since 2008, insurers have increasingly invested in structural, non fee-for-service (non-FFS)

enhancement such as EHR incentives, loan forgiveness and PCMH programs.

• Of the $65m spent on primary care in 2012, nearly $22m (34%) funded non-FFS projects.
• OHIC’s Affordability Standards requires insurers allocate at least 35% of their total

spending on primary care to non-FFS payments in 2013 and 40% in 2014.

8.8% 13.5% 23.6% 29.0% 39.6% 42.5% 45.7% 2.0% 5.9% 13.9% 23.8% 33.0% 41.2% 47.3% 6.0% 12.2% 12.5% 12.2% 10.3% 10.8% 2008 2009 2010 2011 2012 2013 (Proj) 2014 (Proj)

Percent of Primary Care Payments Dedicated to Non-Fee for Service Investments

2008-2012 Actual | 2013-2014 Projected

United BCBSRI Tufts Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Proprietary PCMHs are the largest category of Non FFS spending, followed by incentive payments to providers

• While all insurers invest in the state’s all payer medical home program, as required by the

second Affordability Standard, investments in the companies’ own PCMHs account for nearly half of all 2012 non-FFS investments.

• Each insurer also contributes in some form to CurrentCare in support of the third Standard.
• In addition to Current Care and PCMHs, insurers also fund incentive payment to providers.

UHC, for instance, dedicates over half (57%) of its non-FFS spending to these payments.

$11.81 $3.81 $4.64 $2.75 $0.43 $0 $2 $4 $6 $8 $10 $12 $14

2012 Spending on Non-FFS Investments, in millions

HIT Incentives Other Incentive Payments to Providers CurrentCare Medical Home $12.28 $3.87 $9.79 $0.84 $0.21 $0 $2 $4 $6 $8 $10 $12 $14

Millions

2013 Projected Spending on Non-FFS Investments

CSI-RI ~$2m

CSI-RI ~$4m Proprietary PCMHs ~$10 m Proprietary PCMHs ~$8.5 m

HIT Incentives Other Incentive Payments to Providers CurrentCare Medical Home Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Agenda

I. Background & Highlights II. Primary Care Spending: Total Market III. Primary Care Spending: By Company IV. Non-FFS Primary Care Spending V. Primary Care investment projections

$50 $53 $52 $51 $47 $50

$6 $14 $20 $24

2009 2010 2011 2012 2013 (Proj) 2014 (Proj)

Figure 7: Total Primary Care Spending in Millions Baseline Scenario vs. Meeting Primary Care Target

Affordability Standards increased primary care spend by $64m over previous trends

If insurers continued to spend the same proportion of total medical spend on primary care as they did before the Affordability Standards went into effect, the delivery system would have about $64m fewer dollars invested in it.

Baseline Scenario Meeting Spending Targets

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

$64m

in additional primary care spending, 2011-2014

Data Source: Quarterly spending submissions to the Office of the Health Insurance Commissioner, through October 2013

Appendix: Data on Policy Impact

• Col. Ref.

(A) (B) (C) (D) (E) (F) Reported Reported (B) / (A) (B) / (A) (D) * (A) (B) - (E) 2010 rate held constant Year Total Medical Spend Total Primary Care Spend Rate Baseline Rate Baseline Spend Difference 2009A $787,305,711 $49,919,759 6.34% 6.34% $49,919,759

• 2010A

$748,913,726 $53,448,630 7.14% 7.14% $53,448,630

• 2011A

$731,962,046 $58,208,681 7.95% 7.14% $52,238,819 $5,969,861 2012A $707,932,382 $64,594,559 9.12% 7.14% $50,523,865 $14,070,694 *FORECAST 2013F $661,215,632 $67,046,663 10.14% 7.14% $47,189,775 $19,856,888 *FORECAST 2014F $704,354,460 $74,085,760 10.52% 7.14% $50,268,515 $23,817,245 Total Addition Above Baseline $63,714,688