Healthcare Exchanges in Healthcare Exchanges in the Sky with Diamonds - - PDF document

6/9/2014 1

Healthcare Exchanges in Healthcare Exchanges in the Sky with Diamonds

Lyman Sornberger Chief Healthcare Strategy Officer New Jersey HFMA June 10, 2014

Agenda

• Affordable Care Act (ACA)

– Highlights – Enrollment Assistance P i C i – Premium Comparisons – Industry Impact

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Agenda

• Value Based Health Care

– Goal and Value Proposition – Six Components – Stakeholders

ACA Highlights

• Improve Quality
• Increase Access
• Improve Price

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Quality

• Benefit Design Improvement
• Exchanges to Report Quality in 2016

Access

• Designed to Cover Half the Newly Insured

with Renewal Regardless of Health Status

• New Insured have a Different Profile

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Price

• Price in Parallel to Care Transparency and

Competition

• Sliding Scale for Earnings Between 100% to

400% Federal Poverty Guidelines

ACA Timeline 2014 and 2015

• January 2014: Individual and small group plans offer

January 2014: Individual and small group plans offer coverage of essential health benefits*

• March 31,2014: Exchanges first enrollment period closes
• November 15, 2014: 2015 open enrollment period begins
• January 2015: January 1st : All plans required to limit out‐of

y 5 y p q pocket costs and January 15th open enrollment ends *Except for non‐grandfathered or exempted plans

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ACA Timeline 2016 and 2017

• January 2016: Employers must offer benefits to

employees‐delayed from 2014*

• January 2017: Large employers may offer coverage sold

through exchanges. States’ participation is option.

• December 2017: “Cadillac tax” applies to self funded and

fully insured plans fully insured plans. ELECTION

• *Employers with 50‐99 works will have until 2016 to comply. Employers with 100+ workers

must cover 95% in 2016

STATE EXCHANGE TYPES

• FEDERALLY FACILITATED FFM‐22 states

FFM‐Plan Management (unofficial partnership)‐7 states

• Partnership‐7 states
• State Based‐Washington DC and 14 states

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Sample Full Priced

• Catastrophiic‐$80.00‐under 30
• Bronze‐$100‐60% coverage
• Silver‐$200‐70% coverage (Every Insurer)
• Gold‐$300‐80% coverage

Pl ti $ %

• Platinum‐$400‐90% coverage

Typical employer sponsored is around 85%

Benefit Design Coverage ‐ QHP

1. Ambulatory 2. Emergency 3. Inpatient 4. Preventative wellness & chronic disease 5. Rehabilitation 6. Pediatrics 7. Prescription 7 esc pt o 8. Mental Health and substance use disorder 9. Maternity and newborn care 10. Laboratory

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Subsidies

8 8 % f i di id l h i i

• 80‐85% of individual exchange participants

will qualify for some sort of subsidy

• Based on FPL and family size: its 138% and

% f di M di id d 400% for states expanding Medicaid and 100% and 400% for exchanges

Private Exchanges Front of the Line

• Insurance Control Model
• Retail Managed Concept
• Entrepreneur Visionary Option

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Lessons Learned on Private Exchanges

• Close to 80% of employers stated changing exchanges was a

barrier to offering private options

• The majority of employers are seeking private exchanges versus

public

• Employers have moved from 90% in 2014 to a little more that 75%

in 2016 to offering healthcare benefits to their workers

• 10‐15% of employers have adopted or plan to adopt a defined

contribution in the next couple of years

Cost vs Impact

• Closed Market for providers that “may” improve margins if

the lower reimbursement offsets variable costs

• Employers like the lower premiums with public exchanges

and could result in less future health care spending

• Private exchanges may enforce cost and quality pressure

to benefit the insured

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Patient Assistance

• In Person Assistant (IPA)‐funded
• Certified Application Counselor (CAC)‐no

funding

• Navigator‐funded

Insurance Impact

• Pricing Competition
• Benefit and Quality
• Consumerism
• Transparency

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Provider Impact

• Offset DSH and Medicare Reimbursement
• Provider to Payer networks
• Outreach‐ less than 10% of the navigator

g grants were paid to health systems

Seven Year Mass Experience

• 1996 Insurance Healthcare Market Refors
• 1996 Insurance Healthcare Market Refors
• 2006 Universal Healthcare
• 2008 Cost Constraints
• 2010 ACA
• 2012‐2014 Cost and ACA Defined

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Outcome in Massachusetts

• Negative: Funding is not sufficient‐esp. larger health systems
• Positive Created a new payment model with value based delivery
• Positive: Created a new payment model with value based delivery
• Negative: Spending is higher in the short term with a 3‐5 year ROI—double the

cost

• Positive: Consumerism is gaining momentum
• Negative: Insurances premium controls are not in parallel to medical cost inflation
• Positive: Cost to for employer to compensate employee declined by 2% where

they provided insurance.

• Negative: Cost to employee increased by 3% when employer does not supply

insurance.

DEFINITION

• Value Based
• Population Management
• Meaningful Use
• ACO
• Exchanges

“You can not separate them in the future”

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Value Based Care Delivery

• Organize around the patients condition
• Organize around the patients condition
• Measure cost and outcomes for every patient
• Integrate care delivery across facilities
• Move to bundled payment for care cycles
• Expand “Service Excellence” geographically

What does this mean to providers and Patients

Change the Culture g

• 1. Practice based on evidence
• 2. Reduce unexplained clinical variation
• 3. Reduce slavish adherence to professional autonomy
• 4. Continuously measure and close feedback loop
• 5. Engage with patients across the continuum of care

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Example of Unique Payer Model and Measurement

LOWES

• Cardiac Care
• Bundled Payment
• Payer to Employer Direct
• Reduction of return to work

Example Two

Virginia Mason Spine Clinic

• Clinical Tracks
• Clinical Tracks
• Same Day visit with central line
• Outcome:

– Miss fewer days of work (4.3 vs 9 per episode)* – Required fewer physical therapy visits (4.4 versus 8.8)*

*Comparison to regional averages

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Three Tiers to Outcomes Important to Patients

Tier One Tier One Survival

Mortality Rate

Degree of Health Recovery

b l k Ability to return to work Pain level managed Functional level achieved

Three Tiers to Outcomes Important to Patients

Tier Two Time to recovery

Time to begin treatment, return to work, and physical activity

Reduced “negative” clinical care

Delays and anxiety Pain and Length of Stay Diagnostic errors or adverse effects

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Three Tiers to Outcomes Important to Patients

Tier Three Tier Three Sustainability of health or recovery

No need for additional surgery, independent living, and maintained functional level

Long term consequences of therapy

Loss of mobility, infection, and pain

Opening the Kimono on Cost and Pricing

We have been able to hide our prices for years inside insurance products, but that is going to end as more people move into new, high deductible products Caslight Aetna Cleveland Clinic‐outcomes books

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Pulling the trigger hasn’t address the problem with value to the patient

• Fraud and Stark

Fraud and Stark

• Consumer Driven Health Care
• Evidence Based
• New Primary Care Models
• Capitation
• Reduction of Medical Errors
• Care Coordination
• EMR

Stakeholder for a High Value Health Care Delivery

H lth S t L d hi

• Health System Leadership

– Direction from the top – Commitment to six components

• Patients

– Seek High Delivery Care – Understand the six components and value to their health p

• Health Plans

– Set expectations and revisit the care setting theory – Incentivize providers promoting the six components

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Speed to Market

Organizations that progress rapidly in adopting the value agenda will reap huge benefits even if l t h i l ! regulatory change is slow!

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