Price Transparency & Cost Containment Strategies Improving - - PowerPoint PPT Presentation

Price Transparency & Cost Containment Strategies

Improving Employee Health and Your Bottom Line

Brady Kahl, Strategic Analytics Advisor Brandon Collins, Advisor

Price Transparency

Price-Disclosure Requirement & Consumerism Tools

Price-Disclosure Requirement

Department of Health and Human Services

• Providers kept price lists (“chargemasters”) out of public eye
• Difficulties of the requirement:
• Chargemasters are not final consumer price
• Chargemasters are not organized in any apparent order
• Prices are categorized by billing codes
• While a step in the right direction, these difficulties DO NOT result in

ease of consumerism

Price Transparency Consumerism Tools

• Health plan TPAs and insurers offer cost calculators

tailored to members

• Anthem – Anthem Anywhere app
• United Healthcare – Health4Me app
• UMR – On-The-Go app

Price Transparency Consumerism Tools

• Independent Medical Solutions
• GrandRounds
• Healthcare Bluebook
• HealthAdvocate: Health Cost Estimator+
• Rx Solutions
• GoodRx
• OneRx

Cost Containment

Levers & Solutions

Cost Containment

• Begins and ends with patients
• Has tangible value to plan participants
• Look for themes to target

Wellness

• Physical
• Mental
• Financial

Cost Containment – Levers

Eliminate unnecessary spend

• Dependent eligibility verification audits
• Intentional plan design and edits
• Consumer driven health plans
• Narrow networks
• Decrease coinsurance
• Eliminate copays
• Increase deductibles (participant cost sharing)

Cost Containment – Levers

Optimize funding mechanism

• Fully insured
• Association plans
• Level-funded plans
• Reference-based pricing (Medicare cost+)
• Traditional self-funding
• Captives and consortiums for stop loss
• Evaluate stop loss risk retention levels

Cost Containment – Levers

Create better clinical outcomes

• Target high-cost disease states
• Encourage preventive health measures
• Introduction of preventive Rx programs
• Population health management

Large

(500+)

Mid-market

(51-499)

Small

(2-50)

Disease state and population health management

Large Employers (500+)

What are the Grand Rounds Services?

Beacon Summit Platform Summit Plus

Expert Opinions Complex case review with world-class experts

✓ ✓ ✓

Office Visits We find and schedule high-quality local care for your members’ complex needs

✓ ✓ ✓

Treatment Decision Support Consult with our staff clinicians quickly by video or phone

✓ ✓ ✓

Match Platform Data-enabled matching with high-quality local providers, facilities, and procedures

✓ ✓

Benefits Routing Connect to relevant benefits with intelligent routing

✓ ✓

Plan Details Make sense of deductibles, out-of-pocket expenses, and HRA/HSA balances

✓

Advocacy High-touch support to remove any obstacle, including medical claims issues and care logistics

✓

Beacon is Complex Care Navigation

Treatment Decision Support:

Access staff physicians for answers or triage quickly within 24 hours

Office Visits:

Find best local experts for member needs

Expert Opinion:

Connect with experts for

• ptimal diagnosis and

treatment

Triage Education Physician Matching Cost Efficiency Priority Access Fast Decision Support Diagnosis & Treatment Plan Unnecessary Care Avoidance Rx & Treatment Support Expertise

9 billion clinical data points measured and new

data incorporated monthly

Selected states CMS, medical societies, hospitals, group practices, additional states State APCDs and commercial data vendors Grand Rounds proprietary data

2011 2012 2013 2014 2015 2016

Availability of Provider-Level Data Grand Rounds Analysis

> 96% of MDs rated based on clinical quality Background Data

• Specialization
• Board certification
• Peer recognition
• Medical school
• Residency
• Fellowship
• Yrs. of experience
• Practice location(s)
• Hospital affiliation(s)

Performance Data

• Clinical outcomes
• Patient volumes
• Procedure volumes
• Process measures
• Patient satisfaction
• Referral patterns
• Treatment adherence
• Utilization rates
• Sanctions / lawsuits

Quality Algorithm Scores

Quality Factors Include:

• Institution
• Training
• Procedure volumes
• Patient outcomes
• Research

Grand Rounds expert physicians

(0.3%)

Grand Rounds office visits physicians

(10%)

923,000 U.S. physicians

Every other physician

90%

Evidence-Based Approach

Without Guidance, Members are Unlikely to Find the Best Care

“Average Member” Analysis: Provider quality is defined here based on quality algorithm outputs for a representative member of commercially insured populations. In practice, quality ratings vary for individuals based on each member’s clinical profile.

Physician Quality 0-19% (Lowest) 20-39% 40-59% 60-79% 80-99% (Highest)

The Grand Rounds Matching Effect

Physician Quality 0-19% (Lowest) 20-39% 40-59% 60-79% 80-99% (Highest)

45%

• verall quality

improvement w/out disruption

Top quality physicians achieve:

• 15% lower hospital readmission rates
• 20–25% lower complication rates
• 30–40% lower mortality rates
• 10–30% lower cost per patient

“Average Member” Analysis: Provider quality is defined here based on quality algorithm outputs for a representative member of commercially insured populations. In practice, quality ratings vary for individuals based on each member’s clinical profile.

Average quality of an actual national network optimized for quality

Measurable, Meaningful Impact

66%

change in diagnosis or treatment recommendations

$2,600

saved on average per converted in-person office visit

38%

discontinuation of opioids in

• pinions involving opioids

$16,400

saved on average per expert

• pinion with treatment change

$8,900

saved on average per expert opinion

45%

cancellation of unnecessary procedures

Mid-Market Employers (51-499)

Funding Mechanisms

• Fully insured vs. self-funded
• Captives and stop loss consortiums
• Network evaluation

How to Transfer Health Plan Risk

• 1. Use a fully-insured arrangement
• 2. Self-funded with traditional stop loss coverage
• 3. Self-funded with captive stop loss coverage

What is a Captive?

• Another way to finance risk of loss
• Primary purpose is to insure risks of its members
• Insureds benefit from the captive’s underwriting profits
• Members invest capital in the captive
• Typically controlled or managed by a third party
• Can have foreign or domestic domicile

Captive Goals

Security

• Strongest stop loss policy available

Community

• Environment where employers can share and grow with like-minded peers

Containment

• Data and cultural based cost control initiatives

140,000 Lives 1,000+ Renewals 30% - Largest increase in SL premium 0 New lasers <1% Members hit max 120 Employees 546 Members 97% Renewal ratio $185m SL premium

Captive Metrics Example

Small Employers (2-50)

Eliminating spend and plan funding options

• Plan design considerations
• Association plans
• Level-funding as an alternative to fully insured

Remember the rules in group size counting!

Courses of Action:

• Remaining grandmothered
• Narrow network – Anthem HealthSync
• PEO evaluation
• Level/modified self funding
• Community rate – new plans
• Association plans – Indiana State

Chamber & IndyChamber

Health Plan Trends

New Narrow Network Small Group Plan | HealthSync

• Product built on a high-performance narrow network
• PCP’s must be participating in a value-based arrangement in order to be

eligible

• Sought steeply discounted rates from hospitals through fixed

reimbursement for outpatient services

• The product launched 1/1/18 in the Fort Wayne and South Bend markets
• Further expansion of the network is ongoing

Today’s Pharmacy Landscape

Pharmacy Drug Notoriety

Health insurer Cigna buying Express Scripts for $52 billion Anthem breaks up with Express Scripts, to start own drug plan IngenioRx (CVS platform) CVS buying Aetna for 67 billion, shaking up health care industry Express Scripts leader wants Anthem to stay client despite $15 billion suit

Pharmacy Stats

Americans spend on prescription drugs in 2016

$450 BILLION

pending patents and FDA approvals are for specialty drugs

OVER 70%

Employer plan spending is

• n retail drugs

ROUGHLY 21%

Wholesale pricing for pharmacy drugs has increased by

OVER 13%

Trend Driver: Increasing Drug Cost- Specialty

22.1% 20.5% 29.7%

Specialty Cost Drivers

Inflammatory Diabetes Oncology 55% 45% New Oncology Drugs First-in-class

Pipeline Dominated by Oncology Anti-Inflammatory Drugs in Specialty Pipeline

34 18 7 Total Anti-Inflammatory Drug Potential Approvals New Drugs Potential Biosimilars

Consumer Impact

Consumer Impact Stats

Americans have difficulty affording their medication(s)

1 in 4

• f Americans favor requiring greater

transparency on drug pricing from manufacturers

OVER 80%

• f Americans take a prescription

drug; 85% are filled as generics

ROUGHLY 50%

Diabetes has the highest per member per year spending of

OVER $108

Brandon Collins

bcollins@firstpersonadvisors.com https://www.linkedin.com/in/brand

• n9collins

Advisor FirstPerson

Brady Kahl

Strategic Analytics Advisor FirstPerson

bkahl@firstpersonadvisors.com https://www.linkedin.com/in/brady

• kahl-mba-1356009/