Solutions for Effective Health and Benefit Plans Healthcare Cost - PowerPoint PPT Presentation

Solutions for Effective Health and Benefit Plans Healthcare Cost Transparency Tools March 2015

Today’s Presenters Kristine Klepper  Senior Vice President/Practice Leader  Conner Strong & Buckelew Dan McCormick  Senior Vice President  Healthcare Bluebook 2

Past, Present and Future 1992 2015 The Future At current trend Annual cost to provide rates, annual $4,000 $23,000 coverage for a family costs will double in 10 years Average employer share 76% 78% - 80% Remain steady? of premium Health spending as % of 11% 17% 20% by 2017 GDP Number of Americans 118 million 141 million in 164 million in with a chronic condition in 1992 2011 2025 3

Cost for Family of Four Annual Medical Cost for Family of Four $25,000 $23,215 $22,030 $20,728 $19,393 $20,000 $18,074 $15,000 $10,000 $5,000 $0 2010 2011 2012 2013 2014 Source: 2015 Milliman Medical Cost Index 4

Major Challenges Going Forward  Fragmented delivery system, outdated provider reimbursement model  Outdated information systems  New technology & the increase of testing and new procedures  Poor-quality care, medical errors, fraud, misuse and underuse  Chronic diseases such as heart disease, cancer, diabetes and hypertension, mostly driven by harmful individual behavior  Prescription drug costs  The ACA is about covering people, not addressing the rising cost of health care or the quality gap. Taxes, Record Keeping and Reporting and Cadillac Tax implications 5

Health Care Spending Waste Identified waste $1.2 trillion Behavioral Clinical Operational $303 billion to $493 billion $312 billion $126 billion to $315 billion Obesity/overweight Defensive medicine Claims processing $210 billion $21 billion to $210 billion $200 billion Preventable hospital readmissions Smoking Ineffective use of IT $25 billion $567 million to $191 billion $81 billion to $88 billion Poorly managed diabetes Non-adherence Staffing turnover $22 billion $100 billion $21 billion Medical errors Alcohol abuse Paper prescriptions $17 billion $2 billion $4 billion Unnecessary ER visits $14 billion Treatment variations $10 billion Hospital acquired infections $3 billion Over-prescribed antibiotics $1 billion 6 Source: PWC’s Health Research Institute. The Price of Excess: Identifying waste in healthcare spending

Why Healthcare Cost Transparency?  In healthcare, there is no correlation between cost and quality.  Prices for medical services can vary greatly - even for the same procedure, in the same area, within the same network.  Quality and outcomes can vary with no relationship to price.  The only way to know whether you're getting good care at a reasonable price is to see the data.  Cost transparency tools provide employees with the information they need about cost and quality to choose the best care at the best price. 7

Who Benefits from Cost Transparency?  Employers - Healthcare transparency can help improve the health care that your employees receive, while helping to control skyrocketing medical costs. It also leads to more engaged, activated employees.  Employees - With more large employers now offering high-deductible health plans, consumers are faced with increasingly large out-of-pocket expenses. Access to price and quality information helps employees save money. It also empowers them to get the best care.  Providers - Greater transparency means that high-quality health care providers will receive the recognition they deserve. 8

Changes as a Result of the ACA Employer Actions to Minimize the Impact of the Excise Tax Add or expand tools to encourage plan 73% participants to be better consumers 57% Implement or expand account-based CDHPs Add or expand incentives/disincentives to 53% 3 engage employees in wellness programs 42% Increase employee cost sharing Reduce spousal subsidy or 37% implement spousal surcharge 30% Eliminate high cost plans Add or expand high performance networks, 27% ACOs, PCMHs or similar delivery models 10% Move to a defined contribution model 1% Other Source: 2014 National Business Group on Health Plan Design Surv ey 9

Controlling Medical Plan Costs Employer Tools and Programs Nurse coaching for care/condition management 85% Disease management 84% Prior authorization for selected services 80% Nurse coaching for lifestyle management 73% Price transparancy tools 71% Self-service decision support tools 71% Data warehouse 66% Employee advocacy tools/services for claims 52% assistance Source: 2014 National Business Group on Health Plan Design Surv ey 10

Healthcare Bluebook Conner Strong & Buckelew - Philadelphia

3x to 10x  Variance in price and quality  Plan members are in the dark 12

Healthcare Bluebook’s Vision  Transform inefficient, broad-panel provider networks into virtual networks of high-value providers 13

Transparency Leader  Launched in 2007 | profitable since 2011  180+ direct clients | 5,000+ clients via partners 14

Cost Transparency

Healthcare Price Variance Report Philadelphia Market 16

The Price Problem Colonoscopy (no biopsy) Price Variability Unique Cases $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 17

Start by Understanding Your Excess Cost 18

It’s Not the Physician Cost…. 19

…It’s the Facility. 20

ShopSmart ™ Services Total Total Opportunities Potential Savings Category Procedures Spend to Save Savings Percent Gener al Di agnost i cs 4, 624 $7, 896, 920 2, 459 $2, 735, 785 35% I P / OP Sur ger y & Pr ocedur es 736 $3, 740, 544 402 $1, 140, 354 30% W om en' s Heal t h 6, 800 $5, 008, 379 3, 704 $1, 078, 265 22% Bone & Joi nt 696 $7, 769, 613 436 $2, 173, 131 28% CT I m agi ng 3, 263 $3, 183, 473 1, 911 $1, 733, 976 54% M RI I m agi ng 3, 193 $4, 004, 932 2, 005 $1, 990, 632 50% Ul t r asound 6, 701 $1, 774, 499 3, 082 $703, 976 40% Xr ay I m agi ng 18, 396 $1, 798, 777 9, 396 $945, 085 53% Labs ( Top 30) 104, 914 $3, 331, 610 64, 695 $1, 863, 897 56% Tot al 149, 323 $38, 508, 746 88, 090 $14, 365, 101 37% 25% of total l medical l spend 37% of the spend on ShopSmart servic ices could ld be saved usin ing hig igh-value, in in-network provid iders 22

ShopSmart ™ Services 23

ShopSmart ™ Services 24

Quality Transparency

The Quality Problem Joint Replacement | Philadelphia 100.0 90.0 NATIONAL QUALITY RANK 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 56 Hospitals in the Greater Philadelphia Area 26

Hospital Quality Data Clinical Category: Joint Replacement | Philadelphia, PA City National Hospital City Rating Score Rank Rank √++ 1 Christiana Care Health Services, Inc. Newark 98.7 44 √++ 2 Thomas Jefferson University Hospital Philadelphia 98.5 50 √++ 95.0 3 Doylestown Hospital Doylestown 167 √++ 4 Shore Medical Center Somers Point 94.5 184 Atlanticare Regional Medical Center- City √++ 5 Atlantic City 90.9 293 Division Pennsylvania Hospital of the University of √+ 6 Philadelphia 89.5 366 Pennsylvania √+ 7 St. Mary Medical Center Langhorne 88.4 406 National Percentile Rankings √++ 90 th percentile √ 26 th – 74 th percentile √ - 11 th – 25 th percentile √+ 75 th – 89 th percentile √ -- 10 th percentile -- No data/not eligible 27

Hospital Quality Data Clinical Category: Joint Replacement | Philadelphia, PA City National Hospital City Rating Score Rank Rank √ - 50 Mercy Fitzgerald Hospital Darby 13.2 3,036 √ -- 51 Crozer Chester Medical Center Upland 10.7 3,122 √ -- 52 Memorial Hospital of Salem County Salem 7.8 3,225 √ -- 53 Chestnut Hill Hospital Philadelphia 7.4 3,239 Cape May Court √ -- 54 Cape Regional Medical Center, Inc. 6.1 3,284 House √ -- 55 Cooper University Hospital Camden 5.3 3,313 √ -- 56 Roxborough Memorial Hospital Philadelphia 0.8 3,470 National Percentile Rankings √++ 90 th percentile √ 26 th – 74 th percentile √ - 11 th – 25 th percentile √+ 75 th – 89 th percentile √ -- 10 th percentile -- No data/not eligible 28

Inpatient Quality Scorecard • Data is objectively collected and audited Objective Data • Mortality – Overall  Mortality – Condition- Multi- specific Dimensional • Complications  Patient-Safety Events Scoring • Core Processes  Patient Satisfaction By Clinical • Included quality scores by clinical category Category • Includes virtually all acute, non-fed hospital in US All Hospitals • Ranks hospitals relative to each other Relative Ranking • Adjusts quality scores to account for differences in Risk-adjusted demographics, co-morbidity and complexity • Weights hospital scores according to procedure Volume-adjusted volume 29