COUNTY OF KANE Human Services Committee Presentation
Agenda • Global Group Introduction • Historical County Plan Performance Overview • County Health Care & Cost Containment Strategies • Current Strategies • Enrollment/Dependent Management • Medical Advocacy Program • Wellness Program Progression • Medical Plan Funding Arrangement • Health Care Reform Impacts
Global Group Introduction
Global Group • Awarded County’s benefits consulting contract in 2009 • 30+ years working with the Public Sector • Extensive relationship with all major carriers, TPAs, stop-loss providers, and health care advocacy organizations • Superior understanding of Collective Bargaining relationships • Leader in compliance and consulting relative to legislative changes impacting public sector benefit plans
Global Group • Advanced understanding of underwriting processes and plan funding arrangements • Unique awareness of the impact tax revenue streams have on plan funding and design.
Historical County Plan Performance Overview
Renewal History Actual vs. Trend Comparison 20.0% 18.0% 16.0% 14.0% 12.0% Trend 10.0% Increase 8.0% 6.0% 4.0% 2.0% 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM $1,600 $1,400 $1,200 $1,000 Trend $800 Actual $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM 2007: Plan changes to $1,600 HMO and $1,400 PPO plans $1,200 $1,000 Trend $800 Actual $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM 2008: Wellness $1,600 Program $1,400 Introduced $1,200 $1,000 Trend $800 Actual $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM 2010: Wellness Contributions $1,600 Introduced $1,400 $1,200 $1,000 Trend $800 Actual $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM 2012: Plan changes to HMO and $1,600 PPO Plans $1,400 $1,200 $1,000 Trend $800 Actual $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM 2013: Plan changes to HMO and $1,600 PPO Plans $1,400 $1,200 $1,000 Trend $800 Actual $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Renewal History Actual vs. Trend Comparison Medical Cost PEPM Plan Increase – Trend vs. Actual $1,600 $1,400 Trend PEPM increase: 107% $1,200 $1,000 Trend $800 Actual Actual PEPM increase: 55.3% $600 $400 $200 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013
Cost Containment Strategies Current Programs
Cost Containment Bona Fide Wellness Program • Claims cost is the largest component of health care premiums • Wellness program identifies conditions at an early stage to help prevent & reduce large claims
Cost Containment • Wellness Program – Beginning in 2008, participating employees and their spouses are screened by a 3 rd party vendor (Interactive Health Solutions) via blood draw – Employees receive a confidential, personalized individual health score comparing their results to AMA guidelines
Cost Containment • Wellness Program – From 2008-2009, reward for participation was a contribution to a “wellness account” with BCBS – Beginning in 2010, a $50/$100 incentive was established to promote participation in the wellness program
Cost Containment • Wellness Program Condition Discoveries 600 500 400 300 200 100 0 2008 2009 2010 2011 2012 New Conditions Serious Conditions
Cost Containment • Wellness Program 10.0% 9.7% 1624 1560 1547 Wellness Participants 3.1% Plan Increase 2.5% 406 316 1.0% 2009 2010 2011 2012 2013
Wellness Program What’s Next?
Wellness Program • Since 2010, employees and their spouses have received the wellness incentive premium credit simply for participating in the annual biometric screening with IHS. • Each screened member has received an individual score (“IHI Score”) from the screening with a goal score for the following year’s screening.
Wellness Program • Suggested next step would be to move to a compliance-based screening program, where members are required to meet or exceed their IHI goal for the following year. • Compliance-based programs put the onus on the member to manage and improve their health to continue receiving the financial incentive.
Cost Containment Health Maintenance Organization (HMO) • HMO plans offer – Capitated physician payments – Managed care – Superior facility discounts
Cost Containment HMO Migration Strategy • Cost reducing strategy to move employees from PPO and HMO IL to HMO BA – Began in 2010 – HMO BA premiums are 10% lower than HMO IL with same benefit plan design, and 30% lower than PPO – Dreyer Clinic (the most heavily utilized Medical Group) participates in both HMO programs
Cost Containment BCBS Resources • Condition Management – BCBS outreach program to members with chronic conditions, such as asthma, COPD, congestive heart failure, coronary artery disease, and diabetes. – Case managers at BCBS helps members adopt healthier behaviors, set goals, and manage conditions
Cost Containment BCBS Resources • Condition Management – 2012 Engagement • 152 Total Members Targeted by Outbound calls • 25 New Members Targeted • 13 New Members Engaged with BCBS • 52% Engagement Rate of New Members
Cost Containment BCBS Resources • 24/7 Nurseline – Employees have access to a 24/7 nurseline with experienced clinical staff to provide immediate decision support to help members select the most appropriate course of treatment • 3 Inbound calls to BCBS’s Nurseline in 2012
Cost Containment BCBS Resources • Treatment Cost Estimator – On BCBS’s Blue Access for Members, members can estimate out-of-pocket and total costs of treatment and procedures at different network providers based on their plan provisions.
Cost Containment BCBS Resources • Blue Star Rating – PPO and HMO hospitals and medical groups have been rated based on national, state, and care standards for quality and safety
Cost Containment Strategies Enrollment/Dependent Management Strategies
Enrollment Management • Opt Out • Spousal Carve-out • Dependent Audit
Dependent Audit • Full-scale audit process to ensure that only eligible dependents are covered on the County health plan. • Eligible dependents include: – Spouse (or civil union) – Dependent children up to age 26 – Disabled children over the age of 26 – Eligible military children up to age 30
Dependent Audit • Over a 10-12 week period, a third-party vendor sends 2-3 rounds of communication to employees with covered dependents requesting proof of dependency • Documents can be mailed, fax, or uploaded to a secure website (if offered) • Employees and county are notified of approval status
Dependent Audit • Estimated ineligible dependents removed from the plan during an audit: 3-8% • Current dependents on the plan: 1,628 • Average annual cost per member: $3,000 • Potential savings: $0 - $390,000 (0-2.6% of premium) • Audit cost range: $16,000 - $19,000
Cost Containment Strategies Medical Advocacy Program
Medical Advocacy • Confidential program providing independent cost advice and direction to employees experiencing a care episode. • Designed to support employees and their family members in utilizing health care, increase confidence in their health care decisions, and reduce claims cost to the plan.
Medical Advocacy • When paired with a fully-insured PPO and HMO dual offering like the County program, HMO participants would not be impacted by cost-savings assistance, as plan copays are pre-determined. • PPO participants who utilize an advocacy program could see reduced out-of-pocket expenses for non-copay driven services. • Program would have to be strictly voluntary for County PPO plan
Medical Advocacy • Estimated cost PEPM: $4.50 • Estimated annual cost (PPO only): $29,862 • Given County’s arrangement with BCBS, program success may be limited (East Aurora School District)
Medical Plan Funding Arrangement
Medical Plan Funding Fully-Insured vs. Self-Funded • Fully-Insured – Pre-determined monthly premium per plan/tier paid to the carrier. – Allows for easy budgeting, forecasting and development of employee contributions – Carrier bears all risk, pays claims, then determines annual renewal based on experience. – This is the current arrangement with BCBS.
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