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

6/9/2014 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 – Premium Comparisons P i C i – Industry Impact 1

6/9/2014 Agenda • Value Based Health Care – Goal and Value Proposition – Six Components – Stakeholders ACA Highlights • Improve Quality • Increase Access • Improve Price 2

6/9/2014 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 3

6/9/2014 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 1 st : All plans required to limit out ‐ of y 5 y p q pocket costs and January 15 th open enrollment ends * Except for non ‐ grandfathered or exempted plans 4

6/9/2014 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 5

6/9/2014 Sample Full Priced • Catastrophiic ‐ $80.00 ‐ under 30 • Bronze ‐ $100 ‐ 60% coverage • Silver ‐ $200 ‐ 70% coverage (Every Insurer) • Gold ‐ $300 ‐ 80% coverage • Platinum ‐ $400 ‐ 90% coverage Pl ti $ % 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. 7 Prescription esc pt o 8. Mental Health and substance use disorder 9. Maternity and newborn care 10. Laboratory 6

6/9/2014 Subsidies • 80 ‐ 85% of individual exchange participants 8 8 % f i di id l h i i will qualify for some sort of subsidy • Based on FPL and family size: its 138% and 400% for states expanding Medicaid and % f di M di id d 100% and 400% for exchanges Private Exchanges Front of the Line • Insurance Control Model • Retail Managed Concept • Entrepreneur Visionary Option 7

6/9/2014 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 8

6/9/2014 Patient Assistance • In Person Assistant (IPA) ‐ funded • Certified Application Counselor (CAC) ‐ no funding • Navigator ‐ funded Insurance Impact • Pricing Competition • Benefit and Quality • Consumerism • Transparency 9

6/9/2014 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 10

6/9/2014 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” 11

6/9/2014 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 12

6/9/2014 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 13

6/9/2014 Three Tiers to Outcomes Important to Patients Tier One Tier One Survival Mortality Rate Degree of Health Recovery Ability to return to work b l k 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 14

6/9/2014 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 15

6/9/2014 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 Health System Leadership H lth S t L d hi • – 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 16

6/9/2014 Speed to Market Organizations that progress rapidly in adopting the value agenda will reap huge benefits even if regulatory change is slow! l t h i l ! Comments Questions? 17