MEASURES TO REDUCE PLAN COSTS Cost Containment Strategy Transparent - PDF document

9/27/2016 MEASURES TO REDUCE PLAN COSTS • Cost Containment Strategy • Transparent Pricing • Pharmacy • Transparency Tools • What’s next? W W W . B E N E F I T S . M T . G O V 1

9/27/2016 COST CONTAINMENT STRATEGIES Manage the Benefit Design • Data Analysis • Manage Risk • Manage the Contracts • High Dollar Claim Management • Address the highest spend • areas Engage Members in Cost • Containment W W W . B E N E F I T S . M T . G O V CHARGE LESS DISCOUNT W W W . B E N E F I T S . M T . G O V 2

9/27/2016 CHARGE LESS DISCOUNT 2016 SEGHP Claim Data - Knee Replacement Surgery • Comparison between two Montana Hospitals • Higher Discounts don’t always result in Lower Costs • Hospital A Hos Hospital B Hos Hospital Charge $115,000 Hospital Charge $25,000 Discount 10% Discount 7% Cost to State Plan $103,500 Cost to State Plan $23,250 Not Predictable • Not Transparent • Not Comparable • Not Consistent • WWW.BENEFITS.MT.GOV TRANSPARENT PRICING W W W . B E N E F I T S . M T . G O V 3

9/27/2016 MAP OF PARTICIPATING PROVIDERS Scobey Sco Plenty Ple tywo wo od od Shelby She Cu Cut Ba t Bank Ch Chester Havr Ha vre White itefis ish Libby bby Malt Malta Conrad Con Cu Culbertso Bi Big S Sandy Wol Wolf Glasgow Glas n Kalis Kalispell Point Po int Ch Choteau Pols Po lson Fort For Sidn Sidney Benton Be Plains Plains Circ Ci rcle Ronan Ron Gre Great t Jor Jordan Falls lls Sup Superior Lewistow Le Glendi Gle dive n Misso Missoula Te Terry Hel Helena na Wh White Deer eer Sulphur Sulp Philip Philipsbu Harl Ha rlowto Roundup Rou Lod Lodge Sp Springs Miles C Mile City rg rg n Baker Ba To Townsen Ha Hamilton d Anacond An Forsyth Fors a Bu Butt tte Big Bi Billin llings Ekal alak aka Timber Ti Columbu Col Hard Ha rdin in Sherid She idan an s Bozeman Boz Li Livingst sto n Crow Cro Ennis nnis Agency Ag Dillon Dillo Red Red Lod Lodge 7 TRANSPARENT PRICING W W W . B E N E F I T S . M T . G O V 4

9/27/2016 FINANCIAL PROJECTION W W W . B E N E F I T S . M T . G O V RX CHANGES – EMPLOYEE PLAN URx URx Navit itus Projected Annual Drug Costs $83,329,000 $83,329,000 Retail Discount -$25,687,000 -$27,095,667 Mail Discounts -$9,467,333 -$9,567,333 Specialty Discounts -$4,085,667 -$4,497,000 Total After Discounts $44,089,000 $42,169,000 Rebates -$2,617,500 -$3,982,000 Gross Rx Spend $42,568,167 $39,278,333 Em Empl ployee ee Sa Savi vings ngs $914,3 4,334 Plan Savin Plan Sa vings $2,3 $2,375,50 500 Tota tal Sa l Savi vings ngs $3,289,8 $3,289 ,834 34 W W W . B E N E F I T S . M T . G O V 5

9/27/2016 RX CHANGES – MEDICARE RETIREES URx URx Navit itus Projected Annual Drug Costs $23,812,336 $23,812,336 Administration Costs $90,027 $498,750 Dispensing Fee $178,605 $117,699 Total Costs $24,080,968 $24,428,785 Retail Discount -$11,213,336 -$11,762,001 Coverage Gap Discount - -$991,800 Direct Subsidy - -$427,500 Reinsurance Program - -$1,573,200 RDS Subsidy -$1,450,000 - Rebate Guarantee -$828,380 -$845,966 Gross Rx Spend $10,589,252 $8,828,318 Total Sa l Savings ngs $1, 1,760,9 60,934 W W W . B E N E F I T S . M T . G O V TRANSPARENCY TOOLS Health Care Blue Book W W W . B E N E F I T S . M T . G O V 6

9/27/2016 TRANSPARENCY TOOLS Navi-Gate Rx W W W . B E N E F I T S . M T . G O V WHAT’S NEXT? • Performance Monitoring • Data Analytics • Out of State Facility Costs • Primary Care W W W . B E N E F I T S . M T . G O V 7

9/27/2016 QUESTIONS? W W W . B E N E F I T S . M T . G O V 8