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
Wellness Cost Containment • Physical • Begins and ends with patients • Mental • Has tangible value to plan participants • Financial • Look for themes to target
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
Small Mid-market Large (2-50) (51-499) (500+)
Large Employers (500+) Disease state and population health management
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 Office Visits: Find best local experts for member needs Physician Priority Matching Access Treatment Decision Support: Cost Efficiency Access staff physicians for Fast Decision answers or triage quickly within Support Diagnosis & 24 hours Treatment Plan Triage Unnecessary Expert Opinion: Care Avoidance Education Connect with experts for optimal diagnosis and Expertise Rx & Treatment Support treatment
Quality Algorithm Scores Availability of Provider-Level Data Grand Rounds Analysis Background Data Performance Data Grand Rounds • • Clinical outcomes proprietary data Specialization • • Patient volumes Board certification State APCDs and commercial data vendors • • Procedure volumes Peer recognition • • Process measures Medical school CMS, medical societies, hospitals, group practices, additional states • • Patient satisfaction Residency • • Referral patterns Fellowship • • Treatment adherence Yrs. of experience Selected states • • Utilization rates Practice location(s) 2011 2012 2013 2014 2015 2016 • • Sanctions / lawsuits Hospital affiliation(s) 9 billion clinical data points measured and new > 96% of MDs rated based on clinical quality data incorporated monthly
Evidence-Based Approach Grand Rounds office visits physicians Quality Factors Include: (10%) • Institution Grand Rounds • Training expert physicians • Procedure volumes (0.3%) • Patient outcomes Every other physician • Research 90% 923,000 U.S. physicians
Without Guidance, Members are Unlikely to Find the Best Care Physician Quality 0-19% (Lowest) 20-39% 40-59% 60-79% 80-99% (Highest) “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.
The Grand Rounds Matching Effect Average quality of an actual national network optimized for quality 45% overall quality improvement w/out disruption Physician Quality Top quality physicians achieve: 0-19% (Lowest) • 15% lower hospital readmission rates 20-39% • 20–25% lower complication rates 40-59% • 30–40% lower mortality rates 60-79% • 10–30% lower cost per patient 80-99% (Highest) “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.
Measurable, Meaningful Impact 66 % 45 % 38 % change in diagnosis or cancellation of unnecessary discontinuation of opioids in treatment recommendations procedures opinions involving opioids $ 2,600 $ 16,400 $ 8,900 saved on average per saved on average per expert saved on average per converted in-person office visit expert opinion opinion with treatment change
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 •
Captive Metrics Example 97% Renewal $185m SL 546 ratio premium Members 140,000 1,000+ 120 Lives Renewals Employees 30% - Largest <1% Members 0 New increase in SL hit max lasers premium
Small Employers (2-50) Eliminating spend and plan funding options • Plan design considerations • Association plans • Level-funding as an alternative to fully insured
Courses of Action: Remaining grandmothered • Health Plan Narrow network – Anthem HealthSync • Trends PEO evaluation • Level/modified self funding • Remember the rules in group size counting! Community rate – new plans • Association plans – Indiana State • Chamber & IndyChamber
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 Express Scripts leader wants Anthem to stay client despite $15 billion suit 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
Pharmacy Stats $450 BILLION ROUGHLY 21% Employer plan spending is Americans spend on prescription drugs in 2016 on retail drugs OVER 70% OVER 13% pending patents and FDA Wholesale pricing for pharmacy approvals are for specialty drugs drugs has increased by
Trend Driver: Increasing Drug Cost- Specialty Anti-Inflammatory Drugs in Specialty Cost Drivers Pipeline Dominated by Specialty Pipeline Oncology 7 22.1% 29.7% 45% 55% 34 18 20.5% Total Anti-Inflammatory Drug New Oncology Drugs Potential Approvals Inflammatory Diabetes First-in-class New Drugs Oncology Potential Biosimilars
Consumer Impact
Consumer Impact Stats 1 in 4 ROUGHLY 50% Americans have difficulty of Americans take a prescription affording their medication(s) drug; 85% are filled as generics OVER 80% OVER $108 of Americans favor requiring greater Diabetes has the highest per transparency on drug pricing from member per year spending of manufacturers
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