West Valley - Mission Community College District PPO Claim Experience & Plan Utilization Presented by: Gallagher Benefit Services, Inc. September 9, 2008 A Subsidiary of Arthur J. Gallagher & Co.
PPO Utilization Costs: Expense for employee benefits will increase by 13.6% for 2008/2009 to a total of $16.4 M in annual premium Cost Drivers: Blue Shield PPO demographics, utilization, and claims experience • Plan average age of 61 (actives and retirees combined) • Top 5 paid claim categories - impatient facility, inpatient hospital, outpatient facility, professional office visits, and emergency room o Claim payments exclude Medicare claims where Medicare is primary payer • Expense loss ratio of 111% • 46 individual claims between $15,000 - $99,999 • 6 individual claims in excess of $100,000 2
PPO Utilization Utilization Drivers for comparing 12 month periods May 2006 through April 2007 to May 2007 through April 2008 are as follows: Facility Inpatient paid claims increased 104.7% From $735,714 to $1,506,264 Professional Inpatient paid claims increased 66.3%, From $151,934 to $252,665 Facility Outpatient paid claims increased 27.9%, From $1,170,449 to $1,496,640 Professional Outpatient paid claims increased 3.0%, From $2,086,792 to $2,148,773 • The data above was provided by Blue Shield. This data includes all claims paid and does not adjust for pooled claims in excess of $100,000. 3
PPO Claims - 12 Months Blue Shield Medical PPO ALL MONTH COVERED COVERED PAID PAID UBH PAID TOTAL BLUE SHILED TOTAL MONTHLY CUMULATIVE PARTICIPANTS MEMBERS PREMIUM CAPITATION CLAIMS PAID RETENTION EXPENSE LOSS RATIO LOSS RATIO August-07 732 1,530 $520,482 $5,460 $634,938 $640,399 $65,530 $705,929 135.6% 135.6% September-07 734 1,536 $522,464 $5,482 $592,142 $597,623 $65,787 $663,410 127.0% 131.3% October-07 734 1,539 $522,822 $5,492 $824,612 $830,105 $65,915 $896,020 171.4% 144.7% November-07 735 1,536 $523,409 $5,482 $513,177 $518,659 $65,787 $584,445 111.7% 136.4% December-07 739 1,546 $526,697 $5,517 $363,358 $368,876 $66,215 $435,091 82.6% 125.6% January-08 709 1,481 $507,841 $5,937 $531,186 $537,123 $63,431 $600,554 118.3% 124.4% February-08 710 1,486 $508,898 $5,960 $345,469 $351,429 $63,645 $415,074 81.6% 118.4% March-08 710 1,486 $504,486 $5,962 $410,121 $416,084 $63,645 $479,729 95.1% 115.5% April-08 711 1,485 $505,308 $5,960 $457,655 $463,615 $63,603 $527,217 104.3% 114.3% May-08 710 1,488 $505,079 $5,976 $558,743 $564,720 $63,731 $628,451 124.4% 115.3% June-08 710 1,488 $504,836 $5,972 $423,869 $429,841 $63,731 $493,572 97.8% 113.7% July-08 711 1,493 $595,976 $5,995 $356,474 $362,469 $66,901 $429,370 72.0% 109.8% 12 MONTH TOTAL 8,645 18,094 $6,248,297 $69,196 $6,011,745 $6,080,941 $777,922 $6,858,863 LESS POOLED CLAIMS ($778,227) ADJUSTED TOTAL 8,645 18,094 $6,248,297 $69,196 $5,233,518 $5,302,714 $777,922 $6,080,636 97.3% AVERAGE COVERED 720 1,508 4
Pharmacy Claims - 12 Months Walgreen’s Prescription Drug Cost Number of Percent Avg. Cost Annual Percent Scripts of Total Per Script Total Cost of Total Generic 13,014 47.9% $32.72 $425,818 15.6% Multi-Source 1,262 4.6% $88.66 $111,889 4.1% 12,907 47.5% $169.61 $2,189,156 80.3% Single-Source TOTAL 27,183 $2,726,863 5
Pharmacy Request for Proposal • Sent 12 months WVMCCD pharmacy Data to 6 vendors • Used Gallagher’s Pharm D. Consultant to complete analysis -- subject matter expert • Saving Results with NO plan changes – Walgreen’s ($134,693) – Rx Solutions ($264,049) – Medco ($326,609) – EnVision Rx ($370,103) 6
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