About the ViewsLetter

Transcription

1 IN THIS ISSUE Population Health Management: The Future of Controlling Health Plan Cost?... 1 Volume Seventeen Issue Two May 2014 Population Health Management: The Future of Controlling Health Plan Cost? About the ViewsLetter... 1 Your Questions... 2 Trend Tidbits... 2 Did You Know?... 3 Resetting Benefits Baselines. 4 Technical Corner... 5 The unrelenting rise of health care cost is prompting all employers to investigate cost saving strategies and tactics. A number of strategies change the traditional fee-for-service method of paying for health care. These strategies often consider quality and outcomes when reimbursing physicians. For example, patient-centered medical homes provide additional reimbursements when health care providers regularly offer certain evidence-based treatment protocols. Patient-centered medical homes tie quality measures to the payment formula. Certain carriers are using the patient-centered medical homes as part of their product portfolio. Blue Cross Blue Shield of Michigan has a network of patient-centered medical home offices available to plan members. About the ViewsLetter We welcome you to the second quarterly issue in Volume Seventeen of the McGraw Wentworth ViewsLetter. It is our mission to be the leader in the employee group benefits brokerage and consulting industry to mid-sized organizations. We have established the ViewsLetter as an integral part of our commitment to keep The structure of reimbursement models that replace the historic fee-for-service models are still taking shape. It may be that there is more than one workable strategy. Most approaches will involve financial incentives for following clinical protocols and achieving quality measures. One tactic gaining traction in the large employer marketplace is population health management. Its goal is to keep a health plan participant as healthy as possible in order to reduce the number of costly emergency room visits, hospitalizations, imaging tests and procedures. Population health management should lower cost. It will shift your health plan s emphasis from the sick to all plan participants. Population health management will center partly on high risk, high cost plan participants. It is well established that a small number of plan participants are responsible for the majority of health plan cost. This health management structure will focus on the preventive care and chronic care needs of these high cost, high risk plan participants. This data driven approach will identify gaps in care so the member can be Continued on page 2 you informed of benefit trends, legislative and marketplace developments that may affect your group benefit programs. We welcome your comments and suggestions regarding the ViewsLetter. You can pass your comments directly to your McGraw Wentworth Account Director or Account Manager, or you can reach us at

2 The Future of Controlling Health Plan Cost? cont. encouraged to fill a prescription, schedule a physician appointment and so on. This approach also encourages low risk, low cost participants to get recommended preventive screenings and make recommended lifestyle choices. To identify participants health care needs, population health management will rely on heavily on health plan data. Population health management vendors will typically aggregate data from the medical vendor, the pharmacy benefit manager and possibly even the wellness vendor. The vendor will then look for gaps in care, trends in the usage rate of emergency room and other expensive services, and sometimes even use predictive modeling to identify future potential high cost claimants. Population health management can mean different things to different organizations. A health provider industry group, the Care Continuum Alliance defines population health management as a health improvement model that highlights the following three components: 1. The primary care physician s central care delivery and leadership roles. TREND TIDBITS $ The cost of PPO plans is expected to increase 7.6% with Rx coverage in Without Rx, cost is expected to increase 7.9%. $ The cost of HMO plans is expected to increase 7.0% with Rx coverage in Without Rx, cost is expected to increase 7.2%. $ The cost of high deductible health plans is expected to increase 7.9% with Rx coverage in Without Rx, cost is expected to increase 8.3%. $ The cost of fee for service/indemnity plans is expected to increase 9.7% with Rx coverage in Without Rx, cost is expected to increase 10.4%. $ The cost of prescription drug carve-outs is expected to increase 6.3% in Source: 2014 Segal Health Plan Cost Trend Survey 2. The critical importance of patient activation, involvement, and personal responsibility. 3. Expanded coordinated patientcentered care provided through wellness, disease and chronic care management programs. Health plans would need to work closely with health care providers to move effectively from fee for service to fees for high quality, effective care management, and positive outcomes. Technology is also important to population health management. The Agency for Healthcare Research and Quality (AHRQ) recommends technology tools to help manage population health. These IT tools will need to help: Target patients who need services the most by narrowing groups of members based on various health metrics. Continued on page 3 YOUR QUESTIONS Q. I understand the new employer mandate final rules will require us to cover dependent children until the end of the month they turn 26. The dependent child regulations allowed us to end coverage on the child s 26th birthday. Our plan currently ends coverage on the 26th birthday. When must our plan extend coverage until the end of the month that a dependent turns 26? A. It depends on when the employer mandate rules impact your plan. It is complicated. If you have a calendar year plan, your plan must cover the child until the end of the month as of January 1, If you have a non-calendar year plan year and qualify to delay the play or pay rules, your plan must cover the child to the end of the month as of the first day of your plan year. Some small employers (between 50 and 99 full-time equivalent employees) may qualify to delay penalties to If you are one of these small employers, you have until 2016 to extend coverage to the end of the month when a dependent child turns 26. 2

3 The Future of Controlling Health Plan Cost? cont. Provide actionable data to health plan members, for example, remind patients to make appointments with their primary care physicians. Make data actionable by alerting providers to patient health care needs. A wealth of information is available electronically including medical records and most health claims. However, this information is not useful if health providers don t access it. What s more, this information is static. For example, it may indicate a patient is a Type 2 diabetic. However, health plans don t analyze usage to determine if the diabetic is taking their medication and getting recommended check-ups from their primary care physician. If an employer could use that diagnosis and target its efforts to both patients and health care providers, it could improve the care and the health of the patient. The health plan could then turn the static Type 2 diabetes information into action steps: Send reminders to both patient and provider to schedule routine services. Monitor medication compliance and send reminders if a prescription is not filled. Provide target communications about diet changes and exercise. Population health management is evolving. Jumbo employers are very interested in it. Most of these employers are using data warehouses to analyze their claim spend. These jumbo employers can invest in their health plans to create a new reimbursement model centering on quality, evidencebased protocols and outcomes. This approach is a bit of a challenge for the middle market. Health insurance carriers are very interested in developing health plan models that follow the concepts of population health management. Employers can contract with population health management vendors who will aggregate all the data associated with the health plan. They can then analyze the aggregate data set to provide specific actionable data. Health plans that have successfully moved to population health management often either own or share ownership of their health care systems. Kaiser Permanente, for example, has been integrating its Electronic Health Records with inpatient, ambulatory, and continuing care services. Primary care physicians in that health system will be able to access the integrated data and thus provide proactive health care during office visits. The primary care physician can then treat patients DID YOU KNOW? for all their medical issues, even the problems patients forget to mention. Employers will start to see discussions of population health management as a way to decrease costs. For many, this strategy will not be workable today because of group size or a lack of vendor options. Population health management is a major focus of health systems and health plan vendors. More options will likely be available in the future. MW The type of health plan offered may affect the percentage of employees participating in different types of wellness initiatives as follows: Health Risk Assessments 64% of traditional health plan participants 66% of high deductible health plans 77% of consumer driven health plans (high deductible plan paired with pre-tax account options) Health Promotion Programs 46% of traditional health plan participants 42% of high deductible health plans 57% of consumer driven health plans Biometric Screenings 63% of traditional health plan participants 65% of high deductible health plans 78% of consumer driven health plans Continued on page 4 Source: 2013 Consumer Engagement in Health Care Survey, EBRI/Greenwald & Associates 3

4 r Resetting Benefits Baselines The initial enrollment period for state Marketplaces closed as of March 31. The Obama administration is touting success because early reports show enrollments topped eight million. However, it will be some time before we get an accurate picture of the Exchange enrollment and how many people actually pay for the coverage they signed up for. It will also be interesting to see the mix of insureds in each state. These are just some of the factors that will influence premiums in future years. In the Michigan Marketplace, the premiums for the individual bronze (60 percent value) and silver (70 percent value) plans were reasonable for most ages. However, the benefits in those two metal tiers were significantly different from the benchmark employer-sponsored health plans. The lowest cost bronze plan offered a limited network. The plan had a $6,300 per individual and $12,600 per family deductible. Once the deductible is met, services are covered 100 percent in-network. The lowest cost silver plan also had a limited network. The plan had a significant deductible, $4,600 per individual and $9,200 per family. This plan had office visit, emergency room and prescription drug copays. Cost-Conscious Behavior Asked for a generic instead of a brand-name drug Asked doctor to recommend a less costly prescription Discussed treatment options and costs with doctors Checked price of service before getting care Used health plan's online cost-tracking tool % of Members that use the behavior covered by a high deductible health plan % of Members that use the behavior covered by an account- based consumer driven health plan 47% 50% 36% 38% 33% 36% 33% 39% 13% 25% Source: 2013 Consumer Engagement in Health Care Survey, EBRI and Greenwald & Associates Both of these plans are in stark contrast to the benchmark employer plan. The standard employer plan has a $500 deductible with office visit, emergency room and prescription drug copays. Employers over the coming years will decide whether these plans offered in the Marketplace provide room to move. Will employers see these significant deductibles as a benchmark that may allow them to increase their deductibles to $1,000? As employees costs for services increase under a health plan, they tend to change behavior when they seek care as shown in the table above. When health plan participants pay more, they reconsider the cost and necessity of health care services. Employers have been trying to encourage employees to consider costs of health care services under the health plan. It seems that increasing employee costs for covered services may improve employee cost-conscious behaviors. Employers will have tough decisions to make when it comes to meeting health plan budgets this year. The low value plans offered in the Exchange may offer a new benchmark. This may allow some employers to cut benefits and increase employee cost-sharing at the point of service. MW NOTABLE THOUGHTS ONE OF THE TRUE TESTS OF LEADERSHIP IS THE ABILITY TO RECOGNIZE A PROBLEM BEFORE IT BECOMES AN EMERGENCY. ARNOLD GLASOW Continued on page 5 4

5 Technical Corner In 2014, Facebook celebrates its tenth year. Facebook has grown substantially since its inception. No longer is Facebook limited to students. Most people maintain a Facebook profile; even grandparents are active on Facebook. Employers are active on Facebook as well. It is standard practice for businesses to screen job candidates based on their social media profiles. Employers take this step because it gives them insight into their job candidates. However, this strategy may backfire on employers. As the employment picture improves across the country, job applicants may have more than one offer to consider. Researchers at North Carolina State University recently conducted a study indicating that Facebook screens may drive away qualified applicants. The researchers found that qualified applicants felt their privacy was compromised when potential employers screened their social media profiles. According to the London-based Institute for Employment Studies, in 2013, almost half of all companies reported using social media profiles to make hiring decisions. It is important to consider the potential value of using social media profiles in the hiring process as well as the potential drawbacks. The North Carolina State researchers conducted experiments to determine how job-seekers viewed the use of social media screenings in the hiring process. One experiment had individuals apply for a job. Half of the applicants were notified their social media profiles would be screened as part of the hiring process. After applicants had worked through the hiring process, they were asked to give anonymous feedback. Applicants whose social media profiles were screened found the selection process to be unfair. These applicants were less attracted to the hiring company because of the experience. They were less likely to accept a job offer or more likely to quit because of it. The researchers then broadened their experiment to job-seekers across the country. In this experiment, applicants who were told their social media profile had been reviewed formed negative opinions about the hiring company, even if they were offered a job. They also reported they were more likely to sue the organization because they found the hiring practices unjust. While screening social media profiles is fairly common, few studies have been conducted to determine whether this screening is valid as a hiring tool. Studies need to be conducted to determine whether the information from a social media profile is relevant in assessing whether a candidate is a good fit for a position. Employers should take care in screening social media profiles as part of the hiring process. They may not glean useful information and their job candidates may see the social media screen as an invasion of privacy. Thus the screening may cause a negative perception of the company. It also may affect employee loyalty if the candidate is hired for a position. MW Copyright McGraw Wentworth, a Marsh & McLennan Agency LLC company. Our publications are written and produced by McGraw Wentworth staff and are intended to inform our clients and friends on general information relating to employee benefit plans and related topics. They are based on general information at the time they are prepared. They should not be relied upon to provide either legal or tax advice. Before making a decision on whether or not to implement or participate in implementing any welfare, pension benefit, or other program, employers and others must consult with their benefits, tax and/ or legal advisor for advice that is appropriate to their specific circumstances. This information cannot be used by any taxpayer to avoid tax penalties West Big Beaver Road, Suite 200 Troy, MI Telephone: Fax: McGraw Wentworth 250 Monroe Ave. NW, Suite 400 Grand Rapids, MI Telephone: Fax: