2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Session ID: FIN14 Session Title: Health Care Savings In Tight Budget Times APRIL 3-6, 2013, LONG BEACH,

2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO

Session ID: FIN14Session Title: Health Care Savings In Tight Budget Times

APRIL 3-6, 2013, LONG BEACH, CA

These materials have been prepared by Kelly Porterfield, Eric Fiedler and Doug Richesin. They have not been reviewed by State CASBO for approval, so therefore are not an official statement of CASBO.


Agenda:

• Who has the greatest impact on health insurance cost?

• How can we implement cost containment strategies?

• What are the common areas that have the greatest impact on health insurance cost?

• Q&A


© 2013 Blue Cross and Blue Shield of North Carolina is an independent licensee of Blue Cross and Blue Shield Association. All rights reserved

Let’s Engage in Conversation

Who’s Responsible?

• Doctors• Attorneys• Hospitals• Drug Companies• Insurance Companies• Individuals

http://www.bcbsnc.com/


Who has the greatest impact on the health insurance cost?$700B in waste across U.S. system


% of total medical costKey sources of waste1 that is waste

Admin and system inefficiencies 4-6%

Provider inefficiencies and errors 3-4%

Lack of care coordination 1-2%

Unwarranted use 11-21%

Preventable conditions and avoidable care 1-2%

Fraud and abuse 5-8%

-30%1 Thomson Reuters, 2009 White Paper, Where Can $700 Billion In Waste Be

Cut From the US Healthcare System


First Step to Cost Containment

• Water meter effect! • Must have accountability• Must have buy in by all stakeholders• Best mechanism is by implementing a Health

Insurance Committee• Must include mgmt., collective bargaining

leadership, retirees and health insurance expert.


Plan Modification (Cost Shift?)

• Changes to Benefit Plan Design– Increasing Deductibles– Increasing Coinsurance– Copay Adjustments– Carve outs

Employer

Medical Professionals

Employee


Rate Tier Options Composite• One rate billed for everyone• Families are partially subsidized by

Singles• No incentive to enroll in secondary

coverage and make wise decisions

4-Tiered• Employee Only• Employee + Children or Children• Employee + Spouse• Employee + Family

• Significant flexibility

3-Tiered• Employee Only• Employee + 1• Employee + Family

• Creates Consumer Decisions • Offers more cost effective approach

for single coverage

http://www.google.com/url?sa=i&rct=j&q=cost+shifting&source=images&cd=&cad=rja&docid=B55NNxQxg-fcfM&tbnid=zdDjjlbLf7YGIM:&ved=0CAUQjRw&url=http://www.corporatewellnessmagazine.com/article/using-voluntary-benefits-to-support-consumer-driven-wellness-initiatives.html&ei=cuQvUZHQDMbF2QXss4HgCA&bvm=bv.43148975,d.b2I&psig=AFQjCNG9XZJ1G_rvHPMk-Zn95nk9PKH7CQ&ust=1362179563347060


Cost Containment

• Eligibility Audits (Children, Ex’s, Grandchildren)• Routine Examination of Medical Trends• Referenced based pricing• Multi-year Agreements• Separate costs for Actives vs. Retirees


Cost Containment• Referenced based pricing• Narrow Networks

– Anthem Select Network• Prescription Formulary tightening• Case Management

– Chronic/Rare Disease Management Programs


Controlling Pharmacy Costs• Focus on Generics

– DAW (Dispense as Written Penalties)– Step Therapy– Maintenance Medication Savings

• Tiered Copayments• Mail Order Savings• Strict Quantity Oversight• Specialty Drug Management• Coordination with Disease Management


Cost Containment Wellness Strategies

• PPO/HMO Wellness Plans• Preventive Screenings• Health Risk Assessments• Coaching Programs• Maternity Management• Focus on Chronic Conditions• Generic Copay Reductions


Cost Containment Wellness Strategies

• Walking Campaigns• On-site Flu Clinics• Biometric Screenings• Health Fairs• Guest Speakers


Consumer Decisions• The largest ability to impact costs• Influencing these decisions are critical to managing costs

• Education of Employees and Family• How to use their PPO Plan• Where are the lowest costing services• Analyzing their EOB’s• Prevention measures• Promoting Wellness at work• Tools (Anthem Compare)


Value of a Large Risk Pool• Reinsurance • Pooled Large Claims• Admin Fee Leverage with

Carriers• Rate Stabilization• Professionally Managed

Oversight• Lower Administration Fees


• Detailed Claims– Diagnosis & Prognosis of Plan participants

• Tailor Benefits Specific to Your Employees• Reduced Plan Fixed Costs• Limit Risk through Specific & Aggregate Contracts• Flexible Cash Flow

– Pay Claims as they are incurred• Instant Savings by implementing Specialty Programs

– Wellness, Disease & Case Management Programs• Pharmacy Rebates paid directly to the District’s Plan• Retail, Mail & Specialty Drugs• No Renewal Surprises

– Monthly Executive Summary Claims Reports• Establish an Insurance Committee to communicate how the plan is performing

– Reduces District vs Union benefit issues

Value of Self Insurance


Q&A

Documents

2013 CASBO ANNUAL CONFERENCE & SCHOOL BUSINESS EXPO Session ID: FIN14 Session Title: Health Care Savings In Tight Budget Times APRIL 3-6, 2013, LONG BEACH,