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Health Benefit Design Proposals for 2018
Kathy Donneson, Chief Health Plan Administration Division
CalPERS
Agenda Item 6, Attachment 1, Page 1 of 12
Agenda
• Background
• Health Benefit Design Proposals for 2018
• Expand Value Based Purchasing Design for ASCs
• Align Site of Care for Medical Pharmacy
• Reduce Use of Emergency Room for Urgent Care
• Continue PPO Purchasing Tools
Agenda Item 6, Attachment 1, Page 2 of 12
Value Based Purchasing Design for ASCs
• Colonoscopy, Cataract and Arthroscopy – Ambulatory Surgery Center - pay usual co-
insurance and deductible – Hospital outpatient facility - pay usual co-
insurance and deductible PLUS any costs over the reference price of:
• $1,500 colonoscopy • $2,000 cataract • $6,000 arthroscopy
Agenda Item 6, Attachment 1, Page 3 of 12
Percentage of patients choosing an ambulatory surgical center for cataract surgery, 2009-2013
50
55
60
65
70
75
80
85
90
95
2009 2010 2011 2012 2013
Non-CalPERS Cataract
CalPERS Cataract
Reference pricing program implemented
Source: University of California, Berkeley analysis, February 2015.
2013 average CalPERS price Cataract Hospital Outpatient -- ~$7,500 Cataract ASC -- ~$2,250
Agenda Item 6, Attachment 1, Page 4 of 12
Percentage of patients choosing an ambulatory surgical center for colonoscopy, 2009-2013
50
55
60
65
70
75
80
85
90
95
2009 2010 2011 2012 2013
CalPERS Colonoscopy
Non-CalPERS Colonoscopy
Reference pricing program implemented
Source: University of California, Berkeley analysis, February 2015.
2013 average CalPERS price Colonoscopy Hospital Outpatient -- ~$2,500 Colonoscopy ASC -- ~$1,400
Agenda Item 6, Attachment 1, Page 5 of 12
Percentage of patients choosing an ambulatory surgical center for arthroscopy, 2009-2013
50
55
60
65
70
75
80
85
90
95
2009 2010 2011 2012 2013
CalPERS Arthroscopy
Non-CalPERS Arthroscopy
Reference pricing program implemented
Source: University of California, Berkeley analysis, February 2015.
2013 average CalPERS price Arthroscopy Hospital Outpatient -- ~$11,800 Arthroscopy ASC -- ~$7,400
Agenda Item 6, Attachment 1, Page 6 of 12
Results • Cataract
– $1.3M in savings in first two years – 20% reduction in spending
• Colonoscopy – $7M in savings in first two years – 28% reduction in spending
• Arthroscopy – $2.3M savings first two years – 17% reduction in spending
• Total savings for all three procedures about $5M per year
• No change in complication rates
Agenda Item 6, Attachment 1, Page 7 of 12
EXPAND VALUE BASED PURCHASING DESIGN FOR USE OF ASC
Agenda Item 6, Attachment 1, Page 8 of 12
ALIGN SITE OF CARE FOR MEDICAL PHARMACY
Agenda Item 6, Attachment 1, Page 9 of 12
REDUCE USE OF EMERGENCY ROOM FOR URGENT CARE
Agenda Item 6, Attachment 1, Page 10 of 12
CONTINUE CASTLIGHT AND WELVIE PPO PURCHASING TOOLS
Agenda Item 6, Attachment 1, Page 11 of 12
Continue to Evaluate Options
Stakeholder Feedback
Next Steps
Seek Approval
Agenda Item 6, Attachment 1, Page 12 of 12
