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Maine Health Management Coalition Foundation. MaineCare Redesign Task Force Results of Health Care Cost Workgroup: Savings Opportunities. Sept 12th, 2012. Purchasers. 19 Private Employers 5 Public Purchasers. Providers. 21 Hospitals 14 Physician Groups. Health Plans. 5 Health Plans. - PowerPoint PPT Presentation
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www.getbettermaine.org & www.mehmc.org
MaineCare Redesign Task Force
Results of Health Care Cost Workgroup: Savings Opportunities
Sept 12th, 2012
Maine Health Management Coalition Foundation
www.getbettermaine.org & www.mehmc.org
Maine Health Management Coalition\Foundation
Foundation:•is a public charity •bring the purchaser, consumer and provider communities together into a partnership•measure and report to the people of Maine on the value of healthcare services•educate the public to use information on cost and quality to make informed decisions.
Foundation:•is a public charity •bring the purchaser, consumer and provider communities together into a partnership•measure and report to the people of Maine on the value of healthcare services•educate the public to use information on cost and quality to make informed decisions.
19 Private Employers5 Public Purchasers
21 Hospitals14 Physician Groups
5 Health Plans
Purchasers
Health Plans
Providers
Collectively 35% of Comm. Market
Coalition:•purchaser-led partnership among multiple stakeholders working collaboratively to •maximize improvement in the value of healthcare services delivered to MHMC members’employees and dependents.
Coalition:•purchaser-led partnership among multiple stakeholders working collaboratively to •maximize improvement in the value of healthcare services delivered to MHMC members’employees and dependents.
www.getbettermaine.org & www.mehmc.org
Cost Workgroup Process
Cost Workgroup identifies potential opportunities to reduce total per capita cost
Using data, assess opportunities. Describe variation, identify drivers of variation.
Approximate impacts of interventions, no precise estimates
Identify barriers, complexities, other considerations
Set targets for reducing costs
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• Coalition members (commercial)• Adults 18-64 only
• No Medicare Supplement• Medical Claims for October 2009 – September 2010 • Verified with 2011-2012 data• Residents of Maine by County of Residence• Risk: retrospective based on age, gender, Dx, Tx• Cost: Allowed Amount $ PMPM• PMPM: per member per month
Data
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Why Do Costs Vary?
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www.getbettermaine.org & www.mehmc.orgHealth Care Risk (Morbidity)
PMPM
www.getbettermaine.org & www.mehmc.orgHealth Care Risk (Morbidity)
PMPM
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Issues identified by Cost Workgroup
Admissions and readmissions for people with chronic illnessVariation in prices for inpatient careVariation in price and utilization of outpatient servicesVariation in treatment for Preference Sensitive Conditions
Mental health careWellness and community healthConsumer education and benefit incentives
Cost shifting from public to private payersHealthcare infrastructure, capacity
Administrative costs
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Inpatient
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Reduce PMPM 1.6% ?
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Outpatient
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> 80 % variation
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Mental Health
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Infrastructure
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Impact to Health Systems
For every $1 dollar that we take out of the revenue stream …
$1
A health system must take $1 out of its costs…
Revenue Cost
$.70Fixed
$.30Variable
Yet, only $.30 is variable, so the fixed costs remain. The hit to the bottom line is $.70.
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Benchmark Comparisons
ServiceCategory Benchmark MHMC Benchmark MHMCInpat Fac 1.02 1.14 57 71OP Fac 1.02 1.14 67 131Prof 1.02 1.14 116 110Total 1.02 1.14 240 313
Age/GenderIndex Adj Allowed PMPM
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Benchmark Comparisons
ServiceCategory Benchmark MHMC Benchmark MHMCInpat Fac 1.02 1.14 57 71OP Fac 1.02 1.14 67 131Prof 1.02 1.14 116 110Total 1.02 1.14 240 313
Age/GenderIndex Adj Allowed PMPM
ServiceCategory Benchmark MHMC Benchmark MHMCInpat Fac 11,063 15,439 61 49OP Fac 553 579 1,421 2,381Prof 79 76 17,334 15,198
Adj Allowed/Service Adj Serv/1000
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Morbidity: Significant, but not major factor in regional population cost differences within the state
Inpatient: Price is a major driver of regional population cost differences
Outpatient: Price and utilization are major drivers, across regions and through time
Reductions in PMPM for most interventions range from at least 1 – 3%, some more. Feasibility …..
Within state major drivers confirmed by regional benchmarks
Conclusions