Transcript 2006 Health Plan Design - Bipartisan Policy Center

Health Care Transformation
An Employers’ Perspective
Bipartisan Policy Center
April 24, 2008
Sally Welborn
Senior Vice President – Corporate Benefits
Wells Fargo & Company
About Wells Fargo
• 165,000 active Team Members
• 15,000 retired Team Members with health care through Wells Fargo
• Over 300,000 individuals covered by health plans provided by Wells
Fargo
• Over $1 Billion in health care spend annually
• Located in all 50 states (and some international)
• 156 years old and the result of hundreds of mergers and acquisitions
2
The Health Care Problem
•
•
•
•
Quality
Safety
Cost
Coverage Decline/Cost Shifting
3
The Health Care Problem
• Unexplainable Practice Variation by Physicians
– Overuse, Underuse and Misuse
– Patients get recommended care only about half the time
• Americans less and less healthy
– Chronic Conditions are on the increase
– Lack of exercise, Unhealthy eating habits
• Americans dying from unsafe health care
– Estimate 98,000 people die annually due to medical errors
• Health Care System wasteful and inefficient
– No incentives and/or misaligned incentives for patient, provider and
health plan to “do the right thing”
– Little information on cost/quality available to enable patient or engage
providers
• Uninsured (or underinsured) population large and growing
• Diverse Population with Diverse Needs
BOTTOM LINE: UNSUSTAINABLE HEALTH CARE COST
INCREASES FOR EMPLOYERS AND EMPLOYEES
4
Premium and Trend Context
• Health insurance premium increases have
consistently exceeded the CPI and worker earnings
• Premium increases are “eating” all potential wage
increases for workers and their retirement savings
• Key drivers of premium increases:
– Absence of market forces rewarding better quality
and more efficient care (fee-for-service versus
“whole person”)
– Impact of new technologies, health labor shortages,
aging population and poor population health
– Decreased plan competition
– Provider monopolistic practices
– Cost-shifting from under funding of Medicare,
Medicaid and the uninsured
5
Market Realities and Impact of Cost Increases
• Some Employers Dropping Coverage
– 4% fewer Americans with Commercial insurance
– Large decrease in coverage for the middle classes
– Over one-third of the uninsured nationwide earn more than
200% of the federal poverty level
• Many Employers Dramatically Changing Offerings
– Increasing share of costs to employees (contributions,
rising point-of-service payments, larger deductibles)
– Thinner plan designs
• Threat to Many Consumers Health Status and Financial
Security
– Risk of consumers avoiding care and preventive services
– Major driver of personal bankruptcies
6
A Politically Unstable Trend
Middle Income Workers are Losing Insurance Most Quickly
(Uninsurance kills ~5,000 annually; rising ~450 annually)
Percent of working adults insured, by household income quintile
1987-2003
100%
98%
96%
94%
95%
Highest
Quintile
92%
90%
89%
85%
Fourth
80%
82%
75%
70%
Third
65%
67%
56%
60%
50%
Second
52%
52%
48%
Lowest
Quintile
40%
1987
1989
1991
1993
1995
1997
1999*
2001
2003
Adapted from “A Need to Transform the U.S. Health Care System: Improving Access, Quality, and
Efficiency,” compiled by A. Gauthier and M. Serber, The Commonwealth Fund, October 2005.
* In 1999, CPS added a follow-up verification question for health coverage. Source: Analysis of the March 1988–2004
Current Population Surveys by Danielle Ferry, Columbia University, for The Commonwealth Fund.
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Quality Shortfalls: Getting it Right
50% of the Time
Adherence to Quality Indicators
75.7%
73.0%
68.5%
68.0%
64.7%
63.9%
57.7%
57.2%
53.9%
53.5%
53.0%
48.6%
45.4%
45.2%
40.7%
32.7%
22.8%
Adults receive about half
of recommended care
54.9% = Overall care
54.9% = Preventive care
53.5% = Acute care
56.1% = Chronic care
10.5%
0%
20%
40%
60%
80%
100%
Not Getting
the Right
Care at the
Right Time
Percentage of Recommended Care Received
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BUT…Truly Excellent Care and Rapid
Improvements are Possible
Improvement in Screening and Health Status for
Californians with Diabetes: Results of Measurement, QI,
Reporting and Pay-for-Performance
100
90
88
80
70
77
93
71
61
50
47
94
82
60
40
91
52
67
71
56
42
30
20
LDL Screening
10
LDL <130
0
2000
2001
2002
2003
2004
2005
2006
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What If We Don’t Do Anything???
• US businesses less competitive
globally
• Wage increases depressed
• Employment opportunities dampened
• More and more uninsured Americans
and therefore, more cost shifting to
employers
?????
10
Wells Fargo …. Aspirational Goals
•
For Team Members (Employees)
•
•
•
•
•
•
•
•
Coverage to assure access to right care at right time
Information to be a good consumer (price, quality, access etc)
Improvement in trend of future employee premium increases
Incentives to get right treatment (and get back to work)
Better quality of life
Affordable health care and health insurance
Respectful of diverse needs and desires
For Providers
• Keen appreciation and pressure resulting from their patients having a stake in costs
and outcome
• Incentives to provide evidence-based medicine
• Rewarding better performing providers
• Better outcomes and greater efficiency
•
For Wells Fargo
• Endorsement of philosophy that health coverage is integral part of offering to ensure our
team members’ financial success and part of our strategy to promote productive and
engaged work force
• Moderation in the rate of health cost increases
• Improved team member wellness and productivity
• Reduction in number of uninsured in U.S.
Ideal State: Sustainable Health Care Trend, Better Quality Care
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What catalyst will begin to move the market closer to
Ideal Health Care State?
The Consumer/Patient will !!
• Transparency
– When patients have information to support asking their doctors about
treatment costs and differences in quality, the market will finally respond
in developing national standards of cost and quality reporting
• Incentives to seek right care at right time
– When consumers have a reason to ask about the cost of treatment
choices they will change the way they “purchase” health care
• Cost and Quality Tradeoffs
– When providers understand the patient is “at risk” for the differences
in cost and quality, efficiency will improve
If consumer/patients are engaged and making better choices,
and providers are under pressure from patients to provide more
effective/efficient care, potential impact to health care trend can
be 5 to 40%. (Arnie Milstein)
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Wells Fargo Health Plan Offerings
• PPO offered in all states with small copay in-network
• Two consumer directed health plans offered in all states
– Front end Health Reimbursement Account to pay for first health care
expenses followed by deductible depending on plan and coverage level,
followed by traditional PPO with limit on out of pocket expenses
– Incentives for chronic condition management
– Prevention paid at 100%, no deductible; mental health provided in
additional stand alone benefit
• Health Savings Account/High Deductible Plan offered in all states
– Recently offered to support members who desire HSA
• High quality HMO’s offered where available
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Major Levers of Change for Employers
• Plan selection and holding plans accountable for
assuring that right care is provided at the right time
• Rational plan selection approach for employees
• Benefit design
• Promoting system change with stakeholders and
policy makers
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Wells Fargo Plan Selection
and Accountability Considerations
•
Selection of “Best-in-Class” Health Plans
–
–
–
–
–
•
Strong network with strong network management
Outstanding health management programs and vision
Effective integration of DM/health management
Clear vision regarding consumer activation and excellent consumer tools
Demonstrate flawless administrative capabilities
Holding Health Plans Accountable
– Claims Target and Network Discount Guarantees
– Savings Guarantees for Chronic Condition Management and Preference
Sensitive Care Coaching
– Measure compliance around Evidence Based Medicine and standards of care
– Member service delivery platform effectiveness
– Guarantee Value of Next Generation Networks (i.e. High Performance Networks)
15
Standard Contracting Assessment Areas
• Core Plan Administration
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–
–
–
Plan Collaboration
HIT, PPO Administration
Value-Based Plan Design
Reducing Disparities &
Cultural Compentence
• Consumer Engagement
• Provider Measurement &
Rewards
• Pharmaceutical Management
• Prevention & Health
Promotion
• Chronic Disease
Management
–
–
–
–
Diabetes
Cardiovascular disease
Low back pain
Total population management
• Behavioral Health
Provider Measurement & Rewards:
• Provider Performance Transparency
Practitioners and/or Groups
Hospitals
• Shared Decision Making Support
• Electronic Personal Health Record
• Price Transparency
• Pharmaceutical Management
• CAHPS Ratings
Prevention & Health
Promotion:
• Worksite Health Promotion
• Health Risk Appraisals
• Preventive Screening
(Cancer/ Immunization)
• Tobacco Cessation
• Obesity
• Maternity Care
Chronic Disease Management:
• Member Identification
• Targeted/Tailored Messaging
• Member Reminders
• Inbound/Outbound Calls & Support
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Plan Selection:
Sample for “Core Plan Administration” Elements
100
16
90
80
6
18
Health IT
70
9
11
10
Provider
Contracting
60
11
11
4
50
40
30
3
17
2
7
18
7
2
6
5
4
10
25
30
13
Accreditation
& Performance
Reporting
35
25
Plan Design &
Purchaser
Support
11
20
30
31
24
25
35
28
10
0
Health Net
Kaiser N
Kaiser S
HMO A
HMO B
HMO C
PacifiCare
HMO D
Blue Cross
HMO E
HMO
National
Average
HMO
Benchmark
HMO Max
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Providing Employees with data to make rational decisions
Member Ranking
based on
•Premiums
•Out of Pocket
Costs
•Physician
Selection
•Plan level quality
indicators
•Plan Features
and Services
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Benefit Design Can Address Many Issues
• Respond to diverse employee needs and desires
– Wells Fargo offers HMO’s, CDHP and PPO’s
• Encourage member behavior
– Rx plan designs to encourage best drug for condition at lowest cost
• Incent health management
– Innovative Program in WF CDHP plan – Rewards for Action
• Eliminate real (or perceived) financial barriers to care
– Incentives for chronic care management
• Foster accessing preventive care with low or no cost coverage
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CDHP Incentives for Chronic Care
Management
Rewards For Action Program
Diabetes; Asthma; Coronary Artery Disease; Chronic Obstructive
Pulmonary Disorder; Coronary Heart Failure; Hypertension
Incentive Phase
Maximum Annual Reward
Education – online information program
completed
$50
Recommended Care – Obtain all recommended
care for the condition
$150
Track Your Health – Enter lab and clinical
indicators online
$150
Prescription Monitor – Fill and adhere to
recommended prescriptions
$150
Total Potential Incentive Earned Annually
$500
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Wells Fargo Lessons – We Can Make a Difference, but
We Can’t Solve the Problem Alone
Lessons:
• Thoughtful plan selection and design leads to
cost reductions and savings
• With tools and incentives, consumers will be
better engaged in their care
• Plan designs and engaging consumer can lead
to better outcomes
BUT….Costs are rising because we have VERY little impact over the
broader system failures
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Other Systemic Changes Must Also Take Place
• Improved Health Information Technology (EMR)
– Elimination of waste in the system due to archaic systems and
processes
– Creates the forum to provide transparency to support other
initiatives
• Reduction in provider errors and inappropriate provider
practice patterns
• Alignment of provider payment and incentives
Wells Fargo has influence in these areas through various initiatives
such as PBGH, NBGH, Health Information Technology Leadership
Panel, Leapfrog, but…
ONE EMPLOYER CANNOT DO IT ALONE AND
NATIONAL SOLUTIONS ARE NEEDED!!!
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Wells Fargo Challenges and National Solutions
Wells Fargo Challenges
National Solutions
• Inefficient administrative processes and lack of
transparency
• Interoperable health information technology
standards
• Public payer support for e-prescribing and
electronic medical records
• Demand on plans to promote higher performing
providers and better treatments undercut by lack of
data and consistent reporting on both treatments and
provider performance
• Adoption and use of nationally standardized
performance measures for doctors, groups,
hospitals and treatments
• National comparative effectiveness information
to inform value-based benefit design
• Targeting on better chronic care management can
lead to unclear/mixed messages – Wells Fargo
represents small portion of any provider’s patient mix
• Leadership on chronic care management
including appropriate reimbursement structures
• Efforts to change payments to reward better quality
(e.g., support for Calif. IHA Pay-for-performance) are
tiny in face of toxic FFS payment
• Need changes to public and private payment to
reward and encourage improvement,
excellence and right care delivered at the right
time
• Federal and private collaboration on medical
home model and other pay for performance
models
• Wells Fargo and Team Member costs driven in part
by cost of uninsured and under-funded public
programs
• Move to covering all Americans and away from
cost-shift to employers & insured individuals
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