Transcript SanofiAventis HMO PPO Digest 2007

HMO/PPO Digest
© 2007 sanofi-aventis U.S. LLC
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HMO Industry Overview
• HMOs enrolled a total of 76.3 million
members in 2006, down slightly from
76.7 million in 2005, the seventh straight
annual drop.
• The total number of HMOs operating in the
U.S. fell for the eighth straight year in 2006, to
448 from 456 in 2005. Since reaching 902 in
1998, the number of HMOs has dropped by
more than half.
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HMO Model Types
Operating Plans (2006)
MODEL
TYPE
HMO Members
Number
Percentage
Number
(millions)
Percentage
IPA
242
54.0%
37.7
49.4%
Network
160
35.7%
21.9
28.7%
Group
33
7.4%
15.2
19.9%
Staff
13
2.9%
1.5
2.0%
448
100.0%
76.3
100.0%
TOTAL
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The Seven Largest HMO Chains,
by Enrollment
2005 Total
Enrollment
2006 Total
Enrollment
Enrollment
Change
(2005–2006)
% Total
Enrollment
(76,329,650)
Blue Cross/Blue
Shield Association
19,942,966
18,698,255
-6%
24.5%
UnitedHealthcare*
9,940,016
10,973,148
+10%
14.4%
Kaiser Foundation
Health Plans
8,429,343
8,992,030
+7%
11.8%
Aetna Inc.
3,951,802
3,785,710
-4%
5.0%
Health Net
3,019,132
2,914,821
-3%
3.8%
CIGNA Healthcare
2,504,041
2,321,661
-7%
3.0%
Coventry Healthcare
Corporation
2,291,269
2,295,490
0%
3.0%
50,078,569
49,981,115
0%
65.5%
TOTAL
* UnitedHealthcare is the health insurance subsidiary of UnitedHealth Group.
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HMO Premiums and Revenue
Average Premium
Rates per Month
Average Monthly
Revenue per Member
2005
$800
$705.07
$779.40
2006
$802.76
$875
$625.96
$700
$600
$525
$400
$256.07 $287.02
$200
$350 $227.78 $231.01
$175
$0
Average Family
Premium
Average
Individual
Premium
$0
Non-Medicare
HMO Members
Medicare HMO
Members
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The 25 Largest Individual HMO Plans
Total Enrollment
Number of Plans
All HMOs
(millions)
25 Largest
HMOs
(millions)
All HMOs
25 Largest
HMOs
IPA
37.7
11.9
242
13
Network
21.9
5.6
160
6
Group
15.2
11.5
33
6
Staff
1.5
0.0
13
0
TOTAL
76.3
29.0
448
25
MODEL
TYPE
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Point-of-Service (POS) Plans
2005 Percentage of
HMOs Offering POS
2006 Percentage of
HMOs Offering POS
2006 POS
Enrollment
(millions)
Percentage of
Total POS
Enrollment
IPA
66.7%
66.9%
8,501,940
68.3%
Network
55.6%
52.5%
2,881,013
23.1%
Group
65.7%
66.7%
973,677
7.8%
Staff
30.8%
30.8%
94,054
0.8%
TOTAL/AVG.
61.8%
60.7%
12,450,684
100.0%
MODEL TYPE
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HMO Utilization
Utilization Rates for HMO Members
Hospital Days
per 1,000
Members
Physician
Encounters
per Member
Ambulatory
Visits per
Member
PAYER TYPE
2005
2006
2005
2006
2005
2006
Non-Medicare
216.0
224.4
3.4
3.3
1.5
1.5
1,435.9
1,529.1
7.8
8.4
3.2
3.4
Medicare
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Physician Reimbursement, 2006
74.1%
Percentage of HMOs
80%
67.2%
60%
40%
15.0%
20%
7.5%
3.4%
0%
Salary
Profit
Sharing
Fee-ForService
Bonus
Program
Capitation
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HMO Pharmacy Overview
• Overall HMO pharmacy expenditures per member
per year (PMPY) were $394.72 in 2006, up 5.7%
from $ 373.34 the year before.
• The share of HMOs that covered over-the-counter
(OTC) drugs decreased in 2006, to 57.1% from
57.5% in 2005.
• The percentage of HMOs using mail-service
pharmacies rose to 81.0% from 79.3% in 2005, the
highest such share since 2001 (82.7%).
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HMO Prescriptions and Drug Costs
2005
$44.00
$44.68
$45.86
2006
$36.00
25.0%
22.8 24.6
14.3% 14.3%
$28.00
8.8 8.9
$20.00
$12.00
Prescriptions
Dispensed per
Non-Medicare
Member
Prescriptions
Dispensed per
Medicare Member
.0%
Average
Ingredient
Cost per Rx
HMO Drug Costs
as a Percentage
of Operating
Expenses
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HMO Use of Mail-Service Pharmacies
85%
Percentage of HMOs
82.7%
78.4%
75%
80.6%
79.3%
79.3%
81.0%
65%
55%
45%
2001
2002
2003
2004
2005
2006
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HMO Pharmacy Utilization, 2006
MODEL
TYPE
Proprietary
Formulary
PBM
Formulary
In-House
Pharmacy
Prior
Practice
Authorization Guidelines
IPA
59.7%
27.3%
11.5%
98.2%
82.7%
Network
60.8%
25.5%
27.0%
97.4%
73.5%
Group
61.5%
15.4%
51.6%
97.0%
84.8%
Staff
85.5%
7.3%
75.0%
92.3%
76.9%
Overall
Average
76.7%
12.2%
21.9%
97.6%
79.4%
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Third Party (Commercial) Payer Share of Total
Prescriptions Dispensed, by Drug Market*,**
85%
82.0%
% of Total Prescriptions
80%
75.0%
74.6%
75%
73.1%
72.8%
72.0%
71.7%
70%
65%
Allergies
Cholesterol
Depression
Arthritis
Sleep Disorder
Gastroesophageal
Reflux Disease
* Data are as of midyear 2007 and represent the percentages of prescriptions dispensed to all patients.
** “Third party” refers to commercial HMOs and PPOs, and the PBMs that provide them with pharmacy services.
Asthma
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Percentage of Third Party (Commercial) RXs
Filled with Generic Drugs, by Market*,**
90%
87.2%
82.8%
% of Total Prescriptions
74.8%
75%
70.3%
62.2%
60.4%
60%
55.4%
45%
30%
Pain
Arthritis
Gastrointestinal
Hypertension
Oncology
Depression
Diabetes
* Data are as of midyear 2007 and represent the percentages of prescriptions dispensed to all patients.
** “Third party” refers to commercial HMOs and PPOs, and the PBMs that provide them with pharmacy services. © 2007 sanofi-aventis U.S. LLC
PPO Industry Overview
• In 2006, the total number of eligible employees
covered by PPO corporate chains was 89.7 million,
accounting for 82.3% of PPO eligibles nationwide.
• The number of inpatient hospital days per 1,000 PPO
eligible employees dropped to 226.1 in 2006 from
227.2 in 2005, the third straight annual decline.
• The overall average number of employees in PPOs
that used pharmacy programs rose 7.2% in 2006,
to 203,786 from 190,097.
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PPO Owner Types, 2006
Number of Eligible
Employees (millions)
Percentage of
Eligible Employees
Number of PPOs
282,900
0.3%
3
2,134,902
2.0%
57
234,193
0.2%
5
Hospital Alliance
4,717,827
4.3%
64
Independent Investor
41,615,077
38.2%
41
Insurance Company
55,889,383
51.2%
364
Multiownership
2,195,232
2.0%
21
Physician/Hosp. Joint Venture
1,316,096
1.2%
14
Physician/Medical Group
253,139
0.2%
6
Third-party Administrator
345,783
0.3%
3
Other
89,732
0.1%
5
109,074,264
100%
583*
TYPE OF OWNER
Employer/Employer Coalition
HMO
Hospital
TOTAL
* Includes 31 specialty-only PPOs.
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PPO Utilization
Utilization Rates for PPO Members
Average Length
of Stay per
Medical/Surgical
Hospitalization
SIZE OF PPO
Average Length of Stay
per Psychiatric/
Substance Abuse
Hospitalization
Average Physician Visits
per Eligible Employee
per Year
2005
2006
2005
2006
2005
2006
1–19,999
3.9
3.9
7.4
7.0
3.7
3.7
20,000–99,999
4.0
4.0
6.8
6.8
4.6
4.4
100,000–499,999
3.8
3.9
6.3
6.6
3.8
5.0
500,000–999,999
3.9
3.9
6.2
6.1
5.0
4.9
1,000,000+
3.6
3.8
6.5
6.9
3.2
3.3
All PPOs
3.9
3.9
6.8
6.8
4.1
4.3
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PPO Pharmacy Utilization
Average Number of
Prescriptions per Employee
per Year
Average Prescription Cost
per Employee per Month
SIZE OF PPO
2005
2006
2005
2006
1–19,999
12.1
13.0
$27.92
$27.35
20,000–99,999
11.5
11.5
$30.75
$30.37
100,000–499,999
10.6
10.5
$30.62
$30.40
500,000–999,999
9.2
9.4
$38.15
$38.94
1,000,000+
11.2
10.7
$39.54
$39.54
Overall Average
11.5
11.8
$30.43
$30.18
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Major Trends: HMO-PPO Digest
• The share of the U.S. population served by HMOs fell again in
2006, to 25.5% from 25.9% in 2005.
• Between 2005 (76.7 million) and 2006 (76.3 million), total
enrollment in HMOs dropped less than 1%.
• Four of the seven largest corporate HMO chains had fewer
enrollees in 2006 than the previous year.
• The average number of non-Medicare prescriptions dispensed
per member per year (PMPY) grew to 8.9 from 8.8 in 2005.
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