Transcript Survey Measures the 3 Key Relationships Along 5 Dimensions

Private Sector Initiatives to Control Costs
Presentation to Citizens’ Health Care Working Group
May 13, 2005
Alice Rosenblatt
Executive Vice President & Chief Actuary, WellPoint
Agenda

About WellPoint

Product Innovation

Network Design

Health Care Management

Pharmacy Management

Leveraging Technology
2
About WellPoint

Leading health benefits company in the nation

Approximately 28 million medical members
– Blue plans in 13 states: California, Colorado, Connecticut, Georgia,
Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio,
Virginia and Wisconsin
– UniCare across the country, including significant presence in Illinois,
Texas, and Massachusetts
– HealthLink in Missouri and six other states: Arkansas, Illinois, Indiana,
Iowa, Kentucky and West Virginia




Major specialty businesses: pharmacy, dental, vision, life/disability,
behavioral health, EAP, workers’ compensation, state-sponsored
Nation’s 2nd largest Medicare contractor
Cover 1.8 million State Sponsored members (Medicaid, SCHIP,
etc.)
More than 38,000 associates
3
Product Innovation
Consumer Driven Health Care
Five key elements comprise the framework for the most
common product offerings
• Typically a highdeductible PPO
($1,500 - $4,000)
• 100% covered
preventive care
Cost-share
Funding
Mechanisms
Product and Plan
Design
Consumer-Centric
Product
Consumer Decision
Support Tools
• eHealth tools
• eService tools
• Provider directories
• Quality guidance
• Health
Reimbursement
Account (HRA)
• Health Savings
Account (HSA)
• Complemented by
Flexible Spending
Account (FSA)
Flexible Provider
Network
Technology
Platform
4
• Deep and broad
• Choice-driven
• Web based front end
• Benefits integration framework
Product Innovation
Healthcare Advisor
• User-friendly with
context-consistent
data and
information
• Research more
than 150 different
medical conditions
and procedures
• Compare hospital
quality
5
Product Innovation
Healthcare Advisor
Clinical outcomes
 Patient safety
 Hospital reputation
 Market-specific studies
 Hospital comments

6
Product Innovation
Tonik


Developed by and for the
“Young Invincibles”
Unique package of benefits
7

Educates audience

Offers low price points
Product Innovation
BeneFits Plans for Small Businesses

Makes it easier for small businesses to offer
coverage to their employees
– employee participation requirements reduced to
60%
– employer contribution reduced to 25% or $50
– coverage options for part-time employees

84% of groups buying BeneFits plans to
date were previously uninsured
8
Network Design
Provider Contracting
9
Network Design
Information-Based Networks
Using information to recognize hospitals for
quality of care, better outcomes and efficiency
Centers of Excellence
Hospitals
• Narrow network for high
cost procedures
– CABG
– Transplant
– Bariatric Surgery
Subspecialists
Specialists
Segmented Networks
• Smaller, more efficient
quality networks
– Select HMO
– Select PPO
Primary Care Physicians
10
Network Design
P4P Programs at WellPoint
Partnerships with physicians and hospitals on quality incentive
programs that include PPO and HMO products, and Medicaid
PCP Programs
Focused on primary care
physicians. Typical major
components:
 Clinical Outcomes
 Evidence-based medical
procedures
 Generic Prescribing Rates
 Technology & streamlined
administrative processes
 Patient Satisfaction
Specialist Programs
Hospital Programs
Focused on specialty
care physicians. Early
initiatives in: Ob/Gyn,
Cardiology, Orthopedics.
Measures similar to PCP
programs:
Focused on acute care
hospital, typically full
service facilities. Hospital
programs typically have
the following
components:
 Clinical Outcomes
 Evidence-based medical
procedures
 Generic Prescribing Rates
 Technology & streamlined
administrative processes
 Patient Satisfaction
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 Patient Safety
 Clinical Outcomes
 Patient Satisfaction
Health Care Management
Healthy, Wanting to
Remain Healthy
At Risk with
Unhealthy Lifestyles
Chronically Ill /
Complex Conditions
Wellness - Fitness
Single Factor - Multi-Factor
Early Stage - Late Stage
Sustain Wellness
Improve Health
Manage Disease
Data Mining, Predictive Modeling
Integrated Care Models/Care Counselors
Disease Management
Hospital and Physician Quality Programs/Pay For Performance
New Technologies and Therapeutics Processes
Specialty Pharmacy Programs
12
Health Care Management
Clinically Appropriate, Cost-Effective Imaging
90
85
80
75
70
Before prior consultation
13
After prior Consultation
1Q03
4Q02
3Q02
2Q02
1Q02
4Q01
3Q01
65
2Q01
Criteria developed in
collaboration with
American College of
Radiology
95
1Q01

Steerage from higher
cost to lower cost site of
service, e.g., benefit
designs in consumer
directed plans
CT and MRI Imaging Utilization
Annual Procedures Per 1000 Members
4Q00

Radiology Management
3Q00

Pre-Authorization of
Advanced Imaging
– MRI, CT, PET and
Nuclear Stress
Redirects Imaging to
most clinically
appropriate modality
2Q00

Health Care Management
Disease Management Programs
Midwest Care Counselor
 Prospective controlled study of 12,000 members
– Control group: 4,134
– Intervention group: 7,797
 Multiple chronic diseases: Average cost per year $24,000
 Savings of 14% – or $3,500 per year – for members enrolled in
program
 ROI of 4:1
Health Management Corporation (HMC)
 ASO groups who purchased DM (study group of 76,000 members)
and those who did not (control)
 Chronic diseases (diabetes, asthma, coronary artery disease)
 Savings of 11% for those enrolled in the program
 ROI of 2.8:1
Sources: Cousins, Liu, Disease Management, Vol. 6, 2003. Harvard Blue Works Award, Program Description.
14
Health Care Management
Behavioral Health




Follow-up after psychiatric hospitalization
Health management program for depression
and co-existing illness
Postpartum depression screening and
education program
Anti-depressant medication compliance in
cooperation with PBM
15
Pharmacy Management
Clinical / Medical Management
ReViewPoint
Clinical Business Plan
Therapy Management
Patients-At-Risk
Intervention Programs
Disease Management
Online Reporting
Formulary Management
Treatment Guidelines
P&T Committees
Manufacturer Discounts
Preferred Rx Programs
Prior Auth Center
Generic drug initiatives
Pharmacy Care
Management
Consultative
Services
Incentive Programs
Benefit Designs
Interventions
Account Management
Sales Support
Business Strategies
Claims Processing
Claims Keying
Online DUR
Specialty Pharmacy
Management and distribution of
high tech, injectable drugs
2 Facilities
Network Management
Mail Service Pharmacy
Integrated Mail Service Pharmacy
2 Facilities
National Network
Customized Local Networks
MAC Programs
 4th largest PBM
 Innovative programs to manage drug trend
 Over 336M scripts in 2004
 Clinical programs: outcomes-focused,
patient-centric
 Full spectrum of PBM services
16
Leveraging Technology

Process around 600 million medical and pharmacy claims per year

Benefits, eligibility & claims status inquiries account for about 85%
of customer service call volume
MEMBERSHIP SERVICES
MEMBER
EMPLOYER
EMAIL
IVR
BROKER / AGENT
PROVIDER
Constituents
EDI
WEB
FAX
PHONE
POSTAL
Contact Channels
Contact Point
•
•
•
•
Web
EET
Member Self-service
Employer Access
AgentFinder / AgentConnect
Provider Finder
•
•
•
Provider connectivity (EDI)
Consistent claim edits
Provider education / training
17
Membership
Service
Associate
EDI
•
•
•
•
Auto-adjudication rates
Standard plan designs
Enhanced workflow management
Associate training
Leveraging Technology
Physician Quality & Technology Initiative
GOAL: Move from basic administrative services
to transactions that support quality care
Basic
Connectivity
Eligibility
Member Benefits
Claim Status
Referrals
Claim Submission
Re-Credentialing
Provider Directory
Provider Change
Claims
Processes
Preprocessing
Claims Remittance
Allowance Inquiry
Claims Correction
Plan AR Aging
Medical
Management
ER Notifications
Formulary Management
Alerts and Reminders
Auto-Adjudication
Pre-Certification
Disease Management
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Clinical
Support
E-prescribing
Outcomes Research
Electronic Med Record
Virtual Visits
Leveraging Technology
Physician Quality & Technology Initiative
Prescription Improvement Package
AFTER
BEFORE

High Handwriting Risk

No Handwriting Risk

No Drug Utilization Review

Full Drug Utilization Review

No Formulary Check

Formulary Check Completed
19
Leveraging Technology
CalRHIO


WellPoint Foundation made $1M grant to support
California Regional Health Information Organization
CalRHIO Goal: build a statewide data exchange
– Support use of IT and creation of a secure health information
data exchange system to improve safety, quality, and
efficiency of health care
– Enable healthcare providers to use IT to securely exchange
vital patient information
– Identify legislation and regulation necessary for statewide
data sharing
– Ensure California’s data exchange projects are consistent
with national technology platforms and networks
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