Healthcare…
A New World Order
Competing with Exchanges
Modernizing Plans
Leading for Tomorrow
Michael Moran
Vice President
Cigna’s Taft-Hartley & Federal Business Segment
868575 11/13
© 2014 Offered by Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company.
CHANGING BENEFIT LANDSCAPE
Health care reform
and exchanges
Increasing
global
competition
Spending due to
unhealthy lifestyles
New challenges.
New opportunities.
Aging
population
Delivery system
disruptions
50-65
65+
Technology
explosion
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
$
Consumer cost
share increasing
2
US REALITY: UNACCEPTABLE HEALTHCARE OUTCOMES PERSIST
55%
>68%
of patients don’t
get recommended
evidence-based
(quality) care1
of Americans
are overweight
or obese4
Poor quality
30%
of treatment
costs wasted on
misuse, overuse
or underuse2
High cost
Low satisfaction
<19%
of consumers
access cost
comparison
and health
information tools5
Last place
<38%
U.S. health
ranking among
world’s highincome countries3
of consumers
are satisfied
with their
benefits6
1. Evidence-based care gaps Pervasive, Research Says, Health Leaders Media, January 28, 2011 2. Results-driven HealthCare: Addressing the
Staggering Cost of Poor Performance, American Health & Drug Benefits, 2012. 3. National Academy of Sciences, U.S. Health in International
Perspective, 2013 4. CDC/National Center for Health Statistics, reviewed November 21, 2013. 5.Deloitte Center for Health Solutions, 2011 Survey of
Health Care Consumer in the United States: Key Findings, Strategic Implications. 6. Deloitte, 2011.
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
3
IMPACT OF POOR HEALTH & UNHEALTHY LIFESTYLES
How might this impact
Unhealthy
your Fund?
66% overweight1
55%
gaps in care2
50% not exercising3
49% chronic condition4
33% metabolic syndrome5
20% medication for
mental health6
20% still smoke7
Cost impact
plus…
• Unplanned absence
• Low satisfaction
• Low productivity
• Less competitive
1 – Wang, Y and Beydoun, M. The Obesity Epidemic in the United States—Gender, Age, Socioeconomic, Racial/Ethnic, and Geographic Characteristics:
A Systematic Review and Meta-Regression Analysis. Epidemiologic Review. 2007 29(1):6-28; doi: 10.1093/epirev/mxm007
http://www.jhsph.edu/publichealthnews/press_releases/2007/wang_adult_obesity.html
2 – http://www.healthleadersmedia.com/content/TEC-261894/EvidenceBased-Care-Gaps-Pervasive-Researchers-Say.html##
3 – National Health and Nutrition Examination Survey (NHANES) 2003–2006 and 2007–2008. http://win.niddk.nih.gov/statistics/
4 – Anderson, G. Chronic Conditions: Making the case for ongoing care. Johns Hopkins University.
November 2007.www.fightchronicdisease.org/sites/default/files/.../Almanac_FINAL.p...
5 – Metabolic Syndrome and Employer Sponsored Benefits, An Actuarial Analysis, Milliman, March 2006
6 – America’s State of Mind, Medco, November 2011
7 – (https://www.prb.org/Articles/2011/us-smoking-trends.aspx?p=1)
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
4
AFFORDABLE CARE ACT IMPACT
State-Based ACA Exchanges
 Rates – which are age & plan design driven – can be far lower than the typical
Taft-Hartley Fund’s, especially for young, healthy members
 Innovative program features that Taft-Hartley Funds have typically not
adopted
 Stakeholders – including members – will begin to seek some of the
advantages associated with the exchange offerings
Member Penalties for those Who Do Not Have Coverage
 Members who have contributions directed to the H&WF, but don’t earn
coverage - and will have to pay an increasing penalty for not having coverage
– may demand the refund of their contributions
 By 2016, the individual no-coverage penalties are substantial – i.e.: $200+ a
month per person
Cadillac Tax
 By 2018, a 40% tax will be applied to all Funds whose cost is above $27,500
per family ($31,500 for high risk professions)
 Studies have shown that simple medical trend applied to today’s benefits will
cause more than 40% of US plans to be subject to the Cadillac tax
5
??? EVALUTE YOUR PLAN – CALCULATE YOUR
OPPORTUNITY
Against the Exchanges and Cadillac Tax
• Fund Cost Share = __% compares
to a _____ plan on the exchange
• Approximate cost of the Fund’s
medical, Rx, behavioral benefits is
___ PEPM or ____ PEPY for policy
year 2013. Trend into 2014.
– *** Note your COBRA rate may
be more reflective of the actual
cost of your plan.
• Approximate cost of your early
retirees Medical, Rx, Behavioral
benefits is _____ PEPM or PEPY
for policy year 2014.
Rates on Your State Exchange
For a 30 Year Old
Platinum (90%) = ____ PEPM
 For benchmark plan _____
Gold (80%) =
____ PEPM
 For benchmark plan _____
Silver (70%) =
____ PEPM
 For benchmark plan _____
Bronze (60%) =
____ PEPM
 For benchmark plan _____
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
6
POSSIBLE SOLUTIONS
• Consider moving early retirees into the public exchange
• Modernize:
• Trustees need to adopt programs & solutions that parallel those in
the Exchange
• Implement significant actions to control spend to avoid the Cadillac
tax.
• Modernize plan structure to better engage members
• Start by comparing your Plan cost control & trend control features to
those on the Exchange
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
7
WELL-BEING: THREE PILLARS OPPORTUNITY
Better
Decisions
Stay In Network
CAC (Collaborative
Accountable Care)
Centers of Excellence
High Performance
Networks
Home Delivery
Pharmacy
Preferred Labs
Preferred Radiology
Better
Engagement
Better Health
Know Your Numbers
Disease
Management
Case Management
Lifestyle
Management
At risk coaching
Health Assessment
Preventive Care
Activity Challenges
Onsite coaching
courses and
seminars
Web Tools
Tobacco Cessation
Maternity Support
Nurse Line
Increase Physical
Activity
Use of Mobile Apps
Better Food Choices
Urgent Care vs ER
Stress Management
Primary Care vs
Specialist
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
8
LEVERAGING THE VALUE OF MODERNIZATION
Network
Design
High
Performance
Network
Tiering &
Steerage
Benefit
Design
Coaching
Consumer
Health
Engagement
Incentives to
reward
Chronic Conditions engagement and
At Risk Behaviors healthy behaviors
Health
Assessment
Rx Text Alerts
Social networking
Care Coordinator
CDHP
Up to 30%
savings*
Digital tools to coach
and reward
CDHP
Adjust ER and
Urgent Care
Copays to Steer &
Save
Member outreach
Cultural change –
“accountable patient”
Care
Management
* Percentage of savings represents average savings based on 2013 Cigna Pricing/Underwriting study of network medical management and benefit design changes.
Savings will vary based on plan design, geographic distribution and utilization patterns.
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
9
IT’S TIME: Consumer-Directed Health Plan (CDHP) 6th Year Study Results
Push through the fear & myths: Compare the CDHP facts…
$
more
engaged
are
in health and
health spending
• Better health profile
for full-replacement
CDHP members
• 67% register online
• 2 times more likely to
use online cost and
quality tools
• More likely to
complete health
assessment and
engaged with a
health coach
spend less
on overall
medical services
• 16% lower trend, or
approx. $1,600 savings,
per member in the 1st
year for a typical client
• Savings are sustainable
and over five years can
cumulatively grow to
$9,700 per member
• 13% fewer emergency
room visits
• 14% lower pharmacy
trend in the 1st year
receive
equal/better
quality care
• Sought preventive care
more frequently
• 95% had consistent or
higher use of evidencebased medical best
practice measures in 1st
year
• Compliance with best
practice measures
improved in renewal
year
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
more
satisfied
are
with health care
experience
• Same/higher member
satisfaction rates with
service
10
FIRE UP
Inspire and sustain personal accountability
to improve health
Motivate and reward action:
• Activity participation
• Goal completion
• Health outcome achievement
• Incentives and plan design
PUSH
MEMBERS
Sustain by keeping it
relevant and real:
• Create new habits
• Leverage peers and
social networks
PULL
FULL
POTENTIAL
Workplace cultures of well-being
• Fund Leadership Support
• Incentives and plan design
• Communications plan
• Workplace environment
• Challenges and fun
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
11
LET’S TALK ABOUT PROVIDERS NOW:
High Performance Networks:
Choose and use top-performing* doctors to
help improve health outcomes and lower
overall medical costs
The Result?
Better health
- 14% fewer hospital readmissions
- More compliant with Evidence-Based Medicine
(EBM) measures, for example better
compliance with meeting national clinical
guidelines for managing high cholesterol
Better cost savings
- 16% average lower medical costs
- Lower out-of-pocket costs (with tiered benefit)
19 Specialties and 3 PCPs account for
87% of related total medical spend.
*Top-performing doctors are those identified as having top results based upon Cigna's quality and cost-efficiency methodology.
Better Results When Using a Centers of Excellence Hospital
VS. a Non-COE Hospital
Overall COE
procedures are
Hip replacement
costs on
average
22%
19%
less costly
less
Knee
replacement
costs on
average
23%
Bariatric surgery
costs on
average
Cancer
conditions* cost
on average
25%
26%
less
less
less
Informed
and
engaged
Uninformed
and passive
Source: Cigna analysis of claims processed January 2011–December 2011.
*Cancer conditions are kidney (renal) cancer, uterine cancer, breast cancer and prostate cancer.
13
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
ACCOUNTABLE CARE ORGANIZATIONS
Next Generation Care Delivery – Today
Embedded
care coordinator
Patient
Doctor/Hospital
resources
Triple Aim
• Better health
• Lower costs
• Greater satisfaction
Cigna
resources
Collaborative Accountable Care
Collaborative Accountable Care
Incentives
Pay for value –
not volume
Information
Enhanced
data sharing
Clinical Integration
Embedded care
coordinator
Results
5% better quality than market1
12% fewer avoidable ER visits2
4% lower medical trend3
1. Eastern Maine Healthcare Systems results
2. Holston Medical Group results
3. Medical Clinic of North Texas results
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
14
IMPACT: INDUSTRY MOVES FROM PAYING FOR VOLUME TO
PAYING FOR VALUE
OPEN EYES
PLUG IN
•
• Actionable, patient-specific
•
information such as gaps in
care and ER use
• Performance reports and expert•
consultation
FIRE UP
Dedicated case managers
Learning Collaborative
quarterly meetings
Pharmacy, behavioral and
disability integration
• Value-based reimbursement
model based on quality and
cost performance
• Cigna Care Designation
• Increased patient volume
Collaborative
Care
Support &
Resources
Improved quality
Embedded
Care
Coordinator
Lower cost
Higher satisfaction
PHYSICIAN GROUP
RESOURCES
*Cigna Collaborative Accountable Care, Large PCP Group Results, 2013. Results vs. market average,
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
15
PROVIDER & PAYER RELATIONSHIP EVOLUTION:
Delivery System Alliances
• As collaboration, accountability, and outcomes are demanded from the
marketplace, it is important to find new ways to engage Health Care
Professionals and Hospital Systems to achieve these goals.
• As the next generation of Collaborative Care emerges, Hospitals and HCP’s
are looking for solutions and partners for expertise, technology, and
innovation.
• By strengthening relationships with Health Care Professionals and Delivery
Systems, Payers can better achieve the Triple AIM:
– Improved Quality
– Increased Patient Satisfaction
– Lower Costs.
Health Care
Provider
New relationships that
Group or
drive towards to Triple
System
Aim
Payers
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
16
WHERE IS YOUR PLAN – AS A COMPETITOR WITH EXCHANGE PLANS?
Program
On Exchange
Utilization Review – Inpatient (intense)
√
Utilization Review - Outpatient
√
Case Management including Intense Oncology/Cancer
√
Coaching: Disease Management
√
Coaching: At Risk
√
Rx: Step Therapy, Smaller Formulary, Intense Clinical Management
√
Out of Network Reimbursement Levels
√
Network: High Performance
√
Member Education: Better Decisions: (transparency tools, go here-not
√
Your Plan ?
there, centers of excellence, etc.)
Member Education: Better Health - Prevention, Health
Assessment, Tobacco Use & Weight Loss Support
√
Member Education: Engagement - program awareness, incentives
√
Member Accountability: Consumer Directed Health Plans (CDHP)
√
Several Plan Options
√
Integration Rx, Behavioral
√
17
WHERE ARE YOU IN THIS JOURNEY?
CHALLENGE YOURSELF
1
2
3
4
DON’T BELIEVE
5
6
STRONGLY BELIEVE
Fund role
Administer benefits
Incentives
Cannot impact health
improvement
Network
Influence personal behaviors
to affect health outcomes
Can impact health
improvement
Guide and encourage choice
based on quality/cost
Unguided choice
Future cost management
Slow spending through
cost shift to employees
Slow spending through
consumer-based platform
Carrier role
Improve health status
and outcomes
Build network, pay claims
Funding
Maximize cash flow
Fixed cost
Engagement and control
Hands off,
relinquish control
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
Highly engaged
and in control
18
YOU HAVE A TREMENDOUS OPPORTUNITY TO MODERNIZE
IT’S TIME. LET’S DO THIS.
Zero-Average Trend
Spend less. Year after year.
Save $1.2M
in 1 year
Status quo
Save $6M
in 4 years
Cigna
1,300 members
-10%
-6%
Custom-designed
benefits & funding
Personalized
health & wellbeing support
-10%
Affordable
quality care
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
-3%
Integrated
solutions
19