Getting Ahead of the Trend Using Total Health Management To Chart Your Plan s Future County of Sonoma Joint Labor Management Benefit Committee February 18, 2010 Presented by: Thomas M. Morrison, Jr., Robert Mitchell Copyright 2008 by The Segal Group, Inc., parent of The Segal Company. All rights reserved.
Discussion Topics The Concept of Total Health Management Process for Implementing Total Health Management Case Study Importance of Communications in the Total Health Management Environment 1
The Current Healthcare Model Is Flawed Our healthcare system is designed to treat sick people rather than keep people healthy TPAs and insurers focus on the price of care more than on utilization, employee health habits, and treatment outcomes Public employers have not invested in promoting good health and reducing demand for services Public employers have not acted to promote health care quality, medical outcomes, and patient management Healthcare consumers receive little support or guidance in how to use medical services efficiently Past innovations become embedded concepts (e.g., managed care) The old fixes of managed care are no longer enough. 2
Poor Health Habits Cost Money INCREASE IN COST TO HEALTH PLANS FROM PREVENTABLE CONDITIONS 1 In Billions $30 $25 $20 $15 $10 $5 $0 1987 2002 Pulmonary Conditions Arthritis Cancer High Cholesterol Hypertension Diabetes Heart Disease Between 1987 and 2002 Health care cost rose 60% Costs associated with preventable conditions doubled Prevalence of preventable conditions rose by 78% Obesity rates have increased dramatically Seven conditions accounted for one-third of total cost increases between 1987 and 2002. Source: Health Affairs, 2005 1 Costs are adjusted to reflect general inflation. Number of individuals covered under employer-sponsored health plans rose by only 6.7%. 3
Gaps in Quality of Care Trigger Additional Costs Lack of patient safety is a cost driver Approximately 98,000 people die each year in hospitals due to medical errors that are preventable* Pharmacy errors injure over 1,500,000 people each year* Rarely does the medical system force providers to meet an established standard of care for a patient The Result? Patients have little financial incentive to care about efficiency or appropriate utilization of services * Institute of Medicine, Crossing the Quality Chasm 4
RAND Study: Gaps in Care Drive Higher Costs Condition Percentage of Recommended Care Received Low back pain 68.5 Coronary artery disease 68.0 Hypertension 64.7 Depression 57.7 Orthopedic conditions 57.2 Colorectal cancer 53.9 Asthma 53.5 Benign prostatic hyperplasia 53.0 Hyperlipidemia 48.6 Diabetes mellitus 45.4 Headaches 45.2 Urinary tract infection 40.7 Hip fracture 22.8 Alcohol dependence 10.5 Source: Elizabeth McGlynn, et al, The Quality of Health Care Delivered to Adults in the United States, NEJM, Vol. 348:2635-2645 June 26, 2003 (No. 26). 5
Many Initiatives But Little Coordinated Strategy 6
It s Time for A New Paradigm The definition of insanity is doing the same thing over and over and expecting a different result Einstein The old paradigm of health care cost containment has lost its effectiveness Network management and contracting for discounts are no longer effective cost management tools The aging population minimizes the efficiency of all managed care We need a new paradigm, based on: Promotion of healthy living to eliminate claims from ever happening Proactive County engagement with the employee to promote better health and manage disease states Improving quality of care, not reducing cost of care 7
A New Direction: Total Health Management THM applies a coordinated strategy to address some real causes of medical cost escalation, such as: Outdated care processes in the healthcare system Inefficient providers Poor care management Poor quality care A lack of focus on preventive care and health promotion Poor employee health habits 8
A New Direction: Total Health Management THM employs a variety of tools to focus management resources on the utilization of medical services through: Sophisticated data analytics that identify health risk sources and treatment gaps Support and outreach to assist plan employees in accessing timely and appropriate high-quality care Collaboration with primary care physicians to identify gaps in medical treatment and development of treatment plans to close the gaps in care Promotion of good health habits among plan employees 9
Moving to Total Health Management Now Future PPO Network Prescription Drug Management U/R and Case Management Disease Management Condition Management Using Data to Focus Design Guiding Care to Quality Patient Coaching Patient Coaching Maternity Management Wellness/Health Promotion Care Coordination Nurse Line 10
In a THM World Players Assume New Roles County Employee Medical Provider Insurer/HMO CURRENT ROLE Financial and Fiduciary oversight Passive, Sheltered, Entitled Dominant and Directed Overseer and Gatekeeper NEW ROLE Facilitator, Advocate, Leader Active, Informed and Motivated Consumer Empowered, Accountable Caregiver Case Manager and Advocate Quality Metrics Network Level Consumer Level Administration Disconnected Paper Integrated Electronic It is all about changing behavior. Evolution not revolution. 11
Establishing a Total Health Management Strategy Data Analytics Care Management Condition Management Focused Treatment Plans Guide to Proper Care Promote Wellness Identify opportunities to develop a new healthcare cost management strategy to manage medical utilization Achieve better employee medical treatment outcomes Identify gaps in medical treatment and guide employees to proper care through focused treatment plans Identify high quality, high performing care providers and guide employees to use these providers Improve employee health habits through wellness, health promotion and employee education 12
Implementing Total Health Management Analytics Planning Design Selection Management 6 Outreach Collect claims data to develop a predictive model for health risks Perform cost savings opportunity/health risks analysis 13
Implementing Total Health Management Analytics Planning Design Selection Management 6 Outreach Establish collective vision among decision makers about future state of the plan Define guiding principles and key objectives Define how success will be measured 14
Implementing Total Health Management Analytics Planning Design Selection Management 6 Outreach Develop key elements of the Total Health Management Design Assess the capabilities of the County, Blue Cross, PacifiCare, Kaiser, Caremark, utilization management and other vendors to deliver the needed services 15
Implementing Total Health Management Analytics Planning Design Selection Management 6 Outreach Select service vendors to perform key roles Develop performance standards and key metrics 16
Implementing Total Health Management 6 Analytics Planning Design Selection Outreach Management Finalize financial management reporting requirements and set schedule for monitoring results Perform final operational integration testing of all service vendors Facilitate and manage vendor collaboration 17
Implementing Total Health Management 6 Analytics Planning Design Selection Management Develop communications strategy to educate employees/retirees Roll out stakeholder education and communications campaign for each design element 6 Outreach Initiate outreach to employees/retirees with high health risks 18
Case Study CASE STUDY A Plan of 3,500 members and dependents wanted to determine the cost drivers of health care: Population is concentrated geographically within jurisdiction, with some employees residing in neighboring jurisdictions 85% of employees live in two major urban centers Costs have been rising 10% to12% annually for the last 4 years Self-funded using a TPA Lease a national PPO network 19
Defining Population Health Risk Factors Analytics CRG Status Description of Clinical Group 1 Healthy Non-user vs. user distinctions 2 One or More Significant Acute Diseases Severity Index Chest pain 0 3 One Minor Chronic Disease Hyperlipidemia or Migraine 4 Multiple Minor Chronic Diseases Hyperlipidemia and Migraine 5 One Major Chronic Disease Diabetes or Asthma 6 6 Two Significant Chronic Diseases 7 Three or More Chronic Diseases Asthma and Hypertension CHF, Diabetes and COPD 8 Complicated Malignancies Lung Cancer or Brain Malignancy 9 Catastrophic Conditions AIDS, Dialysis or Ventilator Dependent 0 2 4 6 6 6 6 20
Key Finding #1: Cost Drivers CASE STUDY Status # of CEEs Percent of Total Total Dollars Paid Percent of Paid Projected PMPY Healthy 1,143 46.3% $386,903 4.5% $338 One or More Significant Acute Diseases 63 2.5% $215,111 2.5% $3,414 One Minor Chronic Disease 333 13.5% $516,322 6.1% $1,550 Multiple Minor Chronic Diseases 140 5.7% $468,616 5.4% $3,347 One Significant Chronic Disease 445 18.0% $1,715,530 19.9% $3,855 Two Significant Chronic Diseases 309 12.5% $2,772,816 32.2% $8,973 Three or more Significant Chronic Diseases 20 0.8% $245,149 2.8% $12,257 Complicated Malignancies 12 0.5% $1,965,300 22.8% $163,775 Catastrophic Condition 6 0.20% $331,685 3.8% $55,280 Total 2,471 100% $8,617,432 100% $3,487 CEE = Continuously Enrolled Employee 21
Key Finding #2: Top 10 Diseases Driving Cost CASE STUDY Disease Patients Percent of Total Total Cost Percent of Cost PMPY Diabetes 209 5.95% $1,011,139 12.07% $ 4,838 Hypertension 318 9.05 726,934 9.06 2,286 CAD 83 2.36 37,171 5.47 5,267 CHF 20 0.57 186,979 2.34 9,349 Asthma 64 1.82 173,295 2.11 2,708 ESRD 4 0.11 165,445 2.07 41,361 COPD 39 1.11 153,314 1.92 3,931 Depression 84 2.39 131,262 1.59 1,562 Breast Cancer 17 0.48 126,774 1.59 7,457 CVA 7 0.20 78,204 0.98 11,172 22
Key Finding #3: Diabetics Not Getting Needed Care CASE STUDY Diabetes Testing and Exams Employees Eligible Employees NOT Compliant Percent NOT Compliant Eye Exam 152 55 36.2% Foot Exam 118 117 99.2% Hemoglobin 122 105 85.1% Nephropathy Monitoring 122 115 94.3% Lipid Test 108 59 54.6% 23
Key Finding #4: Ranking Physicians by Practice Management Index Is Important to Diabetic Treatment CASE STUDY Name Specialty Average BOI Average CMI Utilization Score Complication Score Gaps in Care Score Total Score Membership Percent PMI Driver Total Paid PATRICK V MIZRAHI CAROL A MINNEROP BARI F CEKA BEN PASCARIO JOSE KATZ CANDIDA CATUCCI OSCAR L CHAMUDES Internal Medicine 1.43 4.58 27.95 34.48 17.56 79.99 0.83% 66.61 $671,457 Internal Medicine 2.93 6.73 22.92 204.08 11.19 238.19 0.81% 192.99 $931,830 Internal Medicine 1.27 4.43 30.65 55.38 17.11 103.14 0.80% 82.28 $519,804 Obstetrics & Gynecology 1.46 4.32 24.21 39.09 13.28 76.57 0.75% 57.25 $768,137 Internal Medicine 4.76 7.15 16.27 161.81 14.26 192.34 0.72% 138.52 $1,233,453 Internal Medicine 1.54 5.44 30.30 106.76 16.46 153.52 0.68% 103.65 $617,215 Pediatrics 0.35 1.22 24.62 0.00 18.46 43.08 0.67% 28.77 $145,120 BOI: Burden of Illness CMI: Care Management Index PMI: Practice Management Index 24
Key Finding #5: Insufficient Preventive Treatment CASE STUDY Employees Eligible Employees NOT Compliant Percent NOT Compliant Preventive Tests Cervical Cancer Screening 779 350 44.9% Colorectal Cancer Screening 778 575 73.9% Mammogram Exam 291 138 47.4% Cholesterol Screening 875 627 71.7% Cardiovascular Monitoring Lipid Test 218 140 64.2% Beta Blocker 3 1 33.3% 25
Key Finding #6: Children Not Being Immunized CASE STUDY Child Immunizations (0 3) Employees Eligible Employees NOT Compliant Percent NOT Compliant Dtap/DT 78 54 69.2% Hepatitis B 78 44 52.6% HIB 78 45 57.7% MMR (second MMR over 3) 78 38 48.2% Polio 78 46 59.0% Varicella/chicken pox 78 41 52.6% (over 3) All Shots 78 76 97.4% 26
Key Findings Lead to Objectives CASE STUDY 1. Establish a disease management program to achieve higher rates of treatment compliance for members with diabetes and heart disease 2. Improve adherence to recommended preventive care screening and childhood immunizations 3. Improve the overall health and wellness of the plan employees 4. Add incentives and remove barriers to good health 27
But There Are Clear Signs of Measurable Success Emergency room visits overall dropped 11% Inpatient Hospital admissions decreased 16% Inpatient hospital days decreased 27.9% Diabetes HbA1C testing rates have increased 3% (associated with decreased retinopathy, nephropathy, neuropathy and cardiovascular diseases) Diabetes LDL testing is up 28% (associated with reduction of macro vascular disease) Asthma drug compliance increased 10.2% Congestive heart failure ACE inhibitor use is up by 15% Source: Blue Cross/Blue Shield of Minnesota 28
Recap for Achieving Success Get plan utilization and trend data in order Make honest assessment of reality of the plan and its population Establish clear program objectives based on the data and the reality of making changes Implement plan design features to support the program objectives Endorse and brand the program changes as clear indication of management and organizational support of the program changes and the objectives they represent Develop strong and effective employee communication consistent, persistent and multidimensional Test employee understanding of the new programs as well as clarity of objectives Total Health Management program success requires continued commitment. 29