AFFORDABLE CARE, MEDICAL HOMES, AND OTHER COST CONTAINMENT - - PowerPoint PPT Presentation

AFFORDABLE CARE, MEDICAL HOMES, AND OTHER COST CONTAINMENT STRATEGIES

MAY 4, 2016

PREPARED FOR: 2016 TMHRA ANNUAL CONFERENCE

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USE

• Clinical Wellness
• Audits/Edits
• Eligibility Strategy
• Pricing Schemes
• Population Health
• ACOs
• Coalition
• Plan Change Model
• Contribution Strategies
• Dynamic Modeling

A Day in the Life of a Healthcare Dollar

x PRICE = COST

Submitted Claims minus Ineligible Claims Eligible Claims Eligible Claims minus “Discount” Allowed Amount Allowed Amount minus Member Cost Share Payable Amount Member/City Contributions

LIFE IMPACT LEVERS

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ACA coverage expansion new spending $1,658 Billion ACA Revenue $502 Billion

Taxes, fees, penalties

Net Cost of ACA coverage expansion $1,156 Billion

ACA Coverage Expansion Cost

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$1.2 T

ACA

ACA Coverage Expansion Cost

$.5 T

Hospitals

$1.2 T

Medicare

New Medicare Taxes Taxes, Fees & Penalties

Employer Employee 5

NTX Coalition CONFIDENTIAL 6

Revenue Source Revenue Profit / Loss

Government

$1,610,407,000 (7.5%)

Private Payer

$948,940,000 90%

Uncompensated Care

$170,251,000 (7.5%)

Other Non-Patient Revenue

$62,402,000 20%

Total Revenue

$2,791,000,000

100% of Medicare

$2,476,000,000

Total Profit

$315,000,000

Source – Actual medical facility in NTX 6

PERSPECTIVE ISSUE EFFECT

STOP LOSS (Employer) FREQUENCY OF LARGE CLAIMS 1,000% INCREASE IN $1M CLAIMANTS MEDICAL CARRIERS INPATIENT MEDICAL SPEND BCBS - 27% Increase Medicare - 6% increase HOSPITAL HIDDEN PROVISIONS IN CONTRACTS When billed amount for claims reach and/or exceed hospital stop loss amounts, discounts disappear.

TODAY’S REALITY

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HOSPITAL STOP LOSS EXPOSURE

A. Negotiated Per Diem $2,000 B. Days in Hospital 21 C. Billed Charges $210,000 D. Contract Threshold $100,000 E. Stop Loss Discount 45% F. Payable @ Per Diem A x B $42,000 G. Payable @ Stop Loss C x (1-E) $115,000 8

PERSPECTIVE ISSUE EFFECT

EMPLOYER FINITE SOURCES OF FUNDS Cities forced to shift funds internally to fund increases in healthcare EMPLOYER HIDDEN COST IN ADMIN CONTRACTS Shared Savings formulas can result in $5 - $30 PEPM increase in administrative cost EMPLOYEES OUT OF POCKET MAXIMUM LIMITS Employees are shielded from the true cost of services.

TODAY’S REALITY

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CARRIER VS. PROVIDER BY MARKET

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$33,586 $49,827 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000

Iowa Chicago Atlanta N Tx

10th Percentile 25th Percentile Median 75th Percentile 90th Percentile

DRG 470 Price Variability by Market

CARRIER VS. PROVIDER BY MARKET

$33,586 $44,067 $49,827 $75,524 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000

Iowa Chicago Atlanta N Tx

10th Percentile 25th Percentile Median 75th Percentile 90th Percentile

DRG 470 Price Variability by Market

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CARRIER VS. PROVIDER BY MARKET

$33,586 $44,067 $29,797 $49,827 $75,524 $90,199 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000

Iowa Chicago Atlanta N Tx

10th Percentile 25th Percentile Median 75th Percentile 90th Percentile

DRG 470 Price Variability by Market

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CARRIER VS. PROVIDER BY MARKET

$33,586 $44,067 $29,797 $37,053 $49,827 $75,524 $90,199 $128,085 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000

Iowa Chicago Atlanta N Tx

10th Percentile 25th Percentile Median 75th Percentile 90th Percentile

DRG 470 Price Variability by Market

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The 5-50 Principle

4% of the claimants drive the majority of paid claims each plan year. Majority of next year’s “Red” group will come from those with low $ claim history Claimants

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Claims

MIGRATION OF HEALTHCARE SPENDING

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SHIFT IN FOCUS

 MAJOR MEDICAL  INDEMNITY  PPO  POS  HMO  HIGH DEDUCTIBLE HEALTH PLANS  ACO/PCMH

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SHIFT IN FOCUS MANAGING HEALTH

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PATENT-CENTRIC HEALTH POPULATION HEALTH

(EMBEDDED PCMH)

PATIENT CENTERED MEDICAL HOME

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 PROMOTES A MODEL OF CARE  STRENGTHENS CLINICIAN–PATIENT RELATIONSHIP  FOCUSING ON COORDINATED CARE OF PATIENT  PRIMARY CARE ANCHORED IN A PCMH  MEDICAL HOMES CAN LEAD TO QUALITY IMPROVEMENT AND COST REDUCTIONS

ACO DEFINITIONS

 ACCOUNTABLE CARE ORGANIZATION (ACO) HOSPTIALS AND PHYSIANS WORKING TOGETHER TO DELIVER HIGH-QUALITY, COST-EFFECTIVE, VALUE-BASED CARE THROUGH CLINICAL INTEGRATION  CLINICAL INTEGRATION – REDUCE WASTE AND REDUNDANCY USING HEALTH INFORMATION TECHNOLOGY  HEALTH INFORMATION TECHNOLGY – UTILIZING ELECTRONIC MEDICAL RECORD AND DATA ANALYTICS TO MANAGE CARE ACROSS THE CARE CONTINUUM  CARE CONTINUUM – UTILIZING ELECTRONIC MEDICAL RECORD AND DATA ANALYTICS TO MANAGE CARE ACROSS THE CARE CONTINUUM

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SAY WHAT?

ACO TRIPLE AIM PROVIDERS ARE FOCUSED ON:

 IMPROVING QUALITY  ENHANCING PATIENT EXPERIENCE  REDUCING PER CAPITA HEALTH CARE COSTS

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NOW WHAT?

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CARRIER / TPA PAYOR PROVIDER

BROKER / CONSULTANT CARRIER/TPA REP CARRIER/TPA PROVIDER RELATIONS

FACILITIES PHYSICIANS OTHER

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INDEPENDENT PROVIDERS EMPLOYEE EMPLOYER

Any Questions?

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