Finance Committee Review Partnership for Health and Welfare Benefits Management Big Spring School District Finance Committee Review April 10, 2019 Robbi Ritter www.usi.com

Agenda 2018/2019 Financial Summary Calendar Years - 2017 and 2018 Utilization Review Renewal Projection South Central Trust Marketing Results Medical and Prescription Drug Cost Trends

2018/2019Financial Summary

Financial Summary Overview Through February 2019, total costs have decreased $141,785 (-7.76%) to $1,807,258 in 2018/2019 vs. $1,949,043 during the same eight (8) month period in 2017/2018 YTD Paid Claims are $1,628,330; which represents a +36.72% increase vs. the prior period, driven primarily through a significant increase in prescription drug spend Medical Paid Claims decreased -17.65%, from $1,444,448 ($678 PEPM) in 2017/2018 to $1,189,445 in 2018/2019 ($554.77 PEPM) Prescription Drug Paid Claims increased +36.72% from $321,000 in 2017/2018 ($150.85 PEPM) to $438,885 in 2018/2019 ($204.70 PEPM) Enrollment remained fairly steady, with a slight increase of +1.13%; 268 average YTD vs. 266 average YTD for the prior period There is currently two (2) claimants at 50% of the Specific Deductible of $150K for the reporting period

2018/2019 YTD Financial Summary

Financial Statement through June - 2018 and 2017

Calendar Years - 2018 and 2019 Utilization Review

Utilization Overview – CY 2017 and 2018

Claims Paid by Location Top Hospitals by Number of Admissions and Total Paid for 2018 UPMC Pinnacle Hospital @ 16 Admissions; Total Paid @ $322,445 UPMC Pinnacle Carlisle Hospital @ 12 Admissions; Total Paid @ $77,013 Chambersburg Hospital @ 2 Admissions; Total Paid @ $12,083

Rx Paid Per Member Per Month for CY 2017 and 2018

Gaps in Preventive Care Coverage

Renewal Projection

2019/2020 Renewal Projection

2019/2020 Renewal Projection – Experience Period

South Central Trust Marketing Results

2018 Health Plan Marketing Results Capitalized on aggressively negotiated incumbent vendor relationships to produce savings while limiting disruption Savings generated through— Medical Administrative Fee: $183K Partnership Credits: $28K Rx Improvements: $700K Secured Performance Guarantees placing 10% (HBS) - 20% (CBC) of ongoing administrative fees at risk based on service metrics Additional Rx improvements available in the carve-out market; however, LEAs agreed that fully leveraging incumbent vendors now to allow for a paced carve-out project plan was most desirable Should LEAs consolidate to a single medical plan/TPA later, point-in-scale pricing (i.e. headcount credits) and implementation credits will provide further savings opportunities Prior Plan Year (2017 - 2018) $798,552 $139,634 $278,214 $1,216,400 ($46,872) ($438,000) 2018 - 2019 Renewal 1,2 $671,760 $120,840 $240,768 $1,033,368 ($74,424) ($700,000) $136,860 Medical Admin Fee RSP Rollup Big Spring Mechanicsburg Sub-Total Additional Partnership Credits Stop Loss Reporting Fees3 $0 $0 Rx Improvements4 $1,169,528 Total Cost ($1,032,668) Delta Over Current:

Medical and Prescription Drug Trends

Change in Access to Care/Care Delivery Models New, high-touch points of care, from retail clinics to video visits and urgent care, continue to be introduced and many consumers are seeking out care in setting other than the traditional physician office In a recent PwC Health Research Institute Consumer Survey 60% of those surveyed said that they have received care in an urgent care center 25% of those surveyed have received care in a retail health clinic 11% of those surveyed have received care via Telemedicine/Virtual Visits While the short-term result of increased access may be increased utilization, it is expected that enhanced access points will reduce costs in the long term through detecting and treating health concerns early, and shifting care form higher-cost environments to those that are more efficient and cost-effective

Pharmacy – Controlling growth in Pharmacy Costs There is increased focus on proactively managing pharmacy benefit costs through evaluation of pharmacy benefit contracts, emphasis on specialty pharmacy costs addressed through plan design adjustments, coverage changes to continue to promote the use of generic drugs and options for lower-cost sites of care for specialty infusions Over the past five (5) years, the most commonly used brand drugs experienced list price inflation of 62.1%; of that, 55.3% of spend was filled through traditional prescription drug channels and 44.7% was filled through Specialty drug channels Utilization of new drug therapies for lung cancer and breast cancer will drive oncology cost trends, as these therapies have higher costs then prior treatment and approvals for multiple high-cost therapies are ongoing

Trend for the Top 15 Drug Therapy Classes, by Spend

Integrated Employee Wellbeing and Engagement Today’s multigenerational employees have varied and complex needs and employers are recognizing that driving a commitment to wellbeing should be a top priority. Over the next three (3) years, the industry predicts that 82% of all employers will move from reward programs to an investment in holistic wellbeing initiatives and target these four keys to wellness Physician Wellbeing Emotional and Mental Wellbeing Financial Wellbeing Social and Community Wellbeing The average participation rate for employer-sponsored wellbeing programs is only 39%, so employers are working to build health and wellbeing into the employee value proposition in order to boost interest and focus on the overall employee experience

Questions. Robbi Ritter, VP, Manager, Benefits Consulting robbi Questions? Robbi Ritter, VP, Manager, Benefits Consulting robbi.ritter@usi.com