1. CCLA Annual Conference November 2, 2011 Mike Snyder
Health Plan Trends
CCLA Annual Conference
November 2, 2011
Mike Snyder

2. Healthcare in the US
Current environmental conditions are reshaping the behavior of the major stakeholders:
Employer Groups
Consumers
Health Plans
Confidential

3. Employer Groups
The economy and Wall Street are affecting employer sponsored benefits:
Willing to reduce (or curtail!) healthcare benefits
Willing to further cost shift to the employee
Focus is on Wellness vs. Disease Management
Confidential

4. Among Firms Offering Health Benefits, Percentage of Firms That Report They Made the Following Changes as a Result of the Economic Downturn, by Firm Size, 2010
*Estimate is statistically different between All Small Firms and All Large Firms within category (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2010.

5. Average Annual Worker and Employer Contributions to Premiums and Total Premiums for Family Coverage,
$5,791
$6,438*
$7,061*
$8,003*
$9,068*
$9,950*
$10,880*
$11,480*
$12,106*
$12,680*
$13,375*
$13,770*
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

6. Slammed by the economic conditions
Consumers
Slammed by the economic conditions
Ave increase in salary: ~3%
Consumer Index (All): 3.6% (BLS)
Healthcare Benefits: 131% (10 yr inc)
Healthcare Reform
Spotlight on the cost of healthcare in the US
Reminds consumer of their responsibility to manage their personal healthcare costs
Confidential

7. Percentage of Covered Workers Enrolled in a Plan with a General Annual Deductible of $1,000 or More for Single Coverage, By Firm Size,
*Estimate is statistically different from estimate for the previous year shown (p<.05).
Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $1,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Average general annual health plan deductibles for PPOs, POS plans, and HDHP/SOs are for in-network services.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

8. Changes in Average PPO Costs for Family Coverage, 2006-2010
Note: Each 2010 estimate is statistically different from the 2006 estimate within category (p<.05). The survey has asked comparable questions on family deductibles only since An aggregate deductible is one in which all family members’ out-of-pocket covered expenses count toward meeting the deductible amount.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

9. Among All Large Firms (200 or More Workers) Offering Health Benefits to Active Workers, Percentage of Firms Offering Retiree Health Benefits, *
*Tests found no statistical difference from estimate for the previous year shown (p<.05). No statistical tests are conducted for years prior to 1999.
Note: Data have been edited to include the less than 1% of large firms who report “yes, but no retiree” responses in Historical numbers have been recalculated so that the results are comparable.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, ; KPMG Survey of Employer-Sponsored Health Benefits, 1991, 1993, 1995, 1998; The Health Insurance Association of America (HIAA), 1988.

10. Problems Related to Recent Economic Conditions
As a result of recent changes in the economy, have you and your family experienced any of the following problems, or not? Was this a serious problem, or not?
Percent saying each was a “serious problem”
Problems paying for gas
Problems getting a good-paying job or a raise in pay
Problems paying for health care and health insurance
Problems paying for food
Problems with credit card debt or other personal debt
Nearly six in ten (58%) Americans face "serious problems" resulting from recent changes in the economy, with one in four (24%) struggling to pay for health care and health insurance.
Losing money in the stock market
Problems paying your rent or mortgage
Report ANY of the above was a “serious problem”
SOURCE: Kaiser Family Foundation Health Tracking Poll: Election (conducted July 29-August 6, 2008)

11. Confidential

12. 60% … of consumers surveyed by the Employee Benefit Research Institute are either “extremely satisfied (23%) or “very satisfied” (37%) with their health plan, with a total of just 11% either “not too satisfied” or “not at all satisfied.”
Confidential

13. Challenges for the Plans
Higher cost for provision of care
Greater competition for employer business:
Need for lower cost
Greater services (examples):
Specialized benefit design for the chronically ill
Member education and incentives
Reduce internal admin cost (example):
Cost to market lab access

14. Major Trends for Health Plans
Plans are downsizing their provider networks
Employer groups are demanding lower cost of benefits
National labs are leveraging their contracts to gain new volume
States are pushing Medicaid participants to managed care plans (increased capitation)
Medicare Advantage plans continue to grow
Privatization of Medicare

15. Major Trends for Health Plans
Increase in ‘Self Funded’ benefit plans
Greater need to control admin costs
Change in the BCBS ‘Blue Card’ administration
Greater denials
ACO Model formation (non-Medicare)
New requirements?
Participation?
Reimbursement??
Blue card issue will result in a loss of employer biz for the blues; must keep the pressure going
ACO: issue is not how plans will behave once model is established; however, concern is that plans will further leverage services from labs w/o an increase in pricing

16. What is the Effect on Labs?
“When you talk to payers, they want not just benefit to patients but also benefit to payers such as saving costs and needless procedures. They want diagnostics to have clinical utility…but also to be cost effective.”
Bryan Dechairo, Ph.D., senior director research and development, Medco Research Institute.
Confidential

17. What Do the Plans Want from Labs Today?
Broad menu that incorporates AP and other esoteric testing (one stop care)
Generous access to services (locations)
Electronic interface (orders and reporting) to physicians
Submission of member lab results to the plan
Participation in managed networks
Electronic claims submission (clearinghouse)
Strong marketing program (that emphasizes use of in-network services: Competition!!)
Consultation by in-network labs (SME)

18. What are the Expectations for Tomorrow?
Participation in Utilization Management
Synchronization of Test Menu to Medical Policy
Notification of Test Identity (no code or generic stack codes)
Expanded Credentialing: demonstrate proficiency of testing against standards
Participation in Preauthorization
Ability to meet employer demands for member transparency to healthcare costs

19. Increased Pressure to Reduce Costs
Pricing
Greater discounting?
Capitation: more to come?
Steerage (Control OON Leakage)
Push to low cost provider
Restriction in OON payment (MNRP)
Limit access to contracted providers
Panel size is decreasing
Cost Shifting
Higher deductibles and co-insurance
Reduced OON cost share
Enforcement of Medical Policies
Non-covered services
Increasing utilization of PreAuthorization and/or PreCertification
Plan tactics to further reduce lab costs

20. Laboratory Benefit Management
New Development
Laboratory Benefit Management
DNADirect (Medco)
Generation Health (CVS-Caremark)
National Lab forays:
Beacon Laboratory Benefit Solutions, Inc
QuestNet
Confidential

21. Create an overall Health Plan contracting strategy
Survival Solutions
Create an overall Health Plan contracting strategy
Value beyond testing
Determine a “consultative” approach to the plans
Form regional lab networks:
Join an existing network
Create 3rd-party managed collaborations
Deploy tools that create efficiencies and increase your value proposition
Confidential

22. Solutions for Success Educate!! Physicians Community Health Plans
Employer Groups
Patients
Health Plans

23. Educate Your Physicians
Relate the value of your lab to the issue of “local” healthcare
Your lab’s participation in health plans:
Which plans?
What is the cost to the patients?
Value of your lab’s service to patients
UM, HIE, ability to consult

24. Educate Your Community
Role of the lab in community health
Wellness and chronic disease management vs. critical care
Integration of care and the medical record
Who has your complete medical record?
Accountable Care:
Community or Commercial enterprise??
Partner with the local employer groups

25. Educate the Plans Target the Medical Directors
Demo your lab’s value proposition:
Effective care management
Utilization management
Relationship to Disease Management:
Monitoring chronic care
Early ID of medical conditions
Diagnosis of cancer
Early detection of pregnancy

26. Solutions for Success Present ‘Value’ that is meaningful to the Plans
Collaborative lab networks under single contracts
Reduce lab leakage in your area through a strong marketing program; engage the plan
Present Utilization Management solutions:
Sync to the plan’s medical policy
Offer Decision Support to assure appropriate testing
Offer meaningful Utilization Reports
Manage your Lab’s patient results

27. Solutions for Success Assure the efficiency of your lab operation
Billing processes (missing info, denial management, etc)
Manage cost
Use workflow solutions to assure the efficiency of people and processes

28. Time to “Re-Tool”? Network Administration MDx Testing Preauthorization
Notification for non-specified testing
New coding solution (for ‘technology codes’)
Preauthorization
Decision Support
Assure clinical utility and effectiveness
Test Registry
Document science and proficiency
Cost estimator for OOP costs
Confidential

29. Finding the Solutions Health Plans? National Labs?? Trusted Vendors
Healthcare Reform: shift to provider
National Labs??
Plan participation
Funding for tools
Trusted Vendors
Software
Consulting
Confidential

30. Winners and Losers Plans have the leverage: Technology
Employers and consumers demand lower costs
Enrollment is increasing (‘Caid, ‘Care, and Self Funded)
Competition between labs
Technology
Demand for integration (EMR, eligibility, transparency, etc)
New applications (evidenced-based, coding, etc)
Collaboration: Diagnostics and Therapeutics
Confidential

31. Mike Snyder MedSpend msnyder@medspend.com