1. A Roadmap to Integrated Care Primary Care and Behavioral Health The Business Case for Integrated Medical-Behavioral Healthcare An Actuary’s Perspective Steve Melek, FSA, MAAA Doug Norris, FSA, MAAA, PhD June 3, 2015

2. 2 Integrating Behavioral and Medical Healthcare Source: Kathol and Gatteau – Healing Mind and Body, 2007 June 3, 2015

3. 3 48.3% 12.7% 34.9% 5.3% June 3, 2015

4. 4 The Quality of Treatment  In spite of effective treatments and evidence-based guidelines, only 1 in 5 individuals with depression who seek treatment are treated according to minimum standards (JAMA, 2003).

5. 5June 3, 2015 Condition Identification

6. 6 Prevalence of Co-morbidities Unützer, Jürgen. Integrated Behavioral Health Care. Powerpoint Presentation. Seattle, Washington. May 2, 2011.

7. 7June 3, 2015 Cost Impact and Savings Opportunities

8. 8 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations  Basis for analysis was detailed claim and membership files for Commercial, Medicare and Medicaid populations  Commercial and Medicare populations were divided into 4 cohorts: 1.No MH/SUD 2.Non-SPMI MH 3.SPMI 4.SUD  Total spending and per member per month (PMPM) costs were separated between Medical, Medical Rx, Behavioral, and Behavioral Rx June 3, 2015

9. 9 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

10. 10 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

11. 11 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

12. 12 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

13. 13 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

14. 14 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

15. 15 What IMBH Programs have worked?  Multifaceted Diabetes and Depression Program (MDDP) – medical savings of $39 PMPM observed over 18 months  Pathways program for diabetes & depression - $46 PMPM saved, or about 5% over 2 years  IMPACT program for depression among the elderly - $70 PMPM saved over 4-year period, or about 10%  Missouri CMHC health homes in 2012 – independent living increased by 33%, vocational activity increased by 44%, overall healthcare costs decreased by 8%  Observed savings of between 9% and 16% of value opportunity

16. 16 Findings from an Analysis of Comorbid Chronic Medical & Behavioral Conditions in Insured Populations June 3, 2015

17. 17 More Economic Impact Analyses A Focus on Children and Adolescents  Dependent Children and Adolescents  Age Groups 0-5. 6-12, 13-18, 19+  4 Cohort Analysis: Comorbid chronic medical-behavioral, SMI, non-SMI MH, SUD  Impact of behavioral conditions on the healthcare costs of parents June 3, 2015

18. 18 PMPM Cost Comparison of Cohorts June 3, 2015

19. 19 PMPM Cost Comparison of Parents June 3, 2015

20. 20 Total Costs for Children & Adolescents June 3, 2015

21. 21 Total Costs of Parents June 3, 2015

22. 22 PMPM Costs by Medical Condition - Children June 3, 2015

23. 23 Prevalence Rates of Conditions - Children June 3, 2015

24. 24 The Annual Value Opportunity - Children June 3, 2015

25. 25 Annual Value Opportunity - Parents June 3, 2015

26. 26 Annual Potential Savings Projection June 3, 2015

27. 27 The Colorado SIM Opportunity  $65 million award  4-year program, 1 ramp up year, 3 test years  Targeting 80% of Coloradans  CMS wants an ROI  CMS wants sustainability  CMS wants portability  CMMI investment of $1 billion annually is “cheap” compared to the costs of Medicare/Medicaid of $2 billion every day  Payment reform is a MUST  The Triple Aim and the 3-legged stool June 3, 2015

28. 28 Payment Model Reform Ideas  Primary Care Capitation, including primary physical and behavioral healthcare services with care coordination and management  Cap rates must be population-specific and risk adjusted  Options in Cap Rate for the addition of different levels of behavioral service responsibilities  Variations between urban, rural and frontier areas  Risk Sharing or Gain Sharing of non-primary care services  Requires setting risk adjusted targets PMPM for different member populations (commercial, Medicaid, Medicare) for IP facility, OP facility, other physician specialists, Rx and all other services.

29. 29 Questions? steve.melek@milliman.comsteve.melek@milliman.com 303/672-9093 doug.norris@milliman.comdoug.norris@milliman.com 303/672-9015 June 3, 2015