Health Plan Update Fort Worth City Council Presentation
June 23, 2020Brian R. Dickerson
Director of Human Resources
Guiding Principles
Finding the best care for our members
Better monitoring of our employees’ health in order to reduce emergency room visits and inpatient days
Finding physicians that take personal responsibility for the care of their patients
Improving the health of our members
Maintaining a sustainable health plan
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Best Care
High Quality Physicians
Reduced Emergency Room Visits
Better Wellness
Sustainable Health Plan
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HEALTH CENTERS
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Health Center Update Continue to see success Increase despite loss of Fire employees, retirees
and dependents – 18% of plan All providers remain in place since day-one Closed Arlington satellite location due to low usage Opening new satellite location in Bedford Moving Lake Worth location to newly constructed
THR building – 4625 Boat Club Rd (November) Looking to relocate Huguley Health Center to
southwest Fort Worth – high employee density area
Adding diabetes educator to Moncrief location Added virtual visit capability at Health Centers
12540
12019
11700
11800
11900
12000
12100
12200
12300
12400
12500
12600
2019 2018
Total Health Center/Satellite Visits
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Carla Podgurecki, M.D.
Stephen Bojan,R.N., A.G.P.C.N.P.-B.C.
Wondwessen Kebede,R.N., F.N.P.-B.C.
Juliette Fumtim, M.D.
Sherrie Pierce, D.N.P., R.N., F.N.P.-C.
Health Center Providers
David L Reeve M.D.
Satellite Centers
Hoffman Family Practice Associates - Burleson, Texas
Family Medical Center Southwest - Fort Worth, Texas
Cornerstone Family and Sports - Keller, Texas
Texas Health Family Care – Weatherford & Willow Park, Texas
Marina da Silva Pinto Coulter, M.D. Fiona Atitso, M.D.
Roger L. Tolar, M.D. Mary P. Van Hal, M.D.
John G. Hoffman, M.D Destiny F. Smith, R.N., F.N.P.-C.
Patrick A. Conway, D.O Alfred T. Hulse, D.O.
Downtown FW Lake Worth Huguley
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MEDICAL/PHAMACY CLAIMS
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Current Health Plan PerformanceThrough March 2020
ACTIVES + NON-MEDICARE RETIREES
Rx Claims
Generic dispensing rate 86.2%
Specialty percentage – 40%
Top disease category Diabetes
Special programs Free diabetes medication and
supplies Free weight-loss medications
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Current Health Plan PerformanceThrough March 2020
ACTIVES NON-MEDICARE RETIREES
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Current Health Plan PerformanceThrough March 2020
ACTIVES + NON-MEDICARE RETIREES
Medical Claims Top clinical condition –
diabetes 16.5 percent of adults on plan 32.8 percent of medical spend
Number of hospital days is down 15.2 percent
Emergency Room visits returned to high levels
Leading cost drivers Employees – catastrophic claims Retirees – in-patient/out-patient
procedures
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Current Health Plan Performance Through March 2020
ACTIVES NON-MEDICARE RETIREES
Snapshot of Non-Medicare Retiree Health
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Review of retiree claims indicated Spouses are way up in cost –
67% increase ER usage is way up Surgery complications are up Costs are significantly greater
for those not using the Health Centers
Diabetes, Coronary Artery Disease, and Obesity are all rising
Need better engagement
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CONTRIBUTIONS AND PREMIUMS
Contributions and Premiums Actives/Employees and dependents continue to see decreasing costs
• No increase in City contribution for 2021• No increase in premiums to employees for 2021• Projecting FY 2020 $1.2M surplus
Pre-65 retirees are having a very difficult year • On a year-over-year basis claims for three of the first six months October,
November and March were up 37%, 47% and 52%, respectively• Analysis of claims indicates that most of the increase is due to an increased
inpatient and outpatient costs -• None of the increase is due to prescription costs
• Projections are that the retirees will run a deficit for FYE2020 of $1.7M• Contributions/premium increases are going to be needed for FY2021
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Contributions and Premiums Based on traditional costs projections and trending
• A projected increase in City contribution of 13.1 percent• Retiree premium would triple on the Health Center Plan from $50/month to
$150/month on the Health Center Plan, • Plus a three percent increase to spouses and family contributions for all plans
(Consumer Choice/HSA plan would remain at $0 premium for retiree only coverage)
Inpatient and outpatient costs increases such as what has occurred are typically not seen as on-going • Recommending increase of 6.12 percent in City Contribution• Retiree premiums would increase from $50/month to $100/month on Health Center
Plan, with three percent increase to spouses and families• Maintain $0 premium for retiree only coverage on Consumer Choice/HSA plan
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CHALLENGES OF SUSTAINABILITY
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Chapter 175, Texas Local Government Code
• “Same level of coverage” required for retirees
Separated funding of retiree and employee plans in 2017
• Make active cost more competitive with other employers• Retirees more responsible for cost of their healthcare
Plan design changes not a real solution if it is to impact one group, causes subsidization of the other group – leaves contributions and participant premium as the remaining lever
Complexity of Two Groups
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High quality is related to lower costs
Not necessarily on a procedure by procedure basis but on total cost
Shorter recovery, elimination of unnecessary procedures, avoidance of
readmissions, quality of referrals
Quality and Cost - High cost is not related to high quality
North Texas is the most expensive medical market in the countryTexas Teacher Retirement System spends more in the North Texas market than ALL of
the rest of the state – ADDED TOGETHER
The Healthcare Market
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3.2% of plan members drove 63% of claims
Claims
38% of high cost claimants for 2019
were high cost claimants in 2018 and WILL BE high cost claimants for
2020
High Costs Are they receiving the best care
or just a lot of care? What is needed Early engagement before
claimants are high cost is required
Help in navigating health system to ensure against unnecessary procedures
Information to ensure members have the opportunity to receive the best care
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Thirty percent of primary care, specialty and outpatient surgical
procedures were not performed by high quality physicians
Forty percent of inpatient surgeons would not be
recommended
Getting the right care, at the right time by the right person should be the goal
Using quality measures such as readmission rates, surgical site infection rates, average length of stay, and other relevant outcomes within each procedure or condition, adjusted by patient risk factors
Ensuring Quality of Care
Stopping the Cycle
Traditional tools for addressing costs• Increase premiums• Lower benefits• Both
Other ways we have tried to addressed costs• Direct contracts – Southwestern Health Resources• Plan design steerage (Premium Designated Doctors,
Airrosti, Surgery Plus)• Health improvement (Weight Loss Programs,
Blue Zone, etc.)• Providing resources – (Alight)
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Need for a new platform to administer care
New Health Administration Platform
Consolidation of communication to members through one vendor• Health plan TPA (UHC), benefits staff and health concierge (Alight)
Improve communication with retirees Increase engagement with members, significantly, with a focus on the
current and future high cost claimants
Targets communications and services at an individual level with early intervention
Demonstrated ability to keep claims costs low• Through ensuring quality of care, not restriction of care
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RECOMMENDED NEW HEALTH ADMINISTRATION PLATFORM AND VENDORS
New Health Administration Platform Requires moving away from the carrier model (UHC, Aetna, etc)
Partnering with a Third Party Administrator and a Care Advocacy/Coordination provider• Third Party Administrator will provide the network, adjudicate claims, • Care Advocacy/Coordinator centralizes ALL communication to plan members
• Has access to all the member’s information (claims, preferences, etc.) • Can address concerns with the member and offer solutions• Ability to consult with providers
Proven model used by many employers including American Airlines, Disney, Fidelity, Lowes, State Farm, Comcast and Facebook
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Third Party Administrator
• Meritain Health
• Division of Aetna
• Access to Aetna’s broadest network
• Disruption to be no more than 3%
Care Advocacy/Coordination Vendor
• Accolade
• 60% engagement of members and 84% engagement of high cost claimants
• Savings projection over next three years over $24M
• 40 percent of fees at risk based on ROI, engagement and customer satisfaction
New model will reduce administration costs by nearly $1M/year
Vendor Recommendations
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New Programs for 2021
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• Peer reviewed and validated – including American Diabetes Association
First and only medical treatment clinically
proven to reverse Type 2 diabetes
• 94% patients eliminated or reduced insulin• 90% of patients retained after one year• 0% of patients progress to Rx YoY
Stops disease progression/results
• Full point reduction of A1c• 5% weight loss• 40% cost reduction in medication
100% of fees at risk –must obtain the
following after six months
New Diabetes Program
Second Opinion Service
Number of these• 2nd MD, Best Doctors, others
Provide direct access to leading specialist for personalized second opinions from prestigious and recognized institutions• Massachusetts General, John Hopkins, Dana-Farber Cancer
Institute, Mayo Clinic, UCLA Health, UCSF, Boston’s Children, Hospital for Special Surgery and more
Why?• To ensure quality of care
30% of healthcare costs are spent on unnecessary & duplicative procedures
70% of treatment plans are changed as a result of a second opinion
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Wellness
Wellness Review
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Continuously Participating Employees2 years active: 2016 and 2017
Increases in PCP visits and decreases in ER visits means employees engaged in 2016 & 2017 are making better place of treatment decisions
Wellness Review
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Continuously Participating Employees3 years active: 2016 through 2018
Employees engaged in 2016 & 2017 saw further improvements in 2018 regarding: lower risk scores, lower Paid PEPM, fewer ER visits and less trips to the PCP. Opportunities to improve Premium Provider engagement and catastrophic paid.
Wellness Review
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Continuously Participating Employees4 years active: 2016 through 2019
Employees who stay consistently engaged with the wellness program for multiple years show stable results. Fewer catastrophic cases are found in this population; cases that remain are more sever based on inpatient admissions. PCP visits have decreased but remain higher than target (1.8-2.0)
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Bottom Line
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New health administration platform to improve sustainability of plan
Retiree premiums will increase in 2021(Consumer Choice Plan retiree only coverage will continue at $0 cost)
Employee premiums will remain the same for 2021
Focus is on improvements to plan benefits
Changes to plans over the last four-years continue to work
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Questions
COVID-19 Fund Impact2020 YTD Case Summary Paid Per Case
37 Confirmed Cases
31 Individuals with a positive test result $52,338 $1,6886 Individuals with a definitive diagnosis $52,148 $8,691
1 Probable Cases
0 Individuals with a presumptive diagnosis N/A N/A1 Individuals with a likely diagnosis $19,921 $19,921
8 Possible Cases
3 Individuals with a related diagnosis $19,463 6,4885 Individuals with a related diagnosis – inpatient setting $59,398 $11,880
Testing Summary
31 Positive Result
30 Individuals with a positive viral test result1 Individuals with a positive antibody result
365 Negative Result
329 Individuals with a negative viral test result36 Individuals with a negative antibody result
102 Unknown Result
86 Individuals with unknown or inconclusive viral test result16 Individuals with an unknown or inconclusive antibody test result 35
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As of the end of the most recent quarter demonstrated that the firefighter plan is challenged
• The Cigna rental network used by firefighters 5%-6% worse from a discount perspective than the current UHC network that the City uses
• At THR facilities, this delta is exacerbated into multiples of that number based on the City specific deal that the City has with THR –THR is largest volume of spend for the 440
• The 440’s admin fee is 35% higher on a per employee per month basis than through UHC
Most of the issues are structural in
nature:
• The 440’s per employee/per month claims spend is 74% higher than the City’s
• Pharmacy costs on a per member/per month (PMPM) basis are higher for the City - $91 PMPM for the 440 vs. $121.81 PMPM for the City, but 440 PMPM costs are up over 20% from when they were with the City
• Specialty drugs make up 67% of costs
These structural differences lead to
poorer claims results
Firefighter Health Plan
Group Health Forecast FY 2020
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Revenue Actives Retirees Total Other Revenue $3,247,504 $1,000,000 $4,247,504Cost Recoupment from 440 $1,696,954 $465,674 $2,162,628Employer $59,898,551 $24,517,643 $84,416,194Employee/Retiree $19,105,014 $7,124,031 $26,229,045
Total $83,948,023 $33,107,348 $117,055,371Expenses Actives Retirees Total
Claims $61,516,390 $19,680,552 $81,196,942Admin $4,224,656 $925,580 $5,150,236Stop-Loss Premiums $352,193 $65,252 $417,445Salary and Benefits $1,031,182 $124,460 $1,155,642General Operating Other $1,923,349 $8,636 $1,931,985Medicare Advantage Premiums $0 $9,328,925 $9,328,925Transfer to 440 $13,692,690 $4,731,359 $18,424,049
Total $82,740,460 $34,864,764 $117,605,224Surplus/(Deficit) $1,207,563 -$1,757,416 -$549,853
Group Health Forecast FY 2021
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Revenue Actives Retirees TotalOther Revenue $3,180,000 $1,000,000 $4,180,000Cost Recoupment from 440 $1,396,954 $479,644 $1,876,598Employer $51,788,332 $25,455,891 $77,244,223Employee/Retiree $15,274,487 $6,153,181 $21,427,668
Total $71,639,773 $33,088,716 $104,728,489Expenses Actives Retirees Total
Claims $63,506,393 $20,464,210 $83,970,603Administration $4,205,131 $935,337 $5,140,468Stop Loss Premium $387,412 $71,777 $459,189Salary and Benefits $1,082,507 $134,650 $1,217,157General Operating Other $1,906,220 $8,825 $1,915,045
Medicare Advantage Premium $0 $9,320,387 $9,320,387Transfer to Fire 440 $3,639,333 $3,639,333
Total $71,087,663 $34,574,519 $105,662,182Surplus/Deficit $552,110 -$1,485,802 -$933,692
Assumptions• No Health
Insurance Fee (HIF) on Medicare Advantage - $1M for 2019
• No premium or contribution increase to Actives
• Retirees 6.12% increase from City & Retiree only increase by $50 and 3% for family rates