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Health Benefit Design Proposals for 2018
Kathy Donneson, Chief Health Plan Administration Division
CalPERS
Agenda Item 6, Attachment 1, Page 1 of 12
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Agenda
• Background
• Health Benefit Design Proposals for 2018
• Expand Value Based Purchasing Design for ASCs
• Align Site of Care for Medical Pharmacy
• Reduce Use of Emergency Room for Urgent Care
• Continue PPO Purchasing Tools
Agenda Item 6, Attachment 1, Page 2 of 12
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Value Based Purchasing Design for ASCs
• Colonoscopy, Cataract and Arthroscopy – Ambulatory Surgery Center - pay usual co-
insurance and deductible – Hospital outpatient facility - pay usual co-
insurance and deductible PLUS any costs over the reference price of:
• $1,500 colonoscopy • $2,000 cataract • $6,000 arthroscopy
Agenda Item 6, Attachment 1, Page 3 of 12
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Percentage of patients choosing an ambulatory surgical center for cataract surgery, 2009-2013
50
55
60
65
70
75
80
85
90
95
2009 2010 2011 2012 2013
Non-CalPERS Cataract
CalPERS Cataract
Reference pricing program implemented
Source: University of California, Berkeley analysis, February 2015.
2013 average CalPERS price Cataract Hospital Outpatient -- ~$7,500 Cataract ASC -- ~$2,250
Agenda Item 6, Attachment 1, Page 4 of 12
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Percentage of patients choosing an ambulatory surgical center for colonoscopy, 2009-2013
50
55
60
65
70
75
80
85
90
95
2009 2010 2011 2012 2013
CalPERS Colonoscopy
Non-CalPERS Colonoscopy
Reference pricing program implemented
Source: University of California, Berkeley analysis, February 2015.
2013 average CalPERS price Colonoscopy Hospital Outpatient -- ~$2,500 Colonoscopy ASC -- ~$1,400
Agenda Item 6, Attachment 1, Page 5 of 12
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Percentage of patients choosing an ambulatory surgical center for arthroscopy, 2009-2013
50
55
60
65
70
75
80
85
90
95
2009 2010 2011 2012 2013
CalPERS Arthroscopy
Non-CalPERS Arthroscopy
Reference pricing program implemented
Source: University of California, Berkeley analysis, February 2015.
2013 average CalPERS price Arthroscopy Hospital Outpatient -- ~$11,800 Arthroscopy ASC -- ~$7,400
Agenda Item 6, Attachment 1, Page 6 of 12
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Results • Cataract
– $1.3M in savings in first two years – 20% reduction in spending
• Colonoscopy – $7M in savings in first two years – 28% reduction in spending
• Arthroscopy – $2.3M savings first two years – 17% reduction in spending
• Total savings for all three procedures about $5M per year
• No change in complication rates
Agenda Item 6, Attachment 1, Page 7 of 12
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EXPAND VALUE BASED PURCHASING DESIGN FOR USE OF ASC
Agenda Item 6, Attachment 1, Page 8 of 12
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ALIGN SITE OF CARE FOR MEDICAL PHARMACY
Agenda Item 6, Attachment 1, Page 9 of 12
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REDUCE USE OF EMERGENCY ROOM FOR URGENT CARE
Agenda Item 6, Attachment 1, Page 10 of 12
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CONTINUE CASTLIGHT AND WELVIE PPO PURCHASING TOOLS
Agenda Item 6, Attachment 1, Page 11 of 12
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Continue to Evaluate Options
Stakeholder Feedback
Next Steps
Seek Approval
Agenda Item 6, Attachment 1, Page 12 of 12