RSM McGladrey, Inc. is a member firm of RSM International ...
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    RSM McGladrey, Inc. is a member firm of RSM International ... RSM McGladrey, Inc. is a member firm of RSM International ... Presentation Transcript

    • Managing Costs: A Health Care Perspective 3 rd Annual Manufacturing and Wholesale Distribution Conference Tuesday, October 17, 2006 Alicia Faust, manager, RSM McGladrey
    • Agenda
      • Introduction and industry background
      • Current issues impacting your group health plan dollars
      • How are organizations effectively managing health care costs?
        • Effective solutions utilized to manage health care costs
    • Introduction and Industry Background
      • #1 – Reduce cost of health care
        • RSM McGladrey Manufacturing and Wholesale Distributions Survey ranking
      • More than 80% agreed with this ranking
      • More than 60% are passing cost increases to employees
    • Current market factors impacting your group health plan dollars
    • Factors Influencing Health Care Costs
      • Regulatory
        • Payment reductions from federal and state governments
          • Revenue shift from governmental to commercial payors
        • Pricing of provider services
          • Typically based on payment methodologies of commercial insurers and competitor prices
          • Transparent pricing
        • Increased dependent age to 30 years in some states
        • Mandated benefits
    • Factors Influencing Health Care Costs (Cont’d)
      • Non-Regulatory
        • Develop employer of choice initiatives
          • Competitive benefit structures for employee population
        • Provider cost cutting impacts quality of care
          • Reduction of highly experienced clinical staff
          • Ineffective case management protocols
        • New technology and pharmaceuticals
          • Increased availability and use of more expensive drug therapies, including biotech drugs
    • How are organizations effectively managing health care costs?
    • Survey responses on the current methods being utilized to reduce health care costs
    • Pros and Cons to Survey Results
      • Pros
        • Short-term gains and effectiveness
      • Cons
        • Reactive to costs
        • No effective longevity
        • Additional resources, time and costs
    • Management Cycle for Fully Insured Plan Costs Strategic Management Design Actuarial Analysis of Plan Design and Benefit Structure Premium Disclosure and Analysis Negotiate Premiums And Broker Commissions
    • Managing Fully Insured Plan Costs
      • AGGRESSIVE…. Assessment and movement to self insurance
      • Advantages
          • Negotiate service provider contracts
          • Avoids insurance company loads included in premiums
          • Greater control over benefit structure
          • Exemption from state mandated regulations
      • Disadvantages
          • Acquiring historical data
          • Additional internal resources and time
          • Management of the third party administrator (TPA) / pharmacy benefit manager (PBM)
          • Returning to full insurance
    • Fully Insured Strategic Management Ladder Assessment and Movement to Self Insurance Premiums and Broker Fees Negotiations Analysis of Plan Design Case Management Disease Management Wellness Programs Successful Cost Containment
    • Management Cycle for Self Insured Plan Costs Strategic Management Design Selection of Service Providers And Benefit Structure Negotiation of Service Level Agreements On-going Monitoring And Management
    • Managing Self Insured Plan Costs
      • AGGRESSIVE…. External audits of service providers
      • Advantages
          • Service level agreement (SLA) compliance with performance guarantees
          • Greater internal controls assurance
          • Financial reserve accuracy
          • View into the TPA/ PBM
      • Disadvantages
          • Contract limitations
            • Contingent fee auditing
            • Extrapolation of results to total population
            • Sample size
    • Self Insured Strategic Management Ladder External Audits of Service Providers Service Level Agreements Negotiations Benefits Structure Case Management Disease Management Wellness Programs Successful Cost Containment
    • Effective Medical and Drug Expense Model Medical Cost Containment Programs: Wellness Program Disease Management Fraud Cost Sharing Programs: Provider Discounts And Pharmaceutical Rebate Eligibility Administration And Validation Effective Expense Management
    • Last Thoughts
      • Be Proactive not reactive to addressing health care costs
      • Controlling health care costs requires management
      • Cannot reduce health care costs but can effectively manage current and future spend!!
    • Questions?
    • Thank you
      • Alicia Faust, Claims Administration Review Services Group Leader
        • RSM McGladrey, Inc., 20 North Martingale Rd., Ste 500, Schaumburg, IL 60173-2420
        • 847.413.6969 or alicia.faust@rsmi.com