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Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
Proven Strategies for Tackling Health Care Cost
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Proven Strategies for Tackling Health Care Cost

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This session will motivate you to be more proactive in considering major strategies to reduce health care costs.

This session will motivate you to be more proactive in considering major strategies to reduce health care costs.

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  • 1. Presentation Title Presenter’s Name • Date Proven Strategies for Tackling Health Care Costs Jane Cooper June 28
  • 2. Workplace Application <ul><li>This session will motivate you to be more proactive in considering major strategies to reduce health care costs </li></ul>
  • 3. Key Words <ul><li>Motivated </li></ul><ul><li>Pro-active </li></ul>
  • 4.
  • 5. Objectives <ul><li>You will walk away with 3 new ideas to: </li></ul><ul><ul><li>Engage your employees </li></ul></ul><ul><ul><li>Help employees compare the cost of elective procedures </li></ul></ul><ul><ul><li>Identify strategies to manage your health care costs more effectively </li></ul></ul><ul><li>You will laugh at least twice </li></ul><ul><li>You will contribute to the discussion </li></ul><ul><li>You will learn something from another attendee </li></ul>
  • 6. Health Care Reform <ul><li>With health care reform passing… will health care costs be reduced? </li></ul><ul><li>Is it still important to engage participants to make smart lifestyle choices and behave like consumers? </li></ul><ul><li>Is it still important to manage health care costs? </li></ul>
  • 7. Health Care Reform <ul><li>The Patient Protection and Affordable Care Act </li></ul><ul><ul><li>Regulations for this law will be 1,000,000 pages long </li></ul></ul><ul><ul><li>Major corporations: Boeing, Caterpillar and AT&T have already booked $100m - $1 billion to cover additional costs </li></ul></ul><ul><ul><li>Mandates, expanded Medicaid programs and new taxes and fines are expected to add $76 billion/year to our federal deficit </li></ul></ul>
  • 8. Health Care Costs <ul><li>What two things drive health care costs? </li></ul>
  • 9. Health Care Costs <ul><li>At the heart of health care costs – every expense – is a consumer… With an enormous influence </li></ul>
  • 10. Pricewaterhouse Coopers <ul><li>Employers surveyed in 2009 ready to push more costs of health insurance to their workers in 2010, while expecting more responsibility from workers for managing their personal health. </li></ul><ul><ul><li>Improving employee wellness </li></ul></ul><ul><ul><li>Increasing employee cost sharing </li></ul></ul>
  • 11. Pricewaterhouse Coopers <ul><li>More than 66% expect to expand wellness and disease management… although few are convinced that they are effective in mitigating health care costs. </li></ul><ul><li>42% expect to increase employee contributions </li></ul><ul><li>41% expect to increase medical cost sharing through plan design changes </li></ul>
  • 12. Where do we spend money?
  • 13. Prices are going up…
  • 14. How to save money?
  • 15. What about health care costs?
  • 16.
  • 17. Education <ul><li>How important is employee education? </li></ul><ul><li>What do employees need to be educated about? </li></ul><ul><li>Does education alone change behavior? </li></ul>
  • 18. Key Challenges <ul><li>Managing Benefit Programs* </li></ul><ul><ul><li>98% find managing health care costs to be a challenge </li></ul></ul><ul><ul><li>97% find participant engagement to be a challenge </li></ul></ul><ul><ul><li>92% find participant communication and support tools to be a challenge </li></ul></ul><ul><li>*Towers Perrin Study </li></ul>
  • 19. Beliefs drive Behaviors
  • 20. Beliefs drive Behaviors <ul><li>A doctor’s office visit costs $10.00 </li></ul>
  • 21. Beliefs drive Behaviors <ul><li>The insurance company is paying the bill </li></ul>
  • 22. The Importance of Plan Design <ul><li>Patient Care data shows that if a member has a deductible of over $1,000 they are 60% more likely to ask about the cost and quality of health care services before they make a healthcare decision </li></ul>
  • 23. Plan Design Decisions <ul><li>What is your company’s strategy regarding consumerism? </li></ul><ul><li>What is your company’s strategy regarding defined benefit versus defined contribution? </li></ul><ul><li>What is your company’s strategy regarding linking healthy lifestyles and premium contributions? </li></ul><ul><li>What is your company’s strategy regarding incentives and disincentives? </li></ul>
  • 24. Who is your Plan Participant? <ul><li>Male? </li></ul><ul><li>Female? </li></ul><ul><li>Average age? </li></ul><ul><li>Manage their own health care? </li></ul><ul><li>Financial priorities? </li></ul><ul><li>What are they concerned about at work and at home? </li></ul><ul><li>Attitude regarding increased out of pocket health care expenses </li></ul>
  • 25. Answers to these questions impact.. <ul><li>Benefit plan design </li></ul><ul><li>Importance of communications going to the home </li></ul><ul><li>How you communicate to participants regarding their health care responsibilities </li></ul>
  • 26. All Health Care is Local <ul><li>Health care costs are impacted one person at a time and one decision at a time </li></ul><ul><ul><li>Do we take medications appropriately? </li></ul></ul><ul><ul><li>Do we exercise? </li></ul></ul><ul><ul><li>Are we overweight? </li></ul></ul><ul><ul><li>Do we smoke? </li></ul></ul><ul><ul><li>Do we question our doctor or just follow orders? </li></ul></ul>
  • 27. The Jones Family
  • 28. What concerns the Jones family? <ul><li>Paying bills….living from paycheck to paycheck </li></ul><ul><li>Never enough time – how can I exercise? </li></ul><ul><li>Vague sense of uneasiness – difficult to focus – who do you trust? </li></ul><ul><li>The health care burden falls on Sandy… and she doesn’t even work for you! </li></ul>
  • 29. How to engage the Jones Family? <ul><li>Offer a plan design with sufficient out of pocket cost sharing </li></ul><ul><li>It’s about $$$$$$$ (Individual policyholders versus group policyholders) </li></ul><ul><li>Messages must be quick, snappy and meaningful </li></ul>
  • 30. How to engage the Jones Family <ul><li>Repeatedly communicate the business case for managing health care costs – and results! </li></ul><ul><li>Provide different types of tools to engage employees and help them get information </li></ul><ul><li>Reward and penalize for involvement or lack thereof </li></ul>
  • 31. Reducing health care costs <ul><li>We have to teach employees – and their families – about the consequences of their choices – and make those consequences immediate and personal. </li></ul>
  • 32. Case Study <ul><li>Wisconsin distributor – 300 employees – self funded </li></ul><ul><li>Plan design: Two plans- $350 and $700 deductibles </li></ul><ul><li>Built incentive into plan design to call Patient Care for cost/quality information or $300 penalty </li></ul><ul><li>95 calls </li></ul><ul><li>$4500 in employer savings </li></ul><ul><li>168% ROI on Patient Care fees paid </li></ul>
  • 33. Case Study <ul><li>National manufacturer – 5000 employee lives </li></ul><ul><li>Self funded – salaried and union </li></ul><ul><li>Two plans – one high deductible with HSA </li></ul><ul><li>Union plan includes cost sharing for first time </li></ul><ul><li>Health risk assessment and related wellness programs </li></ul><ul><li>Advocacy offered </li></ul><ul><li>Extensive employee communication and engagement program for all employees </li></ul>
  • 34. Idea #1 <ul><li>Create a series of simple communication pieces that employees can read quickly and remember </li></ul><ul><li>Put them everywhere </li></ul>
  • 35.
  • 36. Idea #2 <ul><li>Create informal opportunities for plan participants to learn about current and future programs </li></ul><ul><ul><li>Wellness </li></ul></ul><ul><ul><li>Disease Management </li></ul></ul><ul><ul><li>Health Risk Appraisals </li></ul></ul><ul><ul><li>Case Management </li></ul></ul><ul><ul><li>Advocacy </li></ul></ul>
  • 37. Successful Communication Plans <ul><li>Year-round </li></ul><ul><li>Communicate a goal and communicate progress towards that goal </li></ul><ul><li>Have a spousal component </li></ul><ul><li>Involve senior management </li></ul><ul><li>Use multiple mediums </li></ul>
  • 38. Pro-active versus Re-active <ul><li>A successful cost containment strategy requires a communication strategy – which takes planning and focused execution by you </li></ul><ul><li>Using a variety of mediums is a critical component – people learn differently </li></ul><ul><li>The communication must be ongoing </li></ul><ul><li>Offer incentives </li></ul>
  • 39. Idea #3 <ul><li>Develop and promote quarterly education/communication meetings with participants that cover topics like wellness, benefits cost and/or quality and make them fun and make them mandatory . </li></ul><ul><li>You have mandatory safety meetings, why not mandatory health care/insurance meetings? </li></ul>
  • 40. Sample meeting topics <ul><li>Benefits quiz show – with prizes </li></ul><ul><li>How to exercise effectively to lose weight </li></ul><ul><li>How to find the doctor that you’ve always wanted </li></ul><ul><li>Making wise health care choices – for you </li></ul>
  • 41. More topics – for Discussion <ul><li>How do you as a patient define health care quality? </li></ul><ul><li>Which is more important to you – quality or cost? </li></ul><ul><li>Do you know what procedures should cost and what choices you have for your procedure? </li></ul>
  • 42. Provider cost/quality information <ul><li>Costs among doctors, hospitals and outpatient centers vary significantly from provider to provider in the same market in the same network </li></ul><ul><li>How to determine and communicate “value” </li></ul>
  • 43. Arthroscopy <ul><li>CPT Code – 29873 </li></ul><ul><li>Surgical; with lateral release </li></ul><ul><li>Knee arthroscopy is a surgical procedure in which a small camera is used to examine tissues inside the knee joint. Additional instruments may be inserted to repair the knee </li></ul>
  • 44. Facility Costs Medical Provider Community Hospital St. Mary’s Hospital Waukesha Memorial Total Price $7,400.00 $14,350.00 $12,800.00 Discount Rate 10% 15% 11% Actual Discount $740.00 $2152.50 $1408.00 Discounted Balance $6660.00 $12,197.50 $11,392.00 Applied to Deductible (500) $500.00 $500.00 $500.00 Member Co-insurance (20%) $1232.00 $2338.90 $2178.40 Member Responsibility $1732.00 $2,838.90 $2,678.40 Employer Cost $4,928.00 $9,358.60 $8,713.60
  • 45. Colonoscopy <ul><li>CPT Code – 45378 </li></ul><ul><li>Routine Colonoscopy </li></ul><ul><li>Colonoscopy is a medical procedure where a long, flexible, tubular instrument called the colonoscope is used to view the entire inner lining of the colon (large intestine). </li></ul>
  • 46. Facility Costs Medical Provider Endoscopy Center Regional Hospital Hospital Surgery Center Total Price $1,640.00 $2,945.00 $7,500.00 Discount Rate 35% 35% 35% Actual Discount $574.00 $1,030.75 $2,625.00 Discounted Balance $1,066.00 $1,914.25 $4,875.00 Applied to Deductible (500) $500.00 $500.00 $500.00 Member Co-insurance (20%) $113.20 $282.85 $875.00 Member Responsibility $613.20 $782.85 $1,375.00 Employer Cost $452.80 $1,131.40 $3,500.00
  • 47. Leapfrog Data <ul><li>CPOE to prevent medication errors </li></ul><ul><li>Appropriate ICU staffing </li></ul><ul><li>Steps to avoid harm </li></ul><ul><li>Managing serious errors </li></ul>
  • 48. Leapfrog Quality Information <ul><li>Community Memorial – declined to respond </li></ul><ul><li>Waukesha Memorial – willing to report on 3/some progress on 1 </li></ul><ul><li>St. Mary’s – willing to report on 3/substantial progress on 1 </li></ul>
  • 49. System Challenges <ul><li>My doctor never has enough time for me and I don’t know what to ask him/her </li></ul><ul><li>How do I find the “best” doctor? </li></ul><ul><li>My husband is about to be discharged from the hospital and I have no idea what to do once he gets home. I have a job. </li></ul><ul><li>I just got a bill from the hospital for $3,500. I have no idea why they are billing me. I have insurance. </li></ul>
  • 50. Cost & Quality <ul><li>Quality </li></ul><ul><ul><li>This is very difficult </li></ul></ul><ul><ul><li>Participants need help defining quality </li></ul></ul><ul><ul><li>Public data relates to major illnesses and treatments, not outpatient procedures </li></ul></ul><ul><ul><li>Public data can b e in conflict, not current and debated by the physician or hospital </li></ul></ul><ul><ul><li>Case mix adjusting, physician referral patterns and other external factors can influence “quality data” </li></ul></ul>
  • 51. Cost & Quality <ul><li>Cost </li></ul><ul><ul><li>Outpatient! </li></ul></ul><ul><ul><li>Two numbers impact costs: billed charges and contracted rates </li></ul></ul><ul><ul><li>Patients need specific procedure or revenue codes </li></ul></ul><ul><ul><li>How many variables to measure? </li></ul></ul><ul><ul><li>Ranges are only marginally useful </li></ul></ul><ul><ul><li>How current is publicly available data? </li></ul></ul><ul><ul><li>The member needs help knowing how to use the information – e.g. talking to their physician about changing facilities </li></ul></ul>
  • 52. What’s in it for Me? <ul><li>There are so much money to be saved that you can provide incentives and still be ahead. </li></ul>
  • 53. Idea #4 <ul><li>Implement incentives – or disincentives within your benefit plan to encourage employees to become better health care consumers </li></ul><ul><li>Assurant Health – piloting incentive program for 12 procedures </li></ul><ul><ul><li>Pay policyholders $250 - $3000 if they call Patient Care and use high value provider </li></ul></ul>
  • 54.
  • 55. Carrot Strategy <ul><li>Work with your network and payor to identify the most cost effective and highest quality facilities </li></ul><ul><li>Reward employees for using those providers through plan design or by paying them an incentive for choosing them </li></ul>
  • 56. Decisions by Members <ul><li>After receiving and discussing the cost/quality information: </li></ul><ul><ul><li>78% moved to a lower cost provider </li></ul></ul>
  • 57. Better Consumerism… <ul><li>Publicly available data on provider cost and quality </li></ul><ul><li>Employees making decisions based on that data </li></ul><ul><li>Employees understanding the impact of lifestyle choices on their health care and health care costs </li></ul><ul><li>Employees understanding that their decisions impact health care costs for the entire company </li></ul><ul><li>Informed patients and physicians making decisions together </li></ul>
  • 58. It’s a Long Journey <ul><li>What we’ve learned at Patient Care </li></ul><ul><ul><li>Larger deductibles and increased out of pockets costs do make employees more interested in cost comparisons </li></ul></ul><ul><ul><li>Once an elective procedure has been recommended, people typically do not want to change physicians </li></ul></ul><ul><ul><li>The major opportunity to improve purchasing is in the outpatient area </li></ul></ul><ul><ul><li>More interest in cost than quality </li></ul></ul><ul><ul><li>Technology tools provide limited data with which to make a decision </li></ul></ul><ul><ul><li>Choosing more expensive care has to cost consumers more </li></ul></ul>
  • 59. Keys to Success <ul><li>Boost consumers’ health literacy </li></ul><ul><li>Develop a company goal and a strategy to support </li></ul><ul><li>Identify benchmarks to measure success </li></ul><ul><li>Communicate the goals and strategy to employees and dependents </li></ul><ul><li>Measure based on benchmarks </li></ul><ul><li>Communicate results </li></ul>

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