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Alice Rosenblatt Executive Vice President & Chief Actuary, WellPoint Private Sector Initiatives to Control Costs Presentation to Citizens’ Health Care.

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Presentation on theme: "Alice Rosenblatt Executive Vice President & Chief Actuary, WellPoint Private Sector Initiatives to Control Costs Presentation to Citizens’ Health Care."— Presentation transcript:

1 Alice Rosenblatt Executive Vice President & Chief Actuary, WellPoint Private Sector Initiatives to Control Costs Presentation to Citizens’ Health Care Working Group May 13, 2005

2 2 About WellPoint Product Innovation Network Design Health Care Management Pharmacy Management Leveraging Technology Agenda

3 3 About WellPoint  Leading health benefits company in the nation  Approximately 28 million medical members –Blue plans in 13 states: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio, Virginia and Wisconsin –UniCare across the country, including significant presence in Illinois, Texas, and Massachusetts –HealthLink in Missouri and six other states: Arkansas, Illinois, Indiana, Iowa, Kentucky and West Virginia  Major specialty businesses: pharmacy, dental, vision, life/disability, behavioral health, EAP, workers’ compensation, state-sponsored  Nation’s 2 nd largest Medicare contractor  Cover 1.8 million State Sponsored members (Medicaid, SCHIP, etc.)  More than 38,000 associates

4 4 Product Innovation Consumer Driven Health Care Consumer-Centric Product Typically a high- deductible PPO ($1,500 - $4,000) 100% covered preventive care Health Reimbursement Account (HRA) Health Savings Account (HSA) Complemented by Flexible Spending Account (FSA) Web based front end Benefits integration framework Deep and broad Choice-driven eHealth tools eService tools Provider directories Quality guidance Five key elements comprise the framework for the most common product offerings Consumer Decision Support Tools Technology Platform Flexible Provider Network Cost-share Funding Mechanisms Product and Plan Design

5 5 User-friendly with context-consistent data and information Research more than 150 different medical conditions and procedures Compare hospital quality Product Innovation Healthcare Advisor

6 6  Clinical outcomes  Patient safety  Hospital reputation  Market-specific studies  Hospital comments Product Innovation Healthcare Advisor

7 7 Product Innovation Tonik Developed by and for the “Young Invincibles”  Unique package of benefits  Educates audience  Offers low price points

8 8 Product Innovation BeneFits Plans for Small Businesses u Makes it easier for small businesses to offer coverage to their employees –employee participation requirements reduced to 60% –employer contribution reduced to 25% or $50 –coverage options for part-time employees u 84% of groups buying BeneFits plans to date were previously uninsured

9 9 Network Design Provider Contracting

10 10 Segmented Networks Centers of Excellence Narrow network for high cost procedures –CABG –Transplant –Bariatric Surgery Smaller, more efficient quality networks –Select HMO –Select PPO Using information to recognize hospitals for quality of care, better outcomes and efficiency Network Design Information-Based Networks Hospitals Subspecialists Specialists Primary Care Physicians

11 11 Network Design P4P Programs at WellPoint Partnerships with physicians and hospitals on quality incentive programs that include PPO and HMO products, and Medicaid Clinical Outcomes Evidence-based medical procedures Generic Prescribing Rates Technology & streamlined administrative processes Patient Satisfaction Focused on primary care physicians. Typical major components: PCP Programs Clinical Outcomes Evidence-based medical procedures Generic Prescribing Rates Technology & streamlined administrative processes Patient Satisfaction Focused on specialty care physicians. Early initiatives in: Ob/Gyn, Cardiology, Orthopedics. Measures similar to PCP programs: Specialist Programs Patient Safety Clinical Outcomes Patient Satisfaction Focused on acute care hospital, typically full service facilities. Hospital programs typically have the following components: Hospital Programs

12 12 At Risk with Unhealthy Lifestyles Single Factor - Multi-Factor Chronically Ill / Complex Conditions Early Stage - Late Stage Healthy, Wanting to Remain Healthy Wellness - Fitness Manage DiseaseImprove HealthSustain Wellness Data Mining, Predictive Modeling Integrated Care Models/Care Counselors Disease Management Hospital and Physician Quality Programs/Pay For Performance New Technologies and Therapeutics Processes Specialty Pharmacy Programs Health Care Management

13 Health Care Management Clinically Appropriate, Cost-Effective Imaging  Pre-Authorization of Advanced Imaging –MRI, CT, PET and Nuclear Stress  Redirects Imaging to most clinically appropriate modality  Steerage from higher cost to lower cost site of service, e.g., benefit designs in consumer directed plans  Criteria developed in collaboration with American College of Radiology CT and MRI Imaging Utilization Annual Procedures Per 1000 Members Radiology Management 13

14 14 Midwest Care Counselor  Prospective controlled study of 12,000 members –Control group: 4,134 –Intervention group: 7,797  Multiple chronic diseases: Average cost per year $24,000  Savings of 14% – or $3,500 per year – for members enrolled in program  ROI of 4:1 Health Management Corporation (HMC)  ASO groups who purchased DM (study group of 76,000 members) and those who did not (control)  Chronic diseases (diabetes, asthma, coronary artery disease)  Savings of 11% for those enrolled in the program  ROI of 2.8:1 Sources: Cousins, Liu, Disease Management, Vol. 6, 2003. Harvard Blue Works Award, Program Description. Health Care Management Disease Management Programs

15 15 Health Care Management Behavioral Health u Follow-up after psychiatric hospitalization u Health management program for depression and co-existing illness u Postpartum depression screening and education program u Anti-depressant medication compliance in cooperation with PBM

16 16 Pharmacy Management Clinical / Medical Management Clinical Business Plan Intervention Programs Therapy Management Disease Management Patients-At-Risk Formulary Management Treatment Guidelines P&T Committees Manufacturer Discounts Preferred Rx Programs Prior Auth Center Generic drug initiatives ReViewPoint Online Reporting Claims Processing Claims Keying Online DUR Network Management National Network Customized Local Networks MAC Programs Consultative Services Incentive Programs Benefit Designs Interventions Account Management Sales Support Business Strategies Pharmacy Care Management Mail Service Pharmacy Integrated Mail Service Pharmacy 2 Facilities Specialty Pharmacy Management and distribution of high tech, injectable drugs 2 Facilities  4th largest PBM  Over 336M scripts in 2004  Full spectrum of PBM services  Innovative programs to manage drug trend  Clinical programs: outcomes-focused, patient-centric

17 17 Leveraging Technology Contact Point Contact Channels Constituents MEMBERMEMBERSHIP SERVICESEMPLOYERBROKER / AGENT Membership Service Associate Web EDI EET PROVIDER IVRWEB PHONE EMAILFAXPOSTALEDI Member Self-service Employer Access AgentFinder / AgentConnect Provider Finder Auto-adjudication rates Standard plan designs Enhanced workflow management Associate training Provider connectivity (EDI) Consistent claim edits Provider education / training Process around 600 million medical and pharmacy claims per year Benefits, eligibility & claims status inquiries account for about 85% of customer service call volume

18 18 Leveraging Technology Physician Quality & Technology Initiative E-prescribing Outcomes Research Electronic Med Record Virtual Visits Basic Connectivity Claims Processes Medical Management Clinical Support Eligibility Member Benefits Claim Status Referrals Claim Submission Re-Credentialing Provider Directory Provider Change Preprocessing Claims Remittance Allowance Inquiry Claims Correction Plan AR Aging ER Notifications Formulary Management Alerts and Reminders Auto-Adjudication Pre-Certification Disease Management Move from basic administrative services to transactions that support quality care GOAL:

19 19 BEFORE AFTER High Handwriting Risk No Drug Utilization Review No Formulary Check No Handwriting Risk Full Drug Utilization Review Formulary Check Completed Prescription Improvement Package Leveraging Technology Physician Quality & Technology Initiative

20 20 Leveraging Technology CalRHIO  WellPoint Foundation made $1M grant to support California Regional Health Information Organization  CalRHIO Goal: build a statewide data exchange –Support use of IT and creation of a secure health information data exchange system to improve safety, quality, and efficiency of health care –Enable healthcare providers to use IT to securely exchange vital patient information –Identify legislation and regulation necessary for statewide data sharing –Ensure California’s data exchange projects are consistent with national technology platforms and networks

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