A Provider s Perspective on the Latest Health Care Trends
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1 A Provider s Perspective on the Latest Health Care Trends Orange County Employee Benefits Council Breakfast February 12, 2015 Diane Laird, MPH MHS Chief Strategy Officer Greater Newport Physicians CEO
2 MemorialCare Health System
3 Five Major Trends 1. Consolidation/Alliances 2. Private Exchanges 3. Population Health 4. Consumerism 5. Value
4 Our Existing Business Model Staying Afloat Through Cross-Subsidization Traditional Hospital Cross-Subsidy Commercial Insurance Above-cost pricing Robust fee-for-service volume growth Above Cost Public Payers Steady price growth Only one component of our total business Below Cost 149% Hospital Payment-to-Cost Ratio, Private Payer, % Hospital Payment-to-Cost Ratio, Medicare, 2012 Source: American Hospital Association, Trendwatch Chartbook 2014, available at: Health Care Advisory Board interviews and analysis.
5 Five Major Trends Consolidation/Alliances Private Exchanges Population Health Consumerism Value
6 OC Consolidation/Alliances MemorialCare Health System Bristol Park (2010), Greater Newport Physicians and Nautilus Healthcare Management Group (2012) United Optum MHIPA (2011), Monarch (2011) DaVita HealthCare Partners (2012), Arta (2012) St. Joseph Health System Mission Internal Medical Group (2011), Hoag (2012)
7 MemorialCare Alliances MemorialCare Medical Foundation Imaging Centers Ambulatory Surgery Centers Seaside Health Plan UC Irvine Health Vivity
8 Innovative Alliances JV between Anthem and 7 prominent health systems offered by
9 Consolidation/Alliances Private Exchanges Population Health Consumerism Value
10 Private Exchanges Private exchanges support market shift from defined benefit to defined contribution by offering more choice of plans and coverages
11 Overview PRIVATE EXCHANGES: Continued Cost Pressure $4T 2000 Health Care Costs F A benefits strategy that drives cost efficiency through the healthcare and insurance supply chain Creates new competition among insurers, providers Reduces administrative costs and improves quality through standardization Supports new market entrants enabling competition Healthcare Reform Support healthcare reform compliance and leverage its benefits Streamlines compliance requirements Mitigates 40% excise tax in 2018 Leverages ability to offer non-sponsored employees and retirees support for individual medical plan enrollment Empower Employees Employers Shifting Responsibilities Individuals Offers improved employee benefits appreciation More choice, greater support Can address the needs of all employees and retirees Full and part time employees, pre-medicare and Medicare retirees MERCER
12 Poised for Rapid Growth Employers are moving rapidly to defined contributions contribution and private exchanges In large employers will be offering benefits through private exchanges Private exchange growth has just begun Millions of lives 50 Private Exchange 35+ exchanges carriers participating on third-party exchanges types of products available through private exchanges Private exchanges will be mainly employer-sponsored 65%+ of employees will likely choose different benefits than they have today MERCER
13 Implications for Employees More choice of plans Increased choice of ancillary products (dental, vision, critical illness, etc.) May trade down to cheaper options higher deductibles, narrow/tiered networks
14 Consolidation/Alliances Private Exchanges Population Health Consumerism Value
15 Linking the Triple Aim to Strategy Better health of a population Better patient experience Lower per capita cost
16 Challenges Identifying the population Developing a solid data analysis system/it Establishing a care management team (roles, responsibilities and workflows) Quantifying outcomes beyond cost of care
17 Essential Components Risk based payment Infrastructure IT Experienced care management teams Scale Alignment of provider incentives Engaging the consumer
18 Care Management Risk Stratification and Predictive Modeling High-Cost Patients 5% e.g., poorly controlled CHF With multiple comorbidities Rising-Risk Patients e.g., patient with diabetes 20% And depression At-Risk Patients 40% e.g., pre-diabetic patient Healthy Patients 35% e.g., patient with no disease diagnosis
19 Coordinated Care Wellness & Prevention Health Coaching Preventive Screenings Vaccination Outreach Ambulatory Care Management 24/7 Telephone Advice Nurse Primary Care Case Mgmt. Specialized Clinics Anti-coagulation Discharge Clinic ACTIVE Diabetes Back pain Specialty Care Management Complex & High Risk Care Management Virtual Care Conference Hospital Care Management 24/7 Hospitalists After hours RN Triage Repatriation/Concurrent Review Care Transitions Disease Management Programs COPD CHF Diabetes Palliative Care Medication Reconciliation
20 GNP - Case Study ACTIVE Diabetes Results: HbA1C Right Care Initiative Award
21 Caring for our Own Employees The Good Life Linking Benefits to Behavior Chronic Condition Management In Balance
22 First Year Results - In Balance Participants with diabetes & hypertension 84% participant retention 92% compliance with medications BMI: 50% achieved or maintained BMI < 25 Diabetes: average HbA1c improvement of 10% Hypertension: average BP reduction of 20/13
23 Per Capita Costs National Average Health Care Spending Rate Increase over 5 years = 8.5% MemorialCare Average Health Care Spending Rate Increase over 5 years = 3.5%
24 Consolidation/Alliances Private Exchanges Population Health Consumerism Value
25 Employers Driving Consumerism High deductible health plans Wellness initiatives Steerage and incentives Price transparency tools
26 Patients vs. Consumers Consumers are Engaged Physician recommendation & verification Online tools & social media Personal experience & comparison shopping Value = access + service delivery + outcomes + cost INFORMED & EMPOWERED
27 Consolidation/Alliances Private Exchanges Population Health Consumerism Value
28 Attributes for Success Clinical & Service Quality Geographic Reach Cost
29 Quality Standards of Excellence 4 Star Elite Status Eight consecutive years - Greater Newport Physicians MemorialCare Medical Group Greater Newport Physicians Centers for Medicare and Medicaid Services (CMS) Medicare Five- Star Quality Measures MemorialCare Medical Group - Long Beach Memorial Orange Coast Memorial Saddleback Memorial Receive A Hospital Safety Score Long Beach Memorial Orange Coast Memorial Saddleback Memorial Ranked as High Performing in multiple specialties by US News & World Report.
30 Geographic Reach
31 Cost MemorialCare Controllable Expense per Discharge
32 Questions?
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