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Alice Rosenblatt
Executive Vice President & Chief Actuary, WellPoint
Private Sector Initiatives to Control Costs
Presentation to Citizens’ Health Care Working Group
May 13, 2005
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About WellPoint
Product Innovation
Network Design
Health Care Management
Pharmacy Management
Leveraging Technology
Agenda
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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 2nd largest Medicare contractor Cover 1.8 million State Sponsored members (Medicaid, SCHIP,
etc.) More than 38,000 associates
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Product InnovationConsumer Driven Health Care
Consumer-CentricProduct
•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
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• User-friendly with context-consistent data and information
• Research more than 150 different medical conditions and procedures
• Compare hospital quality
Product InnovationHealthcare Advisor
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Clinical outcomes Patient safety Hospital reputation Market-specific studies Hospital comments
Product InnovationHealthcare Advisor
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Product InnovationTonik
Developed by and for the “Young Invincibles”
Unique package of benefits
Educates audience
Offers low price points
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Product InnovationBeneFits Plans for Small Businesses
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
84% of groups buying BeneFits plans to date were previously uninsured
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Network DesignProvider Contracting
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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 DesignInformation-Based Networks
Hospitals
Subspecialists
Specialists
Primary Care Physicians
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Network DesignP4P 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
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At Risk withUnhealthy Lifestyles
Single Factor - Multi-Factor
Chronically Ill /Complex Conditions
Early Stage - Late Stage
Healthy, Wanting toRemain 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
Health Care ManagementClinically 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
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70
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85
90
95
2Q00
3Q00
4Q00
1Q01
2Q01
3Q01
4Q01
1Q02
2Q02
3Q02
4Q02
1Q03
Before prior consultation After prior Consultation
CT and MRI Imaging UtilizationAnnual Procedures Per 1000 Members
Radiology Management
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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 ManagementDisease Management Programs
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Health Care ManagementBehavioral Health
Follow-up after psychiatric hospitalization Health management program for depression
and co-existing illness Postpartum depression screening and
education program Anti-depressant medication compliance in
cooperation with PBM
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Pharmacy Management
Clinical / Medical ManagementClinical Business Plan Intervention ProgramsTherapy Management Disease ManagementPatients-At-Risk
Formulary ManagementTreatment GuidelinesP&T CommitteesManufacturer DiscountsPreferred Rx ProgramsPrior Auth CenterGeneric drug initiatives
ReViewPointOnline Reporting
Claims ProcessingClaims KeyingOnline DUR
Network ManagementNational NetworkCustomized Local NetworksMAC Programs
ConsultativeServicesIncentive ProgramsBenefit DesignsInterventionsAccount ManagementSales SupportBusiness StrategiesPharmacy Care Pharmacy Care
ManagementManagement
Mail Service PharmacyIntegrated Mail Service Pharmacy2 Facilities
Specialty PharmacyManagement and distribution of high tech, injectable drugs2 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
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Leveraging Technology
Contact Point
Contact Channels
Constituents
MEMBERMEMBERSHIP SERVICES EMPLOYER BROKER / AGENT
Membership Service
AssociateWeb EDIEET
PROVIDER
IVRWEB PHONEEMAIL FAX POSTALEDI
• 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
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Leveraging TechnologyPhysician Quality & Technology Initiative
E-prescribingOutcomes Research Electronic Med RecordVirtual Visits
BasicConnectivity
ClaimsProcesses
MedicalManagement
Clinical Support
EligibilityMember BenefitsClaim StatusReferralsClaim SubmissionRe-CredentialingProvider Directory Provider Change
Preprocessing Claims Remittance Allowance Inquiry Claims CorrectionPlan AR Aging
ER Notifications Formulary Management Alerts and Reminders Auto-AdjudicationPre-Certification Disease Management
Move from basic administrative services to transactions that support quality care
GOAL:
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BEFORE AFTER
High Handwriting Risk
No Drug Utilization Review
No Formulary Check
No Handwriting Risk
Full Drug Utilization Review
Formulary Check Completed
Prescription Improvement PackagePrescription Improvement Package
Leveraging TechnologyPhysician Quality & Technology Initiative
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Leveraging TechnologyCalRHIO
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