2 Per Capita Total Current Health Care Expenditures, U.S. and Selected Countries, 2009 ^OECD...

ALASKACARE HEALTH PLANS

STATE OF REFORMOCTOBER 4, 2013

State of Reform - October 4, 2013 2

HEALTH CARE SPENDING: US

Per Capita Total Current Health Care Expenditures, U.S. and Selected Countries, 2009

^OECD estimate.*Break in series.Notes: Amounts in U.S.$ Purchasing Power Parity, see http://www.oecd.org/std/ppp; includes only countries over $2,500. OECD defines Total Current Expenditures on Health as the sum of expenditures on personal health care, preventive and public health services, and health administration and health insurance; it excludes investment. Source: Organisation for Economic Co-operation and Development. “OECD Health Data: Health Expenditures and Financing”, OECD Health Statistics

http://www.oecd.org/std/ppp


HEALTH CARE SPENDING: US

Average Annual Growth Rates for Health Spending and GDP Per Capita

9.6%

6.8%

4.3%

2.9%

5.7%

4.1%

11.8%

9.8%

5.4% 5.6%

8.1%

5.2%

0%

2%

4%

6%

8%

10%

12%

14%

1970s 1980s 1990s 2000-2010 1970-2011 2012-2021

GDP Per Capita NHE Per Capita

Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.(1) NHE stands for National Health Expenditures


STATE HEALTH CARE SPENDING

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$1,200.00

$1,400.00

$1,600.00

$1,800.00

$2,000.00

$2,200.00Union

JRS

Corrections

Medicaid

Workers Comp

TRS

PERS

AlaskaCare

State of Reform - October 4, 2013

ALASKACARE GOALS

Provide high-quality, high-value, fiscally sustainable care to AlaskaCare members through: • Increasing member engagement• Supporting evidence-based medicine and

promoting data-driven decision making• Collaborating with providers to transform the

Alaska health care market

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STATE COSTS FOR ACTIVE EMPLOYEE HEALTH INSURANCE

• State employee health insurance costs have more than doubled in the past decade, from $117mm in 2003 to $256mm in 2012.

• The population-adjusted increase is approximately 7%/year.


STATE OF ALASKAEMPLOYEE HEALTH INSURANCE

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AlaskaCare Health Plan Union Health TrustsEmployees: 6,700* Employees: 10,500*

AVTEC General Government (GGU/ASEA)

Confidential Employees Labor, Trades and Crafts

Correctional Officers Public Safety Employees Association

Marine Engineers Masters, Mates & Pilots

Mt. Edgecumbe Teachers

Supervisory

Inland Boatmen’s Union

Exempt/Partially Exempt Employees

*Population counts are approximate


BENEFIT CREDIT

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• Amount State contributes per employee per month

• Subject to negotiations

• Historically based on AlaskaCare premiums and plan experience

• FY 14 benefit credit:– $1,389 per month

– $16,668 per year (medical & dental)

FY 01 FY 14$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$525

$1,389

Benefit Credit


US EMPLOYER & EMPLOYEE CONTRIBUTIONS

9

Private Employers Public Employers AlaskaCare (FY13) $0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$4,495 $3,368

$10,704 $12,381

$15,960

Worker Contribution (Yearly) Employer Contribution (Yearly)Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2012.

Worker and Employer Premium Contributions for Family Coverage / Economy Plans (2012)

Participants in the economy plan don’t make

any contribution.


PLAN DEMOGRAPHICS: ACTIVE

Demographic information:• Average number of members (plus dependents) is around 17,000 • Almost even distribution of men and women• Average age is 35 • 0.18% of our membership (31 people) accounted for 14% of the cost of medical claims paid

out• Highly prevalent conditions are:

– Psychiatric disorders– Metabolic disorders– Gastrointestinal disorders– Diabetes


ACTIVE HEALTH PLAN CHALLENGES

• Recent plan experience: spike in high-cost claimants (up approximately 20% in 2012)

• State of Alaska culture• Traditional plan structure• Geography/dispersed population• Network development/access• Cost of services


COSTS FOR RETIREE HEALTH INSURANCE

Retiree health insurance costs have more than doubled in the past decade, from $210mm in 2003 to $451mm in 2012.


BENEFITS: PERS/TRS

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

FY08

FY09

FY10

FY11

FY12

FY13

Propose

d FY14

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

PERS/TRS GF State Assistance (SB125)

Projected GF State Assistance (Level Dollar)


PROJECTED RETIREMENT SYSTEM GROWTH

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 20300

10,000

20,000

30,000

40,000

50,000

60,000

70,000


PLAN DEMOGRAPHICS: RETIREE

Demographic information:• Average number of members (plus dependents) is around 65,000• Slightly higher distribution of women (54%)• Average age is 63• 0.20% of our membership (129 people) accounted for 17.5% of the cost of medical claims

paid out. • Highly prevalent conditions are:

– Degenerative ortho – Diabetes– Metabolic disorders– Hypertension– Gastrointestinal disorders– Coronary artery related conditions– Psychological disorders


RETIREE PLAN CHALLENGES

• Lack of agility/flexibility (diminishment clause)

• Outdated plan structure and benefits

• Dispersed population• Plan demographics• Network development/access• Cost of services

Plan Provisions

Deductible $150 individual$450 family

Coinsurance 80%

Annual Out-of-PocketMaximum

$800 per person after deductible

Lifetime Maximum $2,000,000$5,000 annual restoration

Preventive Care Not covered

Dependents Covered up to age 19, or age 23 if a student


SOLUTIONS


ALASKACARE GOALS

Provide high-quality, high-value, fiscally sustainable care to AlaskaCare members through: • Increasing member engagement• Supporting evidence-based medicine and

promoting data-driven decision making• Collaborating with providers to transform the

Alaska health care market

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NEW PARTNERS: AETNA & MODAHEALTH

We have new health care partners.

As of January 1, 2014 we’ll be transitioning to Aetna, ActiveHealth Management and ModaHealth.

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INCREASE MEMBER ENGAGEMENT: WELLNESSThe aim: move the population to the left


INCREASE MEMBER ENGAGEMENT:DISEASE MANAGEMENT• Disease Management Conditions


INCREASED MEMBER ENGAGEMENT: CDHP (ACTIVE)

• In 2006, the State of Indiana implemented a Consumer-Driven Health Plan (CDHP)– Individual deductible $2,500, family deductible $5,000– State contributed 45% of deductible to Health Savings Account

• In 2007, a second CDHP plan was implemented with lower deductibles but higher premiums

• Indiana saved money: CHDP 2010 savings were 10.7% or $17-$23 million• Employees saved money

– 2010 employees saved $7-$10 million– Unused funds were $30 million– Average of $2,000 per employee

• 2012 CDHP participation above 90%• CDHP participants did not put off or avoid using important health care

services


INCREASED MEMBER ENGAGEMENT: CONCIERGE SERVICES

• A dedicated concierge team - State of Alaska members will have a single point of contact for health care needs

• What is a concierge: A go-to, real, live person who is on-call and on-chat to answer any real-world questions from our members

• Concierges: – Take the time to guide members through their health care journeys– Empower members with tools and resources – Are uniquely equipped with member call history, preferences, clinical alerts and

detailed personal information at hand– Provide a warm transfer if a transfer is necessary

• Personalized guidance and advocacy


INCREASED MEMBER ENGAGEMENT: ITRIAGE

1 iTriagehealth.com2 January, 2012 edition. Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies, including Aetna Life Insurance Company and its affiliates (Aetna). Apple, iPad, iPod and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. ©2012 Aetna Inc.


EVIDENCE-BASED MEDICINE: PLAN STRUCTURE

• Align plan structure around best practices– Expand pre-certification list– Adopt Aetna’s clinical policy bulletins– Rigorous review of our plan provisions– Consider plan design changes to support evidence

based medicine: e.g. three-tier formulary, etc.• Use concierge services as opportunity for decision-

support


EVIDENCE-BASED MEDICINE: CAREENGINE

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Assesses health opportunities: continuous data-driven evidence-based medicine


EVIDENCE-BASED MEDICINE: DATA-DRIVEN DECISION-MAKING

• Identify trends early and address them, before they become cost-drivers• Uncover “hidden cost drivers” that can address the root cause of a problem


COLLABORATE WITH PROVIDERS TO TRANSFORM MARKET

Network Strategy and Priorities

o Improve access to contracting physicians and providers

o Improve predictability and performance (cost) of contracts

o Address egregious charges/rates for targeted high volume procedureso Collaborate with Aetna to identify and engage delivery system partners

committed to designing transformative solutions

o Encourage delivery system investment in integrated care delivery

Comprehensive care models such as PCMH and ACOs

Procedure-based integration opportunities such as bundled payments


THINGS WE’RE WATCHING

• Onsite clinics (State of Montana, HCCMCA)• Centers of Excellence• Narrow networks• Reference pricing (CalPERS)• Private exchanges• Consumerism and transparency tools• Impact of public plans on health care market


ANY QUESTIONS?

Retirement and Benefits 6th Floor State Office Building,P.O. Box 110203Juneau, AK 99811-0203

DRB Call Centers:Outside Juneau: (800) 821-2251Juneau: (907) 465-4460Office Hours of Operation: 8 a.m. to 5 p.m. AKST

DOA Commissioner’s Office:Juneau: (907) 465-2200Anchorage: (907) 269-6293

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www.AlaskaCare.govState of Alaska, Division of

2 Per Capita Total Current Health Care Expenditures, U.S. and Selected Countries, 2009 ^OECD...

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