Health Plan Update Fort Worth City Council Presentation

June 23, 2020Brian R. Dickerson

Director of Human Resources

Guiding Principles

Finding the best care for our members

Better monitoring of our employees’ health in order to reduce emergency room visits and inpatient days

Finding physicians that take personal responsibility for the care of their patients

Improving the health of our members

Maintaining a sustainable health plan

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Best Care

High Quality Physicians

Reduced Emergency Room Visits

Better Wellness

Sustainable Health Plan

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HEALTH CENTERS

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Health Center Update Continue to see success Increase despite loss of Fire employees, retirees

and dependents – 18% of plan All providers remain in place since day-one Closed Arlington satellite location due to low usage Opening new satellite location in Bedford Moving Lake Worth location to newly constructed

THR building – 4625 Boat Club Rd (November) Looking to relocate Huguley Health Center to

southwest Fort Worth – high employee density area

Adding diabetes educator to Moncrief location Added virtual visit capability at Health Centers

12540

12019

11700

11800

11900

12000

12100

12200

12300

12400

12500

12600

2019 2018

Total Health Center/Satellite Visits

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Carla Podgurecki, M.D.

Stephen Bojan,R.N., A.G.P.C.N.P.-B.C.

Wondwessen Kebede,R.N., F.N.P.-B.C.

Juliette Fumtim, M.D.

Sherrie Pierce, D.N.P., R.N., F.N.P.-C.

Health Center Providers

David L Reeve M.D.

Satellite Centers

Hoffman Family Practice Associates - Burleson, Texas

Family Medical Center Southwest - Fort Worth, Texas

Cornerstone Family and Sports - Keller, Texas

Texas Health Family Care – Weatherford & Willow Park, Texas

Marina da Silva Pinto Coulter, M.D. Fiona Atitso, M.D.

Roger L. Tolar, M.D. Mary P. Van Hal, M.D.

John G. Hoffman, M.D Destiny F. Smith, R.N., F.N.P.-C.

Patrick A. Conway, D.O Alfred T. Hulse, D.O.

Downtown FW Lake Worth Huguley

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MEDICAL/PHAMACY CLAIMS

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Current Health Plan PerformanceThrough March 2020

ACTIVES + NON-MEDICARE RETIREES

Rx Claims

Generic dispensing rate 86.2%

Specialty percentage – 40%

Top disease category Diabetes

Special programs Free diabetes medication and

supplies Free weight-loss medications

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Current Health Plan PerformanceThrough March 2020

ACTIVES NON-MEDICARE RETIREES

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Current Health Plan PerformanceThrough March 2020

ACTIVES + NON-MEDICARE RETIREES

Medical Claims Top clinical condition –

diabetes 16.5 percent of adults on plan 32.8 percent of medical spend

Number of hospital days is down 15.2 percent

Emergency Room visits returned to high levels

Leading cost drivers Employees – catastrophic claims Retirees – in-patient/out-patient

procedures

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Current Health Plan Performance Through March 2020

ACTIVES NON-MEDICARE RETIREES

Snapshot of Non-Medicare Retiree Health

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Review of retiree claims indicated Spouses are way up in cost –

67% increase ER usage is way up Surgery complications are up Costs are significantly greater

for those not using the Health Centers

Diabetes, Coronary Artery Disease, and Obesity are all rising

Need better engagement

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CONTRIBUTIONS AND PREMIUMS

Contributions and Premiums Actives/Employees and dependents continue to see decreasing costs

• No increase in City contribution for 2021• No increase in premiums to employees for 2021• Projecting FY 2020 $1.2M surplus

Pre-65 retirees are having a very difficult year • On a year-over-year basis claims for three of the first six months October,

November and March were up 37%, 47% and 52%, respectively• Analysis of claims indicates that most of the increase is due to an increased

inpatient and outpatient costs -• None of the increase is due to prescription costs

• Projections are that the retirees will run a deficit for FYE2020 of $1.7M• Contributions/premium increases are going to be needed for FY2021

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Contributions and Premiums Based on traditional costs projections and trending

• A projected increase in City contribution of 13.1 percent• Retiree premium would triple on the Health Center Plan from $50/month to

$150/month on the Health Center Plan, • Plus a three percent increase to spouses and family contributions for all plans

(Consumer Choice/HSA plan would remain at $0 premium for retiree only coverage)

Inpatient and outpatient costs increases such as what has occurred are typically not seen as on-going • Recommending increase of 6.12 percent in City Contribution• Retiree premiums would increase from $50/month to $100/month on Health Center

Plan, with three percent increase to spouses and families• Maintain $0 premium for retiree only coverage on Consumer Choice/HSA plan

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CHALLENGES OF SUSTAINABILITY

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Chapter 175, Texas Local Government Code

• “Same level of coverage” required for retirees

Separated funding of retiree and employee plans in 2017

• Make active cost more competitive with other employers• Retirees more responsible for cost of their healthcare

Plan design changes not a real solution if it is to impact one group, causes subsidization of the other group – leaves contributions and participant premium as the remaining lever

Complexity of Two Groups

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High quality is related to lower costs

Not necessarily on a procedure by procedure basis but on total cost

Shorter recovery, elimination of unnecessary procedures, avoidance of

readmissions, quality of referrals

Quality and Cost - High cost is not related to high quality

North Texas is the most expensive medical market in the countryTexas Teacher Retirement System spends more in the North Texas market than ALL of

the rest of the state – ADDED TOGETHER

The Healthcare Market

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3.2% of plan members drove 63% of claims

Claims

38% of high cost claimants for 2019

were high cost claimants in 2018 and WILL BE high cost claimants for

2020

High Costs Are they receiving the best care

or just a lot of care? What is needed Early engagement before

claimants are high cost is required

Help in navigating health system to ensure against unnecessary procedures

Information to ensure members have the opportunity to receive the best care

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Thirty percent of primary care, specialty and outpatient surgical

procedures were not performed by high quality physicians

Forty percent of inpatient surgeons would not be

recommended

Getting the right care, at the right time by the right person should be the goal

Using quality measures such as readmission rates, surgical site infection rates, average length of stay, and other relevant outcomes within each procedure or condition, adjusted by patient risk factors

Ensuring Quality of Care

Stopping the Cycle

Traditional tools for addressing costs• Increase premiums• Lower benefits• Both

Other ways we have tried to addressed costs• Direct contracts – Southwestern Health Resources• Plan design steerage (Premium Designated Doctors,

Airrosti, Surgery Plus)• Health improvement (Weight Loss Programs,

Blue Zone, etc.)• Providing resources – (Alight)

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Need for a new platform to administer care

New Health Administration Platform

Consolidation of communication to members through one vendor• Health plan TPA (UHC), benefits staff and health concierge (Alight)

Improve communication with retirees Increase engagement with members, significantly, with a focus on the

current and future high cost claimants

Targets communications and services at an individual level with early intervention

Demonstrated ability to keep claims costs low• Through ensuring quality of care, not restriction of care

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RECOMMENDED NEW HEALTH ADMINISTRATION PLATFORM AND VENDORS

New Health Administration Platform Requires moving away from the carrier model (UHC, Aetna, etc)

Partnering with a Third Party Administrator and a Care Advocacy/Coordination provider• Third Party Administrator will provide the network, adjudicate claims, • Care Advocacy/Coordinator centralizes ALL communication to plan members

• Has access to all the member’s information (claims, preferences, etc.) • Can address concerns with the member and offer solutions• Ability to consult with providers

Proven model used by many employers including American Airlines, Disney, Fidelity, Lowes, State Farm, Comcast and Facebook

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Third Party Administrator

• Meritain Health

• Division of Aetna

• Access to Aetna’s broadest network

• Disruption to be no more than 3%

Care Advocacy/Coordination Vendor

• Accolade

• 60% engagement of members and 84% engagement of high cost claimants

• Savings projection over next three years over $24M

• 40 percent of fees at risk based on ROI, engagement and customer satisfaction

New model will reduce administration costs by nearly $1M/year

Vendor Recommendations

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New Programs for 2021

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• Peer reviewed and validated – including American Diabetes Association

First and only medical treatment clinically

proven to reverse Type 2 diabetes

• 94% patients eliminated or reduced insulin• 90% of patients retained after one year• 0% of patients progress to Rx YoY

Stops disease progression/results

• Full point reduction of A1c• 5% weight loss• 40% cost reduction in medication

100% of fees at risk –must obtain the

following after six months

New Diabetes Program

Second Opinion Service

Number of these• 2nd MD, Best Doctors, others

Provide direct access to leading specialist for personalized second opinions from prestigious and recognized institutions• Massachusetts General, John Hopkins, Dana-Farber Cancer

Institute, Mayo Clinic, UCLA Health, UCSF, Boston’s Children, Hospital for Special Surgery and more

Why?• To ensure quality of care

30% of healthcare costs are spent on unnecessary & duplicative procedures

70% of treatment plans are changed as a result of a second opinion

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Wellness

Wellness Review

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Continuously Participating Employees2 years active: 2016 and 2017

Increases in PCP visits and decreases in ER visits means employees engaged in 2016 & 2017 are making better place of treatment decisions

Wellness Review

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Continuously Participating Employees3 years active: 2016 through 2018

Employees engaged in 2016 & 2017 saw further improvements in 2018 regarding: lower risk scores, lower Paid PEPM, fewer ER visits and less trips to the PCP. Opportunities to improve Premium Provider engagement and catastrophic paid.

Wellness Review

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Continuously Participating Employees4 years active: 2016 through 2019

Employees who stay consistently engaged with the wellness program for multiple years show stable results. Fewer catastrophic cases are found in this population; cases that remain are more sever based on inpatient admissions. PCP visits have decreased but remain higher than target (1.8-2.0)

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Bottom Line

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New health administration platform to improve sustainability of plan

Retiree premiums will increase in 2021(Consumer Choice Plan retiree only coverage will continue at $0 cost)

Employee premiums will remain the same for 2021

Focus is on improvements to plan benefits

Changes to plans over the last four-years continue to work

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Questions

COVID-19 Fund Impact2020 YTD Case Summary Paid Per Case

37 Confirmed Cases

31 Individuals with a positive test result $52,338 $1,6886 Individuals with a definitive diagnosis $52,148 $8,691

1 Probable Cases

0 Individuals with a presumptive diagnosis N/A N/A1 Individuals with a likely diagnosis $19,921 $19,921

8 Possible Cases

3 Individuals with a related diagnosis $19,463 6,4885 Individuals with a related diagnosis – inpatient setting $59,398 $11,880

Testing Summary

31 Positive Result

30 Individuals with a positive viral test result1 Individuals with a positive antibody result

365 Negative Result

329 Individuals with a negative viral test result36 Individuals with a negative antibody result

102 Unknown Result

86 Individuals with unknown or inconclusive viral test result16 Individuals with an unknown or inconclusive antibody test result 35

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As of the end of the most recent quarter demonstrated that the firefighter plan is challenged

• The Cigna rental network used by firefighters 5%-6% worse from a discount perspective than the current UHC network that the City uses

• At THR facilities, this delta is exacerbated into multiples of that number based on the City specific deal that the City has with THR –THR is largest volume of spend for the 440

• The 440’s admin fee is 35% higher on a per employee per month basis than through UHC

Most of the issues are structural in

nature:

• The 440’s per employee/per month claims spend is 74% higher than the City’s

• Pharmacy costs on a per member/per month (PMPM) basis are higher for the City - $91 PMPM for the 440 vs. $121.81 PMPM for the City, but 440 PMPM costs are up over 20% from when they were with the City

• Specialty drugs make up 67% of costs

These structural differences lead to

poorer claims results

Firefighter Health Plan

Group Health Forecast FY 2020

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Revenue Actives Retirees Total Other Revenue $3,247,504 $1,000,000 $4,247,504Cost Recoupment from 440 $1,696,954 $465,674 $2,162,628Employer $59,898,551 $24,517,643 $84,416,194Employee/Retiree $19,105,014 $7,124,031 $26,229,045

Total $83,948,023 $33,107,348 $117,055,371Expenses Actives Retirees Total

Claims $61,516,390 $19,680,552 $81,196,942Admin $4,224,656 $925,580 $5,150,236Stop-Loss Premiums $352,193 $65,252 $417,445Salary and Benefits $1,031,182 $124,460 $1,155,642General Operating Other $1,923,349 $8,636 $1,931,985Medicare Advantage Premiums $0 $9,328,925 $9,328,925Transfer to 440 $13,692,690 $4,731,359 $18,424,049

Total $82,740,460 $34,864,764 $117,605,224Surplus/(Deficit) $1,207,563 -$1,757,416 -$549,853

Group Health Forecast FY 2021

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Revenue Actives Retirees TotalOther Revenue $3,180,000 $1,000,000 $4,180,000Cost Recoupment from 440 $1,396,954 $479,644 $1,876,598Employer $51,788,332 $25,455,891 $77,244,223Employee/Retiree $15,274,487 $6,153,181 $21,427,668

Total $71,639,773 $33,088,716 $104,728,489Expenses Actives Retirees Total

Claims $63,506,393 $20,464,210 $83,970,603Administration $4,205,131 $935,337 $5,140,468Stop Loss Premium $387,412 $71,777 $459,189Salary and Benefits $1,082,507 $134,650 $1,217,157General Operating Other $1,906,220 $8,825 $1,915,045

Medicare Advantage Premium $0 $9,320,387 $9,320,387Transfer to Fire 440 $3,639,333 $3,639,333

Total $71,087,663 $34,574,519 $105,662,182Surplus/Deficit $552,110 -$1,485,802 -$933,692

Assumptions• No Health

Insurance Fee (HIF) on Medicare Advantage - $1M for 2019

• No premium or contribution increase to Actives

• Retirees 6.12% increase from City & Retiree only increase by $50 and 3% for family rates