1© 2018. All Rights Reserved.

www.openminds.com15 Lincoln Square, Gettysburg, Pennsylvania 17325

Phone: 717-334-1329 - Email: info@openminds.com

#OMInnovation

The 2018 OPEN MINDS Strategy & Innovation InstituteJune 6, 2018 | 9:45-11:00 am

Steven E. Ramsland, Ed.D., Advisory Board, OPEN MINDS

William G. Wood, MD, Former National Medical Director, Medical Management, Behavioral Health, Government Business Division, Anthem, Inc.

New Contract Development: Marketing to Payers & Other Stakeholders

2© 2018. All Rights Reserved.

I. Why Marketing To Managed Care Matters

II. Best Practices In Managed Care Marketing

III. Thought Leader Discussion with Dr. William Wood

IV. Questions & Discussion

Agenda

Why Marketing To Managed Care Matters

4© 2018. All Rights Reserved.

Health Plan Roles Are Shifting

• Shift from carve-out by

specialty to carve-out by

consumer type – the

vertical HMO

• Moving care coordination

and population

management role to

provider organizations –

often with ‘gain sharing’

relationship that shifts

many traditional system

roles

• Acquiring care delivery

capacity

• Population health

management

• Medical necessity and

clinical appropriateness

criteria with preferred

treatment protocols

• Decision on specific

service provider and

professionals in system

• Professional and provider

organization performance

standards

• Payment models and rates

for services, drugs, and

devices

Tra

dit

ion

al

Syst

em

Ro

les

Exp

an

din

g S

yste

m R

ole

s

5© 2018. All Rights Reserved.

5% of U.S.

population

account for half

(49%) of health

care spending1

50% of U.S.

population

account for

only 3% of

health care

spending1

Payers Focused On “Superutilizer” Care Coordination For Individuals With Complex & Comorbid Conditions

$43,212

average expenditure per

person per year1

$253

average expenditure

per person per year1

“Superutilizers”

Shorthand term for

people with complex

physical health,

behavioral health,

and social issues who

have high rates of

utilization of

emergency room and

hospital services2

6© 2018. All Rights Reserved.

The Effect Of Mental Illness On Health Care Spending

ConditionNo Behavioral

Health Disorder

With Mental

Illness

With Mental

Illness &

Addiction

Asthma/COPD $8,000 $14,081 $24,598

Congestive Heart

Failure$9,488 $15,257 $24,927

Coronary Heart

Disease$8,788 $15,430 $24,443

Diabetes $9,498 $16,267 $36,730

Hypertension $15,691 $24,693 $35,840

For Consumers with Co-Occurring Mental Illness & Chronic Health

Conditions, Annual Medicaid Costs Increase By 200%+

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Strategic Implications For Health Plans

Margin squeeze due to medical loss ratio requirements

Increased integration

Repositioning as marketing, technology, and analytics organizations

Search for value

Shift from “providers as vendors” to “providers as partners”

– The “narrow network” phenomenon

8© 2018. All Rights Reserved.

• Assuming care

coordination and

population

management role –

often with ‘gain

sharing’ relationship

• Addition of many

population

management

functions

traditionally provided

by health plans

• Acquisition by health

plans

Provider Roles Are Shifting

Delivery of consumer

treatment

Tra

dit

ion

al

Syst

em

Ro

les

Ex

pan

din

g S

yste

m R

ole

s

9© 2018. All Rights Reserved.

Strategic Implications For Service Provider Organizations

Payers are developing more value-based contracts with provider

organizations and creating ‘narrow networks’

Technology requirements (of P4P, of compliance, of consumer

preference) increases need for economies of scale for investment

Role of marketing increasing

Best Practices In Managed Care Marketing

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Building Successful Partnerships With Managed Care – Improving Your Positioning

Gaining ‘exclusivity’ within a payer system

Being ‘preferred’ within a payer network

The fee-for-service payer network contract

12© 2018. All Rights Reserved.

The Fee-For-Service Payer Network Contract

Most fundamental of all business relationships for provider organizations in health and

human services

Often need to begin with privileging professionals individually, rather than being

privileged at the organization level

Difficult market position but often necessary

No assurance of volume and no likelihood of referrals

Often ‘commodity’ positioning

13© 2018. All Rights Reserved.

The Goal: Preferred Or Exclusive

Being ‘Preferred’ Within A Payer Network

Having preferential referrals due

to some market differentiation

Need a demonstrable value

proposition – almost always

involving P4P or value-based

payment

Gaining ‘Exclusivity’ Within A Payer System

Having a financial relationship

(most often with significant

financial risk) that gives you

exclusivity by geography and/or

consumer type

Your organization is the ‘narrow

network’

14© 2018. All Rights Reserved.

Steps To Building Successful Partnerships With Managed Care Organizations

1. Market mapping

2. Solution-focused

sales and payer

strategy

development

3. Developing a

service with the

payer value

proposition in mind

15© 2018. All Rights Reserved.

XXXXXXXXXX Payer Market MapPayer Profiles

Last updated: April 1, 2013

Government Insurers Total Enrollment (CA) Enrollment, San Diego Enrollment, Imperial Enrollment, OrangeEnrollment, San

Bernardino Enrollment, Riverside Headquarters Street Address City

Medicare 5,000,198 178,583 2,466 189,292 123,223 152,359

MediCal 7,339,984 453,494 55,519 469,970 484,988 410,9321501 Capitol Ave., MS 4400 Sacramento

Tri-Care/Military

(UnitedHealthcare beginning

April 1,2013) 290,219 1,823 20,586 49,946 43,653425 Market St., 27th Fl. San Francisco

Blue Shading indicates plan with enrollment ≥ 1000 - threshold to complete demographic research for this plan

Note: Medicare Advantage Enrollment data does not include numbers <10 in each county according to Health Plan

Some Medicare Advantage plans are under same plan name/entity but have a different contract number with CMS, therefore under separate columns (Plan ID included in the last column)

Medicare Advantage Total Enrollment (CA) Enrollment, San Diego Enrollment, Imperial Enrollment, OrangeEnrollment, San

Bernadino Enrollment, Riverside Headquarters Street Address City

Aetna Health Of California, Inc. 25,452 1,844 2,410 5,837 6,813P.O. Box 10169 Van Nuys

Anthem Blue Cross Life And Health Ins Company 37,375 4,668 294 7,457 116 2,08050 Beale Street San Francisco

Blue Cross Of California 12,251 1,746 16 945 1,420 2,46350 Beale Street San Francisco

California Physicians' Service 66,727 569 118 18,124 4,422 2,52250 Beale Street San Francisco

Care1st Health Plan 30,369 7,288 1,075 445 219601 Potrero Grande Drive Montery Park

Caremore Health Plan 51,262 27 8,321 3,835 12900 Park Plaza Drive, Suite 150 Cerritos

Central Health Plan Of California, Inc. 12,211 748 1,320 311540 Bridgegate Drive Diamond Bar

Citizens Choice Healthplan 14,388 1,113 1,543 3,27117315 Studebaker Road, Suite 200 Cerritos

Community Health Group 1,221 1,221 740 Bay Blvd Chula vista

Easy Choice Health Pla Inc. 53,767 1,643 593 7,569 3,220 7,634180 East Ocean Boulevard, Suite 700 Long Beach

Health Net Of California 138,335 12,390 31 12,320 10,884 14,73021281 Burbank Boulevard, B3 Woodland Hills

Humana Health Plan Of California, Inc. 20,961 2,329 1,439 1,449 3,4915421 Avenida Encinas, Suite N Carlsbad

IEHP Health Access 9,452 5,034 4,397303 East Vanderbilt Way, Suite 400 San Bernardino

Inter Valley Health Plan, Inc. 20,191 17 6,859 8,230300 South Park Avenue, Suite 300 Pomona

Kaiser Foundation HP, Inc. 881,902 70,539 102 47,975 41,118 40,828300 Lakeside Drive, 13th Floor Oakland

Molina Healthcare Of California 7,469 1,344 16 1,357 706200 Oceangate, Suite 100 Long Beach

Orange County Health Authority 14,646 14,624 505 City Parkway West Orange

Sample Data

1. Payer Market Mapping – Payers, Consumers, Competitors

16© 2018. All Rights Reserved.

2. Solution-Focused Sales & Payer Strategy Development

Solution-focused sales is focused on understanding the needs of the

customer – and developing a solution (rather than ‘selling’ the services

currently offered)

Meeting with payers to identify problems and concerns

Developing ‘services’ that address those payer problems

17© 2018. All Rights Reserved.

3. Developing A Service With The Payer Value Proposition In Mind

Concept development

– Service description

– Cost/benefit or ROI analysis

Proposal development

Contracting

Implementation

Expansion

1.

Concept

2.

Build

3.

Test

4.

Feedback

5.

Revisions Concept

Development

Cycle

18© 2018. All Rights Reserved.

Partnering With MCOs: Get It Right

Deliver Rapid

Access

Demonstrate

Outcomes

• Clinical

Effectiveness

• Process Efficiency

• Reduced Inpatient

Utilization

• HEDIS & Other

National Measures

Follow Through

On Contractual

And Clinical

Expectations

Demonstrate

Operational

Excellence Via

National

Accreditation,

Licensing & MCO

Site Visits

Provider organizations must

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Partnering With MCOs: Innovate

Be creative - conduct pilots and share what you learn

Integrate with medical and behavioral partners

Evidence-based practices

Peer and/or family support models

Centers of excellence

Telepsychiatry

Web-based member engagement and social networking options

EMR and data management

Submit claims electronically and promptly

20© 2018. All Rights Reserved.

The Golden Rule Of Managed Care Contracting

Treat the

MCO like a

partner – not

an adversary

• Communicate

• Develop relationships with clinical and network

staff

• Participate in periodic meetings with MCO clinical

staff

• Learn about their needs and plans, and how you

can help them

• Keep them informed about you

• Track your outcomes, share your data, talk about

your accomplishments

Thought Leader Discussion

William G. Wood, MD, Former National Medical

Director, Medical Management, Behavioral Health,

Government Business Unit, Anthem, Inc.

Questions & Discussion

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