.…a health and consumer services company making people’s lives better
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Brad Bowlus President, CEO PacifiCare Health Plans James Frey President PacifiCare of California PowerPoint PPT Presentation


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.…a health and consumer services company making people’s lives better. Contracting Strategies. Brad Bowlus President, CEO PacifiCare Health Plans James Frey President PacifiCare of California. .…a health and consumer services company making people’s lives better. Contracting Overview.

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Brad Bowlus President, CEO PacifiCare Health Plans James Frey President PacifiCare of California

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Brad bowlus president ceo pacificare health plans james frey president pacificare of california

.…a health and consumer services company making people’s lives better

Contracting Strategies

Brad Bowlus

President, CEO

PacifiCare Health Plans

James Frey

President

PacifiCare of California


Contracting overview

.…a health and consumer services company making people’s lives better

Contracting Overview

  • Risk Of Conversion Under Control

  • Supporting Claims, Medical Management, Disease Management And Contracting Infrastructure In Place

  • Solid Financial Performance Occurring In Both Capitated And Directly Contracted Models

  • Delegated Model Oversight Enhanced


Delivery system commercial segment all products

.…a health and consumer services company making people’s lives better

Delivery System- Commercial Segment / All Products

PHS Physician Risk

PHS Hospital Risk


Can we manage risk

Can We Manage Risk?

  • Market Leaders In Both States

At - Risk Membership As Of 3/31/02


Improving clinical service cost outcomes

.…a health and consumer services company making people’s lives better

Improving Clinical, Service & Cost Outcomes

  • Integrated Contracting And Medical Management Approach

  • Leverage All Products Into Single Negotiation: “Concentrated Contract Leverage”

  • Target Performance Based Compensation

  • Timely and Accurate Claims Payment In Exchange For Lowest Possible Unit Cost

  • Implement Limited Transplant Network January, 2003

  • Unique Quality Measurement System

  • Narrow Networks And Tiered Networks Concentrate Penetration Into “High Performing” Providers


Environmental scan delivery system

.…a health and consumer services company making people’s lives better

Environmental Scan- Delivery System

  • Significant Delivery System Variation Still Exists Around Cost, Quality, And Service

  • Current Products Are Priced To The “Average”

  • The “Average” Is Configured Around 200% + Variation In Cost:

    • Major Unit Cost Variation

    • Enormous Utilization Variation

    • Major Pharmacy Variation

  • Empower Consumers With Information On Cost, Quality, And Service

2001 Hospital Cost Variation: California

Median

Source: PHS Internal Data


Pacificare of california philosophy toward risk

PacifiCare Of California: Philosophy Toward Risk

  • PacifiCare Of California Is Both Willing And Prepared To Reimburse Providers With A Full Range Of Capitated And FFS Arrangements

  • Currently 325 Groups Operating Under Delegated Arrangements

  • Amount Of Risk A Group Bears Differs Significantly From One Group To Another Based On Their Financial Capabilities


Pacificare of california capitation overview

PacifiCare Of California: Capitation Overview

  • Kaiser Effect

  • Utilization And Unit Cost Data For Delegated Providers Available To Price & Manage Risk

  • DMHC Approach Is To Stabilize

  • Groups Have Strong Commitment To Capitation


Pacificare of california delegated oversight

PacifiCare Of California: Delegated Oversight

  • Rigorous Review Processes In Place To Identify & Manage Delegated Risk

  • Process Overview:

    Step 1: Calculate Liquidity Position For All (Working Capital Vs. Risk)

    Step 2: Some Providers Go To Level 2 Oversight

    • Review Financial Statements And Cash Flow Forecasts

    • Review IBNR Methodology

      Step 3: Some Providers Go To Level 3 Oversight

    • Site Visit For Potentially Unstable Providers

      Step 4: Based On Reviews, Establish Security And/Or Solvency Reserves Or Move To FFS If Necessary


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