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Transforming the Health Insurance Delivery Business Model – A Labor-Management Initiative to Manage Care and Targeting Quality. Presentation to the Citizens Health Care Working Group Salt Lake City, Utah July 22, 2005.

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Transforming the Health Insurance Delivery Business Model – A Labor-Management Initiative to Manage Care and Targeting Quality

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Transforming the health insurance delivery business model a labor management initiative to manage care and targetin

Transforming the Health Insurance Delivery Business Model – A Labor-Management Initiative to Manage Care and Targeting Quality

Presentation to the Citizens Health Care Working Group

Salt Lake City, Utah

July 22, 2005

Presented by: David S. Blitzstein Director, Negotiated Benefits Department

United Food & Commercial

Workers International Union


Background jointly administered health plans in the retail food industry

Background: Jointly Administered Health Plans in the Retail Food Industry

  • Sponsor 70 Plans Governed by ERISA

  • Cover 800,000 Full-Time and Part-Time Employees

  • Pay an Estimated $4.8 Billion in Annual Plan Benefits

  • Administered by Equal Number of Labor and Management Representatives

  • Over 50 years of Experience Delivering Health Insurance Benefits


The current health plan business model is flawed

The Current Health Plan Business Model is Flawed

  • Attempting to Manage Price of Care vs. Actually Managing Care

  • At Competitive Disadvantage in Price Negotiations with National and Regional Managed Care Organizations and PBMs

  • Plans are Dependent on Intermediaries, and Are One Step Removed from Health Care Providers

  • Plans are Not Focused on Health Care Quality and Patient Safety

  • Plan Participants are Expected to Navigate the Health Care System Without Assistance


A vision of a new health plan delivery business model

A Vision of a New Health Plan Delivery Business Model

  • Directing Care to High Performance, High Quality Providers

  • Empowering Members and Physicians through Access to Information Technology

  • Perform Health Risk Profiling that Analyzes the Health of the Plan Population

  • Identify High Risk or At-Risk Participants

  • Organize Targeted Interventions (e.g. Wellness, Disease Management, and Case Management) for High Risk and At-Risk Participants

  • Assist Participants with Personal Health Advocacy Programs

  • Adopt Plan Designs that Compliment this Model


Transforming the health insurance delivery business model a labor management initiative to manage care and targetin

The Economic Foundation for the New Business Model: Correcting Costly Myths About the Health Care System

Fact

Myth #1

Plan members think providers are infallible and there is little variation in provider quality

InfallibilityProvider Quality

Quality

Quality

  • Complication and mortality rates often vary 200 – 400%

  • Service fees and charges often vary by 50%

Myth #2

Plan members think quality is proportional to cost

Fact

Data proves quality = cost:

Quality

Quality

Cost

Cost

Source: UFCW Working Group – Health Plan of the Future


Transforming the health insurance delivery business model a labor management initiative to manage care and targetin

The Economic Foundation for the New Business Model: Correcting Costly Myths About the Health Care System

Fact

Myth #3

Cost Savings can be mined from plan administration and benefit reductions

Source: UFCW Working Group – Health Plan of the Future


Is the information technology to support quality care decisions available

Is the Information Technology to Support Quality Care Decisions Available?

  • Private Sector Platforms

  • Health Care Purchasers – Leapfrog Group

  • Non-Profits: NCQA & JCAHO

  • Medicare – www.hospitalcompare.hhs.gov


Cost analysis by quality ranking salt lake city utah area hospitals

Cost Analysis by Quality Ranking Salt Lake City, Utah Area Hospitals

Average of All Hospitals$8,480

Top Hospital Cost$6,335

Difference between Top and Average Hospital25.3%

Difference between Top and Most Expensive Hospital48.3%

Source: HealthShare Technology


Cost analysis by quality ranking salt lake city utah area hospitals1

Cost Analysis by Quality Ranking Salt Lake City, Utah Area Hospitals

Average of All Hospitals$25,156

Top Hospital Cost$15,851

Difference between Top and Average Hospital37%

Difference between Top and Most Expensive Hospital53.5%

Source: HealthShare Technology


Will plan participants accept direction on health care decisions

Will Plan Participants Accept Direction on Health Care Decisions?

Source: HSC Community Tracking Study Household Survey, 2001 and 2003


Cost savings potential medical delivery efficiencies

Cost Savings Potential:Medical Delivery Efficiencies

Low est.

Medium est.

High est.

“shallow end”

Source: Mercer – Business Roundtable Study


How federal and state governments can support a quality driven health insurance business model

How Federal and State Governments Can Support A Quality-Driven Health Insurance Business Model

  • States Require the Collective and Dissemination Health Provider Outcomes Data

  • Congress Adopts the Recommendations of the HHS Health Information Technology Leadership Panel Report Issued 5/11/05.

  • Congress Legislates the 21st Century Health Information Act (H.R. 2234) introduced by Patrick J. Kennedy and Tim Murphy

  • Congress Should Legislate Price Transparency Requirements for Hospitals, Physicians, Drug Manufactures,and Pharmacy Benefit Mangers


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