Sau 16 medical benefits presentation october 2010
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SAU 16 Medical Benefits Presentation October, 2010 - PowerPoint PPT Presentation

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SAU 16 Medical Benefits Presentation October, 2010. SAU 16 Joint Board Committee. Formed in April 2010 to review all aspects of compensation. Focused on Health Care due to rapidly rising costs. Members: P. Lovejoy, Coop C. Gargaly, Brentwood C. Ellis, Stratham P. O’Day, Exeter

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Sau 16 joint board committee
SAU 16 Joint Board Committee

  • Formed in April 2010 to review all aspects of compensation.

  • Focused on Health Care due to rapidly rising costs.

  • Members:

    P. Lovejoy, Coop C. Gargaly, Brentwood

    C. Ellis, Stratham P. O’Day, Exeter

    A. Mower, Kensington C. Bellisio, Newfields

    P. Flynn, SAU 16 M. Morgan, SAU16

    B. Nigrello, E. Kingston, Chair

SAU 16 Joint Board Committee

  • Health Care cost have risen on average 11.9% per year over the past 13 years.

  • At this rate a family plan will be over $44,000 annually within 5 years.

  • In 2010 the increase was 17.1%.

  • Committee sought to analyze the data for health care options.

  • Determined the best path was to engage a Health Care Consultant.

SAU 16 Joint Board Committee

  • Interviewed 3 highly recommended Health Care Consulting firms.

  • Agreed to retain the services of IPG.

    • IPG was committed to representing all stakeholders.

    • Extensive history with NH SAU’s.

    • Recently consulted with Concord School District.

      • Successful in facilitating enhanced programs, additional provider options with greater discounts.

      • Reducing overall costs to Concord School District.

Ipg represents
IPG Represents

  • SAU 16:

  • Labor

  • School Board

  • It is the intent of IPG to educate all parties as to the various plan designs and carriers available to SAU 16 when considering medical insurance.

Mission of consultants
Mission Of Consultants

  • IPG has been charged with analyzing the claims utilization and plan designs for all of the participating districts within SAU 16. Our objective is to provide guidance on best practices to contain medical costs in the future while providing comprehensive medical benefits to employees. Lower claims = lower premiums = lower contributions for everyone.

There are many options
There are Many Options

  • LGC HealthTrust

  • Primex

  • SchoolCare

  • Harvard Pilgrim

  • HMO, POS, PPO, Indemnity

  • Plan designs with multiple states In-Network

Health insurance carrier options
Health Insurance Carrier Options

In NH there are three entities that offer health insurance to local governments and school districts.

Source: LGC: M. Briggs email 9/22/10 and 9/24/10 SchoolCare: L. Duquette email 9-28-10. Primex: K. VanBuskirk email 9/9/10.

Carrier financial health
Carrier Financial Health

LGC HealthTrust:

Overall Net operating loss for 2009: (- $14.2 Million)

Medical Book of Business loss for 2009: (- $14.8 Million)

SchoolCare: Net operating gain for 2009: + $4.12 Million

Primex: Net operating Loss for 2009 (-$2.9 Million)

for Primex Health Programs

LGC and Primex report financials as a calendar year, above 1/1/09-12/31/09.

SchoolCare reports as a fiscal year, above 7/1/09-6/30/10.

Source: LGC 12/31/09 Financial Statement and 9-24-10 email from M. Briggs for Medical Loss. NH SchoolCare Coalition Financial Statement ending 6/30/10. K. VanBuskirk email from Primex 9/9/10 breaking out financials for health portion of the business.

Carrier average increases compared to sau 16
Carrier AVERAGE Increases Compared to SAU 16

Source: LGC 2/16/10 Memo from M. Briggs comparing CSD to LGC Overall. 2010-2011 LGC rate from 9-24-10 email from M. Briggs. SchoolCare 2/17/10 Overview Slide Presentation to CSD. Primex: K. VanBuskirk email 9/9/10. Paul Flynn Memo to SAU Joint Chairs, undated. SAU 16 Stewardship report for 17.1% rate, 6/7/2010.

Relative plan design claims discounts
Relative Plan Design Claims Discounts

  • Indemnity plans do not have traditional managed care negotiated discounts with medical providers. These plans have the highest claims costs in the medical industry. They have national provider access and freedom of choice. The JW and Comp Series fall into this category.

  • PPO / Open Access + plans have negotiated claim discounts with national access to providers and freedom of choice. The claims cost of this type plan is less expensive than indemnity plans.

  • POS plans have a deeper discount than the PPO plans with either PCP referral or freedom of provider choice depending on the carrier.

  • HMO plans have the least claims costs.

Product mix overview
Product Mix Overview

Source: LGC Financial Statements ending 12/31/09, page 24. SchoolCare email from L. Duquette 9/3/10. Primex email from K. VanBuskirk 9/9/10.

Product mix comparison
Product Mix Comparison

SAU 16

One Of NH’s Largest SAUs

This SAU has very low premiums, low claims, and has done an excellent job of educating employees as to the value of the HMO plan. 79% of employees are on the HMO compared to only 42% in the LGC Trust book of business and 16% for SAU 16.

Source: SAU 16 census from LGC Health Trust 6/8/10. Anthem Cost & Utilization for another NH SAU, reported 10-2010.

Education on benefit design differences
Education on Benefit Design Differences

  • It is important for each employee of SAU 16 to know the differences in their out of pocket potential costs with Indemnity, POS and HMO coverage.

A Teachable Moment

100 $5 Office Visit Copays =

COMP 100 or JW Plan Designs with $500 Max Out of Pocket

Hmos result in lower overall claims costs
HMOs Result in Lower Overall Claims Costs

Lower Overall Claims Costs Result in Lower Premium Increases and Employee Contribution Levels for SAU 16.

POS 3 Tier $436.89 pmpm, 1149 members

HMO $262.88 pmpm, 193 members

Source: Anthem SAU 16 Cost & Utilization report 9/292010 page 2.A.4. Claims Costs Per Member Per Month 7/2009-6/2010.

Jw comp indemnity plans
JW & Comp Indemnity Plans

  • Everyone is impacted by the cost of the JW and Comp Plans.

  • Employees – more premium for less benefits than POS or HMO. You pay more out of pocket.

  • SAU 16 - high claims cost with very little discounting. The same surgery could cost as much as 30% more when billed through a Comp or JW plan than when billed through an HMO or POS plan.

  • Example: Inpatient Procedure: Same Hospital, Same Physician

  • HMO/POS: $14,000

  • Comp or JW: $18,200

A $4,200 Difference!

Exeter hospital
Exeter Hospital

Effective 12/31/10, Anthem will terminate its contract with Exeter Hospital and Exeter physician medical staff. Unless a new agreement is reached, Exeter Hospital will no longer be participating in the Anthem network as of 1/1/2011.

47% of All SAU 16 inpatient and outpatient claims are through Exeter Hospital.

Source: Glenn Klink, VP Exeter Health Resources 9/8/10 Memo from Exeter Hospital.

SAU 16 Anthem Claims & Utilization Report 9/29/10.

Exeter hospital1
Exeter Hospital

  • Exeter Hospital and Anthem Blue Cross Blue Shield are currently at an impasse with their provider negotiations. Exeter Hospital and physician affiliated group have recently sent correspondence to their patients concerning the situation at hand.

  • Anthem Blue Cross Blue Shield has published a public website to access information on updates and a broad range of topics pertaining to Exeter Hospital.

Schoolcare three 3 plan options
SchoolCareThree (3) Plan Options

  • Open Access + 100 (comparable to JW with LGC HealthTrust)

    • Access to CIGNA’s National Network (50 states).

    • Open Access Plans allow members to self-refer.

  • POS(comparable to Blue Choice with LGC HealthTrust)

    • Access to CIGNA New England Seamless Network (NH, ME, VT, MA and RI) No PCP referral necessary on any tier; members may self-refer.

  • HMO (comparable to Matthew Thornton Plan with LGC HealthTrust)

    • Access to CIGNA New England Seamless Network (NH, ME, VT, MA and RI). PCP referral required. Boston hospitals In-Network.

  • HMO Guesting Privileges – Can enter a local HMO network

  • anywhere in country that CIGNA has providers.

    • All Plans available to retirees anywhere in the country.

  • Recommendations

    Side Bar Language to Allow Shopping of Coverage

    It is the recommendation of IPG that SAU 16 seek side bar language, where necessary, with each of the Labor Units. The side bar language would give SAU 16 the right to look at competitive pricing from SchoolCare and Primex. If it is determined that a given Labor Unit wishes to switch carriers or plan designs within the LGC HealthTrust, then such a change would be pursued in accordance with the terms or sidebar of the applicable Collective Bargaining Agreement.

    Sau 16 proposed sidebar language
    SAU 16 Proposed Sidebar Language

    "For the plan year beginning 7/1/11 (Fill in name of district) may seek bids from alternative health insurance providers, or alternative plans within the LGC HealthTrust may be adopted in accordance with the terms of the Collective Bargaining Agreement of (Fill in the name of district). Sufficient time and resources shall be provided by (Fill in name of district) Labor and School Board to fully research and review the alternative plans with its members before implementing any identified changes. Should a decision be made to elect an alternative health insurance provider and plans, or alternative plans within the LGC HealthTrust, this decision will render the current contractual obligation to Anthem Blue Cross Blue Shield null and void for the period July 1, 2011 – June 30, 2013.”

    Proposed timeline
    Proposed Timeline

    October 2010: IPG to meet with Representatives from Labor, Administration & School Board.

    November 10, 2010: Goal is to secure contract language sidebar approval.

    November 16, 2010: IPG to issue full RFP to shop Medical coverage.

    January 2011: Carrier quotes back. IPG to analyze/spreadsheet.

    Before February Vacation 2011: IPG to meet with School Board, Labor, & interested parties regarding proposed plan design or carrier changes.

    By March 11, 2011: Approve plan design or carrier changes, if any.

    April/May 2011: Open Enrollment. IPG to present to employees either to maximize current LGC HealthTrust offerings – including Flex and Wellness -

    or to explain new plan/carrier offerings.

    Thank you