Consumer-centric Medicaid in a

21st Century Intelligent Healthcare System

Healthcare Visions, Inc. Yes, when…

An Approach for Savings Lives and

Improving the Health of Georgians

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What Is a 21st Century Intelligent Health System?

In a 21st Century Intelligent Health System, the individual has: Accurate, timely knowledge of personal health needs, Access to the best information about how to maintain personal health, Knowledge of whom to see and where to go for health services, And confidence that health providers are practicing medicine using best

practices based on the most up-to-date understanding of outcomes-based medicine.

In a 21st Century Intelligent Health System, the individual has the right to know

the price and quality information about health services in the most accurate, least expensive, and most convenient manner possible.

In a 21st Century Intelligent Health System, the individual is the center of

knowledge and decision-making and has responsibility for his or her own health.

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Consumer-centric MedicaidThe 21st Century Medicaid Act

Medicaid should be divided into three distinct sub-programs, each administered separately with its own rules and structures. However, all the sub-programs should be based on the following principles:

1. A 21st Century Medicaid System will focus on wellness,prevention, early detection, and independent living.

2. A 21st Century Medicaid System will integrate the family and community into the healthcare and the lives of loved ones.

3. A 21st Century Medicaid system will leverage innovations inscience and technology, quality systems, and best practices inevery aspect of providing care for its beneficiaries.

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Consumer-centric Medicaid

To achieve real transformation in Medicaid:

One program design cannot meet the needs of such distinct and separate groups of beneficiaries –

1. the poor.

2. people with disabilities (Aged, Blind, Disabled), and

3. the frail elderly.

Consumer-centric Medicaid as described in this presentation focuses on the first group

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Consumer-centric Medicaid

Consumer-centric Medicaid is about transforming the health benefit plan into one that puts economic purchasing power—and decision-making—in the hands of participants.

It’s about supplying the information and decision support tools they need, along with financial incentives, rewards, and other benefits that encourage personal involvement in altering health and healthcare purchasing behaviors.

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Two Basic Principles for Successful Consumer-centric Medicaid

1. Must work for the Sickest Participants, as well as the healthy

2. Must work for those not wanting to get involved in decision-making, as well as the “techies”

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The Core of Consumer-centric Medicaid

The Unifying Theme for a

Health and Healthcare Strategy is:

Behavioral ChangeBehavioral Change

“Implement only if it supports behavioral change consistent with the

strategy”

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Consumer-centric Medicaid Choices involve Options for Behavioral Change

Consumerism Choices:

WellnessPreventive careEarly InterventionLifestyle Options (diet, exercise, smoking, safety)

Self-help, self careDiscretionary Expenses (e.g. OV, ER, Rx)

Value purchasing (e.g. DXL, o/p vs. in/p)

Participation in Disease Management ProgramsCompliance with Evidence Based Medicine

Treatment Plans

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Two Choices for the FutureSupply Controls or Demand Controls

Plan Sponsors and Members have two basic choices to control costs:

1. Managed care & HMOs - The “supply of care” is limited by a third party who controls the access to medical services (e.g. utilization reviews, medical necessity, gatekeepers, formularies, scheduling, types of services allowed), or

2. Consumerism - The member controls their “demand for care” because of a direct and significant financial involvement in the cost of care, rewards for compliance, and the information to make wise health and healthcare value driven decisions.

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High Healthcare Costs Climbing Higher

Patients have lost control of their own healthcare, and are not truly engaged in the process of managing their health

Patients are frustrated with managed care “rules” and the impact on access and quality of care

Patients don’t understand healthcare costs – costs are not transparent

“Every system is perfectly designed for the results achieved”

Supply Controls Are Failing

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Cost Control LeversA comparison between Managed Care and Consumer-centric Medicaid

1. Eligibility

2. Benefit Design

3. Cost Sharing

4. Premium Sharing

5. Service Costs

6. Utilization

Consumer-centric Medicaid

Graduation to Private Ownership

Asset Accumulation

Shared Savings-Pay 4 Compliance

Income based

Shared Savings-Pay 4 Performance

Demand Controlled

Managed Medicare

Legislated Reductions

Fairly Fixed

Minimal

Non-existent

Forced Price Controls

Supply Managed

Georgia - Creating the Possible…

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Two Choices for the FutureManaged Care or Consumerism

Behavioral Change and Cost Management Potential

Low Impact ---- ---- ---- ---- ---- ---- ---- ---- ---- High Impact

Traditional Medicaid

Planswith

Consumer Information

&Managed Care

2nd Generation Consumerism

Focus onBehaviorChanges

TraditionalMedicaid

Plans

3rd Generation Consumerism

IntegratedHealth &

Productive Citizenry

1st Generation Consumerism

Focus on Discretionary

Spending

4th Generation Consumerism

Personal Ownership of Health and Healthcare

2nd Gen Managed Care

Ltd Eligibility, In/P Review, O/P Review

3rd Gen Managed Care

Restrictive Rx Formulary,Social Service

Benefit Reductions

1st Gen Managed Care

Ltd Benefits, Ltd Network

Providers,High

Discounters

4th Gen Managed Care

More Supply Controls, Scheduled Benefits, Prioritized Diagnoses

Consumerism &

Demand Control

Managed Care & Supply Control

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The Promises of Consumerism

Personal CarePersonal CareAccountsAccounts

Incentives & Incentives & RewardsRewards

Health ManagementHealth Management

Disease and Case Disease and Case ManagementManagement

InformationInformation

Decision SupportDecision Support

The Promise of Demand Control & Savings

The Promise of Wellness

The Promise of Shared Savings

The Promise of Transparency

The Promise of Health

It is the creative development,

efficient delivery, efficacy, and successful

integration of these elements that will

prove the success or failure of Consumer-

centric Medicaid.

Major Building Blocks of Consumer-centric

Medicaid

2nd Generation Consumerism

Focus onBehaviorChanges

3rd Generation Consumerism

IntegratedHealth &

Productive Citizenry

1st Generation Consumerism

Focus on Discretionary

Spending

4th Generation Consumerism

Personal Ownership of Health and Healthcare

Personal Care Personal Care AccountsAccounts

Incentives & Incentives & RewardsRewards

Health ManagementHealth Management

Disease and Case Disease and Case ManagementManagement

Education, Education, Communication, InformationCommunication, Information & Decision Support Tools& Decision Support Tools

Allocation to purchase Private

Coverage

Individual Activity & Compliance

Rewards

Individual, Family & Group Rewards

Conversion to Private HSAs, Use for non-Healthcare

100% Preventive Care thru Debit Cards

Web-based behavior change

support programs

Wellness,Stress, Juv Justice, Violence, MH/SA

Genomics, predictive modeling

push technology

Information, health coach,

Cash & Counseling

Disease specific focus, (Diabetes, MH/SA), Special Case Mgmt Svcs

Functionality Focus, Population Mgmt,

Cultural DM, Integrated Hlth Mgmt,

Wireless cyber –support, Holistic

care

Payor / Intermediary

Sponsored, Paper Based

Tele, Personal and Family hlth mgmt,

Community Resources

Info on Quality and Health Disparities,

Multi-Cultural needs, Faith Based Outreach

Personal Responsibilities,

Self-care, information therapy

Potential if unexpected Funds

Zero balance acct, activity based

incentives,P4P,P4C

Non-health State initiatives

Subsidies for movement to Indiv.

or Employment Based Coverage

The Consumer-centric

Medicaid Grid

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Using Information & Incentives To Address Wellness & Disease Management Behavioral Changes

Low Users Medium Users

High Users

Very High Users

No Claims

Generally Healthy

Acute Episodic Conditions .

O/P, Low In/P, High Maternity

Chronic & Persistent . Conditions .

O/P, Low In/P, High

Catastrophic

% Mem 15% 48% 14%

3% 3% 12% 4% 1%

% Dollars 0% 12% 15%

12% 5% 21%

20%

15%

% Mem 63% 32% 17%

% Dollars

12% 32% 56%

PreventionPrevention Wellness - LifestyleWellness - Lifestyle

Minimize

Early InterventionEarly Intervention

Wellness - ClinicalWellness - Clinical

Maximize

Minimize

Maximize

Wellness - LifestyleWellness - Lifestyle

Wellness - ClinicalWellness - Clinical

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State of Georgia Analysis (Includes Aged, Blind & Disabled)

Low Users Medium UsersHigh Users

Very High Users

No Claims Generally HealthyInpatient

CareMaternity

Aged, Blind, Disabled

Catastrophic

% Members 15% 32% 34%

4% 14% 1%

% Dollars 0% 7% 26% 8% 37%

22%

% Members 47% 38% 15%

% Dollars 7%

34% 59%

PreventionPrevention Wellness - LifestyleWellness - Lifestyle

Minimize

Early InterventionEarly InterventionWellness - ClinicalWellness - Clinical

Maximize

Minimize

Maximize

Wellness - LifestyleWellness - Lifestyle

Wellness - ClinicalWellness - Clinical

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Health Promotion

Health Risk Management

Chronic Disease Management

High Cost Case Management

Website Health Risk Assessment

Patient Identification and enrollment

Targeted Behavior Modification

Care Coordination

Practice Guidelines

HealthyLifestyle Promotion

Physical Activity Campaign

Address Comorbid Conditions

Integrated Services, Communications, Measurement and EvaluationIntegrated Services, Communications, Measurement and Evaluation

Care Continuum - Changing Behaviors

Acute Conditionse.g., Infections, Respiratory, Lacerations

Navigational Support

Patient Advocacy

Care Coordination

Address Comorbid Conditions

At Risk

e.g., Inactivity, High Stress, Overweight, High Blood Pressure

Chronic Conditions

e.g., Depression, Heart Disease

Catastrophic Conditions

e.g., Cancer, Hepatitis C

Well

e.g., Low Risk, Good Nutrition, Active

Lifestyle

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Low Users Medium Users High Users Very High Users

No Claims

Generally Healthy

Acute EpisodicConditions

Chronic & Persistent Conditions Catastrophic

O/P, Low

In/P, High Maternity O/P,

LowIn/P, High

% Ee

% Dollars

% Ee

% Dollars

PatientSafety

Centers of Excellence

PatientAdvocacy/

Case Management

Pre-Natal Care

Reduce Variation in Evidence-Based

Medicine

DiseaseManagement

Reduce Variation in Evidence-Based

Medicine

Discretionary Expenses

Psycho-Social Factors / Integrated Absence Management

Personal Health ManagementDecision Support & Information

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Passive Assertive Aggressive Program Type: Phone and mail

out- reach, no incentives

Incentives (i.e., waiving Rx copays)

Incentives (i.e, waiving Rx copays,

premium differential

DM vendor pricing method

Per employee per month, all

employees

Low PEPM on all ees plus hourly or per

case rate on participants only (rate

varies based on participant risk

status)

Low PEPM on all ees plus hourly or per case rate on participants only (rate varies based on participant risk

status)

Percentage of chronic diseased participating in program

10% 50% 75%

Return on investment of disease management programs

0 - .5 1.5 - 2 1.5 - 3

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Wellness

Communication

Acute Case Mgmt

Utilization and Case Management

NETWORK A / TPA A NETWORK B / TPA B

Education

Prevention

Demand Management

Disease Mgmt Programs

Integrated Absence Mgmt The secret is cooperation and synergy between

components supporting the corporate strategies

Integrated Health Management ProgramAn Implementation Option for Multiple Generations

General ManagerPersonal Care Accts.

FSAs, HRAs, HSAs

Process Integration &

Disciplined Im

provement

Com

pany

Dat

a W

areh

ouse

& M

etri

cs

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Align Strategy with the “Value

Purchasing”

Awareness Pay for

Performance Tiered

Networks Regional

Centers of Excellence

CostEfficiency

Quality

Variation in Cost & QualityHospitals – CABG*

Fewer Adverse Affects Lower Complication Rates Lower Mortality

Lower LOS Lower Cost Episodes of Care

* Healthshare/SelectQualityCare weighted averages

Pay for PerformanceDecision Support Tools for Cost & Quality Information

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Comparison of Selected Atlanta Hospitals

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Comparison of Selected Atlanta HospitalsDiabetes Mortality

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Comparison of Selected Atlanta HospitalsDiabetes Complications Index

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We know the Problems and We have the Metrics

The Leading Health Indicators reflect the major public health concerns in the United States and were chosen

based on their ability to motivate action, the availability of data to measure their progress, and their relevance as

broad public health issues. In some cases, BRFSS definitions of objectives differ slightly from those in Healthy

People 2010.

©2000-2005 GA Dept of Human Resources, Div of Public Health Public health information: GDPHINFO@dhr.state.ga.us

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Healthy People 2010, Leading Health Indicators

2001 2002 2003Year 2010

Target

Regular Moderate Physical Activity, 5 or more days/week for 30 or more minutes or Vigorous Physical Activity 20 Minutes or more per Day, Three or more Days per Week (Objective # 22.2) Ages > 18 years

40% N/A 42% 30%

Obese, BMI > 30 (Objective # 19.2) Ages > 20 years

23% 24% 26% 15%

Cigarette Smoking (Objective # 27.1a) Ages > 18 years

24% 23% 23% 12%

Binge Drinking, during past month (Objective # 26.11c)Ages > 18 years

12% 13% 13% 6%

Influenza Immunization, Within Past Year (Objective # 14.29a)Ages > 65 years

62% 59% 67% 90%

Pnumococcal Immunization, Ever had (Objective # 14.29b)Ages > 65 years

58% 57% 61% 80%

Health Insurance (Objective # 1.1)Ages > 18 years

86% 84% 84% 100%

Specific Source of Ongoing Primary Care (Objective #1.4c)Ages > 18 years

77% 77% 77% 96%

Healthy Behaviors in Georgia vs. Year 2010 Objectives

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Healthy People 2010, Other Objectives

2001

2002 2003

Year 2010 Target

Limitation in Activities Due to Arthritis (Objective #2.2)Adults with Chronic Joint Symptoms, Ages > 18 years

54% N/A 41% 21%

Pap Smear, Ever Had (Objective #3.11a)Women, Ages > 18 years

94% 96% 97% 97%

Pap Smear, Within Past Three Years (Objective #3.11b)Women, Ages > 18 years

88% 87% 88% 90%

Fecal Occult Blood Test (FOBT) Within Past Two Years (Objective #3.12a)Ages > 50 years

32% 30% N/A 50%

Sigmoidoscopy, Ever Had (Objective #3.12b)Ages > 50 years

49% N/A N/A 50%

Mammogram, Within Past Two Years (Objective #3.14)Women, Ages > 40 years

79% 76% 76% 70%

Diabetes, Diagnosed (Objective #5.3)Ages > 18 years

7% 7% 8% 2.5%

Cholesterol Screening, Within Past Five Years (Objective #12.15)Ages > 18 years

75% N/A 75% 80%

No Leisure Time Physical Activity (Objective # 22.1)Ages > 18 years

27% 26% 25% 20%

Regular, Vigorous Physical Activity, 3 or more Days/Week for 20 or more Minutes (Objective #22.3)Ages > 18 years

23% N/A 25% 30%

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Percentage of Population with Diagnosed Diabetes 2002 Ages 45-64

Less than 7.0 %

7.0 to 8.9 %

 9.0 to 11.0 %

More than 11%

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Total Number of Adults with Diagnosed Diabetes, 2002

Less than 70,000

70,000 to 189,999

190,000 to 330,000

More than 330,000

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Georgia- Number of Diagnosed Diabetes by Year (1000’s)

18-44 45-64 Total <65 65-74 75+ Total Pop

2002 69,000 215,000 284,000 111,000 34,000 432,000

2001 67,000 205,000 272,000 108,000 38,000 420,000

2000 61,000 182,000 243,000 94,000 40,000 379,000

1999 57,000 164,000 221,000 81,000 44,000 348,000

1998 42,000 135,000 177,000 71,000 41,000 291,000

1994 34,000 89,000 123,000 60,000 20,000 202,000

CDC 2002