A New Strategy for Health Care: The Private Exchange … Hewitt Private Exchange... · Prepared by...
Transcript of A New Strategy for Health Care: The Private Exchange … Hewitt Private Exchange... · Prepared by...
Prepared by Aon Hewitt
Presentation to GDAHC
A New Strategy for Health Care:
The Private Exchange Model
June 20 , 2013
What is an Exchange?
An exchange is a competitive marketplace that consists of
suppliers and buyers
Exchange
2 Consulting | National Health Care Exchange
Presentation to WEB | June 2013
3
Health Care Exchanges at a Glance
Focus
Private Exchanges
Corporate Active employees and pre-65 retirees of large and mid-market employers
Coverage generally continues to be provided through group plans, not individual insurance
Coverage can either be fully-insured or self-funded
Retiree Post-65 retirees
Contracts are between retiree and carrier (individual policies)
Public Exchanges
State Public health care exchanges for individuals and small employers in connection with health care reform
Types of Exchanges
Consulting | National Health Care Exchange
Presentation to WEB | June 2013
Private Exchange Goals
Create a competitive market in health care benefits at a retail/consumer level
– Will drive efficiency and mitigate trend through competitive forces
Facilitate the movement to a defined contribution model for those
employers who are aligned with this philosophy
– Jump off the health care trend curve to a compensation-like rate of increase
– Treat health benefits as an element of total rewards
Expand choice, drive efficiency and simplicity, but allow consumer
selections that could not be driven unilaterally at the employer level
– For example, narrow networks, select formularies
Provide an alternative to state exchanges for large employers before 2017,
and transition to an individual model when the market is ready
Consolidate purchasing power in the private sector to drive systemic reforms
of the health care delivery system
4 Consulting | National Health Care Exchange
Presentation to WEB | June 2013
Value Proposition—Making This Work for All Stakeholders
Employees Greater choice of plans and carriers
Superior customer experience
Flexibility to tailor benefit/contribution trade-offs
Employers Risk transfer and predictability
Trend mitigation through competition, efficiency, and
best-in-market contracting
Focus on health and productivity
Carriers Market share opportunity
Earnings potential
Product innovation and control
Attractive risk pool
5 Consulting | National Health Care Exchange
Presentation to WEB | June 2013
Individual Exchange
Large/Mid Market
Post-65 Retirees
Navigators
Fully-Insured
Group Exchange
Large Market
(5,000 +)
Active + / or
Pre- 65 Retirees
Fully-Insured
Group Exchange
Mid Market
(500-5,000)
Active + / or
Pre-65 Retirees
SI or
Fully-Insured
Aon Hewitt Private Exchange Solutions
In development
6 Consulting | National Health Care Exchange
Presentation to WEB | June 2013
7 7
Corporate Exchange: How It Works
Consulting | National Health Care Exchange
Presentation to WEB | June 2013
8
The Participant Experience—Meaningful Choice, Simplified
Consulting | National Health Care Exchange
Presentation to WEB | June 2013
9
2012 Aggregate Financial Results
Cost Drivers
Risk charges
Profit charges
Premium taxes
Mandated benefits
Commissions
Cost Reducers
Competition
Risk adjustment
Best-in-class networks/provider
discounts
Pricing approach
Standardized designs
Reduced admin/consulting costs
Consulting | National Health Care Exchange
Presentation to WEB | June 2013
10
Observations From 2012
Financial results tended to be
optimized when:
Current designs were leaner (bronze/silver)
vs. richer (gold/platinum)
A national footprint leveraged best-in-market
carrier strengths
The Blues were playing
Recent claims experience was positive
Key decision criteria
(in order of importance)
Mandate for change
Strategic fit
Internal champion with access to the C-suite
Acceptable financials
Internal decision process that matches RFP
results timeline
Willingness to take on change management
activities
Consulting | National Health Care Exchange
Presentation to WEB | June 2013
Web Tool Use Statistics
28%
29%
57%
53%
15%
63%
0% 10% 20% 30% 40% 50% 60% 70%
% of Eligible Employees Using
Carrier Microsite
Rx Formulary
Provider Search
Need Help Deciding
Medical Expense Estimator
Health Plan Comparison Charts
11 Consulting | National Health Care Exchange
Presentation to WEB | June 2013
2013 Enrollment Results
Coming into enrollment 70% of employees were enrolled in PPOs, with 18% in HMOs and 12% in
CDHPs
12 Consulting | National Health Care Exchange
Presentation to WEB | June 2013