Employee Handbook - UW - Laramie, Wyoming | University of Wyoming
Wyoming Business Coalition on Health’s Multi-Payer Claims ...€¦ · Casper, WY 82609 307...
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John Kertesz – Peabody Energy – Chairman Terry Sterling – Wyoming School Board Assn. –Vice Chair Steve Loftin – 71 Construction – Sec./Treasurer Leonard Malin – Wyo Ben – Past Chairman Tracey Belser – City of Casper Cary Brus – Nerd Gas Company George Bryce – Lincoln Financial Group Bob Burnaugh – First Interstate Bank Mike Geesey – State Bankers Association Insurance Trust Sheri Stinson – Neiman Enterprises Betty Wendling – Thunder Basin/Arch Coal 2021 Clifton Casper, WY 82609 307-472-5013 www.wyohealth.org Background for the Joint Appropriations Committee on the Wyoming Business Coalition on Health’s Multi-Payer Claims Database June 2015 Members of the Wyoming Business Coalition on Health have begun to pool their healthcare claims data for the purposes of research and analysis. We believe this voluntary, multi-payer database will help us make the healthcare delivery system more transparent and accountable with regard to the quality of care and the cost of services. We intend to use this data to start purchasing based on value (the result of services), as opposed to the current system that rewards volume (the number of services). We are hoping that the State of Wyoming, as an employer, will join us in this effort to move from anecdotal conversations, to data-driven conversations regarding the quality and cost of healthcare here in Wyoming. Why? Healthcare costs in Wyoming are the highest in the country. This puts Wyoming employers at a serious competitive disadvantage when bidding against out-of-state companies for the same contracts. Wyoming’s high costs make it harder for local employers to bring talent into the state when an out-of-state employer can offer more in salary because they are spending less in benefits. High healthcare costs can be a prohibitive obstacle when an employer wants to add a position, and it is a serious barrier when recruiting new employers into the state. The fact that Wyoming’s healthcare costs are the highest in the country is also a problem for the State of Wyoming. Every dollar spent on healthcare benefits for your own employees is a dollar that cannot be used for salaries or programs in other areas of importance to the people of this State. A recent national study found that knee-replacement surgery in Casper cost $52,500, but the same surgery would cost $19,700 in Fresno, CA. That’s a 166% price difference. How can that be? Salaries for nurses and other healthcare workers are lower in Wyoming compared to California. Real estate is also less costly. We need to dig into this and stop accepting “we are rural” as an excuse for our high healthcare prices. Based on claims data from one of our large members, we also know that prices for healthcare in Montana are about 20% less than in Wyoming. Why is that? Like Wyoming, Montana is a rural state with mostly one- hospital towns and shortages of physicians We ask our employees to use their healthcare dollars wisely, but don’t provide them with tools to do so. We need to provide them with up-front price and quality information. As smart consumers, we can get this information before we buy anything else. Why do we let the healthcare industry get away with keeping healthcare costs hidden? A multi-payer claims database would allow us to arm our employees with reliable pricing information BEFORE they elect to have a test or procedure. It can help us guide them to higher-quality, lower cost providers. Yet, the biggest benefit, over the long run, of a multi-payer claims database will be in changing the way we pay for healthcare. Our current fee-for-service system is, in large part, responsible for our broken, fragmented delivery system that results in poorly coordinated care and less than optimal outcomes. This database will allow us to build what are known as “bundled payments.”
Transcript of Wyoming Business Coalition on Health’s Multi-Payer Claims ...€¦ · Casper, WY 82609 307...
John Kertesz – Peabody Energy – Chairman Terry Sterling – Wyoming School Board Assn. –Vice Chair Steve Loftin – 71 Construction – Sec./Treasurer Leonard Malin – Wyo Ben – Past Chairman Tracey Belser – City of Casper
Cary Brus – Nerd Gas Company George Bryce – Lincoln Financial Group
Bob Burnaugh – First Interstate Bank Mike Geesey – State Bankers Association Insurance Trust
Sheri Stinson – Neiman Enterprises Betty Wendling – Thunder Basin/Arch Coal
2021 Clifton Casper, WY 82609
307-472-5013 www.wyohealth.org
Background for the Joint Appropriations Committee on the Wyoming Business Coalition on Health’s Multi-Payer Claims Database
June 2015 Members of the Wyoming Business Coalition on Health have begun to pool their healthcare claims data for the purposes of research and analysis. We believe this voluntary, multi-payer database will help us make the healthcare delivery system more transparent and accountable with regard to the quality of care and the cost of services. We intend to use this data to start purchasing based on value (the result of services), as opposed to the current system that rewards volume (the number of services). We are hoping that the State of Wyoming, as an employer, will join us in this effort to move from anecdotal conversations, to data-driven conversations regarding the quality and cost of healthcare here in Wyoming.
Why? Healthcare costs in Wyoming are the highest in the country. This puts Wyoming employers at a serious competitive disadvantage when bidding against out-of-state companies for the same contracts. Wyoming’s high costs make it harder for local employers to bring talent into the state when an out-of-state employer can offer more in salary because they are spending less in benefits. High healthcare costs can be a prohibitive obstacle when an employer wants to add a position, and it is a serious barrier when recruiting new employers into the state. The fact that Wyoming’s healthcare costs are the highest in the country is also a problem for the State of Wyoming. Every dollar spent on healthcare benefits for your own employees is a dollar that cannot be used for salaries or programs in other areas of importance to the people of this State. A recent national study found that knee-replacement surgery in Casper cost $52,500, but the same surgery would cost $19,700 in Fresno, CA. That’s a 166% price difference. How can that be? Salaries for nurses and other healthcare workers are lower in Wyoming compared to California. Real estate is also less costly. We need to dig into this and stop accepting “we are rural” as an excuse for our high healthcare prices. Based on claims data from one of our large members, we also know that prices for healthcare in Montana are about 20% less than in Wyoming. Why is that? Like Wyoming, Montana is a rural state with mostly one-hospital towns and shortages of physicians We ask our employees to use their healthcare dollars wisely, but don’t provide them with tools to do so. We need to provide them with up-front price and quality information. As smart consumers, we can get this information before we buy anything else. Why do we let the healthcare industry get away with keeping healthcare costs hidden? A multi-payer claims database would allow us to arm our employees with reliable pricing information BEFORE they elect to have a test or procedure. It can help us guide them to higher-quality, lower cost providers. Yet, the biggest benefit, over the long run, of a multi-payer claims database will be in changing the way we pay for healthcare. Our current fee-for-service system is, in large part, responsible for our broken, fragmented delivery system that results in poorly coordinated care and less than optimal outcomes. This database will allow us to build what are known as “bundled payments.”
What are bundled payments? A bundled payment groups all the charges for an episode of care into a single payment. Instead of getting separate bills from the surgeon, surgical assistant, anesthesiologist, medical imaging, pharmacy, physical therapy, hospital and others; the patient is given an up-front, all-inclusive price with guarantees.
As a coalition, we have paid for thousands of knee and hip replacement surgeries, cesarean sections, normal vaginal deliveries, appendectomies, and many other common tests, procedures and surgeries. Using our claims data we can build the bell curve of costs for these common occurrences. (See Figure 1.) Clearly some patients cost less and some cost more, depending upon their age, co-morbidities and other complicating factors. Building the bell curve from actual claims data, we can determine the average price paid.
Once we know the average price paid, we can start to talk to the providers about a reasonable and fair cost. It would be our goal to negotiate bundled prices that are lower than our current actual payments as shown in Figure 2.
When the bundled price is established, those who work in the healthcare delivery system will have an incentive to find ways to do the test, surgery or procedure more efficiently – to squeeze out the extra costs. With bundled payments, the more efficient the providers become, the more profit they gain. As a result, we anticipate the bell curve to shift as
represented by the green curve seen in Figure 3. The area filled with the yellow squiggly line in Figure 4 represents the cost savings. Over time, these savings can be significant and can have a very positive impact for employers. It is important to note the key difference between a bundled payment and fee-for-service: with a bundled payment, the providers are rewarded for finding ways to do things more efficently. Under fee-for-service, they are not.
Figure 4
Figure 2
Figure 1
Figure 3
Now, for the really good news! Why, you ask, would any provider agree to a bundled payment methodology? How is it in their best interest? First and foremost, the answer is profit. Those providers who are willing to think creatively know they can be more efficient. They’ve just never had the incentive to do so. Second, progressive providers understand that our current fee-for-service system is what got us into our current mess. These progressive providers know the existing payment model is unsustainable and they are looking to work with WyBCH on payment reform. Third, they would much rather have Wyoming citizens, including your employees, stay home for care, as opposed to going out of state. If they can prove they are high quality, cost-effective providers they will be able to capture your health plan members as their customers/patients. In fact, we already have three hospitals committed to working with us on a bundled payment pilot and we are talking to others. The bottom line is, the more employers we have working with us, the greater success we will have in convincing providers to give this new payment methodology a try. So what does the State of Wyoming need to do? Help us help you. Help us help all Wyoming citizens. Agree to work with us as a like-minded employer. Cost: There is no upfront initial expenditure. You don’t need to invest in building the data warehouse or hire the analytics expertise. We are partnering with the Montana Association of Health Care Purchasers who have been doing this for 10 years. MAHCP charges are based on the number of beneficiaries in your plan each month, or “per-member-per-month” (pmpm). Using your current beneficiary count of 37,250 we estimate your annual cost of participation to be just under $450,000. This includes the data warehousing services as well as the data analytics. Final thoughts. Healthcare costs in the United States are double what they are in other developed countries, and Wyoming’s costs are the highest in the nation. Local healthcare costs put Wyoming employers at a competitive disadvantage nationally and internationally with regard to employee recruitment and retention as well as product or service pricing. Employers who pay for healthcare benefits are the only ones with the means and the motivation to tackle this issue, which is a serious threat to Wyoming’s economic development efforts and our economy. Voluntarily pooling your claims data with other members of the Wyoming Business Coalition on Health is a huge step forward. Working with the Coalition on quality improvement, price transparency and payment reform makes you part of the solution.
Moving To Better Healthcare
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Silver Plan Premiums 40 year old man, non-‐smoker (before subsidy)
$395
$365
$295
$271
$255
$258
$250
$231
$194
$401
$372
$301
$264
$257
$241
$211
$210
$171
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450 2014
2015
Source: KFF.org Analysis of 2015 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces 4
Healthcare Economics 101 It is NOT a “Free Market”
• The supplier controls the buyer. • The buyer lacks price information until after
the fact. • The buyer lacks quality information. • We can’t keep dancing with they guy “who brung
us,” – he got us into this mess and doesn’t seem to have much interest in getting us out.
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• Wyoming employers • Large and Small • Private and Public • Understand a healthy boGom line requires healthy people
• The only ones with the means and the moKvaKon to work on systemic change
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Price VariaKon
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Bundled Payments
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