Healthleaders Blues slides 06 18 08

Report
July 17, 2015
Blue Plans: How These Market
Movers Are Shaping Managed Care
Sheri Sellmeyer and Jane DuBose
July 17, 2015
Blue Profiler
 Profiles the top 15 nonprofit Blue Cross Blue Shield plans in the country
 These plans include almost 50 million members (approximately 1/3 of the
commercially insured population)
 BC/BS plans are the dominant regional insurers in their states
Commercial Insured
Population
Independent
nonprofit BCBS
plans
3
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Blue plans’ comprehensive medical premiums are up
DECLINE due to
• Lay-offs
• Small employers
reduce coverage
GROWTH due to
 Enrollment
 Premium Rates
$5.20B
$4.90B
$3.96B
$4.85B
$4.78B
$4.20B
$3.91B
$3.13B
$1.57B
BC/BS-FL
2006
4
HIGHMARK
BC/BS-MA
2007
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
$1.66B
BC/BS-MN
BC/BS-MI
And Blue Cross Blue Shield plans report positive net income
Due to
• Investment income
• Subsidiary businesses
$398.3
$341.6
$248.9
$227.5
$208.7
$158.9
$132.6
$25.1M
$4.9M
BC/BS-FL
2006
HIGHMARK *
BC/BS-MA
2007
*Bars reflect 2005 and 2006 net income.
5
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
BC/BS-MN
$16.2M
BC/BS-MI
…but Blue plans’ net underwriting gain is down or in the red
$239.0M
$211.6M
$105.1M
$21.9M
$9.4M
($19.9M)
($21.1M)
HIGHMARK
BC/BS-FL
2006
6
BC/BS-MA
2007
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
($42.4M)
($42.9M)
BC/BS-MN
($30.7M)
BC/BS-MI
Medicare supplement income is static or declining…
$450.0M $455.8M
$425.1M
$396.8M
$339.8M
$351.7M
$319.2M $326.6M
$220.2M $229.4M
BC/BS-FL
2006
7
HIGHMARK
BC/BS-MA
2007
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
BC/BS-MN
BC/BS-MI
…while Medicare supplement net underwriting is in the red
$204.1M
$27.6M
$26.6M
BC/BS-FL
$16.0M
HIGHMARK
($3.5M)
BC/BS-MA
($1.5M)
BC/BS-MN
BC/BS-MI
($4.1M) ($4.8M)
($18.6M)
($213.4M)
2006
8
2007
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Why is Medicare supplement not profitable?
 Low margins due to competition with MA and PDP plans
 Employers looking for lower cost alternatives for retirees
Expect migration from Medicare supplement to MA and PDP plans
9
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Forecast for Blue Cross Blue Shield financials:
 BC/BS profits will continue to suffer
 Investment gains will be difficult
Expect continued investment in support subsidiary businesses
10
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Where are the opportunities?
 Individual and Small-group
market
About 47 million uninsured
1/3 can afford health insurance
75% of private-sector businesses
have < 50 employees†
Only 43% offer insurance
† Source:
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Agency for Healthcare Research & Quality
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Growth in the Individual and Small-group market
Humana:
 Market potential > 17.3 M individuals
 Current serves 180,000 across U.S.
 Projects 5 – 8% annual growth over
next 5 years.
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Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Robust offerings




BC/BS of Florida: BlueOptions
Highmark: Direct Blue, Health Options HMO
BC/BS of Massachusetts: Get Blue
BC/BS of Michigan: Flexible Blue, Value Blue, Young Adult Blue, Individual
Care Blue
 BC/BS of Minnesota: Options Blue HSA, Simply Blue product
13
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
BC/BS of Florida’s offerings for individual, small-group market
Florida:
38% of employers with < 50 employees offer health insurance
BC/BS of Florida:
 BlueOptions: 38 lower-cost products in this suite; catastrophic
coverage as low as $25 a month. Plans aimed at different
constituencies within individual market: young people
 HSA-compatible product with coinsurance rates up to 20 percent
after deductible is satisfied; option of low copay for generic drugs
or discount program for all prescription drugs
14
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Sampling of Highmark’s offerings for individuals
Pennsylvania:
48% of employers with < 50 employees offer
health insurance
Highmark offerings:
Plan
DirectBlue PPO
PreferredBlue PPO
PPOBlue
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Deductible
Coinsurance
$250
90%
$10 generic; $20 brand;
$50,000 maximum per year
$500–$1,000
80%
$10 generic; $20 brand;
$25,000 maximum per year
$1,200–$3,500
80%, 90%
80%, 90% coinsurance;
$50,000 maximum per year
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Pharmacy
BC/BS of Massachusetts’s offerings for individual, small-group market
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Copays for
Routine
Office Visit
General
Hospital Care
Out of Pocket
Maximum
After $250 per
member deductible,
$15 for Tier 1, 50
percent coinsurance
for Tiers 2 and 3
20 percent
coinsurance after
deductible
$5,000 for individual,
$10,000 for family
$25
After $250
deductible, $15 for
tier 1, 50 percent
coinsurance for
Tiers 2 and 3
20 percent
coinsurance after
deductible
$5,000 for individual,
$10,000 for family
$250 for individual,
$500 for family
$25
No deductible for
Tier 1, with $15
copay; $250
deductible, then 50
percent coinsurance
for Tiers 2 and 3
35 percent
coinsurance after
deductible
$5,000 for individual,
$10,000 for family
$1,000
$25
$15/$30/$50 copays
Plan
Deductible
Access Blue Basic
$2,000 (HMO Blue
network)
$2,000 individual,
$4,000 family
$25
Preferred Blue PPO
Basic $2,000
$2,000 individual,
$4,000 family
HMO Blue Basic
Value
HMO Blue Premier
Value
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Pharmacy
$1,000 deductible
for individuals,
$2,500 for family
$1,000 for individuals,
$2,000 for family
BC/BS of Michigan’s offerings for individual, small-group market
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Plan
Deductible
Copays
Pharmacy
Premium
Flexible Blue
with HSA
$1,500 or $2,500 for
individual; $3,000 or
$5,000 for families
$0 for lower
deductible; 20
percent for higher
deductible
Yes
Start at $58.53 per
month for family
ValueBlue
$1,000 or
$2,000 for
families
30 percent
None, but can
participate in AffinityRx
Discount program
Start at $126 for
singles, maximum
$409 per month for
families
Young Adult Blue
$1,000
30 percent
None, but can
participate in AffinityRx
Discount program
Start at $47 per
month
Individual Blue Care
None
30 percent except
for preventive,
mammography,
hospice and
transplant services
50 percent coinsurance
with minimum of $10
and maximum of $100
per prescription
Start at $138 per
month for younger
individual to $1,058
per month for family
with older covered
member
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
BC/BS of Minnesota’s offerings for individual, small-group market
 Options Blue HSA
 Simply Blue product aimed at younger buyers:
• 100 percent of the first $500, $750 or $1,000 in costs for office visits
• Cover generic drugs
• Brand-name drugs on tiers of $25/$50 and $35/$70; $10,000-deductible plan
has drug copays of $15/$50/$80
• Covers first office visit of every year and first $200 toward each annual
checkup; after that, deductibles of $5,000, $7,500 or $10,000
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Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Forecast for Blue Cross Blue Shield individual,
small-group market:
The plans will make incremental gains in the individual market
 Blue Cross Blue Shield plans in Florida, Massachusetts and
New York, particularly, will make gains in the individual
market
 BC/BS plans developed a wide menu of products
 Small employers continue to drop employee health benefits
 Most plans offer balance between pricing and benefit design
19
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Blue enrollment in Medicare stand-alone prescription drug plans (PDPs)
BC/BS of Florida PDP—7% of market (out of 1 million
in stand-alone plans)
Highmark PDP—13% of market (out of 701,874 in
stand-alone plans)
BC/BS of Massachusetts PDP—16% of market
(out of 391,598 in stand-alone plans)
20
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
The Blue strategy on Medicare PDPs (continued)
BC/BS of Michigan PDP—9.6% of market
(out of 505,869)
BC/BS of Minnesota PDP—44% of market
(out of 299,812)
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Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Blue plans have been slow to enter Medicare Advantage,
Highmark is exception*
Plan
HMO
PPO
PFFS
Med supp
BC/BS-FL
30,716
2,812
111
185,000
Highmark
208,274
43,946
5,646
N/A
BC/BS-MA
32,311
680
75
N/A
BC/BS-MI
20,590
0
218,574
209,395
11,043**
13,115
0
177,761
BC/BS-MN
*January 2008 enrollment.
**Special needs plan.
22
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Average Medicare Advantage reimbursement rates
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MSA
2008 Rate
2009 Rate
Miami-Dade
$1,093.78
$1,237.61
Houston
$1,037.92
$1,069.98
New York
$979.57
$1,013.21
Chicago
$801.38
$828.48
Los Angeles
$937.75
$971.35
Seattle
$791.62
$818.77
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Medicare Advantage in 2008
 BC/BS of Florida: Rolled out a national PFFS product for group retiree
market
 Highmark: Will continue its dominance in the MA market in
Pennsylvania
 BC/BS of Massachusetts: Rolled out a new PFFS offering to compete
with similar products from Harvard Pilgrim and Tufts Health Plan
 BC/BS of Michigan: Will continue its dominance in the MA market in
Michigan, and continue growth of national PFFS plan
 BC/BS of Minnesota: Still taking a cautious approach to the MA market
24
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Forecast for Blue Cross Blue Shield Medicare strategy:
 Late to the Managed Medicare game – but some will see success
 Private fee-for-service may replace Medicare supplement
 Stand-alone PDP are set
 Scattered success with Medicare HMOs
25
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Specialty drug spend to continue to increase…
2007
Specialty drugs = 24% of total drug spend
2030
Specialty drugs = Est. 44% of total drug spend
26
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
…Blue plans continue to develop vendor relationships
Plan
PBM
Specialty Drug Vendor
BC/BS of Florida
Prime Therapeutics*
BlueOptions Injectable Drug
Supplier Program, Option Med,
Priority Health Care Corp.
Highmark
Medco Health Solutions Inc. for
Highmark; Argus for Gateway
products
Medmark Specialty Pharmacy
BC/BS of Massachusetts
Express Scripts
CVS Caremark, Express
Scripts, Freedom, IVP Care,
McKesson
BC/BS of Michigan
MedImpact for retail services;
Blue Care Network HMO uses
Medco
OptionCare
BC/BS of Minnesota
Prime Therapeutics (one of 10
Blue owners)
Accredo Health, Fairview
Pharmacy Services, McKesson,
OptionCare
*Contracts for mail order and specialty services; claims administration, contract negotiation and pharmacy benefit design handled internally.
27
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Percentage of premiums going to pharmacy expenses
Plan
28
2006
2007
BC/BS-FL
16.5%
16.2%
Highmark
11.9%
12.4%
BC/BS-MA
14.4%
14.0%
BC/BS-MI
15.7%
15.5%
BC/BS-MN
16.2%
16.2%
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Sampling of specialty drugs covered by Blue plans
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Plan
Growth Hormones
BC/BS of Florida
Genotropin, Geref, Humatrope, Increlex, Iplex, Norditropin,
Nutropin, Nutropin AQ, Omnitrope, Saizen, Serostim and
Tev-Tropin, Zorbtive
Highmark
Genotropin, Increlex, Humatrope, Iplex, Norditropin,
Nutropin, Protopin, Saizen, Serostim, Somatropin,
Somavert, Tev-Tropin
BC/BS of Massachusetts
Genotropin, Humanatrope, Increlex, Norditropin, Nutropin,
Nutropin AQ, Saizen, Serostim, Tev-Tropin, Zorbtive
BC/BS of Michigan
Genotropin, Geref, Humatrope, Norditropin, NorditropinNordiflex, Nutropin, Omnitrope, Saizen, Serostim, TevTropin, Zorbtive
BC/BS of Minnesota
Follistim AQ, Genotropin, Humatrope, Increlex, Iplex,
Norditropin, Nutropin, Nutropin AQ, Omnitrope, Saizen,
Serostim, Tev-Tropin, Zorbtive
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Comparison of tier placement for sample drugs
BC/BS of
Massachusetts
Harvard Pilgrim
Health Care
Tufts Health Plan
Effexor XR
Tier 3
Tier 2
Tier 2
Lexapro
Tier 3
Tier 3
Tier 3
Seroquel
Tier 2
Tier 2
Tier 2
Actonel
Tier 2
Tier 3
Tier 3
Fosamax
Tier 2
Tier 2 and 3
Tier 2 and 3
Nexium
N/A
Tier 3
Tier 3
Prevacid
Tier 3
Tier 3
Tier 3
Protonix
Tier 2
Tier 2
Tier 1
Drugs
Depression
Osteoperosis
Proton Pump Inhibitors
30
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Forecast for Blue Cross Blue Shield pharmacy
benefit strategy:
BC/BS plans will become more aggressive with prior
authorization, especially on expensive specialty drugs
BC/BS will continue to aggressively steer members to
Tier 1 generic drugs (i.e. BC/BS North Carolina)
31
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Pay-for-performance
 BC/BS plans have led the P4P
movement
 Well developed in markets with large
academic medical centers (i.e.
Massachusetts and Minnesota)
 While Blue plans may have begun their
P4P programs with HMOs, they are
increasingly shifting them to PPOs
 Blue plans are making better use of
metrics to evaluate physicians and the
quality of care they deliver
32
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
DM/P4P—P4P payouts, DM programs
33
Plan
Program
Pay-Outs
BC/BS of Florida
Recognizing Physician Excellence
$8.4 million in 2007, $6.8
million in 2006
Highmark
QualityBLUE program for
physician practices serving 1,000
or more members P4P for
hospitals
Not available
BC/BS of Massachusetts
Primary Care Incentive Program
$94 million in 2005, $189
million in 2006
BC/BS of Michigan
8 separate P4P programs called
Value Partnerships, Physician
Group Incentive Program,
Cardiovascular Consortium
Hospitals can qualify for up
to 4 percent above normal
inpatient rate; PGIP paid
out $36 million in 2007
BC/BS of Minnesota
Recognizing Excellence (for
physicians and hospitals)
Not available
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
Forecast for Blue Cross Blue Shield pay-for-performance
strategy
 P4P will be more widespread among Blue plans
 Seek to include Specialists (as well as PCPs)
34
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
HealthLeaders-InterStudy’s Blue Profiler reports
 BC/BS of North Carolina:
• Unique obesity management programs
• Recent shift of Rx drugs for chronic diseases to new tiers
• Free generics program
 BC/BS of Massachusetts:
• Healthcare cost issues unique to Massachusetts
• BC/BS of Massachusetts’ expanding pay-for-performance programs for
physicians
 BC/BS of Florida:
• How company plans to maintain share in the enormous and growing Medicare
market in Florida
 Highmark (Pennsylvania):
• Company’s unusual formulary structure—it allows clients a more restrictive or
less-restrictive formulary, each with one tier—the drug is either on or off the
list
35
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
HealthLeaders-InterStudy’s Blue Profiler reports (continued)
 BC/BS of Michigan:
• How plan is adapting to worsening economy
• BC/BS of Michigan is competing with a parade of national insurers targeting
Michigan for expansion
 Blue Shield of Minnesota:
• How the plan fits into a large consumer-driven health plan movement
• Why have Minnesotans been receptive to consumerism
 Blue Shield of California:
• Details how, even in the HMO stronghold of California, networks are being
tweaked to offer a broad choice of products
 Premera Blue Cross:
• How Premera has helped make Washington the epicenter for generic drug
usage
• Details Premera’s strategy on first-dollar coverage for drugs treating high
blood pressure/high cholesterol in CDHPs
36
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
HealthLeaders-InterStudy’s Blue Profiler reports (continued)
 BC/BS of Tennessee:
• Is a national leader among Blue plans in developing for-profit subsidiaries
• Offers wellness and electronic health record services
 Health Care Services Corporation:
• HCSC’s solid financials puts it in a good position to acquire, merge or be part
of additional for-profit ventures
• Dominant PPO presence
 The Regence Group (Washington and Oregon):
• Strategy to build on its Medicare Local PPO—which has the third-largest
enrollment in the U.S.
• Regence’s pharmacy strategy differs from many Blue plans since it owns its
own PBM
 Horizon BC/BS of New Jersey:
• Battle between Horizon and Aetna over market share in the New Jersey
market
37
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
HealthLeaders-InterStudy’s Blue Profiler reports (continued)
 Independence Blue Cross:
• Pending merger with Highmark Inc. improves Horizon’s growth prospects
 Lifetime Healthcare Companies:
• How Lifetime’s long-term generic drug promotion strategy has translated into
savings
 CareFirst BC/BS:
• Growing involvement in pay-for-performance and how that is paying off
38
Copyright © 2008 HealthLeaders-InterStudy (a Decision Resources company)
For further information:
Mr. Randy Hagopian
Tel. +1-781-296-2694
Fax +1-781-296-2550
[email protected]
HealthLeaders-InterStudy
One Vantage Way, B-300
Nashville, TN 37228
39
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