March 25, 2010

Representative Hugh Holliman, Co-Chair

Senator Dan Blue-Co-Chair

Creating the Environment for Success Chris Shoffner, managing partner White Bear Group presented information on how to create an environment for success in health care in NC. He began by discussing the idea of value-based benefits. This is a strategy to minimize the cost for high value services, which are identified through evidence based analysis. The more beneficial and cost-effective the therapy is for a group, the smaller the out-of-pocket expenses to the insurers. The financial impact of best practices is shown in the way companies spend less on healthcare. Primarily, they are focusing on improving the health of their employees rather than on the administrative aspects of healthcare. There are several examples of how Cigna, Safeway and others including the Asheville Project have found a way to remove the barriers to care and lowered their costs. One example mentioned was a company that chose to offer $1,250 to employees in a special account if they would go through a health assessment. The employee could then use the funds to pay for doctor’s visits, prescription drugs, medical tests etc. This same company took this effort one step further by allowing employees to choose one area to improve in their health and if they were successful they would receive another $1,250 in their personal health fund account. This incentive attracted more than 90% participation in both of the opportunities. The effort to remove barriers is focused on those with chronic health conditions, such as diabetes.  Cigna has developed a huge list of prescription drugs that are free to those individuals with chronic illnesses. They have found a way to “Remove Barriers.” The last example is the Asheville Project where the city decided to find a way to manage its skyrocketing health care costs by implementing new strategies. The philosophy is based on getting patients to manage their own health. This can be done for diabetic patients by regulating their blood glucose better, the food they eat, and the medication they take for their illness. As a result of the Asheville Project medical costs for the City were lower over a five –year period than they were initially. Their sick leave had decreased, and their overall quality of life had improved. Pharmacists who participated have helped make a difference and physicians have seen a positive impact on their patients. This is about collaboration and innovation in reducing healthcare costs. The Asheville Project has been replicated in ten other cities with the assistance of Glaxo-Smith Kline. The Asheville Project focused on identifying those in need (analysis), engaging them in a value-based designed plan (population specific), educating patients with face to face coaching with measurable goals, communicating about the enrollment process, and a personal health record. The City of Fayetteville was another example used of a city that implemented the program (Asheville pilot) and has had great success in reducing their health care costs. This effort is basically directed toward employees with chronic health issues, but could be expanded to include all employees. The cost of this effort was projected for three areas: 30 cents per month/per employee for analysis, 85 cents per month/per employee for the personal health record and $250 per year/per employee for face to face coaching. These costs have resulted in a $1,200 annual savings per employee to the plan. The average age of patient in the pilot is 40 years old. Members questioned savings sustainability after the initial first year savings. A copy of this report is available upon request from my office.

“Know Your Number” A Way to Promote Healthier Lives and Save $millions for North Carolina, Mark Ruby, VP for Business Development, BioSigna presented on the patented assessment of employees health by finding their number. The assessment is a way of identifying the high risk individuals and helping them. NC clients include ECU, UNC, Duke, NCDOT, Dept. of Corrections, Highway Patrol, Kerr Drugs and others. The State Health Plan used the BioSigna assessment “Know your Number” to screen employees as part of a pilot project. Some facts presented include 40% of members do not have a primary physician. Twenty-four percent of employee members are diabetic or pre-diabetic ($249 million in new costs). Proactive Intervention is the answer. If you focus on modifying employee’s behavior you can tackle $400 million in avoidable costs. In order for the “Know your Number” assessment to be made available to the State Health Plan it would require a five-year program to focus on the 300,000 employees who have health risks.

Physical Education Teacher Representative, Victoria Simmons shared information on three different employees and the impact to them as members of the state health plan. The first employee is a teacher assistant and her health care expense for adding her husband to her plan is $603 per month for ten months. The second is a teacher who has a husband and three children on the health plan with her and her premium cost is $540.31 per month for ten months. The last person is a single mom teacher assistant who has a 13 year-old healthy son, but has him on Medicaid since she can’t afford the $196 per month for ten months to cover him on the State Health Plan. She also shared a briefing paper by NCAE. The issue of employees being asked to pay premiums was raised by members. She said the first time this issue was mentioned it was $10 per employee and now it’s up to $100 per employee per month. There was discussion about “the promise” made to employees to have health care plan without a premium. They did acknowledge the commitment to pay for the health care of retirees They also asked her opinion on asking employees in the plan if they were to pay, to pay an amount based on their income level. The increasing costs of health care to employees in the state health plan is a major problem and needs some answers.

Representative Folwell addressed the Commission members with his visual aids on the importance of moving the State Health Plan from a fiscal calendar to a calendar year plan. He has introduced this legislation for the past several years. The fiscal note is $25 million to handle the 6 month conversion time frame from fiscal to calendar year. Twenty-four states use the calendar year and with the multiple accounts in North Carolina and various calendars impacting deductibles, it would be much easier for employees and the state to change the health plan to a calendar year. He named at least three reasons and named the various supporters of the change, including SEANC and NCAE.

NEXT MEETING: Overview of the Impact of the national Health Reform law on the North Carolina State Health Plan. April 2010.


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