GIC Public Hearing

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GIC Public Hearing

• Shared Responsibilities for Improving Quality and
  
• Containing Costs

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Employers cut nearly 17,000 jobs last month and
the unemployment rate soared to 6.9 percent, the
highest since October 1993. Total 2008 job loss
may be 2.4 million. 1/22/09 Boston Globe
Bank Turmoil Sinks Stocks 1/15/09 Wall Street
Journal
foreclosure crisis in which 12,430 borrowers
lost their homes last year, a 62 percent increase
from 2007. 1/28/09 Boston Globe
Deval Patrick to slash 128 million in Local Aid
1/24/09 Boston Herald
Housing starts plunge 16 in December record low
seen handcuffing US economic growth 1/23/09
Bloomberg News
Layoffs Spread to more sectors of the economy
1/26/09 NY Times
an immense new wave of losses at banks and other
lending institutions that threatens to further
cripple their ability to resume normal lending.
1/20/09 NY Times
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COSTS AND COST-SHARING GIC AND ENROLLEES
FY2004 FY2008
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SHARE OF COSTS GIC AND ENROLLEES FY2001 FY2008
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What Have Other Employers Done?

• Reduced coverage
• Eliminated choice of plans and/or providers
• Implemented high-deductible plans
• Instituted co-insurance (e.g. member pays 20
  percent of the cost of the service)
• Eliminated retiree benefits

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National Survey of Large Employer-Sponsored
Health Plans

• Median deductible 1,000 for individual coverage
• Consumer-directed health plans offered by 20 of
  employers, up from 14 in 2008
• 27 offer retiree benefits, down from 46 15
  years ago

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Average Employee Benefit Levels Massachusetts

• Individual coverage - premium paid 25 PPO and
  23 HMO
• Family coverage - of premium paid 27 PPO and
  28 HMO
• Median physician office visit co-pay 18
• Median emergency room visit co-pay 75
• Median inpatient hospital co-pay 250

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Why Do GIC Health Care Costs Continue to Soar?

• New technology
• Overuse of some services (e.g. radiology, heavily
  advertised brand drugs)
• Lower cost community hospitals being squeezed
• Aging population
• Addition of municipalitiesmore enrollees
• Increased waistlines and other unhealthy
  lifestyle choices

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Grim Budget Outlook Shortfall in Billions

• "The fact is, were in this together, all of us
  are in this together, and were going to have to
  find ways to lean on each other," Governor Deval
  Patrick, January 23, 2009

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THE FY2010 BUDGET PROBLEM
100 MILLION
50 MILLION
50 MILLION -- TIERED PREMIUMS (10 months)
40 MILLION
40 MILLION -- PROPOSED BENEFIT CHANGES
10 MILLION
10 MILLION -- REMAINING GAP
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GIC Principles

• Shared responsibility similar to Health Care
  Reform Act
• Along with cost containment initiatives, shared
  responsibility will enable us to achieve the full
  promise of health care reform., Leslie A. Kirwan
  and Dr. JudyAnn Bigby
• Maintain a comprehensive level of benefits
• Improve health care quality and safety
• Provide as much choice as possible
• Adopt modest member share increases
• Educate members about provider performance
• Encourage healthy behavior
• Maintain retiree health benefits

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Whats the GIC Doing to Address These Factors?

• Collaboration with Others
• Massachusetts Quality and Cost Council
• Health Care Quality Cost Council Cost Containment
  Committee
• Special Commission on the Health Care Payment
  System
• Healthy Mass Compact
• The Partnership for Healthcare Excellence

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Continued Improvement in the Clinical Performance
Improvement Initiative

• Members given co-pay incentives to see better
  performing doctors

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Pay Lower Co-Pays for Providers with the Highest
Quality and Cost-Efficiency Scores
? ? ? Tier 1 (excellent) ? ? Tier 2 (good)
?Tier 3 (standard)
Does not apply to Medicare Plans
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Quality Metrics Continue to Improve

• Implementation of advance statistical model
  developed by a leading biostatistician at Johns
  Hopkins University

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More Specialties Tiered

• Cardiology
• Endocrinology
• Rheumatology
• OB-GYN Orthopedics
• Gastroenterology
• NEW Pulmonology/Pulmonary Disease
• NEW ENT/Otolaryngology

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Governors Budget FY10

• Proposal for state employees premium
  contribution
• Salaries less than 35,000 15
• Salaries 35,000-50,000 20
• Salaries over 50,000 25
• Saves 60 million for entire fiscal year

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Our Budget Challenge

• Governors Bill or Legislation must pass for
  savings to be realized wont know until late
  June
• Otherwise, drastic benefit cuts would need to be
  made to make up this shortfall
• Lag time for implementation means cuts would be
  very deep e.g. double all co-pays

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Commission Will Find Middle Ground
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Prescription Drug Changes for UniCare State
Indemnity Members

• 3-tier co-pays for specialty drugs
• Non-coverage of non-sedating antihistamines
• Elimination of underutilized Value Tier

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Potential Benefit Changes
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Whats Next?

• Commission determines benefits on February 13
• Rates voted March 4
• Annual Enrollment begins April 13 and ends May 15
• Changes become effective July 1, 2009

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Weigh Your Options

• During Annual Enrollment call or visit the
  websites of the health plans youre considering
  to see which co-pays you would pay for your
  doctors and hospitals
• After Annual Enrollment Be an informed
  consumer!
• Consider a physicians ranking before you choose
  (and save )

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GIC Resources to Help You

• Benefit Decision Guides delivered to
  agencies/benefits offices (employees), homes
  (retirees/survivors) and new municipalities by
  mid April
• All new website that includes new accessibility
  standards for visually impaired www.mass.gov/gic

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New Municipalities Effective July 1, 2009
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18 Health Fairs

• Located primarily near new municipalities
• Four Saturday fairs
• Bring your family
• Schedule is on the GICs website

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