Future of Disease Management Under CDHC

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Future of Disease Management Under CDHC

• Tomás D. Valdivia, MD, MS
• Chief Medical Officer
• Definity Health

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Overview

• CDHC introduced new dynamics between the
  consumer and plan, doctor and DM.
• IOM and many others are driving toward a
  patient-centered health care system with
  ubiquitous information about the system.
• DM has a unique challenge to respond to the
  new health care environment to create and support
  health care consumers.

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Agenda

• Define Consumer-Drive Health Care
• Describe the effect on constituents
• Other important activities
• Implications for Disease Management

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The Problems
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Consumer Driven Healthcare

• As a benefit strategy reduces waste and
  improves healthcare outcomes (including member
  satisfaction) by giving members the financial
  responsibility, information, and tools to become
  empowered consumers of discretionary and routine
  healthcare services

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Consumer Driven Healthcare

• Managed care has funded first dollar coverage
• First dollar coverage works poorly inside an
  insurance economic model
• Definity created a tax-effective way to offer a
  new financial services product for healthcare
• Unbundled and repackaged the good stuff of
  managed care

RAND
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Account Based CDHC Products

• Three components that work together to create a
  consumer driven product

• Involved
• Informed
• Better decisions

• Benefit dollars
• Rollover feature
• No copays
• No cash-out opportunity

• Comprehensive coverage
• Preventive care covered first dollar

• Care support and coaching
• Personal website
• Information on Providers, Treatments, Pricing

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CDHC An Example

• Meet Phil and Nancy, a growing family with one
  child, Lisa. Phil and Nancys family plan
• Employer-funded PCA allocation 2,000
• Health Coverage annual deductible 3,000

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Phil and Nancys Family PlanYear One Expenses
600 Rollover
1 May not apply against Health Coverage annual
deductible.
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Phil and Nancys Family PlanYear Two
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Phil and Nancys Family PlanYear Two Expenses
1,100 Rollover
1 May not apply against Health Coverage annual
deductible.
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Phil and Nancys Family PlanYear Three
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Defined Contributionversus CDHC

• Defined Contribution
• A benefit strategy, not a benefit design
• Limit employer financial liability
• Shift costs to employee
• Benefit design methods
• Fixed annual benefit, regardless of need
• Increase co-pays, deductibles, or EE contribution

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CDHC vs DC
Defined Contribution CDHC
Cost Control Strategy Cost Shifting Cost Efficiency
Level of Employee Choice Plan or Benefit Services, Providers, and Treatments
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Concerns about CDHC

• Positive selection
• Cost shifting for sicker members
• Erosion of risk pooling

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Actual Enrollment Experience
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Definity Health Results

• Client Satisfaction 100 renewal
• Member Satisfaction
• 97 re-enrollment
• 91 satisfaction
• Member Web Use 50
• Care Support Line Use call volume 70 above
  benchmark

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Utilization Results

• Cost control better than market trend
• Utilization
• Inpatient comparable to MR well managed
• Outpatient 20 reduction in office visits
• Pharmacy better than Medco tightly managed
  benchmark
• Preventive services at or above national
  benchmarks

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Measure and ReportClient Plan Comparison
19 decrease in office visits and Rx
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CDHC Adoption (Definity)
Jan 01 Jan 02 Jul 02 Jan 03
Clients 4 15 20 50
Members 5K 25K 40K 200K
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New Behaviors
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Old DM
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Definition A Health Care Consumer

• A health care consumer is
• An individual
• choosing the services
• they use
• and bearing the consequences (financial and
  others) of those choices.

• More technologically savvy
• Well-educated
• Wealthier than their parents

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Our Members Engaged

• Concerned (and informed) about costs
• Involved as an active decision maker
• Longer term view of healthcare spending
• No longer year to year
• More interested in preventive health

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Measure and ReportPreventive Care
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What Decisions?
Plan Choice
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Effect on Physicians Intrigued

• Three possible paths
• Continued commoditization price competition
  only, now at the individual provider level
• Differentiation and market segmentation on the
  basis of quality and value and member preferences
• Isolated care monopolies no change?

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Focus on Information Availability

• Institute of Medicine -To Err is Human (1999)
• Leapfrog Group (2000)
• Institute of Medicine - Envisioning the National
  Health Care Quality Report (2001)
• Midwest Business Group on Health - Cost of Poor
  Quality (2002)

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IOM Quality Chasm Report

• Six Aims for Improvement
• Safety
• Effectiveness
• Patient Centeredness
• Timeliness
• Efficiency
• Equity

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IOM Ten Rules for Redesign

• 2 Care customized to patient needs/values, not
  professional autonomy
• 3 Patient is source of control, not the
  professional
• 4 Knowledge is shared freely

• 5 Decision is based on evidence, not training
  and experience
• 7 Transparency is necessary

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Consumer-Purchaser Disclosure Project (2003)

• By January 1, 2007, Americans will be able to
  select hospitals, physicians, physician
  groups/delivery systems and treatments based on
  public reporting of nationally standardized
  measures for clinical quality, consumer
  experience, equity and efficiency.

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New Directions in DM
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New Directions in DM

• Plan Level
• Consumer incentives baked into the plan
• Implicit
• Explicit
• Plan services integration
• Changing perspective Right care at the right
  time, right place,

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New Directions in DM

• Program Features
• Consider the practice context at identification
  step
• New information comprehensible transparency of
  cost and quality
• Support extended to non-standard practices for
• value decisions in health care
• new transparency of information
• non-traditional matters (significant medical
  decisions)
• Create consumers

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New Directions in DM
Identify
1
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An Old New Perspective

• Relevant
• Complete
• Timely
• Inexpensive

Better Information
Consumer Provider
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The Power of the Balding
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and Celebrities
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A New Perspective
Better Decisions Actions
Health Choice

• What are my treatment choices?
• - Rx-focused
• - Procedure-focused
• - Disease-focused
• What is the right tx for me?
• How much should I expect to pay for my care?
• How do I stay healthy?

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Information A Personalized Approach

• Weve redefined the member experience
• Personalized website
• Rich content
• Drug bargain finder
• Pricing
• Quality metrics

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Drug Bargain Finder
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Significant Medical Decision Making
Health Status improved the same amount over
baseline in all three groups
Outcome Control Information Only Coaching
Surgical Rate 48 48 38
Costs / patient 2,800 2,000 1,600
Satisfaction -- 16 higher satisfaction 44 higher satisfaction
JAMA 20022882701 Statistically significant
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Non-traditional Services

• Chronic conditions
• Diabetes
• Asthma
• Cardiac
• Etc.
• Significant medical decisions
• Hysterectomy
• Low back pain
• Cardiac
• Etc.

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Practice Pattern VariationGeography as Destiny
Treatment options For many problems surgery and
medical therapy have equal effectiveness but
different side effects.
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ABC Co Discretionary Surgery Signature
Source Dartmouth Atlas of Healthcare 1999
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Whats the Right Rate?

• The right rate of healthcare consumption is the
  rate that results when patients are fully
  informed and their values and preferences are
  incorporated into the treatment selection process.

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Summary

• CDHC introduced new dynamics between the
  consumer and plan, doctor and DM.
• IOM and many others are driving toward a
  patient-centered health care system with
  ubiquitous information about the system.
• DM has a unique challenge to respond to the
  new health care environment.