美世Mercer-美国保险公司人力资源方案ppt课件

1、Rich Bailey FSA, MAAA, FCARichmond, VAIs it Time for Employers to Move Away From the Traditional Ways of Providing Employee Benefits? November 3, 2004AgendaThe EnvironmentThe Catch-22Paths Away from Traditional Delivery: Two CampsOpportunities Along Path 2The AnswerAdditional Topics1AgendaThe Enviro

2、nmentMedical TrendsLegislationMarketplace ChangesPopulation DemographicsEmployer OutlookThe Catch-22Paths Away from Traditional Delivery: Two CampsOpportunities Along Path 2The AnswerAdditional Topics2Double-Digit Increase for Second Year in a RowPer employee costs in excess of $5,600 per year-2.9%+

3、6.2%+7.3%+8.1%+11.2%+14.7%Source: 2002 Mercer/Foster Higgins National Survey of Employer-sponsored Health Plans3Annual CPI Trend U.S. health care costs rise, despite continuing economic recessionThe gap between CPI-U and medical care component is increasing4Comparison of Overall Growth Cumulative me

4、dical care CPI 89% greater than overall CPI since 1967Data based on January 1 CPI values5Employers Cost Increases Out-Pace Other Indicators Largest increase since 1990 (all employers)Includes medical, dental and pharmacySource: 2002 Mercer/Foster Higgins National Survey of Employer-sponsored Health

5、PlansResults for Employers with 500 or more lives6.9%18.6%16.7%17.1%12.1%10.1%8.0%-1.1%0.2%6.1%7.3%8.1%11.2%14.7%2.1%2.5%-2.00%0.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%16.00%18.00%20.00%1987198819891990199119921993199419951996199719981999200020012002EmployersCPI-MedicalCPI-All Items6Aggregate Heal

6、th Care Spending (1980 2021) Government portion of payments increasing; total projected to be over $2 trillion by 2021Source: CMS7Medical TrendsPop QuizHow many years will it take gross medical costs to double, assuming no specific employer interventions or national health care?10 or more98765 or fe

7、wer8Medical TrendsResponses from a group of 25 actuaries who had time to get their calculators9LegislationMedicare Prescription DrugsIf made into law, will have major impact on retiree benefits and strategiesInitial confusion aside, should have positive impact on retiree plansExpect cost shifting to

8、 negatively impact active plansEEOC Proposed changes in ADEA regulationsCline vs. General DynamicsWells Fargo caseAppears to allow pre-funding (and tax-deductibility) of entire retiree liabilityan ILP approachwont be exactly same number as FAS liabilityfunding in years 2+ would be limited to service

9、 costIRS weighing its options10Proposals to Increase Coverage Among Early RetireesFew government programs except for financially indigentCOBRA extensions and/or Medicare buy-insProhibitions on post-retirement benefit reductionsExpanded pre-funding for retiree medicalStill few viable products for pre

10、-65 in individual market that overcome access and affordability issues.11ADEA IssuesImpact on retiree medical coverageAge Discrimination in Employment Act (ADEA) prohibits discrimination against persons age 40 or older in terms and conditions of employmentAge-based distinctions in employee benefit p

11、lans are permissible only if:A specific statutory exception applies, orEqual benefit/equal cost test is satisfiedPlan must provide equal benefits for older and younger workers, orPlan must incur equal costs for older and younger workersThird and Sixth Circuit Courts reach different conclusionsEEOC r

12、eviewing ADEA regulations12Marketplace ChangesConsolidation of Major Health Care Carriers Employer options are greatly reduced, carriers have more cloutUnited HealthcareHealthSourceProvidentCIGNAEquicorMetrahealthUS HealthcareAetnaTakeCareFHPPacifiCareHealthSourceCIGNAAetna US HealthcareNYLCarePrude

13、ntial HealthCareFHPPacifiCareProvidentTransamericaEquitableHCAMetropolitanPartnersAetnaGSDHPLincoln National HPsTakeCarePacifiCareHealth Plan of AmericaWellPoint/Blue Cross of CaliforniaHancockMass MutualTravelersUnited HealthcareAetnaPacifiCare Health SystemsWellPoint/BlueCross of CaliforniaCIGNABC

14、BS of GeorgiaMultiple BCBS PlansFewerMajor BCBS13Marketplace Changes PBM consolidation continues; three major national PBMs remainCPIAPICPNRxNetValue RxDiagnostekPerformHCSHPIDiagnostekValue RxRxNetColumbiaValue RxExpress ScriptsExpress ScriptsNPADPSExpress ScriptsPAIDMEDCOAdvanced ParadigmAdvanceMe

15、dcoIntegrated Prescription Solutions (IPS)PCSFoundationMerck-MedcoMerck-MedcoProadvantageSystemedParadigmMerck-MedcoMedcoAdvance PCSMajor InsurersMajorInsurersMPSPCSClinical Pharmacy Advantage14Population TrendsAging baby boomers will increase the elderly and near elderly populationsData Source: U.S

16、. Census Bureau State Population ProjectionsBaby Boomers Year of Birth 1946 to 1964Source: U.S. Census Bureau as of January 2000U.S. Population, 2000Projected PopulationMillions15Negative Tidal Wave of Available Talent Pool of “prime workers will be decreasing Source: DRI, World at Work Journal, fou

17、rth quarter 2001Percent Change in Population by Age Group, 2000-10-20%-10%0%10%20%30%40%50%60%5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79The “Echo boomages 15-29Shrinking Pool of“Prime workersages 30-44Aging “Baby boomersages 45-6916Impact of Demographics

18、on Health Care Cost Cost increases with age0.000.501.001.502.002.503.0020-2425-2930-3435-3940-4445-4950-5455-5960-6465+AgeRelative Cost by AgeMaleFemaleAverage employer cost = 1.0Relative Costs By Age and Gender17Health Deterioration A cause and a consequence We eat too much - 64.5% of adults overwe

19、ightPopulation with diabetes increased over 50% in last decade*Overweight is roughly 10 to 30 pounds over an ideal weight. Obesity is roughly 30 pounds over an ideal weightSource: National Health and Nutrition Examination Survey45.0%47.0%47.0%56.0%64.5%18Issues Facing Businesses The perfect storm Lo

20、w ambient inflation; high medical inflationAdvances in medical technology likely to lead to higher costs, difficult decisionsLegislative uncertaintyConsolidating medical delivery and financing systemAn aging workforceIncreased longevitySlowing economyDisappearing over-funded pension plansFew, if any

21、, obvious and easy alternatives to managing health care costs19Employer OutlookEnvironmental outlook spurring employer actionEmployers acutely aware of trendsHeightened interest in cost saving strategies (active and retiree)Greater emphasis on longer term cost projections and on the “bottom lineProj

22、ection results have induced “fight or flight responses20Retiree Medical Coverage Employers continue to drop retiree medical coveragePercentage of EmployersOffering Coverage to Future RetireesBased on employers of 500 or more lives responding to the2001 Mercer/Foster Higgins Survey of Employer-Sponso

23、red Health PlansWhen coverage is offered, retiree premiums and out-of-pocket costs often increase21AgendaThe EnvironmentThe Catch-22Paths Away from Traditional Delivery: Two CampsOpportunities Along Path 2The AnswerAdditional Topics22The Catch-22Reducing employer cost typically implies increasing em

24、ployee/retiree costEventually runs against employers sensibilities regarding fairness, paternalism (if present), and the concept of benefits generallyExample (FAS 106): “Lower my liabilities significantly but dont do anything harsh to our retireesthey wont accept itTo the extent that retirees repres

25、ent the bulk of the liability, this is a very difficult propositionOpportunities exist to change eligibility, design , etc. for future retireesIf we dont take cost out of the system, either the employer or the employees/retirees will pay the increases23AgendaThe EnvironmentThe Catch-22Paths Away fro

26、m Traditional Delivery: Two CampsOpportunities Along Path 2The AnswerAdditional Topics24Paths Away from Traditional Delivery: Two CampsEmployers that become more involved inChanging employee behaviorChanging provider behaviorChanging providers that they work withChanging the lawsEmployers that reduc

27、e their involvement byIncreasing employee responsibilityLimiting employer costLimiting employer risk25Employers Becoming More InvolvedCollective PurchasingHigh Performance NetworksDirect ContractingConsumer AccountabilityLeap FrogLobbyingDisease Management/Preventive CareWhat these approaches share

28、is an eye toward reducing cost from the employers system, and in some cases, the entire health care system.26Collective PurchasingUse employer and plan manager clout to negotiate favorable payment arrangementsBackgroundTraditional network negotiations are volume drivenApproaches to achieve lower cos

29、ts includeAggregated purchasing to improve negotiating strengthCoalitionsFormal alliancesInformal alliancesDirecting care to most cost-effective source of quality careReviewing effectiveness, efficiency and “fit of current vendor relationships; changing as appropriate27What is a HPN? High Performanc

30、e Network: A health plan performance improvement method that steers care to providers that meet specific efficiency and quality criteria28Rationale for HPNs New management approaches are needed in this era of cost accelerationPatients and physicians are the key drivers of health care costsBut they h

31、ave limited or no incentive to care about costsThe heart of the High Performance Network concept is to change the provider selection behavior of patients and/or physicians29High Performance Networks Network modelsLimited NetworkA subset of an existing provider network comprised of high performing pr

32、ovidersTiered NetworkEmployee copay/coinsurance differentials to encourage use of high performing providersPhysician PartneringAn arrangement with (typically) primary care physicians to enhance efficiencyConsumer DrivenDeployment of performance information to consumers to improve provider selection3

33、0Direct Contracting Large employers with significant market presenceMay be able to achieve significant savings by contracting directly with health care providersMay need group of regional employers to achieve critical mass31Promote Consumer AccountabilityHelp patients be better consumers of health c

34、areBackgroundIf half of cost is due to lifestyle and half of chronic patients do not follow treatment plan, what can we do?Get members attention make them aware of consequencesApproaches to encourage consumer involvement includeCoordinated health promotion, disease prevention and educational program

35、sTying employee cost increase to trend“Defined contribution health plansConsumer directed health careRe-introduction of coinsurance32Efforts to Improve Quality of Care in Hospitals Leapfrog initiative The Leapfrog Group: BackgroundFormed in response to Institute of Medicine study of errors in health

36、 careGoal: Major gains in patient safety, customer service and health care affordabilitySponsored by Business RoundtableEmployers in Leapfrog Group use purchasing power to encourage health care providers to adopt patient safety standardsLeapfrog standards include:Computerized systems in hospitals to

37、 improve the accuracy of physicians prescriptions and minimize medication errorsStaffing of intensive care units by physicians trained in critical care medicineReferral of patients requiring certain complex procedures to hospitals offering the best results33Lobbying Some employers making presence fe

38、lt on Capitol HillMany have been active for years and are recognized as important voicesSome large associations have similar goals and represent large voting populations34Preventive Care and Disease Management Across theHealth Care Continuum Programs should be tailored to the needsPreventionScreenin

39、gsHealth Risk AssessmentTargeted Risk Reduction ProgramsRisk ModelingNurse Advice LineWeb ToolsConsumer DirectedHealth PlanDiseaseManagementIncentive DesignSelf ManagementTrainingCase ManagementDecision SupportPredictive ModelingWellNo DiseaseAt RiskObesityHigh CholesterolAcute Illness/Discretionary

40、 CareDoctor VisitsEmergency VisitsChronic Illness DiabetesCoronary Heart DiseaseCatastrophicHead InjuryCancer85% members = 15% cost15% members = 85% cost35Employers Becoming More Involved SummaryTypically the larger employers“Fighting to change the way health care delivered to own employeesGoal is t

41、o produce better outcomesAnd lower cost36Employers Becoming Less Involved (Camp 2)Employers desire to “know their costDollar-based plans (often account-based)Reimbursement plansAccess Only plans“Capped Planstypically retiree medicalWhat these approaches share is an eye toward reducing employer cost

42、at the expense of employees/retirees37Account-Based ApproachesDefines employers commitment as a defined dollar contribution instead of a defined medical benefitCommitment can be monthly, annual, aggregateCommitment can be based on retiree-only or recognize dependentsAmounts available for health care

43、 only; employer contributions are tax-free to the retiree and deductible for employer under Sections 105, 106 and 162 of IRCCan be funded or unfundedFor Medicare-eligible, Medicare+Choice, Medigap and traditional Medicare available; HIPAA may eventually make this a viable option for pre-Medicare ret

44、irees38Account-Based ApproachesExamplesMonthly/annual promiseRetirees receive monthly (or annual) credits of a specified dollar amount (e.g., $100/monthly; $5/month/year of service for 20 years of service)Fixed or increases annually; “flat or tied to service; amount not used can be carried over or n

45、otAggregate (“lump sum) promiseEmployer promise is one-time credit (e.g., $30,000; $1,000 per year of service for 30 years of service); accounts earn interest (e.g., at T-bill rate) or not; no employer pre-funding requiredPayment options“Draw-down on funds (retiree uses funds to pay portion of retir

46、ee medical cost; ends when fund exhausted), or “lump sum is converted to an annuity (multiple options)39Reimbursement Plans Employer often requires submission of receipts for health care expendituresPremiumsOut-of-Pocket costsTypically defined with a maximum reimbursable limit (e.g. $75/month)Most c

47、ommon is reimbursement (or pre-payment) of Medicare Part B premium for Medicare eligible retireesCurrent cost $58.70 per month with moderate year-to-year trendsEmployer motivated to ensure Part B in effect for Medicare-eligible retireesPart D reimbursement may become popularEmployer achievingEscape

48、from plan sponsorship (for whichever segment of his population the plan applies to)Fixed costs; increases subject to employer discretionNot a tax-advantaged approach40Access Only Plans Employer “sponsors company health plans (stays “in the business)By doing so, retains group underwriting, pricing an

49、d risk profileEmployer contemplates no subsidyFull cost and annual increases absorbed by employees/retireesFully insured plansWorks bestCosts known in advancePremiums fixed in advanceSelf-insured plansRequires more managementCosts not known in advanceBut premiums must be fixed in advanceCaution rega

50、rding active/retiree subsidyMay impact other accounting (FAS 106)41Capped Plans “Employer cost will be capped at 2 times the 1993 costImplication is that employer share becomes a fixed dollar commitment at some point in the futureTypical action taken in early to mid 1990s for retiree programs in res

51、ponse to FAS 106; liabilities approximately of uncapped plansMany caveatsUsually applied only to those retiring post-announcementEvaluate separately for pre-Medicare eligible vs. Medicare eligible, or in aggregateEvaluate per retiree or in aggregateDefinitions of “premiums and “costscross subsidy of

52、 actives/retirees can cloud calculationsNeed clear definition of how costs and contributions are calculated before cap is hitEnrollees will understand concept, but likely wont be prepared for eventual increases42Employers Becoming Less InvolvedSummary Focusing on approaches that allow a fixed employ

53、er commitmentRisk transferred to employees/retireesIn some versions (caps), no immediate impact felt by participantsCommunication is criticalEmployers concerned about participant response43The Two Camps SummarizedFight or FlightThe largest employers seem willing to try to change the worldMid sized a

54、nd smaller employers seem to want to “get out of the responsibilityNeither reflects the traditional way of providing benefitsFocus on employers reducing involvement, using a generic defineddollar (defined contribution) approach44AgendaThe EnvironmentThe Catch-22Paths Away from Traditional Delivery:

55、Two CampsOpportunities Along Path 2The AnswerAdditional Topics45Where can we apply “Defined Contribution approaches most easily?Active employees/early retireesEmployers will still need to “sponsor a planCan set employee contributions to meet desired cost share and allow employees to buy back into a

56、self-insured planEasiest calculation if underlying plan is fully insuredMedicare Eligible RetireesEmployers may actually be able to get all the way outEven if company sponsors no Medicare eligible retiree plan, options available in market for retirees to choose fromSome with little or no underwritin

57、g (removes access problem) but eligibility/timing important46DC Health Plans in the Spectrum of Employer Contributions% of CostEmployer pays X%(e.g., 80%) of cost ofhealth plans; employee paysthe remainder.% for Benchmark; DC for OthersEmployer pays X% of costof one specified Plan A(“preferred or “e

58、mployer plan).The amount of employercontribution for Plan A becomes thedefined dollar contribution forPlans B, C, ; the employee paysthe balance in cost.Pure DCEmployer pays $Z peremployee. Employee must paybalance for whatever plan ispicked. The employercontributionis not tied directly to thecost o

59、f any plan.Employer Contribution LevelDC Health Plans% ofCostNoContribution(wages only)% forBenchmarkPlans; DCfor OthersPureDCFullCostHighLow47Medicare+ChoiceHealth plan takes risk, receives “capitated paymentMedicare “Part C (Medicare Advantage?)Health plan offered by private insurance companies, u

60、sually on an HMO-like basisBenefits broader than Original MedicareReduced out of pocket expenses for deductibles and copaymentsMay offer prescription drug coverageMedicare pays a set amount of money to private insurerMay be additional premium cost over Part B premium (fully insured to employer)Avail