TRICARE Update for Navy Medicine January 21, 2011 RADM C.S. Hunter, MC, USN Deputy Director TRICARE Management Activity.

TRICARE Updatefor Navy Medicine

January 21, 2011

RADM C.S. Hunter, MC, USNDeputy Director

TRICARE Management Activity

TRICARE Beneficiaries:Who We Serve

Nearly 9.7 million beneficiaries (2.8M Navy/Marine Corps)

• TRICARE Prime enrollees:− 3.7 million in direct care system

1.1M Navy/Marine Corps − 1.7 million in contractor networks

540,000 Navy/Marine Corps

• Others are TRICARE Standard/Extra,TRICARE Reserve & TRICARE for Life

TRICARE annual cost per retired beneficiary • Prime: $4,202• Standard: $3,584• TRICARE For Life (age 65+): $3,874

(does not include Medicare contribution)

2

A Week in the Life of TRICARE

• 2.6 million prescriptions(730,000 Navy/MC)– 924,000 direct care– 1.44 million retail pharmacies– 228,000 home delivery

• 231,000 behavioral health outpatient services– 52,000 direct care– 179,000 purchased care

• 23,300 inpatient admissions– 5,100 direct care (1,600 Navy/MC)– 18,200 purchased care

(5,100 Navy/MC)

• 1.8 million outpatient visits – 810,000 direct care – 1.0 million purchased care

• 2,400 births– 1,000 direct care (350 Navy/MC)– 1,400 purchased care (420 Navy/MC)

• 3.5 million claims processed

• 12.6 million electronic health record messages

Behavioral HealthOutpatient Visits

Active Duty Family

Active Duty

Quadruple Aim as an Enduring Construct for Care

Aligning Behindthe Quadruple Aim

• Readiness– Pre- and Post-deployment– Family Health – Behavioral Health – Professional Competency/Currency

• Population Health– Healthy service members, families, and retirees– Quality health care outcomes

• A Positive Patient Experience– Patient and Family centered Care, Access, Satisfaction

• Cost– Responsibly Managed– Focused on value

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

33 40 42 45 47 49 52 52

17 11 10 10 10 11 10 1028 27 26 24 23 20 21 20

22 22 22 21 20 20 18 18

Reserve Component

1QFY

09

2QFY

09

3QFY

09

4QFY

09

1QFY

10

2QFY

10

3QFY

10

4QFY

10

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

51 55 58 60 62 64 66 66

15 12 9 9 9 9 8 821 20 20 18 17 15 15 14

13 13 13 13 13 12 12 12

Total Force

1Q

FY

09

2Q

FY

09

3Q

FY

09

4Q

FY

09

1Q

FY

10

2Q

FY

10

3Q

FY

10

4Q

FY

10

62 65 68 72 72 74 76 76

14 13 9 8 8 86 6

16 15 16 13 13 1111 10

8 7 7 7 7 12 7 8

Active Component

• To improve performance, commands should focus on completingdelinquent PHAs & dental exams

• New for 2011: Examining impact of ‘retained but not deployable’

Individual Medical Readiness Target: 80%

5

Approaching Readiness Goals

Fully Ready Partially Ready Indeterminate Not Ready

82%74%

80%

62%

Behavioral Health, FY07-FY10

Services Patients

Direct care Up 47% Up 26%

Purchased care Up 84% Up 40%

PTSD “Engaged in Treatment” Rate

Reserve

Total Force

Active

Enhancing Readiness:Behavioral Health

• TRICARE is assisting with:– TRIAP: Counselors available for

confidential, private discussions using video chat and instant messaging

– USMC DSTRESS Line: Callers speak with counselors and clinicians with specialized training and/or exposure to USMC culture

• Challenges:– 31.5% of MTF referrals for network

outpatient behavioral health aren’t activated (improved from 39.1% in 2008)

– More military children reporting problems (Nat’l. Military Family Assn. study)

– Reserve health coverage continuum

– Caregiver behavioral health

• Annual investment in BH increased from$500M in 2005 to over $1B in 2010

6

Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-100

20,000

40,000

60,000

80,000

100,000

10,831

3,941 2,129 608 209 107 63

7,122

75,676

107,836

56,669

19,893

Immunizations at Retail Pharmacies in 2010

New Benefit Contributesto Family Readiness

Flu Case Data Source: Google Flu Trends

We

ek

ly F

lu C

as

e E

stim

ate

National Flu Cases

First Available December 29, 2009

7

4 4 4 4 5 5 5 53 4 4 4 4 4 4 4

3 3 3 3

4 4 4 4

33 3 3 3 3 3 3

4 4 4 4

54 4 4

44 4 4

5 5 5 5

3 4 4 4

44

3 3

33 3 3

3 3 3 3

55 5 5

55

5 5

55 5 5

5 5 5 5

0

5

10

15

20

25

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2008 2009 2010 2008 2009 2010

Navy DoD

Po

ints

8

Enrollee Preventive Health Quality Index (HEDIS)

How Are We Doingin Population Health?

Go

od

Sum of Asthma Medication

Sum of Diabetes Index

Sum of Colorectal Cancer

Sum of Cervical Cancer

Sum of Breast Cancer

* Display contains rounded index points for each respective screening component.Index Points

>90th Percentile 5

<90th and >75th Percentile 4

<75th and >50th Percentile 3

<50th and >25th Percentile 2

<25th and >=10th Percentile 1

<10th Percentile 0

To improve, recommend focus onA1c screening and A1c control measures in diabetes index

• Navy is slightly below the 75th percentile for both A1c screening and A1c control (<9mg/dL)

• Control should improve as screening improves

At over 50% of MTF primary care clinics, patients calling for an acute appointment will be offered at least 3 options within 24 hours

MTF Enrollees

Contractor Enrollees

Emergency Room Utilization

Benchmark

• Patient Centered Medical Homeemphasizes: – Access– Coordination of care– Preventive care– Disease management

• To reduce ER utilization, practicesmust address after hours care in 2011– TRICARE is now affiliated with:

• > 2000 urgent care facilities• 530 convenience clinics

– Secure messaging availablein many locations

How Are We Improving? Patientis the Center

of theMedical Home

1010

Expanding Medical Hometo Improve Performance

2.5M2.5M

1.25M1.25M

500K500K

250K250K

Emergency Room (ER) Utilization ↓24%

Primary Care Manager (PCM)

Continuity ↑16%

Getting Timely Care ↑14%

Beneficiary Satisfaction ↑10%

Beneficiary Satisfaction

Getting Timely Care

PCM Continuity

ER Utilization

R

Y

R

Y

Beneficiary Satisfaction

Getting Timely Care

PCM Continuity

ER Utilization

Y

R

Y

Y

Beneficiary Satisfaction

Getting Timely Care

PCM Continuity

ER Utilization

Y

G

G

G

Beneficiary Satisfaction

Getting Timely Care

PCM Continuity

ER Utilization

Y

Y

G

Y

655K655KAct

ua

l20

10P

roje

cte

d20

11

Which Patients Benefit Most?

Linked to Secure Messaging in 2011

TRICARE Online: A Personal Health Portal

Meaningful Use of Health IT

Get started with secure messaging

Introducing New 2011 Health Plan Quality Measures

Completed All Well-Child Visits

Navy MTFs 62.4%

90th Percentile 90.4%

Behavioral Health Admission7-Day Follow-up

Navy MTFs 65.8%

90th Percentile 73.3%

Cardiac Patients:LDL Cholesterol Control

Navy MTFs 60.7%

90th Percentile 70.6%

C-Section Rate (Lower is Better)

Navy 24.8%

National 32%

Congrats!

• Well child visits include routine newborn care, immunizations, eye screenings, etc.

• LDL Control regarded as <100 mg/dL 12

Patient Satisfaction with Military Health Care

Active Duty Satisfaction Family Member Satisfaction

Top Customer Service Issues: Getting appointments, Clinic wait times, Specialist availability, Finding parking

Active Duty Satisfaction Family Member Satisfaction

Jul 03 Aug 05 Aug 07 Aug 09

Per

cen

t S

atis

fied

100

80

60

40

20

0

Per

cen

t S

atis

fied

100

80

60

40

20

0Jul 03 Aug 05 Aug 07 Aug 09

13

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec500

600

700

800

900

1,000

1,100

1,200

0%

5%

10%

15%

20%

25%

30%

2008 2009 2010 '09 to '10 growth rate

# of

Rxs

(rou

nded

, in

thou

sand

s)

Grow

th ra

te

Using Our Benefits WiselyPlease Encourage Use of Mail Order Pharmacy

2009 Growth

2010 Growth

Home Delivery

3.9% 12.3%

Retail 7.5% 4.2%

Network Enrollee Cost

RetailPharmacy

22%

Home Delivery Growth Trend – Year over Year

Where Else Does the Data Point Us?

Should We Adopt New Models for On-Base Care?

• Contractors routinely authorize greater than20 PT visits per referral

• What is readiness impact?– Visit cost is modest, but

lost work time is significant Jan-

05

Aug-0

5

Mar

-06

Oct-0

6

May

-07

Dec-0

7

Jul-0

8

Feb-0

9

Sep-0

9

Apr-1

0

Nov-1

0

Jun-

11

Jan-

12

Aug-1

2

Mar

-13

Oct-1

3

May

-14

Dec-1

40

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Musculoskeletal and Physical Therapy Visits

Purchased Care

Direct Care

0

1000

2000

3000

4000

Jun-10 Jul-10 Aug-10 Sep-10

Camp LeJeune AreaPhysical Therapy Visits

Active Duty AD Family

• Increases in new eligible beneficiaries– Increase of 400,000 beneficiaries

since 2007

• Expanded benefits– TRICARE For Life, Prescription

benefits, Reserve coverage

• Increased utilization– Existing users are consuming

more care (ER, Orthopedics, Behavioral Health)

• Healthcare inflation – Higher than general inflation rate

Why are Healthcare Costs Growing in TRICARE?

Annual Cost Breakdown (TRICARE Prime)

Inpatient Ambulatory PharmacyFY05 FY06 FY07 FY08 FY09

2007

2010

Beneficiaries(millions)

• Redesign direct care with Patient-Centered Medical Home

• Re-engineer purchased care − Negotiate best possible pricing− Reduce administrative costs− Design new approach to future

TRICARE contracts (T4)

• Address TRICARE program issues− Redirect pharmacy to lower cost

venues− Reduce ER utilization

• Streamline TRICARE Management Activity

− Decreasing by 780 contractors

Addressing Cost Growth

Secretary Gates (1/6/11): Anticipate Modest Increases in Retiree Fees in 2012

2010 Target: 6.1%

-2.7%

Bending the Cost Curve:Annual Cost Growth Per Equivalent Life

2.9%

Navy

Purchased Care

Major TRICARE Contractors

North ~ $17B

South ~ $22B

West ~ $17B

Overseas ~ $5.3B

Pharmacy ~ $42B (Using FY10 actual costs)

Contract Value Over 5 Years

Costs include health care, drugs, supplies, and administration

18

TRICARE Contract/Benefit Updates

• Health care delivery goes live under T3 North Region 1 April 2011− ICDB/RMSTR to manage referrals and authorizations (Clear & Legible Reports)− Greater emphasis on prevention− Medical Home Pilot with State of Maryland anticipated

• Includes care management fees

• New family member dental contract announced 1/7/2011− Better coverage for orthodontia, ‘natural’ fillings

• Overseas − Health care delivery began 1 September 2010− Referrals greater than anticipated (2,800 per week), backlog now addressed

• T3 South/West− Getting closer to protest resolution

19

• Premium-based TRICARE Standard coverage available Spring 2011

• Offered to eligible dependents who:− Are unmarried − Age out of TRICARE at age 21, or age 23 if in college full-time − Are not eligible for their own employer-sponsored coverage

• TRICARE Standard/Extra health coverage on a month-to-month basis

• Retroactive to January 1, 2011, provided premiums are paid back to January 1

• ID cards can be obtained after purchasing TRICARE Young Adult

• TRICARE Prime benefit anticipated later in 2011; will have separate premium

• Estimated 233,000 will qualify for TRICARE Young Adult

• Offers excellent coverage at a competitive price– Respects fiscal constraints on DoD healthcare

TRICARE Young AdultSave YourReceipts!

20

21

• Posing strategic questions:– Alternate delivery and finance models– Leveraging national health reform– Individual choice and financial responsibility– Need for global coverage and products for diverse populations– Rapid adoption of best practices, knowledge management – Scope of benefit, ease of use

• Ensuring we maintain:– Focus on Quadruple Aim– Patient and family centered care ethos– Robust direct care system for force projection– Coordination of care for individual and family readiness

Designing the Way Ahead “T- 4 Study Group”

How Can T4 Achievethe Quadruple Aim?

22

• Study group assessment:– High quality care reduces cost

– High quality care requires systems

– Primary care is key to improving quality and cost,but shortage is imminent

– Policy makers will resort to price cutting to manage costif providers do not deliver quality and control cost themselves

• Four courses of action being examined:– TRICARE (with incremental improvements)

– FEHBP / Insurance exchanges / Medicare-like product

– MTF-managed regional systems of care

– Purchase systems of care from integrated provider groups

Supporting Change in the Right Direction

Learning &Continuous

Improvement

What Skill Sets do Navy Medicine LeadersNeed to be Successful in 2015?

• Military

• Strategic

• Operational

• Business

• Financial

• Communications

• Quality

• Process Flow

• Systems Integration

• Feedback

• Innovation / R&D

• Technology Assessment

• Incentivizing Performance

23

We Are All Part of the Solution

24

TRICARE Beneficiaries by Category

• 1.5 million active duty service members

• 2.1 million active duty family members

• 139,000 eligible dependent survivors (under age 65)

• 3.0 million retirees and family members (under age 65)

• 1.9 million TRICARE For Life (age 65+)

• 642,000 Guard/Reserve and families (active)

• 324,000 Guard/Reserve and families (inactive)

9.6 Million Eligible Beneficiaries

25

Trauma Care Outcomes in Theater

Navy Hospital Corpsmen Contribute Significantlyto Unprecedented Survival Rates

Observed vs. Expected Survival Rate

Observed Survivors

Predicted Survivors