Working Together to Help Keep Connecticut’s Economy Healthy Eileen Auen, President Health Net of the Northeast CBIA Economic Forum September 4, 2003
Dec 20, 2015
Working Together to Help Keep Connecticut’s Economy Healthy
Eileen Auen, President Health Net of the Northeast
CBIA Economic ForumSeptember 4, 2003
CBIA – September 4, 2003 2
Connecticut Executives’ Top Concerns
81%
37%32%
25% 24%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Health CareCosts
PropertyTax
Workers’Compensation
PersonalIncome
Tax
Labor Costs
BlumShapiro//CBIA 2003
CBIA – September 4, 2003 3
Our Regional Health Care Picture
Health care utilization and costs are continuing to rise
Premiums increasing in 2004 between 11% – 14% on average
Employers passing cost increases on to their employees
Employees looking to employers and legislators for leadership
State budget shortfalls will create more pressure on hospitals and insurers
CBIA – September 4, 2003 4
Industry Premium Comparisons
150
170
190
210
230
250
270
290
2000 2001 2002
California
Connecticut
New York
New Jersey
IndustryCommercial Premium, per member per month
Source: 2003 Health Leaders, Inc.
CBIA – September 4, 2003 5
Health Net Hospital Cost Comparison
Q2 2003 (Per member, per month relative cost)
Connecticut 1.26
California 1.10
New Jersey 1.15
New York* 1.0
*Excludes HCRA Tax
CBIA – September 4, 2003 6
Factors Driving Premium Increases%
Source: PricewaterhouseCoopers
0
5
10
15
20
25
Drugs, Medical
Devices &Advances
Rising Provider
Expenses
Government
Mandates &Regulations
Increased
ConsumerDemands
Litigation &
RiskManagement
Other
22% 18% 15% 15% 7% 5%
$15B
$12B
$10B $10B
$5B$3B
*Plus 18% general inflation
CBIA – September 4, 2003 7
Utilization Increasing
8,186
9,49010,320 10,713
0
2,000
4,000
6,000
8,000
10,000
12,000
Q 4/99 Q 4/00 Q 4/01 Q 4/02
Rx per 1,000 MembersHealth Net of the Northeast
CBIA – September 4, 2003 8
Missing the Mark on Generics
3936 37
39
0
10
20
30
40
50
Q 4/99 Q 4/00 Q 4/01 Q 4/02
% of GenericsHealth Net of the Northeast
CBIA – September 4, 2003 9
Rising Provider Expenses
Industry factors Macro-economic issues Regulatory Government programs General lack of competitiveness
CBIA – September 4, 2003 10
Government Mandates and Regulations
More than 1,500 existing Federal and state mandates, and more to come
Unintended financial consequences Elimination of cost-control tools Shift away from medical necessity
CBIA – September 4, 2003 11
Mandates that make sense
Mammography screenings Cervical cancer screenings Some clinical trials
CBIA – September 4, 2003 12
Our Aging Population
12.5% of the U.S. population is 65 or older
14% of CT’s population is now 65 or older
By 2030 more than 20% will be 65 or older
CBIA – September 4, 2003 13
Litigation and Risk Management
Class-action lawsuits Defensive medicine Malpractice premiums
CBIA – September 4, 2003 15
Solutions for Reducing Health Care Costs
Bring consumers back into the process Focus on pharmacy issues Use information to target appropriate
interventions Reduce administrative costs
CBIA – September 4, 2003 16
Bringing Consumers into the Process
Transparency Cost and quality incentives Variable-option plans Access to information
CBIA – September 4, 2003 17
Focus on Pharmacy Issues
Triple-tier Rx Lower co-payments for generics, and
increased co-pays & coinsurance for brand-name drugs
Patient/member education (i.e., antibiotic-resistance, compliance, interactions, etc.)
CBIA – September 4, 2003 18
Target Appropriate Interventions
Focus on high-cost providers Evidence-based medicine Disease management programs for chronic
illnesses Case management of high-risk populations Promote preventative health
CBIA – September 4, 2003 19
How Health Net is Reducing Administrative Costs
Increasing auto-adjudication Online enrollment Physician and hospital Internet
connectivity Less documentation required from most
in-network physicians
CBIA – September 4, 2003 20
Reducing Costly Mandates and Regulations
Write or call your legislator and regulators Lobby for more flexible benefits Request cost-benefit analysis prior to any
new health-care mandates being imposed Educate your employees about issues driving
health cost increases
CBIA – September 4, 2003 21
Importance of Partnership with CBIA
Health Net serves close to 20,000 members through CBIA
Increases “buying power” for small businesses
Influential voice for meeting small-business needs in Connecticut