MBGH ANNUAL CONFERENCE MAY 10-11, 2007 Health Benefits GPS-Mapping Your 2008 Strategy

1. MBGH ANNUAL CONFERENCEMAY 10-11, 2007 Health Benefits GPS-Mapping Your 2008 Strategy Paying For Quality Health Care Benefits With Actions, Not Cash Hank Scheff, American Federation of State, County and Municipal Employees (AFSCME) Council 31

2. Paying For Quality Health Care Benefits With Actions, Not Cash Health Care Benefits at AFSCME: History • What is AFSCME Council 31? • 254 adult participants (165 employees/retirees) • Comprehensive PPO, self funded, with modest cost sharing • Like everywhere else, costs threaten the status quo • Voluntary screenings, Health Risk Assessments and medical self care training • Negotiated with employees • Employees as negotiators are health benefits savvy AFSCME Council 31

3. Paying For Quality Health Care Benefits With Actions, Not Cash A New Direction in 2007 • Build on what was in place • Preserve quality benefits by upping the behavioral ante for participants • Stress participant competencies essential to better communications with health professionals and health-affecting decision making • Adopt a “Value Based Benefits” strategy- Integrate innovative benefit cost sharing and “sculpting” with mandatory education, training and (nurse) care counseling to cause participants to be value co-creators – not merely value beneficiaries AFSCME Council 31

4. Paying For Quality Health Care Benefits With Actions, Not Cash 2007 Benefit Program Attributes • Two plans replaced the former plan: • The Health ImprovementPlan (HIP)—better, “sculpted” benefits if covered adults followed a Personal Health Improvement Prescription (PHIP) • The StandardPlan-lesser benefits and higher costs for adults who do not wish to follow a PHIP and make a real effort to improve their health • Health Care Counselors replaced previous utilization review and case management AFSCME Council 31

5. Paying For Quality Health Care Benefits With Actions, Not Cash 2007 Benefit Program Attributes (cont’d) • A new pharmacy benefit manager was named, and greater emphasis placed on the clinical appropriateness of prescribed medications • Existing PPO networks and TPA retained • A new and improved Council 31 Pathways to Health web site that: • Connects participants to their PHIPs, personal health information and members of their health team • Helps participants learn how to become knowledgeable and effective contributors to their health AFSCME Council 31

6. Paying For Quality Health Care Benefits With Actions, Not Cash Why Join the Health Improvement Plan? Financial Incentives! • PPO Deductibles: $200 HIP/$400 Standard Plan • Coinsurance: 90%/80% HIP; 80%/70% Standard Plan • Annual OOP Limits: $1,250 HIP; $2,500 Standard Plan AFSCME Council 31

7. Paying For Quality Health Care Benefits With Actions, Not Cash Why Join the Health Improvement Plan? Financial Incentives! (cont’d) • Double above for family; double again for non-PPO providers • Lifetime Limits: $2 million HIP; $1 million Standard Plan • Contributions (for the first time!): • HIP: 0.5% of salary for a spouse • STANDARD: 1.0% of salary for employee; 2.0% for a spouse = 3% of salary! • Each adult makes their OWN SELECTION, they don’t have to be in the same plan. • Children are automatically in the HIP AFSCME Council 31

8. Paying For Quality Health Care Benefits With Actions, Not Cash The Change “Navigator”- the PHIP • A CONFIDENTIAL health competency development schedule for each adult based on merged health risk assessment, wellness screening, and claims data • It may require the use of specialized services at various stages of diagnosis and treatment based on personal health factors • Compliance will be tracked and noncompliance will result inineligibility for the Health Improvement Plan and transfer to the Standard Plan AFSCME Council 31

9. Paying For Quality Health Care Benefits With Actions, Not Cash Examples of the PHIP’s Targeted Actions and Competencies • Participate in CONFIDENTIAL health risk assessments and wellness screenings • Designate a primary care physician and learn how to communicate more effectively with him/her • Become care cost and benefits savvy by understanding what constitutes the “right” care and learning how to make care and cost trade-offs • Learn to stay healthy; reduce risks of illness, disease, injury, and premature death; improve capabilities, quality of life • Adopt appropriate early detection practices AFSCME Council 31

10. Paying For Quality Health Care Benefits With Actions, Not Cash Examples of the PHIP’s Targeted Actions and Competencies (Cont’d) • Effective use of information technology • Self treat health problems appropriately • Help prevent medical errors • Help coordinate their own care • Work with the health care counselor • Actively participate in treatment plans and comply fully with them • Access end-of-life resources AFSCME Council 31

11. Paying For Quality Health Care Benefits With Actions, Not Cash Five Months In, What Have We Learned? • Lots of administrative glitches caused by introducing new program elements, integrating new service providers and tying adult participants to their own plans. • Aligning a Value Based Benefit philosophy with conventional stop loss carrier utilization review requirements is not easy • Building the “right” website takes time, and getting participants to use it in meeting their PHIP requirements and making better health improvement and care choices is a new frontier • Participants are forgiving, and most importantly “get” what we’re trying to do AFSCME Council 31

12. Paying For Quality Health Care Benefits With Actions, Not Cash QUESTIONS? NEED TO KNOW MORE? CHECK OUT THE HPN DISPLAY AFSCME Council 31