MERCER为美国保险业协会做的绝密HR分析报告
- 1. Rich Bailey FSA, MAAA, FCA Richmond, VAIs it Time for Employers to Move Away From the Traditional Ways of Providing Employee Benefits? November 3, 2004
- 2. AgendaThe Environment The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics1
- 3. AgendaThe Environment Medical Trends Legislation Marketplace Changes Population Demographics Employer Outlook The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics2
- 4. Double-Digit Increase for Second Year in a Row Per employee costs in excess of $5,600 per year-2.9%+6.2%+7.3%+8.1%+11.2%+14.7%Source: 2002 Mercer/Foster Higgins National Survey of Employer-sponsored Health Plans3
- 5. Annual CPI Trend U.S. health care costs rise, despite continuing economic recessionThe gap between CPI-U and medical care component is increasing4
- 6. Comparison of Overall Growth Cumulative medical care CPI 89% greater than overall CPI since 1967Data based on January 1 CPI values5
- 7. Employers’ Cost Increases Out-Pace Other Indicators Largest increase since 1990 (all employers)Includes medical, dental and pharmacy Source: 2002 Mercer/Foster Higgins National Survey of Employer-sponsored Health Plans Results 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 Items6
- 8. Aggregate Health Care Spending (1980 – 2010) Government portion of payments increasing; total projected to be over $2 trillion by 2009Source: CMS7
- 9. Medical TrendsPop Quiz How many years will it take gross medical costs to double, assuming no specific employer interventions or national health care? 10 or more 9 8 7 6 5 or fewer8
- 10. Medical Trends Responses from a group of 25 actuaries who had time to get their calculators9
- 11. LegislationMedicare Prescription Drugs If made into law, will have major impact on retiree benefits and strategies Initial confusion aside, should have positive impact on retiree plans Expect cost shifting to negatively impact active plans EEOC Proposed changes in ADEA regulations Cline vs. General Dynamics Wells Fargo case Appears to allow pre-funding (and tax-deductibility) of entire retiree liability an ILP approach won’t be exactly same number as FAS liability funding in years 2+ would be limited to service cost IRS weighing its options 10
- 12. Proposals to Increase Coverage Among Early Retirees Few government programs except for financially indigentCOBRA extensions and/or Medicare buy-ins Prohibitions on post-retirement benefit reductions Expanded pre-funding for retiree medicalStill few viable products for pre-65 in individual market that overcome access and affordability issues.11
- 13. ADEA Issues Impact on retiree medical coverageAge Discrimination in Employment Act (ADEA) prohibits discrimination against persons age 40 or older in terms and conditions of employment Age-based distinctions in employee benefit plans are permissible only if: A specific statutory exception applies, or Equal benefit/equal cost test is satisfied Plan must provide equal benefits for older and younger workers, or Plan must incur equal costs for older and younger workers Third and Sixth Circuit Courts reach different conclusions EEOC reviewing ADEA regulations12
- 14. Marketplace Changes Consolidation of Major Health Care Carriers Employer options are greatly reduced, carriers have more cloutUnited HealthcareHealthSourceProvidentCIGNAEquicorMetrahealthUS HealthcareAetnaTakeCareFHPPacifiCareHealthSourceCIGNAAetna US HealthcareNYLCarePrudential HealthCareFHPPacifiCareProvidentTransamericaEquitableHCAMetropolitanPartnersAetnaGSDHPLincoln National HPsTakeCarePacifiCareHealth Plan of AmericaWellPoint/Blue Cross of CaliforniaHancockMass MutualTravelersUnited HealthcareAetnaPacifiCare Health SystemsWellPoint/BlueCross of CaliforniaCIGNABCBS of GeorgiaMultiple BCBS PlansFewer Major BCBS13
- 15. Marketplace Changes PBM consolidation continues; three major national PBMs remainCPIAPICPNRxNetValue RxDiagnostekPerformHCSHPIDiagnostekValue RxRxNetColumbiaValue RxExpress ScriptsExpress ScriptsNPADPSExpress ScriptsPAID MEDCOAdvanced ParadigmAdvanceMedcoIntegrated Prescription Solutions (IPS)PCSFoundationMerck-MedcoMerck-MedcoProadvantageSystemedParadigmMerck-MedcoMedcoAdvance PCSMajor InsurersMajor InsurersMPSPCSClinical Pharmacy Advantage14
- 16. Population Trends Aging baby boomers will increase the elderly and near elderly populationsData Source: U.S. Census Bureau State Population Projections Baby Boomers Year of Birth 1946 to 1964Source: U.S. Census Bureau as of January 2000U.S. Population, 2000Projected PopulationMillions15
- 17. Negative Tidal Wave of Available Talent Pool of “prime workers” will be decreasing Source: DRI, World at Work Journal, fourth 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 boom” ages 15-29Shrinking Pool of “Prime workers” ages 30-44Aging “Baby boomers” ages 45-6916
- 18. Impact of Demographics 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 Gender17
- 19. Health Deterioration A cause and a consequence We eat too much -- 64.5% of adults overweightPopulation 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 weight Source: National Health and Nutrition Examination Survey45.0%47.0%47.0%56.0%64.5%18
- 20. Issues Facing Businesses The perfect storm Low ambient inflation; high medical inflation Advances in medical technology likely to lead to higher costs, difficult decisions Legislative uncertainty Consolidating medical delivery and financing system An aging workforce Increased longevity Slowing economy Disappearing over-funded pension plans Few, if any, obvious and easy alternatives to managing health care costs 19
- 21. Employer OutlookEnvironmental outlook spurring employer action Employers acutely aware of trends Heightened interest in cost saving strategies (active and retiree) Greater emphasis on longer term cost projections and on the “bottom line” Projection results have induced “fight or flight” responses 20
- 22. Retiree Medical Coverage Employers continue to drop retiree medical coveragePercentage of Employers Offering Coverage to Future RetireesBased on employers of 500 or more lives responding to the 2001 Mercer/Foster Higgins Survey of Employer-Sponsored Health PlansWhen coverage is offered, retiree premiums and out-of-pocket costs often increase21
- 23. AgendaThe Environment The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics22
- 24. The Catch-22Reducing employer cost typically implies increasing employee/retiree cost Eventually runs against employer’s sensibilities regarding fairness, paternalism (if present), and the concept of benefits generally Example (FAS 106): “Lower my liabilities significantly but don’t do anything harsh to our retirees…they won’t accept it” To the extent that retirees represent the bulk of the liability, this is a very difficult proposition Opportunities exist to change eligibility, design , etc. for future retirees If we don’t take cost out of the system, either the employer or the employees/retirees will pay the increases23
- 25. AgendaThe Environment The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics24
- 26. Paths Away from Traditional Delivery: Two CampsEmployers that become more involved in Changing employee behavior Changing provider behavior Changing providers that they work with Changing the laws Employers that reduce their involvement by Increasing employee responsibility Limiting employer cost Limiting employer risk25
- 27. Employers Becoming More InvolvedCollective Purchasing High Performance Networks Direct Contracting Consumer Accountability Leap Frog Lobbying Disease Management/Preventive Care What these approaches share is an eye toward reducing cost from the employer’s system, and in some cases, the entire health care system.26
- 28. Collective Purchasing Use employer and plan manager clout to negotiate favorable payment arrangementsBackground Traditional network negotiations are volume driven Approaches to achieve lower costs include Aggregated purchasing to improve negotiating strength Coalitions Formal alliances Informal alliances Directing care to most cost-effective source of quality care Reviewing effectiveness, efficiency and “fit” of current vendor relationships; changing as appropriate27
- 29. What is a HPN? High Performance Network: A health plan performance improvement method that steers care to providers that meet specific efficiency and quality criteria28
- 30. Rationale for HPNs New management approaches are needed in this era of cost acceleration Patients and physicians are the key drivers of health care costs But they have limited or no incentive to care about costs The heart of the High Performance Network concept is to change the provider selection behavior of patients and/or physicians29
- 31. High Performance Networks Network modelsLimited Network A subset of an existing provider network comprised of high performing providers Tiered Network Employee copay/coinsurance differentials to encourage use of high performing providers Physician Partnering An arrangement with (typically) primary care physicians to enhance efficiency Consumer Driven Deployment of performance information to consumers to improve provider selection30
- 32. Direct Contracting Large employers with significant market presence May be able to achieve significant savings by contracting directly with health care providers May need group of regional employers to achieve critical mass31
- 33. Promote Consumer Accountability Help patients be better consumers of health careBackground If 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 consequences Approaches to encourage consumer involvement include Coordinated health promotion, disease prevention and educational programs Tying employee cost increase to trend “Defined contribution” health plans Consumer directed health care Re-introduction of coinsurance32
- 34. Efforts to Improve Quality of Care in Hospitals Leapfrog initiative The Leapfrog Group: Background Formed in response to Institute of Medicine study of errors in health care Goal: Major gains in patient safety, customer service and health care affordability Sponsored by Business Roundtable Employers in Leapfrog Group use purchasing power to encourage health care providers to adopt patient safety standards Leapfrog standards include: Computerized systems in hospitals to improve the accuracy of physicians’ prescriptions and minimize medication errors Staffing of intensive care units by physicians trained in critical care medicine Referral of patients requiring certain complex procedures to hospitals offering the best results33
- 35. Lobbying Some employers making presence felt on Capitol Hill Many have been active for years and are recognized as important voices Some large associations have similar goals and represent large voting populations34
- 36. Preventive Care and Disease Management Across the Health Care Continuum Programs should be tailored to the needsPrevention ScreeningsHealth Risk Assessment Targeted Risk Reduction Programs Risk ModelingNurse Advice Line Web Tools Consumer Directed Health PlanDisease Management Incentive Design Self Management Training Case Management Decision Support Predictive ModelingWell No Disease At Risk Obesity High CholesterolAcute Illness/ Discretionary Care Doctor Visits Emergency VisitsChronic Illness Diabetes Coronary Heart DiseaseCatastrophic Head Injury Cancer85% members = 15% cost15% members = 85% cost35
- 37. Employers Becoming More Involved SummaryTypically the larger employers “Fighting” to change the way health care delivered to own employees Goal is to produce better outcomes…… And lower cost36
- 38. Employers Becoming Less Involved (Camp 2)Employers desire to “know their cost” Dollar-based plans (often account-based) Reimbursement plans Access Only plans “Capped Plans”…typically retiree medical What these approaches share is an eye toward reducing employer cost at the expense of employees/retirees37
- 39. Account-Based ApproachesDefines employer’s commitment as a defined dollar contribution instead of a defined medical benefit Commitment can be monthly, annual, aggregate Commitment can be based on retiree-only or recognize dependents Amounts available for health care only; employer contributions are tax-free to the retiree and deductible for employer under Sections 105, 106 and 162 of IRC Can be funded or unfunded For Medicare-eligible, Medicare+Choice, Medigap and traditional Medicare available; HIPAA may eventually make this a viable option for pre-Medicare retirees38
- 40. Account-Based Approaches ExamplesMonthly/annual promise Retirees 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 not Aggregate (“lump sum”) promise Employer 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 required Payment options “Draw-down” on funds (retiree uses funds to pay portion of retiree medical cost; ends when fund exhausted), or “lump sum” is converted to an annuity (multiple options)39
- 41. Reimbursement Plans Employer often requires submission of receipts for health care expenditures Premiums Out-of-Pocket costs Typically defined with a maximum reimbursable limit (e.g. $75/month) Most common is reimbursement (or pre-payment) of Medicare Part B premium for Medicare eligible retirees Current cost $58.70 per month with moderate year-to-year trends Employer motivated to ensure Part B in effect for Medicare-eligible retirees Part D reimbursement may become popular Employer achieving Escape from plan sponsorship (for whichever segment of his population the plan applies to) Fixed costs; increases subject to employer discretion Not a tax-advantaged approach40
- 42. Access Only Plans Employer “sponsors” company health plans (stays “in the business”) By doing so, retains group underwriting, pricing and risk profile Employer contemplates no subsidy Full cost and annual increases absorbed by employees/retirees Fully insured plans Works best Costs known in advance Premiums fixed in advance Self-insured plans Requires more management Costs not known in advance But premiums must be fixed in advance Caution regarding active/retiree subsidy May impact other accounting (FAS 106)41
- 43. Capped Plans “Employer cost will be capped at 2 times the 1993 cost” Implication is that employer share becomes a fixed dollar commitment at some point in the future Typical action taken in early to mid 1990s for retiree programs in response to FAS 106; liabilities approximately ½ of uncapped plans Many caveats Usually applied only to those retiring post-announcement Evaluate separately for pre-Medicare eligible vs. Medicare eligible, or in aggregate Evaluate per retiree or in aggregate Definitions of “premiums” and “costs” cross subsidy of actives/retirees can cloud calculations Need clear definition of how costs and contributions are calculated before cap is hit Enrollees will understand concept, but likely won’t be prepared for eventual increases42
- 44. Employers Becoming Less Involved Summary Focusing on approaches that allow a fixed employer commitment Risk transferred to employees/retirees In some versions (caps), no immediate impact felt by participants Communication is critical Employers concerned about participant response43
- 45. The Two Camps Summarized Fight or FlightThe largest employers seem willing to try to change the world Mid sized and smaller employers seem to want to “get out” of the responsibility Neither reflects the traditional way of providing benefitsFocus on employers reducing involvement, using a generic defined dollar (defined contribution) approach44
- 46. AgendaThe Environment The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics45
- 47. Where can we apply “Defined Contribution” approaches most easily?Active employees/early retirees Employers will still need to “sponsor” a plan Can set employee contributions to meet desired cost share and allow employees to buy back into a self-insured plan Easiest calculation if underlying plan is fully insured Medicare Eligible Retirees Employers may actually be able to get all the way out Even if company sponsors no Medicare eligible retiree plan, options available in market for retirees to choose from Some with little or no underwriting (removes access problem) but eligibility/timing important46
- 48. DC Health Plans in the Spectrum of Employer Contributions% of Cost Employer pays X% (e.g., 80%) of cost of health plans; employee pays the remainder.% for Benchmark; DC for Others Employer pays X% of cost of one specified Plan A (“preferred” or “employer” plan). The amount of employer contribution for Plan A becomes the defined dollar contribution for Plans B, C, …; the employee pays the balance in cost.Pure DC Employer pays $Z per employee. Employee must pay balance for whatever plan is picked. The employer contribution is not tied directly to the cost of any plan.Employer Contribution LevelDC Health Plans% of CostNo Contribution (wages only)% for Benchmark Plans; DC for OthersPure DCFull CostHighLow47
- 49. Medicare+Choice Health plan takes risk, receives “capitated” paymentMedicare “Part C” (Medicare Advantage?) Health plan offered by private insurance companies, usually on an HMO-like basis Benefits broader than Original Medicare Reduced out of pocket expenses for deductibles and copayments May offer prescription drug coverage Medicare pays a set amount of money to private insurer May be additional premium cost over Part B premium (fully insured to employer) Available only in certain areas Recent private insurer profitability poor and insurers have curtailed availability and increased costs to retiree48
- 50. Medicare+Choice HMO Enrollment Enrollment declined for first time in 2000Source: Medicare Managed Care Contract (MMCC) Plans - Monthly Summary Reports - from CMS Website (CMS.hhs.gov/statistics/MMCC.asp)49
- 51. 2002 Medicare+Choice HMO Availability Even after pullbacks, slightly more than three-quarters of Medicare Eligibles still live in counties which offer at least one M+C plan in 2002PFFS Plan Locations Cover Approximately 35% of Medicare EligiblesOver 58% of Medicare Eligibles Live in M+C HMO AreasSource: CMS Medicare Plan Compare Data & Sterling Life Insurance Company Coverage Data as of 3/31/02350
- 52. Medigap Overview Plans supplement “original Medicare” benefitsSold to individuals age 65+ (and certain other Medicare Eligibles under 65) Medigap carriers must accept all applicants for the first six months of eligibility The basic benefits included in every Medigap plan are Part A coinsurance (for admissions of more than 60 days) Coverage for 365 additional hospital days after Medicare benefits exhausted Part B coinsurance The first three pints of blood each year Product types Standard products A through J sold from 1992 to present Only H, I and J cover prescription drug Medicare Select Provides Medigap benefits with network discount and lower prices51
- 53. Medigap Policies Overview AARP and BCBS plans offer majority of productsOnly individual insurance plans permitted by law that can be issued to Medicare Eligible individuals Carriers cannot customize plans and must offer “standardized” plans Regulated by state insurance authorities within federal government guidelines Major providers include AARP, Blues plans, some insurers AARP in all states with Plan A through J Blues in all states but limited offering, particularly of plans H, I and J Most plans underwrite where allowed Exception is AARP, with minimal underwriting requirements (only ESRD) except on plans H, I and J52
- 54. Medigap Policies Policy features ItemPlan APlan BPlan CPlan DPlan EPlan FPlan GPlan HPlan IPlan JBasic Benefits*Skilled Nursing CoinsurancePart A DeductiblePart B DeductiblePart B ExcessForeign Travel EmergencyAt Home RecoveryDrugs**Preventive CareApproximate Monthly Premium Range$55-$150$90-$190$100-$210$90-$200$100-$200$110-$210$100-$230$150-$230$160-$250$200-$290*Basic Benefits = Part A coinsurance plus 365 extra days of hospital care plus Part B coinsurance plus three pints of blood/year**$250 deductible, 50% coinsurance to contract limit53
- 55. Medicare SelectSame standardized plan designs (A through J) as other Med Supp policies AARP offers it on Plan C only Works like a Preferred Provider Organization (PPO) Full supplemental benefits available if network providers used Reduction or loss of supplemental benefits if non-network providers used Always retain full Medicare benefits Most common provider networks are hospitals only Hospital can waive Part A deductible via safe harbor from anti-kickback statutes Limited ability to affect Part B cost Negotiations with other vendors possible Lower cost than Medigap: typically 20% discount AARP example: Ohio Plan C: $122; Ohio Medicare Select-C: $9454
- 56. AgendaThe Environment The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics55
- 57. The Answer Yes, it may be time for employers to consider new approaches But which direction are your clients heading? Standing still is likely not an option56
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