Beacon Health Strategies, LLC Medicaid Behavioral Health Presentation Meeting With

www.beaconhealthstrategies.com

Beacon Health Strategies, LLC

Medicaid Behavioral Health Presentation

Meeting With

January 25, 2008


The commercial health insurance market is contracting…

Note: Employment-based insurance includes CDHPsSource: U.S. Census

0

50

100

150

200M

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Individual

Employment-based

1%

-3%

('93-'00)

CAGR

-2%

-1%

('00-'05)

CAGR

Total commercial insurance enrollment (millions)

2


…with companies less likely to offer health insurance, especially small businesses

Source: Urban Institute

0

20

40

60

80

100%

<10 Emp

20012005

59%53%

10-24 Emp

68%63%

25-99 Emp

77% 75%

100+ Emp

88%85%

Changes in Employees’ ESI Coverage by Firm Size (2001 vs. 2005)

3


0

20

40

60

80

100%

2003 2004 2005

Blues

Top10

Other

13.0%

14.0%

-29.0%

(03-05)CAGR

Low growth and margins have driven consolidation

Total Privately Insured Lives (2003-5)

0

700

1,400

2,100

1998

PPOs

HMOs

2,029

2005

1,080

Total Number of Health Plans

AveragePlan Enrollment: 86K 165KN=180 million lives

4

www.beaconhealthstrategies.comwww.beaconhealthstrategies.com

Medicaid enrollment has been healthy during the same period

0

5

10

15

20

25

30

35

40

45

J une 2000 J une 2002 J une 2004 J une 2006Aged and Disabled Families

Medicaid Enrollment(in millions)

5

CAGR

2.7%

6.1%


With Medicaid managed care growth particularly robust

Managed Care

FFS and Other

0

5

10

15

20

25

30

35

40

45

50

1990 1994 2000 2006

Source: Kaiser Commission on Medicaid and the Uninsured and Urban Institute (2007)

Medicaid Plan Type(in millions)

6

CAGR

17.4%

(1.6%)


States have embraced managed care for more complex population

Source: National Academy for State Health Policy, June 2005 Report

States with Managed Care for ABD

9

40

0

10

20

30

40

50

1990 2004

7


2,697

950

716

-

500

1,000

1,500

2,000

2,500

3,000

Commercial TANF ABD Special Pop

IP Admits/1,000

8

These more complex populations require active care management


Medicaid growth outstrips CPI and remains a cost concern

11.90%

7.20%6.50%

4.00%3.23%3.39%

2.50%2.20%

0%

5%

10%

15%

00-02 02-04 04-05 05-06

Aged and Disabled CPI

Overall Average Annual Total Medicaid Spending Growth

9Source: Kaiser Commission on Medicaid and the Uninsured and Urban Institute (2007)


Employers and governments are pushing MCOs for the next generation of cost containment

0

2

4

6

8

10%

0

2

4

6

8

10%

1996

2.0

1997

3.3

1998

5.3

1999

7.1

2000

7.2

2001

7.7

2002

9.52003

7.4

2004

7.5

2005

7.42006

6.5

0

20

40

60

80

100%

InsuredLives

ChronicI llness

239M

MedicalExpenditures

$2.3T

CPI

Average Annual Increase in Medical CostsU.S. Incidence and Cost of Individuals

with Chronic Diseases

Managing individuals with chronic disease is the focus

10


Co-morbidity is frequent in all of the “high-profile” diseases

0

20

40

60

80

100%

Asthma

BH

Co-M

orb

idC

hro

nic

Dia

gnosi

s

3,208

COPD

1,828

CHF

231

CAD

279

Diabetes

2,114

0

20

40

60

80

100%

AsthmaC

hro

nic

Dia

gnosi

sB

HC

o-M

orb

id

8,921

COPD

1,485

CHF

87

CAD

483

Diabetes

279

Adult Members (19+) witha Chronic Disease Diagnosis

Pediatric Members (18 or under)with a Chronic Disease Diagnosis

11


The public segment, especially Medicaid, remains highly fragmented

0

20

40

60

80

100%

2006

Others

AetnaMMM

IndependenceGHI /HIPHealth

HighmarkWellPoint

Kaiser

Humana

UnitedHealth

7M

Source: CMS, 2006

0

20

40

60

80

100%

2006

Other

Humana,BCBS

LAHealthMolina

WellCareCentene

Amerigroup

UnitedHealth

WellPoint,

30M

Medicaid Managed Care Enrollment Medicare Advantage Enrollment

12


Trends suggest continued Medicaid opportunity

• Eligibility expansions continue across the states– SCHIP and kids initiatives– Efforts to address the uninsured

• Outreach to the “eligible but un-enrolled” is improving and becoming more sophisticated

• Willingness by states to place “high risk” populations in Managed care

• Traditional limitations in the PCCP, state-run health plan model– IT, up-front investment, staffing, provider capture, role of doctors

• Management of chronic conditions is imperative

• CMS policy emphasis on “dollars following the individual” favors managed care

13


Massachusetts

Rhode Island New York Ohio

MMCO Clients Two Two Two One

Commenced 1996 2001 1998 2006

Medicaid Members

165,000 90,000 280,000 530,000

PopulationsServed

TANFDisabled

SCHIPCommonwealth

Care

TANFDisabledCSHCNSCHIP

Foster CareDual Eligible

TANFDisabled

SCHIPDual Eligible

TANFDisabled

SCHIP

Services Full Suite (IPM) Full Suite (IPM) Full Suite (IPM) Specialty

Serving Medicaid members is Beacon’s primary expertise

14


Beacon’s Medicaid health plan clients are the best in the nation

Beacon Client since ‘99



15


Beacon’s best results are achieved through our Integrated Partner Model (IPM)

• Beacon brings its specialized behavioral health expertise into a plan’s organization

- Clinical and quality design and protocols- Integrated operational workflows

• Local management- Account manager responsible for all activities- Clinical manager runs clinical duties- Absorbs some or all local staff if appropriate- Maintain local/regional office structure if appropriate

• All activities supported by the company’s robust expertise and capabilities

- Leading clinical and quality department- Specialized care programs, including case management- FlexCare, a fully integrated care management system designed for

Medicaid behavioral health- Tailored analysis and reports- Network administration, members services and claims

“Carve-In” not a

“Carve Out”

16


Care Management Approach – Member Centric

Responsive

Physical

Behavioral Social

• Holistic approach

• Consumer and family member participation

• Recovery and resiliency

• Cultural competency

• Coordinated care

• Integration and linkage

• Consumer rights and responsibilities

• Safety of consumers

17


Continuum of Care Model

Responsive

Inpatient care

Crisis Stabilization

Acute Residential Care

Partial Hospitalization

FST/CSP

Day Treatment

Intensive Outpatient

OutpatientLow

High

Behavioral Health Risk / Status

Low

Hig

h

Serv

ice I

nte

nsit

y Observation Beds

18


Integrated Partner Model (IPM) Case Study: Neighborhood Health Plan of Massachusetts

Neighborhood Health Plan of MA

170,000 members, 85% Medicaid

Innovative care management approach

Excellent HEDIS and consumer satisfaction results

Beacon Integrated Partner Model

On-site utilization management

Integrated case review teams

Aftercare, depression and case management programs

Joint disease management programs

Network, member and claims management

Best in classBH Expertise

19


IPM implementation is improving efficiency both in BH and Medical expenditures

0

200

400

600

$800

Pre-IPM

I /P

Div

O/P

$664

0-6 IPM

$577

6-12 IPM

$369

0

250

500

750

1,000

$1,250

Pre-IPM

O/P

I /P

Rx

ER

$1,148

0-6 IPM

$1,063

6-12 IPM

$933

Behavioral Health PMPM Medical Expenditure PMPM

44% Decrease in BH 13% Decrease in Medical Spend

Complex Case Management

20


Rapidly Improving Quality – Case Study

50

60

70

80%

2004

NY

MC

OA

vg.

Aff

init

y

68%

62%

2005

NY

MC

OA

vg.

Aff

init

y

70%

61%

2006

NY

MC

OA

vg.

Aff

init

yw

ith

Beaco

n

76%75%

Improvement in QARR/HEDIS Measures One Year After Beacon Implementation

• Beacon took over BH operations for a 200,000+ member health plan in Jan ‘06

• Absorbed existing health plan staff under Beacon clinical and process management

• 2007 - 7 Day Follow-Up after Hospitalization– Moved from bottom quartile ranking to

second quartile (21st to 11th)– Equal to statewide average score

• 2007 - 30 Day Follow-up after Hospitalization– Moved from bottom quartile ranking to

the second quartile (22nd to 10th)– Equal to statewide average score

New York City Implementation

21

Documents

Beacon Health Strategies, LLC Medicaid Behavioral Health Presentation Meeting With