Care Delivery in RINow, and A Look Ahead

May 2015

Gus Manocchia, MDSenior Vice President & Chief Medical OfficerBCBSRI

2

The Growing Affordability GapCumulative active employee health care costs vs. wage increase

Source: Towers Watson Health Care Cost Survey 2010 (active employee data) and Bureau of Labor Statistics, seasonally adjusted data from the Current Employment Statistics Survey August to August, 2000 – 2009

Health Care Cost Growth vs. Wage Increases

Hospital 38%

Lab 4%

Physician 15%

Pharmacy 18%

Other 6%

Imaging 7%

Surgery 9%

Machine Tests 3%

BCBSRI Healthcare "Pie"

3

4

• Regional and National Benchmarks tell us BCBSRI prices to providers on target

• BCBSRI has focused on large scale price moderation with hospitals

BCBSRI Impact on Hospital Price Increases

BCBSRI Price for Medical Services; Too High?

Incurred: Nov 2013 – Oct 2014; Allowed Dollars; RI Residents, Commercial & Medicare Advantage Only

5

Blue Cross Commercial Utilization Compared to “Well Managed” Markets

CategoryRI vs.

BenchmarkPrescription Drug +32%Inpatient Surgery +35%Outpatient Professional BH +379%Inpatient Medical +52%Emergency Room +86%Inpatient BH +250%Imaging +25%Lab/Pathology +25%SNF +67%

• Regional and National Benchmarks tell us utilization is too high

Utilization of Services; Too High?

Primary Care Reimbursement

Transition to Systems of Care

6

BCBSRI SupportingFormation of Systems of Coordinated Care

Rhode Island Today Rhode Island in 2018

Advanced Primary CareMedical home

Labs & Radiology

Hospitals

Advance Primary Care Medical Home24/7 Access

Nursing homes

Partnering specialists physicians

Labs, Radiology, etc.

Hospitals

7

Independent specialist physicians

Home Care

Rehab: PT/OT

Rehab: PT/OT

Today’s Membership in Systems of Coordinated Care

Membership Distribution

Denominator = 387K BCBSRI Members Living in Rhode Island

2018 Goal: 70% of BCBSRI Members in Systems of Coordinated Care

8

CTC PCMH Practice considerations:• “Raise the bar”• Focus on “Population Health”• Higher Quality = Lower Cost …• “Community” Expectations [access, cost, patient experience, etc]• No More “Hamster Wheels” …• How do you care for the “sickest of the sick” ?• What happens when patients get outside the PCMH practice confines ??• Do you know how your practice is performing ??• Etc, etc …

9

Retail Based Clinics

CVS MinuteClinic

10

Questions?