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TRICARE Update for Navy Medicine January 21, 2011

TRICARE Update for Navy Medicine January 21, 2011. RADM C.S. Hunter, MC, USN Deputy Director TRICARE Management Activity. TRICARE Beneficiaries: Who We Serve. Nearly 9.7 million beneficiaries (2.8M Navy/Marine Corps) TRICARE Prime enrollees:

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TRICARE Update for Navy Medicine January 21, 2011

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  1. TRICARE Updatefor Navy MedicineJanuary 21, 2011 RADM C.S. Hunter, MC, USN Deputy Director TRICARE Management Activity

  2. TRICARE Beneficiaries:Who We Serve • Nearly 9.7 million beneficiaries (2.8M Navy/Marine Corps) • TRICARE Prime enrollees: • 3.7 million in direct care system 1.1M Navy/Marine Corps • 1.7 million in contractor networks 540,000 Navy/Marine Corps • Others are TRICARE Standard/Extra,TRICARE Reserve & TRICARE for Life • TRICARE annual cost per retired beneficiary • Prime: $4,202 • Standard: $3,584 • TRICARE For Life (age 65+): $3,874(does not include Medicare contribution) 2

  3. A Week in the Life of TRICARE 2.6 million prescriptions(730,000 Navy/MC) 924,000 direct care 1.44 million retail pharmacies 228,000 home delivery 231,000 behavioral health outpatient services 52,000 direct care 179,000 purchased care 23,300 inpatient admissions 5,100 direct care (1,600 Navy/MC) 18,200 purchased care (5,100 Navy/MC) 1.8 million outpatient visits 810,000 direct care 1.0 million purchased care 2,400 births 1,000 direct care (350 Navy/MC) 1,400 purchased care(420 Navy/MC) 3.5 million claims processed 12.6 million electronic health record messages Behavioral HealthOutpatient Visits Active Duty Family Active Duty

  4. Aligning Behindthe Quadruple Aim Readiness Pre- and Post-deployment Family Health Behavioral Health Professional Competency/Currency Population Health Healthy service members, families, and retirees Quality health care outcomes A Positive Patient Experience Patient and Family centered Care, Access, Satisfaction Cost Responsibly Managed Focused on value Quadruple Aim as an Enduring Construct for Care

  5. Approaching Readiness Goals Not Ready Indeterminate Fully Ready Partially Ready Individual Medical Readiness Target: 80% 74% 80% 82% • To improve performance, commands should focus on completingdelinquent PHAs & dental exams • New for 2011: Examining impact of ‘retained but not deployable’ 62%

  6. TRICARE is assisting with: TRIAP: Counselors available for confidential, private discussions using video chat and instant messaging USMC DSTRESS Line: Callers speak with counselors and clinicians with specialized training and/or exposure to USMC culture Challenges: 31.5% of MTF referrals for network outpatient behavioral health aren’t activated (improved from 39.1% in 2008) More military children reporting problems (Nat’l. Military Family Assn. study) Reserve health coverage continuum Caregiver behavioral health Annual investment in BH increased from$500M in 2005 to over $1B in 2010 Enhancing Readiness:Behavioral Health PTSD “Engaged in Treatment” Rate Active Total Force Reserve Behavioral Health, FY07-FY10 6

  7. New Benefit Contributesto Family Readiness First Available December 29, 2009 National Flu Cases Weekly Flu Case Estimate Flu Case Data Source: Google Flu Trends

  8. Sum of Asthma Medication Sum of Diabetes Index Sum of Colorectal Cancer Sum of Cervical Cancer Sum of Breast Cancer How Are We Doingin Population Health? Enrollee Preventive Health Quality Index (HEDIS) • To improve, recommend focus onA1c screening and A1c control measures in diabetes index • Navy is slightly below the 75th percentile for both A1c screening and A1c control (<9mg/dL) • Control should improve as screening improves Good * Display contains rounded index points for each respective screening component.

  9. How Are We Improving? • Patient Centered Medical Homeemphasizes: • Access • Coordination of care • Preventive care • Disease management • To reduce ER utilization, practicesmust address after hours care in 2011 • TRICARE is now affiliated with: • > 2000 urgent care facilities • 530 convenience clinics • Secure messaging availablein many locations Patient is the Centerof theMedical Home Emergency Room Utilization MTF Enrollees Contractor Enrollees Benchmark At over 50% of MTF primary care clinics, patients calling for an acute appointment will be offered at least 3 options within 24 hours

  10. Expanding Medical Hometo Improve Performance Beneficiary Satisfaction Getting Timely Care PCM Continuity ER Utilization G G Y 2.5M G Beneficiary Satisfaction Getting Timely Care PCM Continuity ER Utilization Y G 1.25M Y Beneficiary Satisfaction ↑10% Y Beneficiary Satisfaction Getting Timely Care PCM Continuity ER Utilization Y Getting Timely Care ↑14% Y Y Primary Care Manager (PCM) Continuity ↑16% 500K R Emergency Room (ER) Utilization ↓24% Beneficiary Satisfaction Getting Timely Care PCM Continuity ER Utilization Y R 250K Y R Projected2011 655K Actual2010 Which Patients Benefit Most? 10

  11. Meaningful Use of Health IT TRICARE Online: A Personal Health Portal Get started with secure messaging Linked to Secure Messaging in 2011

  12. Introducing New 2011 Health Plan Quality Measures Congrats! • Well child visits include routine newborn care, immunizations, eye screenings, etc. • LDL Control regarded as <100 mg/dL 12

  13. Patient Satisfaction with Military Health Care • Top CustomerService Issues: • Getting appointments, Clinic wait times, Specialist availability, Finding parking Family Member Satisfaction Active Duty Satisfaction Family Member Satisfaction Active Duty Satisfaction 100 80 60 40 20 0 100 80 60 40 20 0 Percent Satisfied Percent Satisfied Jul 03 Aug 05 Aug 07 Aug 09 Jul 03 Aug 05 Aug 07 Aug 09 13

  14. Using Our Benefits WiselyPlease Encourage Use of Mail Order Pharmacy Home Delivery Growth Trend – Year over Year Network Enrollee Cost RetailPharmacy22%

  15. Where Else Does the Data Point Us? Purchased Care Direct Care • Contractors routinely authorize greater than20 PT visits per referral • What is readiness impact? • Visit cost is modest, but lost work time is significant Should We Adopt New Models for On-Base Care?

  16. Increases in new eligible beneficiaries Increase of 400,000 beneficiaries since 2007 Expanded benefits TRICARE For Life, Prescription benefits, Reserve coverage Increased utilization Existing users are consuming more care (ER, Orthopedics, Behavioral Health) Healthcare inflation Higher than general inflation rate Why are Healthcare Costs Growing in TRICARE? Beneficiaries(millions) 2010 2007 Annual Cost Breakdown (TRICARE Prime) FY07 FY08 FY09 FY06 FY05 Inpatient Ambulatory Pharmacy

  17. Addressing Cost Growth • Redesigndirect care with Patient-Centered Medical Home • Re-engineer purchased care • Negotiate best possible pricing • Reduce administrative costs • Design new approach to future TRICARE contracts (T4) • Address TRICARE program issues • Redirect pharmacy to lower cost venues • Reduce ER utilization • Streamline TRICARE Management Activity • Decreasing by 780 contractors Bending the Cost Curve:Annual Cost Growth Per Equivalent Life Navy 2010 Target: 6.1% Purchased Care 2.9% -2.7% Secretary Gates (1/6/11): Anticipate Modest Increases in Retiree Fees in 2012

  18. Major TRICARE Contractors Contract Value Over 5 Years Costs include health care, drugs, supplies, and administration North ~ $17B South ~ $22B West ~ $17B Overseas ~ $5.3B Pharmacy ~ $42B (Using FY10 actual costs) 18

  19. TRICARE Contract/Benefit Updates • Health care delivery goes live under T3 North Region 1 April 2011 • ICDB/RMSTR to manage referrals and authorizations (Clear & Legible Reports) • Greater emphasis on prevention • Medical Home Pilot with State of Maryland anticipated • Includes care management fees • New family member dental contract announced 1/7/2011 • Better coverage for orthodontia, ‘natural’ fillings • Overseas • Health care delivery began 1 September 2010 • Referrals greater than anticipated (2,800 per week), backlog now addressed • T3 South/West • Getting closer to protest resolution 19

  20. TRICARE Young Adult Save YourReceipts! • Premium-based TRICARE Standard coverage available Spring 2011 • Offered to eligible dependents who: • Are unmarried • Age out of TRICARE at age 21, or age 23 if in college full-time • Are not eligible for their own employer-sponsored coverage • TRICARE Standard/Extra health coverage on a month-to-month basis • Retroactive to January 1, 2011, provided premiums are paid back to January 1 • ID cards can be obtained after purchasing TRICARE Young Adult • TRICARE Prime benefit anticipated later in 2011; will have separate premium • Estimated 233,000 will qualify for TRICARE Young Adult • Offers excellent coverage at a competitive price • Respects fiscal constraints on DoD healthcare 20

  21. Posing strategic questions: Alternate delivery and finance models Leveraging national health reform Individual choice and financial responsibility Need for global coverage and products for diverse populations Rapid adoption of best practices, knowledge management Scope of benefit, ease of use Ensuring we maintain: Focus on Quadruple Aim Patient and family centered care ethos Robust direct care system for force projection Coordination of care for individual and family readiness Designing the Way Ahead “T- 4 Study Group” 21

  22. How Can T4 Achievethe Quadruple Aim? • Study group assessment: • High quality care reduces cost • High quality care requires systems • Primary care is key to improving quality and cost,but shortage is imminent • Policy makers will resort to price cutting to manage costif providers do not deliver quality and controlcost themselves • Four courses of action being examined: • TRICARE (with incremental improvements) • FEHBP / Insurance exchanges / Medicare-like product • MTF-managed regional systems of care • Purchase systems of care from integrated provider groups 22

  23. Supporting Change in the Right Direction What Skill Sets do Navy Medicine LeadersNeed to be Successful in 2015? • Process Flow • Systems Integration • Feedback • Innovation / R&D • Technology Assessment • Incentivizing Performance • Military • Strategic • Operational • Business • Financial • Communications • Quality Learning &ContinuousImprovement 23

  24. We Are All Part of the Solution 24

  25. TRICARE Beneficiaries by Category 1.5 million active duty service members 2.1 million active duty family members 139,000 eligible dependent survivors (under age 65) 3.0 million retirees and family members (under age 65) 1.9 million TRICARE For Life (age 65+) 642,000 Guard/Reserve and families (active) 324,000 Guard/Reserve and families (inactive) 9.6 Million Eligible Beneficiaries 25

  26. Trauma Care Outcomes in Theater Observed vs. Expected Survival Rate Observed Survivors Predicted Survivors Navy Hospital Corpsmen Contribute Significantlyto Unprecedented Survival Rates

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