CONSUMERS IN THE DRIVER S SEAT Enabling High Performance Through Member Incentives

1. 1 CONSUMERS IN THE DRIVER�S SEAT Enabling High Performance Through Member Incentives COLORADO SPRINGS SCHOOL DISTRICT 11 October 16, 2007

2. 2 Agenda Background D11 strategy Value and quality emphasis Why MIS? MIS Incentives Considerations and next steps

3. 3 D11 Background 30,000 students K-12 60 schools; 2,000 teachers 3,600 total employees Self-Funded: One hospital & one network 3,220 members includes 550 retirees Claims $25m

4. 4 D-11 Insurance Company Profit and loss statement Set reserves Self-funded - 1991 Flexibility - meets D11 needs Carve-outs for cost-effective solutions i.e. Rx, stop-loss, DM, EAP and wellness programs Insurance Committee

5. 5 D11 Environment Core city school district CSAP scores at state average Lost 4,000 students last 10 years Charter/private schools Home schooling/internet Revenues declining Salaries increased 1%/yr. last 5 yrs. Difficult to attract and retain teachers CQI programs

6. 6 Salaries vs. Benefits ($000)

7. 7 Bottom Line �Every dollar spent on healthcare is a dollar that doesn�t get to the classroom�

8. 8 Strategies Improve the health of our members Improve quality of care Contain health care costs Solutions involve key stakeholders: Providers Plan Members Provide value to our stakeholders Search for quality

9. 9 Value Equation QUALITY VALUE = COST

10. 10 Quality Better Outcomes Less Complications Employee Satisfaction

11. 11 D11 Quality Initiatives Bridges to Excellence (P4P) Diabetes screens & education Disease Management Centers of Excellence � Stop/Loss Rx � mail order, RDUR, CDUR, & quantity duration Minimally Invasive Surgery

12. 12 Cost Containment Exclusive hospital and network VEBA Trust and CBGH RFP/RFIs and carve outs (Rx & DM) Co-pays, coinsurance and deductibles Rx � formulary, mail-order, generic+ and specialty drugs Minimally Invasive Surgeries

13. 13 What are Minimally Invasive Surgeries? Surgeries performed through small incisions or natural orifices Reduced trauma Use of specialized instruments Insertion of a miniature camera, or videoscope Due to the specialized instruments and skills, surgeons need training in order to perform minimally invasive procedures. Video: Surgeon is performing the procedure while the assistant controls the insuflation with carbon dioxide. Due to the specialized instruments and skills, surgeons need training in order to perform minimally invasive procedures. Video: Surgeon is performing the procedure while the assistant controls the insuflation with carbon dioxide.

14. 14 Standard Practice is Becoming Less Invasive There is a clear trend demonstrating a decrease in invasiveness as medical devices and skills develop.There is a clear trend demonstrating a decrease in invasiveness as medical devices and skills develop.

15. 15 Process To Adopt MIS Colorado Business Group on Health D11 expression of interest Presentations to Insurance Committee Meetings with TPA and Medical Director IC developed plan design Approval of Board of Education 7/1/07 Communications to members

16. 16 Why MIS? Meets D11 Strategies: Provides Value: Increased quality Cost effective Affordable and competitive Employee accountability for health Continuous Quality Improvement (CQI) Sets the proper tone � D11 concern for members� health

17. 17 D11 Payoff Direct Shorter length of stay & less hospital resources Less post-procedural pain means less Rx & therapy Less hospital acquired infections In-direct Reduced absenteeism Improved productivity

18. 18 Member Payoff Less pain Less risk of complications � acquired infections Less scarring Shorter lengths of stay Faster return to work and normal activities

19. 19 Why MIS? Meets Institute of Medicine Quality Criteria: P S � Safety P T � Timely P E � Effective P E � Efficient P P � Patient Centered P E � Equity

20. 20 D11 MIS 1st Step Colectomy Cholecystectomy Hysterectomy Breast Biopsy Bariatric Hemorrhoid Appendectomy Anti-Reflux Capsule Endoscopy

21. 21 Why These Three? Data indicates highest savings Medical Director felt comfortable with these three - adequate resources Less impact on employees as 1st step Contacted surgeons and received a buy-in

22. 22 D11 Plan Language Plan document changes: Failure to obtain pre- authorization as required will result in an increase of 50% to the Inpatient Hospital co-payment for the inpatient procedure. Failure to obtain pre- authorization as required will result in an increase of 50% to the Outpatient Surgery co-payment for the outpatient procedure.

23. 23 Copayment Incentives (for three procedures)

24. 24 D11 Analysis

25. 25 Potential Direct Savings Inpatient Open to Inpatient MIS

26. 26 Potential Direct SavingsInpatient Open to Outpatient MIS

27. 27 Realized Direct SavingsOutpatient MIS

28. 28 Realized Direct Savings Inpatient MIS

29. 29 Communications Strategy Letters and emails to employees Letters to doctors and surgeons from Memorial Hospital Personal discussion with surgeons by Medical Director � get trained! Website info on MIS and surgeons

30. 30 Next Steps Monitor surgeries, both open and MIS Additional communications to members Work with Medical Director on appeals Gather costs of open vs. MIS and compare to prior periods Develop and do satisfaction survey of members Encourage other Colo. Spgs. employers Consider next procedures to add and when

31. 31 Considerations What if not enough surgeons use MIS? What if member has to wait? What if the surgeon recommends open vs. MIS? Why do you use pre-authorization? What about appeals? Who decides?

32. 32 Questions?