《MERCER为美国保险业协会做的绝密HR分析报告.ppt》由会员分享，可在线阅读，更多相关《MERCER为美国保险业协会做的绝密HR分析报告.ppt（57页珍藏版）》请在三一办公上搜索。
1、Rich Bailey FSA,MAAA,FCARichmond,VA,Is it Time for Employers to Move Away From the Traditional Ways of Providing Employee Benefits?,November 3,2004,1,Agenda,The EnvironmentThe Catch-22Paths Away from Traditional Delivery:Two CampsOpportunities Along Path 2The AnswerAdditional Topics,2,Agenda,The Env
2、ironmentMedical TrendsLegislationMarketplace ChangesPopulation DemographicsEmployer OutlookThe Catch-22Paths Away from Traditional Delivery:Two CampsOpportunities Along Path 2The AnswerAdditional Topics,3,Double-Digit Increase for Second Year in a RowPer employee costs in excess of$5,600 per year,4,
3、Annual CPI Trend U.S.health care costs rise,despite continuing economic recession,The gap between CPI-U and medical care component is increasing,5,Comparison of Overall Growth Cumulative medical care CPI 89%greater than overall CPI since 1967,Data based on January 1 CPI values,6,Employers Cost Incre
4、ases Out-Pace Other Indicators Largest increase since 1990(all employers),7,Aggregate Health Care Spending(1980 2010)Government portion of payments increasing;total projected to be over$2 trillion by 2009,Source:CMS,8,Medical Trends,Pop QuizHow many years will it take gross medical costs to double,a
5、ssuming no specific employer interventions or national health care?10 or more98765 or fewer,9,Medical TrendsResponses from a group of 25 actuaries who had time to get their calculators,10,Legislation,Medicare Prescription DrugsIf made into law,will have major impact on retiree benefits and strategie
6、sInitial confusion aside,should have positive impact on retiree plansExpect cost shifting to negatively impact active plansEEOC Proposed changes in ADEA regulationsCline vs.General DynamicsWells Fargo caseAppears to allow pre-funding(and tax-deductibility)of entire retiree liabilityan ILP approachwo
7、nt be exactly same number as FAS liabilityfunding in years 2+would be limited to service costIRS weighing its options,11,Proposals to Increase Coverage Among Early RetireesFew government programs except for financially indigent,COBRA extensions and/or Medicare buy-insProhibitions on post-retirement
8、benefit reductionsExpanded pre-funding for retiree medical,Still few viable products for pre-65 in individual market that overcome access and affordability issues.,12,ADEA IssuesImpact on retiree medical coverage,Age Discrimination in Employment Act(ADEA)prohibits discrimination against persons age
9、40 or older in terms and conditions of employmentAge-based distinctions in employee benefit plans are permissible only if:A specific statutory exception applies,orEqual benefit/equal cost test is satisfiedPlan must provide equal benefits for older and younger workers,orPlan must incur equal costs fo
10、r older and younger workersThird and Sixth Circuit Courts reach different conclusionsEEOC reviewing ADEA regulations,13,Marketplace ChangesConsolidation of Major Health Care Carriers Employer options are greatly reduced,carriers have more clout,14,Marketplace Changes PBM consolidation continues;thre
11、e major national PBMs remain,15,Population TrendsAging baby boomers will increase the elderly and near elderly populations,16,Negative Tidal Wave of Available Talent Pool of“prime workers”will be decreasing,17,Impact of Demographics on Health Care Cost Cost increases with age,18,Health Deterioration
12、 A cause and a consequence,We eat too much-64.5%of adults overweight,Population 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 weightSource:National Health and Nutrition Examination Survey,45.0%,47
13、.0%,47.0%,56.0%,64.5%,19,Issues Facing Businesses The perfect storm,Low ambient inflation;high medical inflationAdvances in medical technology likely to lead to higher costs,difficult decisionsLegislative uncertaintyConsolidating medical delivery and financing systemAn aging workforceIncreased longe
14、vitySlowing economyDisappearing over-funded pension plansFew,if any,obvious and easy alternatives to managing health care costs,20,Employer Outlook,Environmental outlook spurring employer actionEmployers acutely aware of trendsHeightened interest in cost saving strategies(active and retiree)Greater
15、emphasis on longer term cost projections and on the“bottom line”Projection results have induced“fight or flight”responses,21,Retiree Medical Coverage Employers continue to drop retiree medical coverage,22,Agenda,The EnvironmentThe Catch-22Paths Away from Traditional Delivery:Two CampsOpportunities A
16、long Path 2The AnswerAdditional Topics,23,The Catch-22,Reducing employer cost typically implies increasing employee/retiree costEventually runs against employers sensibilities regarding fairness,paternalism(if present),and the concept of benefits generallyExample(FAS 106):“Lower my liabilities signi
17、ficantly but dont do anything harsh to our retireesthey wont accept it”To the extent that retirees represent the bulk of the liability,this is a very difficult propositionOpportunities exist to change eligibility,design,etc.for future retireesIf we dont take cost out of the system,either the employe
18、r or the employees/retirees will pay the increases,24,Agenda,The EnvironmentThe Catch-22Paths Away from Traditional Delivery:Two CampsOpportunities Along Path 2The AnswerAdditional Topics,25,Paths Away from Traditional Delivery:Two Camps,Employers that become more involved inChanging employee behavi
19、orChanging provider behaviorChanging providers that they work withChanging the lawsEmployers that reduce their involvement byIncreasing employee responsibilityLimiting employer costLimiting employer risk,26,Employers Becoming More Involved,Collective PurchasingHigh Performance NetworksDirect Contrac
20、tingConsumer AccountabilityLeap FrogLobbyingDisease Management/Preventive CareWhat these approaches share is an eye toward reducing cost from the employers system,and in some cases,the entire health care system.,27,Collective PurchasingUse employer and plan manager clout to negotiate favorable payme
21、nt arrangements,BackgroundTraditional network negotiations are volume drivenApproaches to achieve lower costs includeAggregated purchasing to improve negotiating strengthCoalitionsFormal alliancesInformal alliancesDirecting care to most cost-effective source of quality careReviewing effectiveness,ef
22、ficiency and“fit”of current vendor relationships;changing as appropriate,28,What is a HPN?,High Performance Network:A health plan performance improvement method that steers care to providers that meet specific efficiency and quality criteria,29,Rationale for HPNs,New management approaches are needed
23、 in this era of cost accelerationPatients and physicians are the key drivers of health care costsBut they have limited or no incentive to care about costsThe heart of the High Performance Network concept is to change the provider selection behavior of patients and/or physicians,30,High Performance N
24、etworks Network models,Limited NetworkA subset of an existing provider network comprised of high performing providersTiered NetworkEmployee copay/coinsurance differentials to encourage use of high performing providersPhysician PartneringAn arrangement with(typically)primary care physicians to enhanc
25、e efficiencyConsumer DrivenDeployment of performance information to consumers to improve provider selection,31,Direct Contracting,Large employers with significant market presenceMay be able to achieve significant savings by contracting directly with health care providersMay need group of regional em
26、ployers to achieve critical mass,32,Promote Consumer AccountabilityHelp patients be better consumers of health care,BackgroundIf 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 consequencesApproaches t
27、o encourage consumer involvement includeCoordinated health promotion,disease prevention and educational programsTying employee cost increase to trend“Defined contribution”health plansConsumer directed health careRe-introduction of coinsurance,33,Efforts to Improve Quality of Care in Hospitals Leapfr
28、og initiative,The Leapfrog Group:BackgroundFormed in response to Institute of Medicine study of errors in health careGoal:Major gains in patient safety,customer service and health care affordabilitySponsored by Business RoundtableEmployers in Leapfrog Group use purchasing power to encourage health c
29、are providers to adopt patient safety standardsLeapfrog standards include:Computerized systems in hospitals to improve the accuracy of physicians prescriptions and minimize medication errorsStaffing of intensive care units by physicians trained in critical care medicineReferral of patients requiring
30、 certain complex procedures to hospitals offering the best results,34,Lobbying,Some employers making presence felt on Capitol HillMany have been active for years and are recognized as important voicesSome large associations have similar goals and represent large voting populations,35,Preventive Care
31、 and Disease Management Across theHealth Care Continuum Programs should be tailored to the needs,36,Employers Becoming More Involved Summary,Typically the larger employers“Fighting”to change the way health care delivered to own employeesGoal is to produce better outcomesAnd lower cost,37,Employers B
32、ecoming Less Involved(Camp 2),Employers desire to“know their cost”Dollar-based plans(often account-based)Reimbursement plansAccess Only plans“Capped Plans”typically retiree medicalWhat these approaches share is an eye toward reducing employer cost at the expense of employees/retirees,38,Account-Base
33、d Approaches,Defines employers commitment as a defined dollar contribution instead of a defined medical benefitCommitment can be monthly,annual,aggregateCommitment can be based on retiree-only or recognize dependentsAmounts available for health care only;employer contributions are tax-free to the re
34、tiree and deductible for employer under Sections 105,106 and 162 of IRCCan be funded or unfundedFor Medicare-eligible,Medicare+Choice,Medigap and traditional Medicare available;HIPAA may eventually make this a viable option for pre-Medicare retirees,39,Account-Based ApproachesExamples,Monthly/annual
35、 promiseRetirees 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 notAggregate(“lump sum”)promiseEmployer promise is one-time c
36、redit(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 requiredPayment 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
37、an annuity(multiple options),40,Reimbursement Plans,Employer often requires submission of receipts for health care expendituresPremiumsOut-of-Pocket costsTypically defined with a maximum reimbursable limit(e.g.$75/month)Most common is reimbursement(or pre-payment)of Medicare Part B premium for Medic
38、are eligible retireesCurrent cost$58.70 per month with moderate year-to-year trendsEmployer motivated to ensure Part B in effect for Medicare-eligible retireesPart D reimbursement may become popularEmployer achievingEscape from plan sponsorship(for whichever segment of his population the plan applie
39、s to)Fixed costs;increases subject to employer discretionNot a tax-advantaged approach,41,Access Only Plans,Employer“sponsors”company health plans(stays“in the business”)By doing so,retains group underwriting,pricing and risk profileEmployer contemplates no subsidyFull cost and annual increases abso
40、rbed by employees/retireesFully insured plansWorks bestCosts known in advancePremiums fixed in advanceSelf-insured plansRequires more managementCosts not known in advanceBut premiums must be fixed in advanceCaution regarding active/retiree subsidyMay impact other accounting(FAS 106),42,Capped Plans,
41、“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 futureTypical action taken in early to mid 1990s for retiree programs in response to FAS 106;liabilities approximately of uncapped plansMany caveatsUsually
42、 applied only to those retiring post-announcementEvaluate separately for pre-Medicare eligible vs.Medicare eligible,or in aggregateEvaluate per retiree or in aggregateDefinitions of“premiums”and“costs”cross subsidy of actives/retirees can cloud calculationsNeed clear definition of how costs and cont
43、ributions are calculated before cap is hitEnrollees will understand concept,but likely wont be prepared for eventual increases,43,Employers Becoming Less InvolvedSummary,Focusing on approaches that allow a fixed employer commitmentRisk transferred to employees/retireesIn some versions(caps),no immed
44、iate impact felt by participantsCommunication is criticalEmployers concerned about participant response,44,The Two Camps SummarizedFight or Flight,The largest employers seem willing to try to change the worldMid sized and smaller employers seem to want to“get out”of the responsibilityNeither reflect
45、s the traditional way of providing benefits,Focus on employers reducing involvement,using a generic defineddollar(defined contribution)approach,45,Agenda,The EnvironmentThe Catch-22Paths Away from Traditional Delivery:Two CampsOpportunities Along Path 2The AnswerAdditional Topics,46,Where can we app
46、ly“Defined Contribution”approaches most easily?,Active employees/early retireesEmployers will still need to“sponsor”a planCan set employee contributions to meet desired cost share and allow employees to buy back into a self-insured planEasiest calculation if underlying plan is fully insuredMedicare
47、Eligible RetireesEmployers may actually be able to get all the way outEven if company sponsors no Medicare eligible retiree plan,options available in market for retirees to choose fromSome with little or no underwriting(removes access problem)but eligibility/timing important,47,DC Health Plans in th
48、e Spectrum of Employer Contributions,48,Medicare+ChoiceHealth plan takes risk,receives“capitated”payment,Medicare“Part C”(Medicare Advantage?)Health plan offered by private insurance companies,usually on an HMO-like basisBenefits broader than Original MedicareReduced out of pocket expenses for deduc
49、tibles and copaymentsMay offer prescription drug coverageMedicare pays a set amount of money to private insurerMay be additional premium cost over Part B premium(fully insured to employer)Available only in certain areasRecent private insurer profitability poor and insurers have curtailed availabilit
50、y and increased costs to retiree,49,Medicare+Choice HMO EnrollmentEnrollment declined for first time in 2000,Source:Medicare Managed Care Contract(MMCC)Plans-Monthly Summary Reports-from CMS Website(CMS.hhs.gov/statistics/MMCC.asp),50,2002 Medicare+Choice HMO AvailabilityEven after pullbacks,slightl
