Health Care Trends

From the GIC Winter 2003 Newsletter pdf format of fybwinter2003.pdf

The GIC continues to attack the factors that are driving up health care costs, producing results for both the Commonwealth and its employees and retirees. The results have paid off with the GIC consistently keeping health care premium increases below both the state and the national averages. Over the last five years, the GIC's premiums have increased 28.8%. Mercer Human Resource Consulting estimates that Massachusetts' average premium costs have increased 47.8% and the nation's have increased a whopping 55.0%. Applying these percentages, the GIC has saved more than $109 million over the state trend and more than $150 million over the national trend.

We continue to aggressively pursue multiple avenues to control costs:

Medical Mistakes: The GIC has been at the forefront of improving patient safety, requiring our plans to gather data and improve admissions to hospitals that meet the Leapfrog standard for patient safety. Similarly, we implemented the Early Risk Intervention Program for PPO members.

Prescription Drug Costs: The GIC successfully leveraged its pharmacy benefit manager (PBM) procurement to negotiate bigger prescription drug discounts, saving the Commonwealth an average $4.4 million per year. We also instituted a three-tier copayment system to provide incentives for members to use generic or preferred brand name drugs. We also put in place drug intervention programs to catch potential adverse interactions for seniors taking too many drugs or drugs that are not appropriate for the elderly, as well as multiple prescriptions for controlled medications.

Provider Payments: The GIC discovered that for the same procedure, providers were charging the Indemnity Plan substantially higher amounts than they were charging other plans. It became apparent that hospitals and outpatient providers were using the Indemnity Plan to subsidize the discounts they had given to HMOs. In FY 99 the GIC instituted Market Based Reimbursement schedules to bring the Indemnity Plan's charges in line with other plans. We instituted a similar program for out-of-state providers for FY03.

Holding Plans Accountable for Quality and Cost: The GIC uses all of our procurements to get the most for the taxpayers' and enrollees' money. Extensive data gives us the tools we need to be tough negotiators. Our contracts hold plans accountable for many standards, including patient safety and disease management benchmarks. We regularly audit our plans to discover inefficiencies in an effort to improve service delivery. We hold regular operations meetings with our self-insured plans and conduct annual site visits with our HMOs to ensure ongoing collaboration and cooperation. The GIC also implemented risk adjustment for changes that occur during annual enrollment. We pay plans that have older, sicker enrollees more than those with younger, healthier enrollees.

Aging Population: The GIC has put in place many disease management programs to help coordinate and streamline care. Some of these include the Coronary Artery Disease Program, Do It Diabetes Program and Premier Health Plan, for enrollees with chronic medical conditions.

Collaboration

The GIC is an active member of leading players in the health care industry: The Massachusetts Healthcare Purchasers Group, Associated Industries of Massachusetts (AIM) Health Care Committee, Massachusetts Health Data Consortium and Massachusetts Coalition for the Prevention of Medical Errors. This enables us to be at the forefront of shaping health care policy to improve quality and contain costs.

Patients are the GIC's Partners: Our FYB newsletters are just one of the ways we assist you, our enrollees, to take charge of your health. This web site offers another venue for giving you the tools you need to be an informed health care consumer. Our health fairs also provide screenings and information to help you become an informed health care consumer.


This information provided by the Group Insurance Commission .