FY07 Annual Report

The majority of the GIC's FY07 Annual Report is available on this website. You may download a copy of the complete report on this website. Or, to request a printed copy, use our online contact form.

Raising the Bar – Improving Health Care Quality While Containing Costs

Health Plans Accelerate to Meet Our Challenge – New Plan Designs
FY08 Rates Bests Others
FY07 CPI Initiative Work Paves Way for FY08 Benefits
Implementing Better Benefits for the Very Sick

The Clinical Performance Improvement Initiative
Four years ago, the GIC began the Clinical Performance Improvement (CPI) Initiative, a ground breaking effort that identifies differences in physician care and rewards members, through modest co-pay incentives, to see better performing providers.   

Why Did We Do This?

• Cost of employee health care in 2006 rose 7.7% nationally:
• More than double the current inflation rate
• Exceeds the increase in workers’ income
• Since 2000, the cost of family health coverage has risen 87% nationally

(The GIC and our members have done better than many in containing annual rate increases, but escalating health care costs are a continuing challenge) 

• Fewer than 55% of patients receive care that meets the standards of quality care, according to a RAND study; wide disparity in quality of care between physicians and hospitals
• Consumer information about providers is unavailable, difficult to find, or too complex to be usable

What have Other Employers Done?

• Cut benefits/Reduced coverage
• Eliminated choice
• Established high deductible plans
• Eliminated retiree benefits

The GIC Has Taken a Different Approach, Engaging Members While Encouraging Provider Improvement
The GIC’s CPI Initiative seeks to improve health care quality and promote cost-effectiveness through increased transparency.  The GIC has required our health plans to provide their entire book of business claims (de-identified) to our consultants to be aggregated and analyzed for relative provider efficiency and quality.  After this process, the GIC gives these analyses back to the health plans which then use the information to develop benefit designs in which members are given modest co-pay incentives to use better performing doctors and, in some plans, hospitals.

FY07 – Tiered Physician Benefits Rolled Out
The GIC and our health plans rolled out the first year of physician tiering on July 1, 2006.  The health plans took varying approaches to our objectives, with two of the Commonwealth Indemnity PPO-type plans tiering all Massachusetts physicians, two PPO plans tiering certain specialists, two HMOs establishing selective networks, and two HMOs tiering providers based on the member’s PCP selection.

Inviting Others to Join the Team
The GIC and our consultants actively sought input from the Massachusetts Medical Society (MMS) to improve our CPI Initiative and help improve the quality of the data analyses.  The GIC invited two physicians and the President of the MMS to participate in the CPII Physician Advisory Committee, which meets frequently to provide feedback and suggestions.  Although some providers are apprehensive about physician rankings, the GIC continues to reach out to physician groups to improve their understanding of the program.

FY08 Rates Best Others
Rigorous negotiations typify the GIC’s annual rate negotiations.  In part due to the CPI Initiative, the GIC’s combined non-Medicare health plan rates for FY08 averaged a 5.04% increase over FY07.  This was achieved without shifting costs to enrollees.  With Medicare rates added in, the average rate increase dropped to 3.78% average.  With other employer rate increases averaging 14%-15%, the GIC’s results garnered mention in the press as exemplary.

FY07 CPI Initiative Work Paves Way for FY08 Benefits
The GIC, our consultants, our health plans, and the Physician Advisory Committee met frequently throughout FY07 to refine the CPI Initiative, review refreshed data analyses and determine opportunities for expanded physician tiering.  For FY08, all of the GIC’s Non-Medicare plans, including the Indemnity Basic plan, introduced physician tiering.  All Massachusetts doctors in the Indemnity Basic plan were tiered.  Additional specialists were tiered in two of the GIC’s major PPO plans.  Specialist tiering was added to one of the GIC’s HMOs, and another HMO merged its two plans and introduced physician tiering.

Implementing Better Benefits for the Very Sick
Recognizing that the very sick, particularly cancer patients, can sometimes have the added burden of multiple hospital stays, the GIC instituted a policy to waive the hospital co-pay or deductible if patients were readmitted to the hospital within 30 days.  The benefit change was effective July 1, 2007.  Additionally, the GIC voted to implement a specialty drug provider for members in the Indemnity Plans who use Express Scripts for prescription drug benefits.  Members who take drugs for certain diseases, such as hemophilia, hepatitis C, HIV, multiple sclerosis, rheumatoid arthritis, infertility and cancer must fill their medications through Express Scripts’ specialty pharmacy, CuraScript.  Medications are delivered to the member’s home or doctor’s office.  We also reduced the co-pay for a 30-day supply to $10.  While these changes, effective July 1, 2007, provide some savings for the GIC, more importantly they will help improve drug compliance for sick members.  Services include self-injection support, education, medication adherence counseling, refill reminders and follow-up.