strategic outlook on healthcare market : a medical group perspective
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Strategic Outlook on Healthcare Market : A Medical Group Perspective. Don Crane President and CEO. 2008 Health Care Forecast Feb 22, 2009. Overview. Introduction Environmental Assessment Challenges for Groups Medical Group Responses Q and A. California Association of Physician Groups. - PowerPoint PPT PresentationTRANSCRIPT
2008 Health Care ForecastFeb 22, 2009
Strategic Outlook on Healthcare Strategic Outlook on Healthcare Market :Market :
A Medical Group PerspectiveA Medical Group Perspective Don CranePresident and CEO
OverviewOverview
IntroductionIntroduction
Environmental AssessmentEnvironmental Assessment
Challenges for GroupsChallenges for Groups
Medical Group ResponsesMedical Group Responses
Q and AQ and A
California Association of California Association of Physician GroupsPhysician Groups
OverviewOverview
IntroductionIntroduction
Environmental AssessmentEnvironmental Assessment
Challenges for GroupsChallenges for Groups
Medical Group ResponsesMedical Group Responses
Q and AQ and A
Underlying Premium Underlying Premium PressuresPressures
New Tech
nologies
Uninsura
nce
Gov’t Cost
Shift
Hosp
ital U
nit Cost
Benefit Mandate
s 8+%More than doublerate of inflation!
Pharmacy
Source: CHCF/Health System Change (HSC) California Employer
Health Benefits Survey, 2006
EMPLOYER REACTIONEMPLOYER REACTION
Annual Growth in Private Health Insurance Premiums
12.0%
18.0%
14.0%
8.5%
0.8%
5.3%
8.2%
10.9%
12.9%
13.9%
11.2%
9.2%
7.7%
6.1%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
1988 1989 1990 1993 1996 1999 2000 2001 2002 2003 2004 2005 2006 2007
Percentage Growth
YearSource: KFF/HRET Survey of Employer- Sponsored Health Benefits 2007
Premium TrendPremium Trend
Premiums: HMO vs. PPOPremiums: HMO vs. PPO
Premium IncreasesPremium Increases
HMO PremiumsHMO Premiums
Premium Trend by ProductPremium Trend by Product
Enrollment by Plan TypeEnrollment by Plan Type
High Deductible PenetrationHigh Deductible Penetration
Employer Coverage TrendEmployer Coverage Trend
Concentration of HMO Concentration of HMO Enrollment - CaliforniaEnrollment - California
33.0%
12.0%
5.0%
11.0%
12.0%
19.0%
36.0%
16.0%
9.0%
11.0%
10.0%
14.0%
2000 2006
All Others
CIGNA
Aetna
PacifiCare
HealthNet
Blue Shield
Blue Cross
Kaiser
73%82%
Source: Cattaneo & Stroud, Inc.
2.0%
4.0%
Commercial HMO Commercial HMO Concentration - Concentration -
CaliforniaCalifornia
39.0%
11.0%
7.0%
11.0%
12.0%
11.0%
45.0%
13.0%
12.0%
10.0%
11.0%
3.0%
2000 2006
All Others
CIGNA
Aetna
PacifiCare
HealthNet
Blue Shield
Blue Cross
Kaiser
80%91%
Source: Cattaneo & Stroud, Inc.
3.0%
5.0%
2.0%
Concentration of Concentration of Medicare HMO Medicare HMO
Enrollment - CaliforniaEnrollment - California
36.0%
8.0%
36.0%
9.0%
49.0%
7.0%
26.0%
9.0%
2000 2006
All Others
Aetna
PacifiCare
HealthNet
Blue Shield
Blue Cross
Kaiser
87%89%
Source: Cattaneo & Stroud, Inc.
4.0% -- 2.0%
- 5.0%- 2.0%
4.0% -2.0% -
OverviewOverview
IntroductionIntroduction
Environmental AssessmentEnvironmental Assessment
Challenges for GroupsChallenges for Groups
Medical Group ResponsesMedical Group Responses
Concluding Remarks; Q and AConcluding Remarks; Q and A
ChallengesChallenges
Declining Commercial HMODeclining Commercial HMO– erosion of revenueerosion of revenue– tipping point tipping point
ChallengesChallenges
Medicare Advantage funding Medicare Advantage funding flush…at the momentflush…at the moment
…….funding cuts .funding cuts possiblepossible
ChallengesChallenges
Powerful Competitors: KaiserPowerful Competitors: Kaiser– market share market share – competition in physician competition in physician
recruitmentrecruitment
ChallengesChallenges
HMO vs PPO HMO vs PPO
Hospital utilization?Hospital utilization? Price differential shrinking?Price differential shrinking? Influence of P4P?Influence of P4P? Uneven Playing fieldUneven Playing field
ChallengesChallenges
Influx of high deductible products Influx of high deductible products coupled with inability to coupled with inability to administer deductiblesadminister deductibles
Risk segmentation Risk segmentation death spiraldeath spiral
Can’t participateCan’t participate
ChallengesChallenges
Time of Uncertainty; Time of Uncertainty;
Healthplan commitment to Healthplan commitment to ModelModel
OverviewOverview
IntroductionIntroduction
Environmental AssessmentEnvironmental Assessment
Challenges for GroupsChallenges for Groups
Medical Group ResponsesMedical Group Responses
Q and AQ and A
Medical Group ResponsesMedical Group Responses
1.1. Get BetterGet Better
2.2. Get BiggerGet Bigger
3.3. CollaborateCollaborate
4.4. LobbyLobby
Medical Group ResponsesMedical Group Responses
1. Get better1. Get better
– ITIT– Pay for PerformancePay for Performance– QI ProgramsQI Programs– CAPG Standards of ExcellenceCAPG Standards of Excellence
Medical Group ResponsesMedical Group Responses
CAPG Standards of ExcellenceCAPG Standards of Excellence
1.1. What: A recognition program that What: A recognition program that rewards members exhibiting rewards members exhibiting established attributes of excellence. established attributes of excellence.
2.2. Goals: Goals: • Stimulate all groups to Stimulate all groups to improveimprove• BrandingBranding
Medical Group ResponsesMedical Group Responses
CAPG Standards of Excellence CAPG Standards of Excellence -- Three Domains:-- Three Domains:
Care Management ProcessesCare Management Processes
Health Information TechnologyHealth Information Technology
Accountability and TransparencyAccountability and Transparency
Medical Group ResponseMedical Group Response
2. Get Bigger2. Get Bigger
– Mergers and Acquisitions Mergers and Acquisitions – Knox Keene LicensureKnox Keene Licensure
Global Risk ContractingGlobal Risk Contracting Go into healthplan business?Go into healthplan business?
Medical Group ResponsesMedical Group Responses
3. Collaborate3. Collaborate– With PlansWith Plans– With HospitalsWith Hospitals– With EmployersWith Employers– With GovernmentWith Government
Medical Group Responses Medical Group Responses
Data Sharing Code of ConductData Sharing Code of Conduct
WHO?: WHO?: CAPG and top 6 PlansCAPG and top 6 Plans
WHAT?:WHAT?:1.1. Reciprocal Sharing of new data setsReciprocal Sharing of new data sets2.2. Coordination of Disease management Coordination of Disease management
programs programs
STATUSSTATUS:: Being adopted and implemented. Being adopted and implemented.
Medical Group ResponsesMedical Group Responses
4. Lobby, lobby, lobby4. Lobby, lobby, lobby
Wither Universal Coverage?Wither Universal Coverage?
Medicare AdvantageMedicare Advantage
MiscMisc
Medical Group ResponsesMedical Group Responses
OverviewOverview
IntroductionIntroduction
Environmental AssessmentEnvironmental Assessment
Challenges for GroupsChallenges for Groups
Medical Group ResponsesMedical Group Responses
Q and AQ and A
2008 Health Care ForecastFeb 22, 2009
Strategic Outlook on Healthcare Strategic Outlook on Healthcare Market :Market :
A Medical Group PerspectiveA Medical Group Perspective Don CranePresident and CEO