Purdue Managed Care Case Study

Question 1

True or False?

If I have health insurance, all of my medical expenses will be covered?

Answer 1

False
- premium
- deductible
- copay

Question 2

True or False?

Employers typically pay 25-30% of total annual salary for benefits?

Answer 2

True

Question 3

True or False?

People need health insurance because health care is expensive?

Answer 3

True; and unpredictable

Question 4

Overview of Fully vs Self Insured Health Plans

Answer 4

Self Insured (Purdue)
- Employee –> $$$ –> Employer
- can be used to save money
- can still pay anthem to administrate claims

Fully Insured
- Employee –> $$$ –> Employer –> $$$ –> Insurance
- set price annually
- insurance assumes the risk and manages everything
- insurance desires to make a profit

Question 5

Fully vs Self Insured Health Plans

Answer 5

Fully Insured:
- insurance company assumes the risk
- employer pays per-employee premium to insurance company
- SMALLER EMPLOYERS

Self-Insured:
- employer assumes the risk
- employer acts as there own insurer
- claims can still be managed and processes by insurance company
- LARGER EMPLOYERS

Question 6

Benefits of Self-Insured Plans

Answer 6

• allows customization of plans vs one size fits all
• employer is free to contract with any provider
• employer does not have to pre-pay for coverage
• avoids state mandated benefits’
• level of control maximizes income
• avoids state health insurance taxes & other fees

Question 7

Disease State Prevalance at Purdue

Answer 7

• disease state prevalence is much lower at Purdue compared to national prevalence

Why?
- may not utilize HC services
- highly educated & healthier

Outlier
- MS & Leukemia are similar to normal because they require access to HC system –> major issues

Question 8

Purdue Prevention Screening Rates

Answer 8

“mediocre”

Question 9

Purdue Healthcare Expenditure 2004-2010

Answer 9

• HC expenditure drastically increased from 2004-2010 and was unsustainable
• results in less money for faculty salaries, student services or that money must come from somewhere else like tuition

MUST BE WILLING TO DO UNPOPULAR THINGS TO SOLVE

Question 10

Purdue Healthcare Cost Split

Answer 10

• Before 2014: 84/16
• 2014: 80/20 mandate

INDUSTRY STANDARDS: 75/25

Question 11

Geographical Influence on Purdue Cost

Answer 11

• employees have entitlement to choose location & procedures
• lack of information on comparative pricing
• stagnant plans fostered continuation of current coverage

Question 12

Purdue’s Benefits Compared to Peer Universities

Answer 12

• Purdue was spending much more on benefits compared to other universities (exception of CDHP)

Question 13

General Strategies to decrease cost

Answer 13

• increase housing costs for students
• corec access for employees
• incentivize preventative care
• choose in network providers
• increase students; decrease faculty

Question 14

Pharmacy Strategies to decrease cost

Answer 14

• do not cover nonessential meds
• switch to generic meds
• increase adherence
• increase follow-up and monitoring

Question 15

Purdue’s Short Term Strategies

Answer 15

Changed Insurance Plan
- 2-tier premium structure
- deductible/coinsurance arrangement
- offer free generic preventative meds
- combined Rx and medical deductibles

Encouraged Consumerism
- develop lab and imaging benefits
- implement Cashlight Rewards
- adjust Center for Healthy Living copay

• incentivize improving wellness outcomes

Question 16

Purdue Long Term Strategies

Answer 16

Awareness
- develop metrics
- develop brand
- develop champions
- asess funding

Engagement/Accountability
- share stories
- education
- partner with local providers
- create penalty or reward system
- evaluate metrics

Improvement/Maintenance
- evaluate outcomes
- add new incentives

Question 17

Center for Health Living

Answer 17

Goal: provide CDTM and MTM services by pharmacists

Potential:
- > 4600 faculty take > 5 medications
- > 10% have common disease states

Cost Saving:
- 2.89 benefit-to-cost in outpatient setting

Productivity:
- 50% reduction in missed work hours for employees with DM
- 400% reduction in missed work hours for employees with asthma

Question 18

In conclusion

Answer 18

• Purdue got to a 75/25 split in 2022
• HC expenditures have went down or slowed down
• increased outcomes in BP and DM

Question 19

Purdue offers health incentives for engaging with HC system
- can increase amount of $ in HSA by completing physical or biometric values

Answer 19

Purdue offers health incentives for engaging with HC system
- can increase amount of $ in HSA by completing physical or biometric values