boyertown area school district€¦ · discover trion, a marsh & mclennan agency. we achieve...

April 4, 2017

BOYERTOWN AREA SCHOOL DISTRICTHealthcare Program Consulting and Overview

1March 31, 2017MARSH & McLENNAN AGENCY, LLC • Trion

Agenda

• Trion

• Highlights of Healthcare Program

• Prescription Drug Request For Proposal (RFP) Analysis

• Premium Holiday


TRION


Discover Trion, a Marsh & McLennan Agency

We achieve this by delivering exceptional value

Provide a compelling and consistent client experience

Understand and solve for client needs through segmentation and industry specialization

Partner with key carriers and innovate to meet emerging client needs

Enhance value to clients through innovation and process excellence

High-touch, responsive service model delivered by local experts who understand the specific market

Built on the entrepreneurial spirit and “client and colleague first” culture

World Class. Local Touch.


MMC is #1 global insurance broker* in the

world with $12.9B annual revenues.

MMA comprises 40boutique brokers/

consultants with $900M+ annual revenues and 3,000+ colleagues in

70+ locations.

Trion - WORLD CLASS. LOCAL TOUCH.

Trion represents $100M+ annual revenues with

400+ employees.

Marsh & McLennan Companies (MMC)

Marsh Guy Carpenter Mercer Oliver

Wyman

Marsh & McLennan Agency (MMA)

Trion 39 MMA companies

As a part of MMC, Trion can leverage Marsh’s extensive array of world class capabilities and resources while still maintaining an entrepreneurial environment to help meet your business objectives.

*Source: Business Insurance (www.businessinsurance.com), July 18, 2016

http://www.businessinsurance.com/


We offer clients access to a power house team of specialists and seasoned professionals who understand the insurance industry.

These professionals deliver the Trion value and deliver world-class strategic services and solutions.

• Medical Directors • National Advisory Team • Actuaries• Technology Specialists

• Pharmacy Experts • Attorneys• Benefit Analysts

Trion - Specialized Expertise


Trion - The Benefits of Wisdom

The thought leadership of senior consultants, the aggressive purchasing strength of major brokers, and the technological skills of leading administrators unite at Trion to create effective solutions that meet unique objectives, delivered through one team with dedicated focus.

First to market strategies and solutions

Streamlined efficiencies through proprietary technology tools

Custom recommendations to fit industry segment

National and Global Benchmarking

Insights and financial metrics to improve plan strategies and match business objectives

Trusted resource for compliance and ACA guidance


Trion and Boyertown Area School District• September 2016: Boyertown School District (BASD) contracted with Trion to provide health

and welfare program consulting services

• Trion provides the following services to Boyertown Area School District– Client management

- Overall client service including program and relationship management – Strategy development and implementation

- Program offerings, plan design and overall alignment with business objectives– Financial strategy and cost management

- Budgeting and cost analytics– Renewal strategy and vendor management

- Underwriting and renewal development and negotiations, vendor negotiations and cost management– Wellness support

- Support incumbent wellness programs - assisting with communication materials, attending meetings, sharing market based solutions/ideas/programming

– Compliance services- Ongoing communication of the latest legal and compliance (i.e. Affordable Care Act) information

including evaluation of any impact on the BASD programs and members– Communications support

- Messaging to members - Open enrollment, wellness programming, new programs, etc.

• Trion works with over 25 local and regional school districts offering the same suite of consulting services afforded to BASD


HIGHLIGHTS OF HEALTHCARE PROGRAM


Highlights of BASD Healthcare Programs• Medical and Rx plan performance continues to run favorably

• Annual market based medical/Rx trend (healthcare inflation): 8% - Historically, BASD averaging 2-3% increases/year over the last 5 years- BASD: 0% projected change in cost for 7/1/17 – 6/30/18

• Contributing Factors: - Plan design and structure - Care management - Wellness strategy and programs- Members conscientious consumers of healthcareCovered members and dependents are maintaining, managing and improving their health

• Member contribution levels are above market

• Primary plan designs are market competitive


PRESCRIPTION DRUG RFP ANALYSIS


Introduction

• Trion conducted a comprehensive prescription drug program vendor evaluation. The Request for Proposal (RFP) process and resulting analysis were based on the following objectives:– Analyze marketplace for better strategic and service oriented partner– Secure market competitive discounts and cost structure– Secure access to best in market networks with minimal disruption for members– Duplicate in force benefit designs– Opportunities for expanded care and formulary management options providing savings to members and

Boyertown Area School District

Request for Proposal Process (RFP) Overview


Introduction

• The following vendors were included in the RFP process:

– CVS Caremark is the incumbent and provided current pricing and terms for inclusion in this RFP process– ESI and OptumRx provided quotations through the Trion Rx Coalition

• Financial variables included in our cost analysis:– Discounts– Rebates– Dispensing & Administrative Fees

Prescription Vendor Summary

https://www.caremark.com/wps/portal/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gnC3NzC-8gw1CXAB8DA08zY1cfD0MXYwMDA6B8pFm8AQ7gaEBAt59Hfm6qfkFuRDkAQrr79Q!!/dl3/d3/L2dJQSEvUUt3QS9ZQnZ3LzZfQjg3NzhLUjFVRFBMMDBJNjNFTEgxRDMwMDA!/

https://www.caremark.com/wps/portal/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gnC3NzC-8gw1CXAB8DA08zY1cfD0MXYwMDA6B8pFm8AQ7gaEBAt59Hfm6qfkFuRDkAQrr79Q!!/dl3/d3/L2dJQSEvUUt3QS9ZQnZ3LzZfQjg3NzhLUjFVRFBMMDBJNjNFTEgxRDMwMDA!/


Prescription Drug RFP Analysis

• The pricing provided by each Pharmacy Benefit Manager (PBM), with the minimum intent to match the incumbent equivalent formulary arrangement and produce savings over pricing provided by CVS Caremark

• Drug formulary- List of medications evaluated and reviewed by clinical professionals on a semi-annual basis to determine the most cost and

clinically effective options that should be on the formulary

• There are two (2) types of formulary arrangements: - Open: Non-formulary drugs are covered under the 3rd tier- Closed: Plan could exclude certain medications from being covered instead of including them under the 3rd tier. There are

formulary alternatives for excluded drugs.- Boyertown School District currently has an open formulary and the quotes from ESI and OptumRx reflect this strategy

• ESI and OptumRx provided proposals based upon their broadest formulary - Basic and Select Focused formulary options are comparable to the current Traditional Formulary inforce with CVS Caremark

• Incumbent programs available under the quoted offers– Voluntary Maintenance Choice Program (90 day fills at retail vs. mail order)– Prior Authorizations– Enhanced Prior Authorization (Step Therapy)– Drug Quantity Management– Specialty dispensed through Specialty Pharmacy– Voluntary Generic Substitution

Summary



• The financial savings is based on pricing improvements. The opportunity for clinical and utilization management can be evaluated after implementation (matching incumbent programs) and within the context of the next bargaining/negotiation opportunities.

• Examples of employer cost strategies focusing on greater management of the prescription costs:– Utilization Management Programs

- Chronic care and disease state management (i.e. diabetes, oncology, etc.)- Mandatory Generic and Dispensed As Written (DAW) programs- Quantity Limits- Step Therapy- Mandatory Specialty Pharmacy

Summary

In-force with BASD


Prescription Drug RFP AnalysisFinancial Review

Pharmacy Network CVS/Caremark Express OptumRxFormulary Traditional Basic (Open) Select Focused

Specialty CBC Specialty Network Exclusive Exclusive

Projected Results : 7/17 to 6/18Net Plan Drug Costs $1,707,774 $1,640,232 $1,638,494 Net vs. Current (%) -4.0% -4.1% Net vs. Current (Annual $$) ($67,543) ($69,281)Projected Results : 7/18 to 6/19Net Plan Drug Costs $1,916,054 $1,788,156 $1,825,040 Net vs. Current (%) -6.7% -4.8% Net vs. Current (Annual $$) ($127,898) ($91,013)Projected Results : 7/19 to 6/20Net Plan Drug Costs $2,148,536 $1,942,528 $2,028,731 Net vs. Current (%) -9.6% -5.6% Net vs. Current (Annual $$) ($206,007) ($119,804)Three Year TotalNet Plan Drug Costs $5,772,364 $5,370,916 $5,492,265 Net vs. Current (%) -7.0% -4.9% Net vs. Current (Annual $$) ($401,448) ($280,099)Capital Blue Cross Rx Credit: $.50 PEPM: $4,100

Enrollment: 677 employees


Prescription Drug RFP AnalysisDisruption Results

EXPRESS SCRIPTS - BASIC FORMULARY

All Brand Rx's Rx Count % ImpactUnique

Utilizers% Member

ImpactMOVING TO FORMULARY 461 3.0% 157 11.3%MOVING TO NON-FORMULARY 164 1.1% 53 3.8%

All Maintenance Brand Rx's Rx Count % ImpactUnique

Utilizers% Member

ImpactMOVING TO FORMULARY 350 2.3% 88 6.3%MOVING TO NON-FORMULARY 147 0.9% 43 3.1%

TOTAL # SCRIPTS 15,543 Medications move to higher co-pay tier or grandfather existing for a period of time to help with

transition.



Advantages Of Using A PBM• Lower total cost Rx solution • Market focus/specialization• Extensive data analysis

– Plan modeling – price and behavior– Actionable recommendations

• Proactive plan management– Designed specifically for mid- and large-sized employers

Disadvantages Of Using A PBM• Challenge to integrate medical and Rx data• Potential carve-out charges • Additional administration

Using a Pharmacy Benefit Manager (PBM)


NEXT STEPS


Next Steps

• Decision on new Rx vendor

• Strategy for managing the transition and impact on membership

• Communication campaign for covered members announcing the changes, impact on members and introducing the new vendor and how to can engage and use the new vendor for questions, assistance and guidance

• Target implementation process for 9/1/17 effective date begins May 2017


PREMIUM HOLIDAY


Premium Holiday

• Ensure fund balance is adequate– Current: $6m which is about 7 months of cost (market competitive)

• Premium holiday strategies– Forgo premium/contribution requirements from members or from both the district and members for period

of time that is justifiable based on renewal projection and fund balance requirements– No changes in COBRA required with a premium holiday– Common timing for holiday: end of calendar year (December) or end of school year (May/June)– One pay premium holiday: $50,000 from members and $350,000 from BASD

- Reduce fund balance by about 7% or about 50% of one month

The Patient Protection and Affordable Care Act is a complex law. Any statements made by Trion Group, a Marsh & McLennan Agency, LLC Company concerning tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as accounting, tax, or legal advice. We recommend that you seek the advice of your own tax, accounting and legal advisers as to whether or not the health plans you select are compliant with the Patient Protection and Affordable Care Act, including the minimum essential coverage requirements.

No part of this document may be reproduced, quoted, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or by any information storage and retrieval system), without express, prior permission, in writing from Marsh & McLennan Agency, LLC Company.

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