Strengthening Behavioral Health care

Presentation to :

Health, Welfare and Institutions Committee

Virginia House of Delegates

July 30, 2007

Dr. Lawrence GoldmanVP, Strategic Planning

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We Are the Industry Leader in Managed Behavioral Health, with a Focus on the Public Sector

• We understand the unique challenges of serving in the Public Sector.

• Programs designed to advance a public service agenda

• Populations with different behavioral health issues and social supports

• Real-time accountability to multiple stakeholders

• Need to balance administrative economies of scale and customization

• Programs must complement – rather than duplicate or disrupt – the existing delivery system

• Founded in 1986, with headquarters in Norfolk and Reston• Privately held and physician-owned• Committed to principles of recovery• Diverse client base – over 24 million lives

– Employer Solutions Division covering 21% of Fortune 100’s

– Health Plan Division with 26 health plan clients– Federal Division (TRICARE) with 3 Million lives– Public Sector Division with Government clients covering

over 4 million lives in 12 states

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ValueOptions’ National Footprint

Long Beach

Phoenix

Colorado Springs

Topeka

Irving

TraffordBoston

Trafford

Phoenix

Colorado Springs

Topeka

Irving

Trafford

New York City

Trafford

Phoenix

ColoradoSprings

Dallas

Tampa

Jacksonville

Detroit

Hamilton

HeadquartersHeadquarters

Service CentersService Centers

Corporate Support OfficesCorporate Support Offices

Norfolk

Trafford

> 1 million lives> 1 million lives

> 300,000 > 300,000

> 100,000> 100,000

< 100,000< 100,000

24.7 million covered lives24.7 million covered lives

Latham

Topeka Reston

Durham

Troy

Virginia Beach

Santa Fe

Hartford

Total Locations - 20Total Locations - 20

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Manage access and treatment for children

and adolescents Transition of Medicaidbehavioral health to

recovery-based model

Target broader issues like homelessness that

are related to behavioral health

Meet diverse needs of rural counties

Provide statewide utilization

management and review

Support consumer-led initiatives, quality improvement, and integration of care

Improve care and support for Medicaid-eligible children and

families

Bring technology and care

management to bear for at-risk children

Partner with providers to

improve breadth and quality of care

Coordinate and manage behavioral health care and an

innovative pharmacy program

Blend 17 funding streams to enable

an integrated service delivery

system

• Experience and innovation

• Increased access and quality leading to demonstrable improvements

• Cost-effective and operationally efficient programs

• Robust data management

• Customized programs to meet diverse needs

• Minimizing disruption and mitigating risks

• Responsiveness – providing access to our senior decision-makers

We Are the Industry Leader in Managed Behavioral Health, with a Focus on the Public Sector

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Scope of Mental Health Problem

• Headlines• Washington Post, July 17, 2007

– “In addition to a call for more funding, the most immediate changes probably will address laws that oversee how those with mental illnesses are monitored after they receive community-based services. Such people often do not need to be in a hospital but need to stick to treatment, which could include medication, therapy or both. Many mental health experts and lawmakers have said the state's oversight of people in this category is lax and the law is not specific enough to address those who do not comply with court orders…”

• Roanoke Times, May 25, 2007– EDITORIAL: Fix the fractured mental health system: Virginia mental health

officials and the ill need unified standard procedures.

• The Virginia Pilot, March 2, 2006– Virginia gets a D in mental health services

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Scope of Mental Health Problem

• Kaiser Commission reported* • Increased public cost when mental illness is not

treated• 20% of the US Population is some form of

mental health disorder• 5% have serious mental illness such as

schizophrenia, major depression, etc.

* Profiles of Medicaid's High Cost Population - December 2006

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•Untreated or poorly managed behavioral health problems have

serious social repercussions.

•This a key strategy to

– Improve broader health issues

– Reduce the cost of other social services

Source: World Health Organization, “Investing in Mental Health,” 2003

Improve broader social and public health

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The Social Cost of Poor Treatment Is High

• Mental disorders are the leading disability in the US among those 15-44

• Mental illness results in more than 4 million lost work days and 20 million work cutback days each year in the US

• A third of those who are homeless have a mental disorder, and more than half suffer from substance abuse

• The majority of people who commit suicide have a mental disorder, with estimates above 80%

• In 1998, 16% of those in state prisons and local jails were mentally ill

• Alcohol was involved in 39% of fatal car crashes in 2004

• Patients with depression are 3x more likely not to comply with medical regimens

Untreated or poorly treated problems...

Absenteeism

Job loss

School drop-out

Injuries/Accidents

Suicide

Incarceration

Gambling

Poverty

Homelessness

Crime

...Produce tremendous social costs.

Note: Direct costs estimate from 1996; indirect from 1990

$6 B$16 B

$26 B

$134 B

$0

$40

$80

$120

$160

CriminalJusticeSystem

VehicleCrashes

Health Care LostProductivity

$69 Billion$79 Billion

$0

$20

$40

$60

$80

$100

Direct Costs Indirect Costs

$ Billions

$ Billions

•Cost of Mental Health

•Cost of Alcohol Abuse

(Source: U.S. Surgeon General)

(Source: WHO)

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Public Sector Programs

• Customized solutions• Tailor program & administrative strategies

• Technological innovations• Integrated IS to track/report across funding

streams• Web-enabled systems for real time decision

support and inter-agency planning• QM programs

• Flexibility• Responsiveness to consumers and family

members

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Key strategies…

• Engage providers, consumers and family members• Oversight, • Design & implementation

• Use evidence based practices• Facilitate inter-agency collaboration• Monitor improvements and document outcomes• Create provider incentives• Accurate and timely claims processing

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And some results are…

• Increased access to services• Expanded roles of and relationships

• Involvement in program design• Increased satisfaction

• Savings that have been reinvested in the behavioral healthcare system

…and some examples are…

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Integrate With and Improve Physical Health Care…

Source: Study conducted by the Center for Health Policy Research (CHPR) at the University of Massachusetts Medical School

Essential Care Medical Care Management Program

• Assigns each member a care manager who coordinates the services of the primary care clinician, behavioral health providers, state agencies, and community services, etc.

• Program has grown to serve over 740 members from July 2005 to present

Situation: Some members in the Massachusetts program are too ill to seek needed care

10.0

12.1

1.8

4.0

7.7

1.1

0

2

4

6

8

10

12

14

Average Gaps in RxRefills

Average Office Visitsper Year

Average EmergencyRoom Visits per Year

Before EnrollmentAfter Enrollment

Impact: Participant PMPM medical costs reduced from $798 to $648

•A 2005 academic study found that enrolled members:•Received more targeted, integrated medical and behavioral health care, with increased access to primary care•Improved on both the mental- and physical-related physical functioning scores on a standardized tool •Increased compliance with behavioral and physical care•Required less acute and emergency care services

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Integrate With and Improve Physical Health Care…

Impact on Children• Surveys show that PCPs participating in MCPAP

report that they are now able to meet the mental health needs of children and adolescents in their practices

• Program was implemented in FY05; 34% of pediatric practices were enrolled by September 2005.  Full statewide PCP participation is expected by end of FY06

Care Management Decreases Physical Health Costs

Massachusetts Child Psychiatry Access Project (MCPAP)

• Teams of child psychiatrists, social workers, and care coordinators provide psychiatric telephone consultation to PCPs within 30 minutes

• Consultation guides PCP to the appropriate level of care based on the member’s needs

Other MBHP Initiatives

• Regional staff visit PCC Plan offices bi-annually to ensure that primary care staff know how to access behavioral health services and have a good relationship with a behavioral health provider

• MBHP places care managers in primary care offices to serve members with depression

Situation: Statewide in Massachusetts, many PCPs did not know how to treat, screen, and refer patients with behavioral health issues

Care Management Period

CC Jan 02-Mar 02 (n=50)

ICM Jan 02-Mar 02 (n=183) CC Apr 02-Jun 02 (n=103)

ICM Apr 02-Jun 02 (n=198)

$400

$800

$1,200

Pre During Post$0

•PMPM Cost

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The More Inclusive the Program, the Wider Its Impact

State policy

decisions play a

major role in

determining the

nature and breadth

of programs...

. . . the more

opportunities

they provide

for social

impact.

Housing

Jail Diversion

Coordination with Physical Healthcare

Support for the Child Welfare System

Pharmacy Management

. . .the more broadly they are conceived...

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…And a Range of Program Designs

• Single Funding Stream (e.g., Medicaid) • People enrolled and services covered are those funded through a single funding

source• Colorado, Florida, North Carolina, Pennsylvania

• Dual Funding Streams (e.g., Medicaid, MH, Child Welfare)• Two or more agencies jointly contract for services or create inter-agency

agreements to coordinate service delivery through single vendor• Massachusetts, Connecticut, New Jersey

• Integrated Systems of Care • Multiple agencies braid or blend programs and funding streams with a vision of

reducing barriers, reducing admin costs, and creating a unified delivery system• New Mexico, Arizona, Texas NorthSTAR

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Meet your Specific Objectives…

Examples of State-Specific Goals ValueOptions Program Approach

New Mexico

• Create a unified behavioral healthcare system to improve quality and simplify administration

• Provide access to care and cultural sensitivity in rural and Native American communities

• Braided funding across 17 state agencies

• Regional offices with local staff and decision-making authority

Massachusetts

• Adapt focus over time to ensure continuous improvement of the care delivery system

• Improve provider care quality

• Performance incentives defined annually by the state

• Quality improvement and pay-for-performance program for providers

New Jersey

• Improve the child welfare system

• Leave medical risk in the hands of the state

• Improve care management and monitoring

• Focus on all at-risk children and their families

• ASO arrangement focused on care management

• Technology and reporting infrastructure used to improve access and quality of care and inform policy decisions

Florida

• Build on the existing provider network

• Share risk and care management to encourage mutual accountability and financial feasibility

• Improve integration of physical and behavioral healthcare

• 50/50% partnership with major BH providers

• Fully capitated system from the state, with sub-capitation arrangement with providers for OP services

• Pharmacy management and PCP integration programs

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Reinvest Savings to Improve the Delivery System

State Priority Reinvestment Approach

Improve quality and breadth of care

• Support development and payment for new services• Management and innovations in our Massachusetts program yield some $12M each year to reinvest in

community-based mental health and substance abuse services• Our Colorado program has consistently leveraged Medicaid capitation to reinvest approximately 5% of

annual revenue dollars toward recovery-based programs, community based programs and other innovative services

• In Pennsylvania, we have used reinvestment dollars to fund “bricks & mortar,” start-ups, and ongoing overhead costs for a consumer-driven Drop-In Center

Increase access to services • Expand eligibility• In Florida, we have reduced the administrative rate from 22% in 1996 to a current rate of 12% through

operational efficiencies, economies of scale, and a a new provider contracting/funding model. The net effect is an annual increase in the plan’s medical budget - $1.2M in 2005

• In New Jersey, we introduced data mining technology that has helped produce an annual $64M in incremental Medicaid reimbursement for the state, which has been invested in care

Ensure provider sustainability • Increase reimbursement rates• Operational efficiencies in Pennsylvania enabled us to keep administrative costs flat as the covered

population grew. Through dialogue with the state, we identified opportunities to shift resulting surplus funds back to providers in rate increases for targeted services

• The Florida program implemented a 2% Risk and Reinvestment Pool to be funded from managed care administrative savings. Part of this pool is used to offset any financial losses that providers may incur due to expanded requirements with the same capitation rates

Minimize related expenditures • Return funds to the state• In Colorado, our provider partnership has met the needs of the State’s growing Medicaid population while

receiving just 81.5 % of the amount the State’s actuaries predicted these services would cost, saving more than $10M per year

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VIRGINIA

• Community Service Board System• Right reasons, right mandate• Community based services• Provides emergent, residential and preventative• Needs (as reported to this committee)

• More trained professionals• Increased training opportunities• Quality improvement and data analytics• Increased connectivity

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The Virginia Solution

• States have turned to the private sector• Need cohesion in the system with all stakeholders• Private sector partnerships in other states have

been effective• Tools to consider are:

• Bed Tracking (especially residential)• Primary Physician Outreach• Outcomes measurement and Quality improvement• Jail Diversion

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The Virginia Solution

• System Integrator• Linkage between CSB and DMHMRSAS• Maintain CSB gateway• Tracking entry into the system• Analyze resources needs and allocation• Expand outreach based on determined need• Outcomes, quality• Expanded IT capabilities• Expanded toolset

• For the delivery system• For the Department

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Collaboration

• Along all stakeholders

• Increased system communication

• Efficiency, allows maximizing Federal matching funds

• Savings generated create re-investment opportunities

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Conclusion

• The enemy - status quo• The challenge - embrace change• The solutions

• engage the private sector• build a bridge between the system and the

government• amplify stakeholder involvement• bring new technology• create a reinvestment opportunity and strategy

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Thank you

Thank you for your time and interest….ValueOptions looks forward to working with you to build the new future for Virginia….

Dr. Lawrence Goldmanlarry.goldman@valueoptions.com

757 474 3204