publicmeetings.delaware.govwillistowerswatson.com WebEx: Overview and Best Practices The May 7, 2020...

willistowerswatson.com

WebEx: Overview and Best PracticesThe May 7, 2020 Financial Subcommittee meeting will be conducted via WebEx WebEx has both computer video and audio, as well as a dial-in option WebEx has the functionally to allow for multiple video layouts

Details for the May 7 Financial Subcommittee Meeting: Start time: 10:00am (recommendation is to dial in 15 minutes early to ensure proper connectivity)

https://www.webex.com/ Meeting number (access code): 678 381 430, or join via telephone at 1-866-205-5379 Hyperlink to join: https://twmeetingcenter.webex.com/twmeetingcenter/j.php?MTID=m2d19f0476281a0fbfc2c8be8bf2c78e8

The meeting will be recorded

Public comment will be available as indicated on the agenda

You may also send your questions/comments to the Willis Towers Watson moderator – click the chat icon in WebEx – and/or via

email to Martha Sturtevant at [email protected]

Please keep your line on mute when you are not speaking

We will pause for questions from the Subcommittee members throughout the discussion. To join the conversation:

Computer Audio: Press unmute icon in WebEx

Phone audio: Press *6

© 2020 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

For optimal viewing and audio quality, join the meeting via your local computer and computer audio (not dialing in remote desktop)

https://urldefense.proofpoint.com/v2/url?u=https-3A__www.webex.com_&d=DwMFAg&c=3NBXXUKukgVIjVXwt0Rin6h0GAxIKZespWWvcJx4w9c&r=QJivEZYYX1HAFZfuMS119Lmt-UieWYYC00oOn3zkholoiEN0mFx4h9ltxz9oIGQJ&m=bBUNHV3MoRtCYxzYesJ-LXzM5kmsFR5wp1ZGzALbwHE&s=-VQLPYkT0uK7GWibRRC0Cw-WmH5GGrSa4FYAjjA6icU&e=

https://twmeetingcenter.webex.com/twmeetingcenter/j.php?MTID=m2d19f0476281a0fbfc2c8be8bf2c78e8

mailto:[email protected]

AGENDA SEBC Financial Subcommittee Meeting

Thursday, May 7, 2020 at 10:00 a.m.

In accordance with Governor Carney’s Proclamation Authorizing Public Bodies to Meet Electronically, “in the interests of protecting the citizens of this state from the public health threat caused by COVID-19,” this meeting will be held via WebEx, without a physical location. Members of the public may participate using the information provided.

https://www.webex.com/

Meeting number (access code): 678 381 430

or Join by Phone Toll Free: 1-866-205-5379

1. Call to Order

2. Approval of Minutes*

3. Director’s Report- SEBC & Subcommittee Updates

4. Financials a. January, February and March 2020 Fund Reports b. FY20 Qtr 3 Financial Reporting c. GHIP Long Term Projection Recast d. COVID-19 Cost Reporting e. Lab and Imaging Costs

5. Other Business

6. Public Comment

7. Adjournment

Visit http://ben.omb.delaware.gov/sebc for details on SEBC Health Policy & Planning and Financial Subcommittee meetings. *Agenda items may require action and approval by the Committee.

The Committee may move into Executive Session for the purpose of discussing confidential financial information and trade secrets pursuant to 29 Del.C. §10004(b)(6) and to receive legal advice pursuant to 29 Del.C. §10004(b)(4) relating to pending or potential litigation. The Committee may move into Executive Session for one or more of these reasons.

https://governor.delaware.gov/wp-content/uploads/sites/24/2020/03/Proclamation-173292-03132020.pdf






tel:8662055379,,*01*678381430%23%23*01*

tel:8662055379,,*01*678381430%23%23*01*

http://ben.omb.delaware.gov/sebc

http://ben.omb.delaware.gov/sebc

STATE OF DELAWARE STATEWIDE BENEFITS OFFICE 97 Commerce Way, Suite 201, Dover DE 19904 (D620E)

Phone: 1-800-489-8933 • Fax: (302) 739-8339 • Email: [email protected] • Website: de.gov/statewidebenefits

MINUTES FROM THE COMBINED MEETING OF THE FINANCIAL and HEALTH POLICY & PLANNING SUBCOMMITTEES

TO THE STATE EMPLOYEE BENEFITS COMMITTEE FEBRUARY 13, 2020

The Health Policy & Planning (“HP&P”) Subcommittee and the Financial Subcommittee to the

State Employee Benefits Committee (the “Committee”) met in a combined session on Thursday, February 13, 2020 in the Large Conference Room of the Statewide Benefits Office (“SBO”), 97 Commerce Way, Dover, Delaware

Committee Members Represented or in Attendance: Director Faith Rentz, SBO, Department of Human Resources (“DHR”) (Appointee of DHR Sec. Johnson), Chair Ms. Judy Anderson, DSEA, (Appointee of the DSEA, Jeff Taschner) Mr. Steve Costantino, Dept. of Health and Social Services (Appointee of Sec. Walker) Ms. Emily Molinaro, OMB (Appointee OMB Dir. Jackson) Mr. Tanner Polce, Policy Director, Office of the Lt. Governor (Appointee of Lt. Governor Hall-Long) Ms. Judi Schock, Deputy Principal Assistant, Office of Management & Budget (Appointee OMB Dir. Jackson) Mr. Stuart Snyder, Chief of Staff, Department of Insurance (Appointee of Commissioner Navarro) Subcommittee Members Not Represented or in Attendance: The Honorable Colleen Davis, State Treasurer, Office of the State Treasurer (“OST”) Ms. Victoria Brennan, Sr. Legislative Analyst, Office of the Controller General (Appointee for CG Morton) Ms. Ruth Ann Jones (Appointee for CG Morton) Ms. Molly Magarik, Deputy Secretary, Dept. of Health and Social Services (Appointee of Sec. Walker) Mr. William Oberle, Delaware State Trooper’s Association (Appointee of the DSEA, Jeff Taschner) Mr. Keith Warren (Appointee of Lt. Governor Hall-Long) Others in Attendance: Ms. Leighann Hinkle, Deputy Director, SBO, DHR Ms. Jaclyn Iglesias, Willis Towers Watson (“WTW”) Mr. Chris Giovannello, WTW Ms. Rebecca Warnken, WTW Ms. Cherie Biron-Dodge, Controller, DHR Ms. Rebecca Byrd, ByrdGomes Group Ms. Julie Caynor, Aetna

Ms. Nina Figueroa, SBO, DHR Ms. Lisa Mantegna, Highmark Delaware Mr. Walter Mateja, IBM Watson Health Ms. Jennifer Mossman, Highmark Delaware Ms. Suzanne Raab-Long, DE Healthcare Assoc. Ms. Martha Sturtevant, Executive Assistant, SBO, DHR Mr. Drew Wilson, Morris James

CALL TO ORDER Director Rentz called the meeting to order at 10:03 a.m. APPROVAL OF MINUTES –DIRECTOR FAITH RENTZ, CHAIR A MOTION was made by Mr. Polce and seconded by Ms. Schock to approve the Minutes from the November 7, 2019 Health Policy and Planning Subcommittee meeting. MOTION ADOPTED UNANIMOUSLY. A MOTION was made by Mr. Polce and seconded by Ms. Schock to approve the Minutes from the December 5,

2019 Health Policy and Planning Subcommittee meeting. MOTION ADOPTED UNANIMOUSLY.



https://de.gov/statewidebenefits

https://de.gov/statewidebenefits

FEBRUARY 13, 2020 – COMBINED SUBCOMMITTEE MEETING

2 | P a g e

A MOTION was made by Ms. Schock and seconded by Mr. Polce to approve the Minutes from the January 9, 2020 Health Policy and Planning Subcommittee meeting. MOTION ADOPTED UNANIMOUSLY. A MOTION was made by Ms. Molinaro and seconded by Mr. Costantino to approve the Minutes from November 7, 2019 meeting of the Financial Subcommittee. MOTION ADOPTED UNANIMOUSLY. A MOTION was made by Ms. Anderson and seconded by Ms. Molinaro to approve the Minutes from the December 5, 2019 meeting of the Financial Subcommittee. MOTION ADOPTED UNANIMOUSLY. DIRECTOR’S REPORT – DIRECTOR FAITH RENTZ, CHAIR SEBC Updates The SEBC met on January 13, 2020 to continue discussions on the Group Health Insurance Plan (“GHIP”) and the SBO Strategic framework. Additionally, the Committee voted to move forward with the development and advertising of a Request for Information to assess Delaware provider and stakeholder readiness regarding value-based contract arrangements, services and programming. The 2020 Open Enrollment strategy was also reviewed. The Committee will meet on February 17, 2020 to review the financial experience through December 31, 2020, updates on recent plan design and GHIP programs implemented during FY20, and additional modeling scenarios on premium rate action. The Committee is also expected to finalize revisions to the GHIP Strategic Framework. FY21 Dental & Vision Premium Rates The Dental and Vision contracts are entering the fifth and final year. Premium rates have been negotiated and finalized for an effective date of July 1, 2020. There is a 2.5% increase for the Dominion HMO Plan, a 3.1% increase in the Delta PPO Plan, and a 2.3% increase in the EyeMed vision rates. Subcommittee Updates The Financial Subcommittee did not meet in January. The Health Policy & Planning Subcommittee met on January 9, 2020 to hear from American Well and Cerner related to alternative primary care options. Legislative/Policy Updates SBO continues to monitor several bills being considered by the Legislature and is participating on four legislative task forces.

• HB 263 proposes to implement a copay cap of $100/month on insulin medications and requires that insulin be available on the lowest tier formulary.

• HB 268 requires coverage on the lowest tier formulary for EpiPens.

• HB 286 prohibits inadvertent balanced billing where out-of-network services are performed in an in-network setting.

• HCR 35 sponsored by Representative Siegfried assembled a Pharmacy Purchasing Workgroup. A report

has been finalized for submission to the General Assembly and administration. Rep Siegfried has introduced HB 287 to form a Purchasing Collaborative, for Pharmacy Benefit Manager (“PBM”) services and drug purchasing, that incorporates transparency requirements for purchasing contracts after July 14, 2021.


3 | P a g e

• HCR 57 sponsored by Rep Bennett initiated a pharmacy reimbursement taskforce. The deadline for report to General Assembly and administration was extended until March 31, 2020 and the group continues to meet to review the best practices in other states, and the Department of Insurance’s Development of Regulations as it relates to HB 194. Consideration is being given to a possible amendment to HB 216 that would remove the requirement that pharmacies not be reimbursed less than the PBM reimbursement.

FINANCIALS – CHRIS GIOVANNELLO, and REBECCA WARNKEN, WTW November Fund Report November was a high revenue month including Commercial ($10.8M) and EGWP rebates ($7.2M) and Coverage Gap discount payments ($4.2M) for the EGWP program. The paid amounts are based on what was incurred during Q2 of the calendar year or Q4 of the fiscal year. Rebates continue to come in higher than projected even when accounting for the lag. Revenue was offset by a high claim month ($73.1M) compared to budget ($66.0M). The variance to budget was the highest in FY20, and $10.5M or 3% higher than budget on claims. November had a net income of $16.4M bringing the Fund Equity balance to $169.0M. December Fund Report Claims were $2.0M above budget for the month of December, and $12.5M or 2.8% over budget for the year. The Fund Equity balance is $156.0M or $13.5M below budgeted balance through December. A row has been added to the report for SurgeryPlus and reflects the first claim paid. FY20 Q2 Financial Reporting The Subcommittee reviewed updated financials through Q2. On a total program cost basis, medical is up 5.3%, pharmacy is up 1.1% and premium contributions are up 1%. Total cost Per Member Per Year (“PMPY”) is up 3%. Pharmacy claims are going up, but rebates and EGWP payments continue to outperform, driving down the net trend. A 5% composite trend has been built in and is applied to the gross claims, with net trend now being under 5%. When negotiating contracts, WTW utilizes the total net cost (cost of drugs and total of rebates). Dir. Rentz noted the 6-month lag and queried whether the prescription program costs include the actual contracted rebates and other revenues. Ms. Warnken responded that figures for Q1 are actual and the figures for Q2 are estimated based on emerging data for Q1. She added that the EGWP payments have been going up and more money has been collected back from the government. WTW budget reflects 14 assumed ESI pharmacy invoices, compared to 13 invoices reflected in ESI’s paid claims reporting for FY20 through Q2. Smoothing for the difference, the actual cost per member would be about 2% above WTW budget. Positive trends continue in chronic condition prevalence including asthma, diabetes and hypertension. Well child/baby and preventative adult visits exceed benchmarks across all age groups. Screening rates have also improved for cholesterol and breast cancer. High Cost Claimants (“HCC”) increased in frequency of claimants by 6% over the prior period and translating to a 10% increase in payments. The increase is primarily driven by an increase in specialty pharmaceuticals which is at 42% of allowable spend attributable to specialty and a 27% increase in utilization. In-patient admission declined 4% over the prior period but is offset by a 7% increase in cost-per-admit and a 6% increase in length of stay.


4 | P a g e

GHIP Long-term Projection Recast The Subcommittees reviewed a 15-year history of total program costs compared to national Trend. The GHIP trend fluctuates but comes in favorable to the national average. Gross claims have increased PMPY. Premium rates have been held flat except for a 17% increase in 2016 and an 8% increase in 2017. Membership has increased 1% per year. Gross claims for FY20 are 7% (higher than the 5% trend). The Subcommittee reviewed the highlights to the FY20 emerging experience resulting from GHIP initiatives. Site of care steerage continues to promote an increase in urgent care utilization. There has been an overall increase in high-tech imaging services; however basic-imaging is shifting away from hospital-based to free-standing facilities. Hospital-based lab services continue to decrease, while usage of preferred labs continues to increase. Telemedicine utilization has also increased. Highmark Infusion Therapy steerage has been effective in redirecting members to preferred sites of care where appropriate and when quality will not be impacted; the savings is estimated at $700K. Livongo has reported interim results since its July 1, 2019 implementation. They have identified 14K members as candidates for participation and have enrolled 13%. Livongo estimates $400K in FY20 savings. SurgeryPlus reported a YTD savings of $219K for the first 6-months of the program compared to the estimate of $500K annually. WTW is working to validate the estimate. Data reported from Highmark on the first two months of experience related to the enhanced fertility coverage experience reflects a minimal increase in overall costs. Mr. Costantino queried whether the anticipated savings from GHIP initiatives were realized. Ms. Iglesias responded that the interim data has been encouraging but more than one quarter of data is needed. It is recommended that the GHIP maintain programs in place today with the potential for mid-year changes if needed, and to continue to monitor the emerging experience with a focus on communication and education for Plan members. Ms. Anderson queried whether member feedback was available on the use of SurgeryPlus. Anecdotal feedback reflects that members are satisfied with the program. Dir. Rentz added that contact to SBO has been regarding a need for more local providers and SurgeryPlus is undergoing conversations with local providers. FY21 GHIP Premium Rates The FY20 budget recast increased to $845.7M, representing a 0.8% increase over the previous FY20 Q1 update, driven primarily by an increase in claims experience and enrollment. The FY21 budget increased to $899.5M, representing a 1.5% increase over the previous FY20 Q1 update. Trend experience for a rolling 12 month period reflects that claims are 5.5% higher than the prior period: medical 4.2% and pharmacy 8.3%. The FY20 trend assumption uses a 5% composite. It is recommended to maintain trend assumption for medical and increase pharmacy to 8%, translating to a 5.7% composite trend and aligned with national trend.


5 | P a g e

Rates have been held flat despite a 14% increase in per capita gross claims; therefore, holding rates with no increase will erode the surplus and GHIP expenses are projected to exceed revenues by $53.0M in FY21. Delaware Code dictates the percentage of cost share between member contributions and state share; therefore, it is not possible to increase the state share without also increasing the members contribution. This prevents any increase in FY20. Mr. Costantino queried the timeline required for implementing a rate increase. Dir. Rentz responded that 60-90 days would be the minimum. She added that a significant increase could result in a re-opening of Open Enrollment for members who wanted to make a change as a result of a mid-year premium increase. The Subcommittee reviewed long-term health cost projections based on updated financial projections. As of FY20 Q2, the GHIP is projected to end FY20 with a $72.2M surplus. After including PBM contract savings, the FY21 budget is projected to end with a $13.8 surplus. There was a review of long-term projections for several premium rate scenarios that varied from 0% to 5.3% and each with proposed implementation dates of October 1, 2020 or January 1, 2021. Members discussed that the scenarios modeled all projected deficits in FY22. Ms. Warnken responded that the scenarios are a minimum and meet the requirement to smooth the surplus over two years. Mr. Costantino requested additional modeling to correct for the deficit in FY22. Ms. Warnken will provide additional options but noted that health care experience could be higher or lower over time. The Subcommittee discussed framing messaging of premium rate increases in dollars rather than percentages. Dir. Rentz added that messaging should also include the amount paid by the State. ESI provided a best and final offer for a traditional and a transparent one-year renewal for both the EGWP and Commercial populations. The traditional offer provides a combined contract improvement of $12.2M over the current terms and $5.1 over the initial offer. The transparent offer provides a combined contract improvement of $7.4 over the current terms and $5.4M over the initial offer. The Subcommittees discussed the higher cost of transparency over a traditional contract arrangement. Legislation may impact the Committees ability to negotiate future contracts as PBMs are not receptive to providing information they believe may impact their competitiveness in the marketplace. To help the administration and legislature understand the impact, SBO requested both financial models. When deciding between a traditional and transparent arrangement, plan sponsors must consider the potential tradeoffs. In one arrangement there may be a PMPY administrative fee and a lower minimum guarantee, and to the extent that utilization varies, there is upside potential to exceed the estimated base savings. The Subcommittees reviewed the cost implications for the State and General Fund, employees/pensioners, and the GHIP surplus levels in FY21 and FY22 under the premium rate increase scenarios. A vote by the Committee as early as May would allow sufficient time for a premium rate increase in October. The Subcommittee requested incorporating additional rate scenarios for the Committees review, including the FY21 increase required to get to zero surplus in FY22 (implementation dates of 10/1 and 1/1). Additional recommendations and comments will also be incorporated for the Committees review. PRIMARY CARE COLLABORATIVE UPDATE – DIR. RENTZ


6 | P a g e

Primary Care Collaborative The Primary Care Collaborative (“PCC”) met February 10, 2020 where Johns Hopkins researchers and SBO were presenters. Both presentations were shared with the Subcommittees. Johns Hopkins presented on hospital pricing and hospital profit margins. SBO was asked to present on the work of the Committee around payment reform, care coordination and primary care. The PCC expressed concerns over the accuracy of the data presented by John Hopkins as it pertains to Medicare cost reports. The total hospital spend was the area of focus and specific to outpatient facilities for high-tech radiology and inpatient maternity; 72% of the $500M in GHIP medical spend in FY19 occurred in a hospital setting. The PCC has established a primary care spend target of 12% (the GHIP is less than 4%) and expressed concerns that the GHIP was not considering the utilization and spend across different demographics within the population. SEBC has been asked to share the results of the site of care steerage initiatives implemented in FY19 and recommendations to reallocate the existing healthcare spend with an increased spend on primary care. OTHER BUSINESS No new business. PUBLIC COMMENT Notes ADJOURNMENT A MOTION was made by Mr. Polce and seconded by Ms. Molinaro to adjourn the meeting at 11:45 a.m. MOTION ADOPTED UNANIMOUSLY. Respectfully submitted, ________________________________ Martha Sturtevant, Statewide Benefits Office, Department of Human Resources Recorder, Statewide Employee Benefits Committee

State of DelawareFinancial Subcommittee Topic Tracking Log5/7/2020

Meeting Date Agenda Topic(s) New Topic(s) Quick Hits(Follow-ups Outside of Meeting)

Short Term FY20 Focus Topics

Long Term Focus Topics No Longer Consider Move to/Receive

direction from SEBCPlanned discussion topics for this

date's meeting

Topics brought up during the meeting for

further consideration

Follow-up to be sent to subcommittee

after discussion

Topic determined for continued

subcommittee dialogue

Topic tabled for longer term

consideration

Agreed upon to cease discussion

of topic

Decision to move topic for

presentation and potential

approval/receive direction from

SEBC

10/25/2018

- Committee Business Rules- Overview and History of Group Health Financials- Quarterly Financial Reporting Format- Trend Methodology

- Look at demographic/geographic cuts of claim costs- Provide regional breakdown of trend (include Rx net of rebates)- Research other states financial reporting - what data/metrics do other states find valuable?- Reference-based pricing- Should the subcommittee establish a level of funding for future legislative actions?- Provide total cost share pie chart (shown in 10/25 P&P subcommittee meeting)- Medical administrative fees - amount and % of total cost?

- Review demographic/geographic cuts of claim costs- Provide regional breakdown of claim cost/trend - Provide GHIP quarterly claims exhibit net of Rx rebates- Review components of national health care trend (price, utilization)- Provide total cost share pie chart (shown in 10/25 P&P subcommittee meeting)- Medical administrative fees - amount and % of total cost?

- Premium Increases- Measuring savings for adopted programs (e.g., site-of-care steerage)- Walk-through quarterly reporting (what does the data suggest are the GHIP's problems and opportunities for short/long-term focus?)- Research other states financial reporting - what data/metrics do other states find valuable?

- Reference-based pricing- Pricing equity- Should the subcommittee establish a level of funding for future legislative actions?

- Reference-based pricing - Should the subcommittee establish a level of funding for future legislative actions?

11/7/2018

- Updates from October 25th- FY18 Q4 Dashboard and Incurred Reporting Overview- Reserve, Claim Liability & Surplus Methodology Discussion

- Estimated participating group fees in aggregate- Provide commentary on how specialty drug costs vary by place of care and what other employer's are doing to address these costs- IBM Watson Health to determine if prior quarter net paid amounts can be added to top clinical conditions in incurred reporting- IBM Watson Health to determine if HCC exhibit in quarterly dashboard can be broken down by claimant status (e.g., termed vs ongoing)

- Develop reporting baseline for initiatives that may be adopted for FY20 (and beyond)- Establish reporting metrics to track recent GHIP initiatives (i.e., site of care steerage)- Continued discussion of minimum reserve methodology; model and evaluate alternative methodologies- Continued discussion of use of surplus; consider spreading over 2-3 years

- Review detailed incurred utilization report once per year

- Approved change to summary at the bottom of Fund Equity exhibit; will be reflected in October Fund report





direction from SEBC

12/4/2018

- Updates from November 7th- October Fund Report- FY19 Q1 Reporting and Reforecasted Long Term Projection- Reserve and Surplus Modeling

- Review past SEBC discussions related to salary-banded employee contribution structure '

- Historical enrollment growth for GHIP - Circulate June 2017 document with enrollment distribution by salary (provide to both subcommittees)- Provide historical budget vs. actual results for last 5 to 10 years; track moving forward

- During next meeting on 12/18, Financial Subcommittee to finalize recommendations regarding reserve methodology and use of surplus to bring to SEBC- For future long term projection exhibits, show the $ impact range to employee for any modeled premium increases, as well as FY17 % change per member

- Present October Fund Equity at 12/10 SEBC meeting- Present FY19 Q1 financial results and revised long term projections at 12/10 SEBC meeting

12/18/2018

- Updates from December 4th- FY20 Group Health Premium Rate Discussion- Reserve & Surplus Modeling Options & Recommendations

- Addition of two columns to premium increase modeling to show monthly and annual dollar changes for state - Addition of employee and state cost ranges to header on GHIP Long Term Projection modeling - Discussion/ decision by SEBC and Administration should Health Fund exhaust reserve and surplus

- Addition of two columns to premium increase modeling to show monthly and annual dollar changes for state - Addition of employee and state cost ranges to header on GHIP Long Term Projection modeling - Remodel premium projections using the $9M savings recommended by HP&P Subcommittee

- Provide comments at 1/14 SEBC meeting related to the discussion/ decision by SEBC and Administration should Health Fund exhaust reserve and surplus





direction from SEBC

12/18/2018

- Updates from December 4th- FY20 Group Health Premium Rate Discussion- Reserve & Surplus Modeling Options & Recommendations

- Addition of two columns to premium increase modeling to show monthly and annual dollar changes for state - Addition of employee and state cost ranges to header on GHIP Long Term Projection modeling - Discussion/ decision by SEBC and Administration should Health Fund exhaust reserve and surplus

- Addition of two columns to premium increase modeling to show monthly and annual dollar changes for state - Addition of employee and state cost ranges to header on GHIP Long Term Projection modeling - Remodel premium projections using the $9M savings recommended by HP&P Subcommittee

- Provide comments at 1/14 SEBC meeting related to the discussion/ decision by SEBC and Administration should Health Fund exhaust reserve and surplus

1/24/2019 Combined Meeting

- Updates from January 14 SEBC Meeting- Healthcare Cost Landscape Analysis and Discussion- Healthcare Cost Containment Strategies

- consider ways to engage employees on work being done

- Breakout of hospital profits by for-profit and non-profit - Adjust hospital prices for the labor market and Case Mix index - whether other states utilized legislation or program adjustments to contain costs - Highmark and Aetna pricing for the existing RBP plans

- Explore opportunities to address pricing concerns in the contracting renewal process with Highmark and Aetna that begins July 1 - Consider ways to engage employees on work being done

-Explore global budgeting - Explore ACO options

2/7/2019

- Updates from January 24 joint Subcommittee Meeting- December Fund Report- FY19 Qtr 2 Financial Reporting - GHIP Long Term Projection Recast

- How do DE hospitals define investments - How do DE hospitals define investments - Breakout HCC into chronic utilizers vs one-time claims over $100k - Add benchmark to Well Care and Preventive visits in IBM dashboards - Rate increase options in one-pager, model rate increase of 5% (national trend), model how proposed changes impact member's out of pocket costs - Details of ESI savings at plan level

3/7/2019

- Updates from February 7- January Fund Report- GHIP Long Term Projection Recast - GHIP Utilization and Cost Reporting - HSA Planning

- Historical projections vs actuals - Report urgent care utilizaton during nights and weekends - Is facility fee included in UC avg cost of visit - Primary care spend by provider tpe and percentage of total spend - Outcomes of high utilization engagement for Aetna and Highmark - Highmark and Aetna value based contracts and number of participating providers - myBenefitsMentor migration analysis - HSA plans implemented in other states

5/2/2019

- Updates from March 7- March Fund Report- FY19 Q3 Financial Reporting - FY19 Health Plan Premium Recommendations - HSA Planning

- State share for proposed rate increases - FY20 new FTEs and impact to growth rate - Number of employees who left state service within the last year

- FY19 Health Plan Premium Recommendations

6/6/2019

- Updates from May 2- April Fund Report- FY20 Premium Recommendations - HSA Planning - SurgeryPlus Implementation

- COE baseline reporting and every 6 months post go live - SurgeryPlus utilization projection

- Health Savings Account Planning- SurgeryPlus Implementation - FY20 Premium Recommendations

8/22/2019

- Updates from June 6- May and June Fund Reports- FY19 Q4 Financials - FY20 GHIP Budget - Excise Tax/Updated LT projections

- FY20 Budget


- Updates from August 22- July Fund Report- Approaches to Health Care Contracting

- Reason why program fees/costs and consultants fees above budget

- Details of Oregon balance billing legislation - How did states with RBP determine percentage of Medicare rates -What is percentage of population in DE HCCD - In the RAND study 2.0, reason why percentage of Medicacre decreased for Michigan





direction from SEBC

11/7/2019

- Updates from September 19- August and September Fund Reports- FY20 Q1 Financials - GHIP Long Term Projection recast - FY21 health premium rates - Prescription Program-policy and contracting updates

- compliance metric for screenings for chronic condition prevalence separated by controlled and uncontrolled populations - IBM dashboards to show paid amounts for service categories/conditions as percentage - SurgeryPlus reporting include rate of consultation that doesnt result in surgery

12/5/2019

- Updates from November 7- October Fund Report- Plan Mirgration Analysis - Incurred and High Cost Claimant Reproting - GHIP Impact Analysis - SBO Strategic Framework

- MBM Usage data for prior years - plan enrollment by usage/non-usage of mBM tool - office visit utilization breakdown - ED useage breakdown b/t emergent/non-emergent - NJ reverse auction for PBM services. SBO to investigate - HCC in 2015 - breakdown of current HCCs by member type - add benchmark data to preventive screenings - validate savings assumptions for plan design changes and new programs - WTW to determine if HCC limit should be $100k - reason for increase in pharmacy- cost or utilizaton


- Updates from January 9-November and December Fund Reports- FY20 Q2 Financials - GHIP Long Term Projection recast - FY21 health premium rates

- additional modeling for rate increase to show $0 at end of FY22 for both a 10/1 and 1/1 effective date

OPERATING REVENUES

Premium Contributions % % % % % %

Highmark 52,416,376$ 64.43% 53,392,838$ 71.21% (976,462)$ -1.83% 371,118,711$ 67.26% 372,556,971$ 68.30% (1,438,260)$ -0.39%

Aetna 15,821,236$ 19.45% 16,067,895$ 21.43% (246,658)$ -1.54% 110,477,969$ 20.02% 112,116,274$ 20.56% (1,638,305)$ -1.46%

Total Premium Contributions 68,237,612$ 83.88% 69,460,733$ 92.64% (1,223,120)$ -1.76% 481,596,680$ 87.28% 484,673,245$ 88.86% (3,076,566)$ -0.63%

Other Revenues Medicare Retiree RX Prog. (EGWP) Direct Subsidy 174,469$ 0.21% 165,223$ 0.22% 9,245$ 5.60% 1,708,165$ 0.31% 1,820,987$ 0.33% (112,822)$ -6.20%

Federal Reinsurance 6,314,761$ 7.76% 1,459,967$ 1.95% 4,854,794$ 332.53% 13,106,025$ 2.38% 6,972,062$ 1% 6,133,963$ 87.98%

Prescription Drug Rebates (Commercial) -$ 0.00% -$ 0.00% -$ 0.00% 21,400,207$ 3.88% 20,049,133$ 3.68% 1,351,073$ 6.74%

Prescription Drug Rebates (EGWP) -$ 0.00% -$ 0.00% -$ 0.00% 14,149,264$ 2.56% 13,096,121$ 2.40% 1,053,142$ 8.04%

Prescription True Up/Yr End Recon Pymts -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00%

Medicare Part D Coverage Gap Discount 5,921,576$ 7.28% 3,393,496$ 4.53% 2,528,080$ 74.50% 13,186,123$ 2.39% 15,340,352$ 2.81% (2,154,230)$ -14.04%

Participating Group Fees 493,053$ 0.61% 500,122$ 0.67% (7,068)$ -1.41% 3,501,007$ 0.63% 3,489,679$ 0.64% 11,328$ 0.32%

Other Revenues 209,481$ 0.26% -$ 0.00% 209,481$ 0.00% 3,127,880$ 0.57% -$ 0.00% 3,127,880$ 0.00%

Total Other Revenues 13,113,340$ 16.12% 5,518,809$ 7.36% 7,594,532$ 137.61% 70,178,670$ 12.72% 60,768,335$ 11.14% 9,410,335$ 15.49%

Total Operating Revenues 81,350,953$ 74,979,541$ 6,371,411$ 8.50% 551,775,350$ 545,441,581$ 6,333,769$ 1.16%

OPERATING EXPENSESClaims Highmark 42,650,409$ 50.23% 45,939,290$ 53.94% (3,288,881)$ -7.16% 273,594,347$ 48.59% 278,095,015$ 50.59% (4,500,667)$ -1.62%

Aetna 16,420,486$ 19.34% 14,364,914$ 16.87% 2,055,571$ 14.31% 90,483,521$ 16.07% 86,958,483$ 15.82% 3,525,038$ 4.05%

Express Scripts (non-Plan D) 11,953,247$ 14.08% 11,636,025$ 13.66% 317,222$ 2.73% 93,552,785$ 16.62% 87,083,969$ 15.84% 6,468,815$ 7.43%

Express Scripts (Plan D) 10,201,838$ 12.01% 9,910,747$ 11.64% 291,091$ 2.94% 80,533,741$ 14.30% 74,171,999$ 13.49% 6,361,741$ 8.58%

Surgery Plus -$ 0.00% 0.00% -$ 15,306$ 0.00% 0.00% 15,306$ Total Claims 81,225,979$ 95.66% 81,850,976$ 96.11% (624,997)$ -0.76% 538,179,699$ 95.59% 526,309,467$ 95.74% 11,870,232$ 2.26%

Other Expenses Program Fees and Costs (Vendor ASO Fees) 3,069,945$ 3.62% 2,898,076$ 3.40% 171,869$ 5.93% 21,319,263$ 3.79% 20,221,782$ 3.68% 1,097,481$ 5.43%

Office Expenses 246,152$ 0.29% 206,994$ 0.24% 39,158$ 18.92% 1,340,936$ 0.24% 1,448,961$ 0.26% (108,025)$ -7.46%

Employee Assistance 31,473$ 0.04% 30,799$ 0.04% 674$ 2.19% 218,036$ 0.04% 215,592$ 0.04% 2,444$ 1.13%

Data Warehouse 37,606$ 0.04% 42,052$ 0.05% (4,447)$ -10.57% 508,024$ 0.09% 294,366$ 0.05% 213,657$ 72.58%

Consultant Fees 236,332$ 0.28% 125,000$ 0.15% 111,332$ 89.07% 1,054,766$ 0.19% 875,000$ 0.16% 179,766$ 20.54%

COBRA Fees 9,188$ 0.01% 5,665$ 0.01% 3,523$ 62.19% 41,259$ 0.01% 39,654$ 0.01% 1,605$ 4.05%

ACA Fees 56,783$ 0.07% -$ 0.00% 56,783$ -23.07% 354,594$ 0.06% 324,430$ 0.06% 30,164$ 9.30%

Total Other Expenses 3,687,478$ 4.34% 3,308,586$ 3.89% 378,892$ 11.45% 24,836,879$ 4.41% 23,419,787$ 4.26% 1,417,092$ 6.05%

Total Operating Expenses 84,913,457$ 85,159,563$ (246,105)$ -0.29% 563,016,578$ 549,729,254$ 13,287,325$ 2.42%

Net Income (3,562,504)$ (10,180,021)$ 6,617,517$ (11,241,229)$ (4,287,673)$ (6,953,556)$

Balance Forward 156,078,597$ 169,649,669$ 163,757,321$ 163,757,321$

Fund Equity Balance 152,516,092$ 159,469,648$ (6,953,556)$ -4.36% 152,516,092$ 159,469,648$ (6,953,556)$ -4.36%

Average Members 128,746 128,282 464 0.36%

$ % $ %

Fund Equity 81,800,000$ 159,469,648$ 152,516,092$ (6,953,556)$ -4% 157,464,099$ 150,510,544$ (6,953,556)$ -4%Claim Liability 57,500,000$ 57,500,000$ 57,500,000$ -$ 0% 57,500,000$ 57,500,000$ -$ 0%Minimum Reserve 24,300,000$ 24,300,000$ 24,300,000$ -$ 0% 24,300,000$ 24,300,000$ -$ 0%Surplus/(Deficit) -$ 77,669,648$ 70,716,092$ (6,953,556)$ -9% 75,664,099$ 68,710,544$ (6,953,556)$ -9%

Target

YTD End of Year

Budget ActualVariance

Budget Forecast*Variance

State of Delaware Health FundMonthly Statement

January 2020January January Budget Variance YTD Actual YTD Budget Variance

Reports Used: Detail Tab, Mthly Bdgt-Willils & YTD Bdgt-Willis

OPERATING REVENUES


Highmark 54,673,930$ 60.37% 53,392,838$ 61.43% 1,281,091$ 2.40% 425,792,640$ 66.29% 425,949,809$ 67.36% (157,169)$ -0.04%

Aetna 15,833,508$ 17.48% 16,067,895$ 18.49% (234,387)$ -1.46% 126,311,477$ 19.66% 128,184,169$ 20.27% (1,872,692)$ -1.46%

Total Premium Contributions 70,507,438$ 77.85% 69,460,733$ 79.91% 1,046,705$ 1.51% 552,104,117$ 85.95% 554,133,978$ 87.63% (2,029,861)$ -0.37%

Other Revenues Medicare Retiree RX Prog. (EGWP) Direct Subsidy 175,654$ 0.19% 165,223$ 0.19% 10,431$ 6.31% 1,883,820$ 0.29% 1,986,211$ 0.31% (102,391)$ -5.16%

Federal Reinsurance 1,087,173$ 1.20% 1,459,967$ 1.68% (372,794)$ -25.53% 14,193,198$ 2.21% 8,432,029$ 1% 5,761,169$ 68.32%

Prescription Drug Rebates (Commercial) 11,180,100$ 12.34% 9,276,285$ 10.67% 1,903,816$ 20.52% 32,580,307$ 5.07% 29,325,418$ 4.64% 3,254,889$ 11.10%

Prescription Drug Rebates (EGWP) 7,090,959$ 7.83% 6,059,282$ 6.97% 1,031,677$ 17.03% 21,240,223$ 3.31% 19,155,403$ 3.03% 2,084,820$ 10.88%

Prescription True Up/Yr End Recon Pymts -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00%

Medicare Part D Coverage Gap Discount -$ 0.00% -$ 0.00% -$ 0.00% 13,186,123$ 2.05% 15,340,352$ 2.43% (2,154,230)$ -14.04%

Participating Group Fees 493,305$ 0.54% 500,122$ 0.58% (6,817)$ -1.36% 3,994,312$ 0.62% 3,989,801$ 0.63% 4,511$ 0.11%

Other Revenues 33,568$ 0.04% -$ 0.00% 33,568$ 0.00% 3,161,448$ 0.49% -$ 0.00% 3,161,448$ 0.00%

Total Other Revenues 20,060,760$ 22.15% 17,460,879$ 20.09% 2,599,881$ 14.89% 90,239,430$ 14.05% 78,229,215$ 12.37% 12,010,215$ 15.35%

Total Operating Revenues 90,568,198$ 86,921,612$ 3,646,585$ 4.20% 642,343,547$ 632,363,193$ 9,980,354$ 1.58%

OPERATING EXPENSESClaims Highmark 38,901,339$ 50.30% 36,751,432$ 50.28% 2,149,907$ 5.85% 312,495,687$ 48.80% 314,846,447$ 50.55% (2,350,760)$ -0.75%

Aetna 12,750,733$ 16.49% 11,491,931$ 15.72% 1,258,802$ 10.95% 103,234,254$ 16.12% 98,450,415$ 15.81% 4,783,839$ 4.86%

Express Scripts (non-Plan D) 12,066,358$ 15.60% 11,636,025$ 15.92% 430,334$ 3.70% 105,619,143$ 16.49% 98,719,994$ 15.85% 6,899,149$ 6.99%

Express Scripts (Plan D) 10,221,325$ 13.22% 9,910,747$ 13.56% 310,577$ 3.13% 90,755,065$ 14.17% 84,082,747$ 13.50% 6,672,319$ 7.94%

Surgery Plus -$ 0.00% 0.00% -$ 15,306$ 0.00% 0.00% 15,306$ Total Claims 73,939,755$ 95.61% 69,790,135$ 95.47% 4,149,620$ 5.95% 612,119,455$ 95.59% 596,099,602$ 95.71% 16,019,852$ 2.69%


Office Expenses 248,789$ 0.32% 206,994$ 0.28% 41,795$ 20.19% 1,589,726$ 0.25% 1,655,956$ 0.27% (66,230)$ -4.00%


Data Warehouse 75,211$ 0.10% 42,052$ 0.06% 33,159$ 78.85% 583,235$ 0.09% 336,419$ 0.05% 246,816$ 73.37%

Consultant Fees 9,176$ 0.01% 125,000$ 0.17% (115,824)$ -92.66% 1,063,943$ 0.17% 1,000,000$ 0.16% 63,943$ 6.39%

COBRA Fees 6,443$ 0.01% 5,665$ 0.01% 778$ 13.73% 47,702$ 0.01% 45,319$ 0.01% 2,383$ 5.26%

ACA Fees -$ 0.00% -$ 0.00% -$ 0.00% 354,594$ 0.06% 324,430$ 0.05% 30,164$ 9.30%


Total Operating Expenses 77,337,421$ 73,098,722$ 4,238,699$ 5.80% 640,353,999$ 622,827,975$ 17,526,024$ 2.81%

Net Income 13,230,777$ 13,822,891$ (592,113)$ 1,989,548$ 9,535,217$ (7,545,669)$

Balance Forward 152,516,092$ 159,469,648$ 163,757,321$ 163,757,321$


Average Members 129,084 128,282 802 0.63%

$ % $ %


*Forecast = Actual + Remaining Budget

Target

YTD End of Year

Budget ActualVariance

Budget Forecast*Variance


February 2020February February Budget Variance YTD Actual YTD Budget Variance

Reports Used: Detail Tab, Mthly Bdgt-Willils & YTD Bdgt-Willis

OPERATING REVENUES


Highmark 54,181,036$ 75.47% 53,392,838$ 74.59% 788,197$ 1.48% 479,973,676$ 67.21% 479,342,648$ 68.09% 631,028$ 0.13%

Aetna 15,791,174$ 22.00% 16,067,895$ 22.45% (276,721)$ -1.72% 142,102,651$ 19.90% 144,252,063$ 20.49% (2,149,413)$ -1.49%

Total Premium Contributions 69,972,209$ 97.46% 69,460,733$ 97.03% 511,476$ 0.74% 622,076,327$ 87.11% 623,594,711$ 88.59% (1,518,385)$ -0.24%

Other Revenues Medicare Retiree RX Prog. (EGWP) Direct Subsidy 165,558$ 0.23% 165,223$ 0.23% 334$ 0.20% 2,049,377$ 0.29% 2,151,434$ 0.31% (102,057)$ -4.74%

Federal Reinsurance 1,086,357$ 1.51% 1,459,967$ 2.04% (373,610)$ -25.59% 15,279,555$ 2.14% 9,891,996$ 1% 5,387,559$ 54.46%

Prescription Drug Rebates (Commercial) -$ 0.00% -$ 0.00% -$ 0.00% 32,580,307$ 4.56% 29,325,418$ 4.17% 3,254,889$ 11.10%

Prescription Drug Rebates (EGWP) -$ 0.00% -$ 0.00% -$ 0.00% 21,240,223$ 2.97% 19,155,403$ 2.72% 2,084,820$ 10.88%

Prescription True Up/Yr End Recon Pymts 12,575$ 0.02% -$ 0.00% 12,575$ 0.00% 12,575$ 0.00% -$ 0.00% 12,575$ 0.00%

Medicare Part D Coverage Gap Discount -$ 0.00% -$ 0.00% -$ 0.00% 13,186,123$ 1.85% 15,340,352$ 2.18% (2,154,230)$ -14.04%

Participating Group Fees 518,114$ 0.72% 500,122$ 0.70% 17,992$ 3.60% 4,512,426$ 0.63% 4,489,923$ 0.64% 22,503$ 0.50%

Other Revenues 37,697$ 0.05% -$ 0.00% 37,697$ 0.00% 3,199,145$ 0.45% -$ 0.00% 3,199,145$ 0.00%

Total Other Revenues 1,820,301$ 2.54% 2,125,313$ 2.97% (305,012)$ -14.35% 92,059,731$ 12.89% 80,354,527$ 11.41% 11,705,204$ 14.57%

Total Operating Revenues 71,792,510$ 71,586,045$ 206,465$ 0.29% 714,136,057$ 703,949,238$ 10,186,819$ 1.45%

OPERATING EXPENSESClaims Highmark 37,973,676$ 47.50% 36,751,432$ 50.28% 1,222,244$ 3.33% 350,469,363$ 48.66% 351,597,879$ 50.52% (1,128,516)$ -0.32%

Aetna 12,733,098$ 15.93% 11,491,931$ 15.72% 1,241,167$ 10.80% 115,967,352$ 16.10% 109,942,346$ 15.80% 6,025,006$ 5.48%

Express Scripts (non-Plan D) 13,815,729$ 17.28% 11,636,025$ 15.92% 2,179,704$ 18.73% 119,434,872$ 16.58% 110,356,019$ 15.86% 9,078,854$ 8.23%

Express Scripts (Plan D) 11,442,805$ 14.31% 9,910,747$ 13.56% 1,532,058$ 15.46% 102,197,870$ 14.19% 93,993,494$ 13.51% 8,204,376$ 8.73%

Surgery Plus 408,399$ 0.51% 0.00% 408,399$ 423,704$ 0.06% 0.00% 423,704$ Total Claims 76,373,707$ 95.52% 69,790,135$ 95.47% 6,583,572$ 9.43% 688,493,162$ 95.58% 665,889,738$ 95.68% 22,603,424$ 3.39%


Office Expenses 204,285$ 0.26% 206,994$ 0.28% (2,709)$ -1.31% 1,794,011$ 0.25% 1,862,950$ 0.27% (68,940)$ -3.70%


Data Warehouse 37,606$ 0.05% 42,052$ 0.06% (4,447)$ -10.57% 620,841$ 0.09% 378,471$ 0.05% 242,370$ 64.04%

Consultant Fees 212,832$ 0.27% 125,000$ 0.17% 87,832$ 70.27% 1,276,775$ 0.18% 1,125,000$ 0.16% 151,775$ 13.49%

COBRA Fees 9,155$ 0.01% 5,665$ 0.01% 3,490$ 61.60% 56,857$ 0.01% 50,984$ 0.01% 5,873$ 11.52%

ACA Fees -$ 0.00% -$ 0.00% -$ 0.00% 354,594$ 0.05% 324,430$ 0.05% 30,164$ 9.30%


Total Operating Expenses 79,952,973$ 73,098,722$ 6,854,252$ 9.38% 720,306,972$ 695,926,697$ 24,380,275$ 3.50%

Net Income (8,160,463)$ (1,512,676)$ (6,647,787)$ (6,170,915)$ 8,022,541$ (14,193,456)$

Balance Forward 165,746,869$ 173,292,538$ 163,757,321$ 163,757,321$


Average Members 129,084 128,282 802 0.63%

$ % $ %


*Forecast = Actual + Remaining Budget


March 2020March March Budget Variance YTD Actual YTD Budget Variance

VarianceTarget

YTD End of Year

Budget Actual Budget Forecast*Variance

State of Delaware - Quarterly Financial Reporting FY20 Q3 Cost Analysis

May 2020

Proprietary and Confidential

Not for use or disclosure outside Willis Towers Watson and State of Delaware

State of Delaware

Health Plan Quarterly Financial Reporting

FY20 Q3 Plan Cost Analysis

Summary plan information

n

Medical Rx Total1 Medical Rx Total1 Medical Rx Total

Total program cost ($M)1 $484.1 $144.5 $630.4 $464.2 $132.6 $598.6 ▲ 4.3% ▲ 9.0% ▲ 5.3%

Premium contributions ($M)2 $492.9 $132.7 $625.6 $474.6 $141.6 $618.1 ▲ 3.8% ▼ 6.3% ▲ 1.2%

Total cost PEPY $8,916 $2,664 $11,604 $8,676 $2,480 $11,189 ▲ 2.8% ▲ 7.4% ▲ 3.7%

Total cost PMPY $5,052 $1,512 $6,576 $4,900 $1,400 $6,320 ▲ 3.1% ▲ 8.0% ▲ 4.1%

Average employees

Average members

Loss ratio

Net income ($M)1 Total program cost includes office operational expenses2 Includes fees for participating non-State groups

n

Medical Rx Total1 Medical Rx Total

1 Medical Rx Total

Total program cost ($M)2 $484.1 $144.5 $630.4 $488.5 $131.5 $620.1 ▼ 0.9% ▲ 9.9% ▲ 1.7%

Total cost PEPY $8,916 $2,664 $11,604 $8,457 $2,870 $11,361 ▲ 5.4% ▼ 7.2% ▲ 2.1%

Total cost PMPY $5,052 $1,512 $6,576 $4,797 $1,628 $6,445 ▲ 5.3% ▼ 7.1% ▲ 2.0%

Net income ($M)1 Total program cost includes office operational expenses (medical and Rx splits exclude these expenses)

2 Total program cost excludes fees for participating non-State groups (these fees are included in premium contributions)

Plan performance dashboard - key observations for total GHIP populationn

n

depressionn

n

n

Additional notes

n

n

n

n

n

n

n

n

n

n

IBM Watson Executive Dashboard for April 2019 - March 2020 (compared to April 2018 - March 2019) details the following trends and cost drivers:

Chronic condition prevalence remained relatively stable for asthma, diabetes and hypertension; larger increases observed for osteoarthritis and

FY20 Actual compared to Original Budget (approved in August 2019):

Summary (total)% Change

ASO Fees: includes fees for vendor administration, COBRA administration, ACA-related (PCORI), IBM Watson data analytics, EAP, and WTW consulting fees

Office Operational Expenses: includes expenses for items such as staff salaries, supplies, etc.

No adjustments made to cost tracking for large claims as the State does not have stop loss insurance

HRA dollars are assumed to be included in the reported claims

Rx rebates and EGWP payments are shown based on the period to which offsets are attributable, rather than actual payment received in a given period

Participating groups (such as University of DE) are included in the cost tracking, but are assumed to be 100% employee paid; as a result, reported net cost and cost share percentages may be skewed; participating group fees are included in premium contributions

FY20 Q1-Q3 compared to FY19 Q1-Q3:

72,745 ▲ 2.0%

Summary (total)FY20 thru Q3 FY19 thru Q3 % Change

71,324

128,283

($4.8) $8.0

126,278

97%

$19.5

▲ 1.6%

101%

($4.8)

Expenses are broken down into two categories:

Paid claims and enrollment data based on reports from Aetna, Highmark, and ESI; costs include operating expenses

Claims and expenses are reported on a paid basisFY20 budget rates were held flat from FY19

Inpatient admit frequency decreased by 3%, offset by a 3% increase in length of stay

The percent of prescription drug allowed amounts attributable to specialty medications increased by 4 percentage points over the prior period to 42%

Increase in portion of GHIP spend attributable to members with >$100k in medical and Rx payments increased, driven by an 8% increase in total high cost claimants; payments per high cost claimant decreased 1% over prior period

1

FY20 thru Q3 Actual FY20 thru Q3 Budget

State of Delaware

Health Plan Quarterly Financial Reporting

FY20 Q3 Plan Cost Analysis

Legend

‒ Medical/Rx Budget

n Fees and Op. Expenses

n Rx (incl. Rebates and EGWP)

n Medical (incl. capitation)

Q1 2020 Q2 2020 Q3 2020 Q4 2020FY20 YTD

Actual

FY20 YTD

WTW Budget8

Difference

vs. Budget

FY20

Projected9

$206,234,229 $200,218,517 $223,931,568 $630,384,313 $620,062,093 ▲ 1.7% $849,234,201

195,393,297 189,894,742 213,282,464 598,570,503 590,025,133 ▲ 1.4% 807,884,587

148,761,351 149,813,400 158,141,759 456,716,510 461,540,225 ▼ 1.0% 627,109,642

46,631,946 40,081,342 55,140,705 141,853,993 128,484,908 ▲ 10.4% 180,774,944

- Rx Paid Claims 75,507,949 65,184,395 81,400,192 222,092,535 204,349,512 ▲ 8.7% 291,260,510

- EGWP 2(10,604,944) (9,601,456) (7,160,377) (27,366,777) (27,383,783) ▼ 0.1% (36,810,053)

- Direct Subsidy (771,080) (752,004) (514,102) (2,037,186) (2,151,434) ▼ 5.3% (2,740,144)

- CGDP (5,921,576) (5,959,864) (3,386,561) (15,268,001) (15,340,352) ▼ 0.5% (20,536,431)

- Catastrophic Reinsurance3(3,912,288) (2,889,588) (3,259,714) (10,061,590) (9,891,996) ▲ 1.7% (13,533,477)

- Rx Rebates 4(18,271,059) (15,501,597) (19,099,110) (52,871,766) (48,480,821) ▲ 9.1% (73,675,513)

10,269,920 9,800,002 9,949,877 30,019,800 28,174,009 ▲ 6.6% 38,865,680

571,012 523,772 699,227 1,794,011 1,862,950 ▼ 3.7% 2,483,934

$207,540,932 $207,772,274 $210,247,506 $625,560,712 628,084,634$ ▼ 0.4% $834,245,053

1,084,467 7,098,750 (13,006,818) (4,823,602) 8,022,541 (14,989,148)

99% 96% 107% 101% 99% 102%

Current Year Per Capita

- Total per employee per year611,412 11,100 12,312 11,604 11,361 ▲ 2.1% 11,700

- Total % change over prior 2.1% 2.8% 5.1% 3.3% 3.4%

- Medical per employee per year 8,748 8,808 9,192 8,916 8,457 ▲ 5.4% 9,137

- Medical % change over prior 4.5% 3.2% 0.8% 2.8% 4.5%

- Rx per employee per year 2,652 2,280 3,108 2,664 2,870 ▼ 7.2% 2,530

- Rx % change over prior -4.6% 2.3% 21.7% 5.7% -0.1%

- Medical per member per year 4,956 4,980 5,208 5,052 4,797 ▲ 5.3% 5,181

- Rx per member per year 1,500 1,284 1,752 1,512 1,628 ▼ 7.1% 1,434

- Total per member per year66,468 6,276 6,984 6,576 6,445 ▲ 2.0% 6,635

Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY19 FY 2019

- Total Program Cost 198,069,057 192,811,944 209,847,345 600,728,346 - - 807,749,851

- Total Program Cost $ Change 8,165,172 7,406,572 13,032,308 28,604,052 - - 41,484,350- Total per employee per year6

11,182 10,796 11,710 11,229 - - 11,313

- Medical per employee per year 8,371 8,536 9,121 8,676 - - 8,746

- Rx per employee per year 2,778 2,228 2,553 2,520 - - 2,532

$40,928,715 $40,824,809 $41,124,630 $40,959,385 - $164,498,522

- Net SoD 165,305,514 159,393,708 182,806,937 169,168,720 - - 684,735,679

80% 80% 82% 80% - - 81%

72,317 72,136 72,745 72,399 72,768 ▼ 0.5% 72,581

127,519 127,523 128,283 127,775 128,282 ▼ 0.4% 127,995

- Member/EE Ratio 1.8 1.8 1.8 1.8 1.8 1.8

1 Capitation payments apply to HMO plan only2 Direct subsidy and catastrophic reinsrance prospective payments reflect actual payments received during quarter; CGDP estimated based on payment attributable to quarter; projected EGWP PMPM amounts provided by ESI3 Includes $1.2m prospective reinsurance adjustment payment received in August 2019 to align with cash flow timing in Fund4 Reflects estimated rebates attributable to FY20; prior quarters to be updated with actual FY20 rebates when received; estimated rebates based on WTW analysis of expected rebates under ESI contract effective July 20195 Premium contributions include fees for participating non-State groups6 Total per employee per year (PEPY) and per member per year (PMPY) values include operational expenses; these expenses are excluded from medical and Rx PEPY/PMPY splits7 Participating groups are assumed to be 100% EE funded, and Medicare retirees are assumed to be fully subsidized8 WTW Budget based on final FY20 Budget approved by SEBC on 8/26/20199 FY20 Projected based on 24 months of claims experience through FY20 Q1; reflects average headcounts during Q1 with 1% assumed enrollment growth during FY20; reflects costs and savings attributable to all GHIP initiatives

effective 7/1/19, including impact of passed legislation; 5% composite medical/Rx trend; EGWP revenues and prescription drug rebates projected based on the period revenues are attributable

Headcount

- Enrolled Ees

Total GHIP Results

- Enrolled Members

Prior Year Results

- ASO Fees

- Operational Expenses

EE Contributions7

- SoD Subsidy %

Medical/Rx Premium Contributions5

- Net Income

- Total Cost as % of Budget

Total Program Cost- Paid Claims

- Medical (includes capitation1)

- Rx (Including Rebates and EGWP)

2

State of DelawareHealth Plan Quarterly Financial ReportingFY20 Q3 Reporting Reconciliation (WTW vs DHR Fund Equity Report)

FY20 YTD Reporting

Reconciliation

WTW FY20 Q3

Financial

Report

DHR March

2020

Fund Equity

ReportTotal Program Cost $630,384,313 $720,306,972

Paid Claims 598,570,503 688,069,458Medical Claims 456,716,510 466,436,716

Rx Claims1141,853,993 221,632,742

Rx Paid Claims 222,092,535 221,632,742EGWP (27,366,777) (30,515,055)

Direct Subsidy (2,037,186) (2,049,377)CGDP (15,268,001) (13,186,123)

Catastrophic Reinsurance 2(10,061,590) (15,279,555)

Rx Rebates (52,871,766) (53,833,105)

Total Rx Claim (Offsets)/Revenue3(80,238,543) (84,348,160)

Total Fees 31,813,811 31,813,811ASO Fees 30,019,800 30,019,800Operational Expenses 1,794,011 1,794,011

Premium Contributions/Operating Revenues4$625,560,712 $714,136,057

Net Income (4,823,602) (6,170,915)Total Cost as % of Budget 101% 101%

1WTW Rx claims shown net of EGWP revenue and Rx rebates; DHR Rx claims reflect gross claim dollars excluding additional revenue

(EGWP and rebates)2WTW FY20 reinsurance includes $1.2m prospective reinsurance adjustment payment received in August 2019 to align with cash flow

timing in Fund3WTW reflects EGWP revenue and Rx rebates as offsets to Rx claims; DHR reflects these items as additions to operating revenues4DHR premium contributions represent total operating revenues, including premium contributions, Rx revenues (EGWP and rebates),

other revenues totaling $3,199,145, and participating group fees totaling $4,512,426; WTW premium contributions represent FY20 budget rates and headcounts (net of Rx revenues), including participating group fees

3

State of DelawareHealth Plan Quarterly Financial Reporting

Assumptions and Caveats

Claim basis and timing

1

2

Enrollment

3

Benefit costs/fees

4

5

a.

b.

6

7

8

Budget/contributions

9

10

11

12

13

14 HRA funding for CDH plans are included in the paid claims reported in this document.

Active and non-Medicare eligible retiree budget rates and contributions reflect rates effective July 1, 2019. Medicare eligible retiree budget rates reflect rates effective January 1, 2019 for FY20 Q1 and Q2, and rates effective January 1, 2020 for FY20 Q3 and Q4. Budget rates include FY20 risk fees for Participating groups (excludes $2.70 PEPM charge). FY20 budget rates were held flat from FY19.

Premiums and employee contributions are the product of monthly budget rate/contribution and quarterly average tiered contract counts provided by the medical vendors; assumes 1% enrollment growth during FY20.

Highmark quarterly reports do not provide enrollment data split by retirement date. All Medicare eligible retirees are assumed to have retired prior to July 1, 2012, and therefore do not contribute towards the cost of premiums. As a result of this conservative assumption, the healthcare program's net cost to the State may be overstated.

Participating groups are assumed to be 100% employee paid in order to estimate the healthcare program's net cost to the State; actual employee contributions vary and are difficult to capture since each group pays premiums at different times; participating group fees are included in premium contributions.

While COBRA enrollment and claims are reflected in the expenses, all medical/Rx participants are assumed to pay active contributions since COBRA participants make up less than 0.1% of the total population.

EGWP payments based on actual and expected payments attributable to the period July 1, 2019 through June 30, 2020; reflects actual direct subsidy, prospective reinsurance and coverage gap discount payments received through March 2020; remaining payments attributable to FY20 estimated based on projected amounts provided by ESI; may differ from actual payments received during FY2020 due to payment timing lag.

Prior year costs calculated from WTW's FY19 Financial Reports

All reporting provided on a paid basis within this document.

FY2020 represents the time period July 1, 2019 through June 30, 2020 for all statuses; note Medicfill plan for Medicare eligible retirees runs on a calendar year basis. Therefore, FY2020 financial results span two plan years for the Medicare eligible population.

Medical and Rx enrollment based on quarterly tiered enrollment data from Highmark and Aetna; Medicare enrollment provided separately for retirees enrolled in medical (Highmark) and Rx (ESI).

Medical quarterly paid claims from Highmark and Aetna; Rx quarterly paid claims from ESI; EGWP subsidies and Rx rebates (Active, non-Medicare eligible retiree, and Medicare eligible retiree) from DHR

Administration fees and operational expenses from DHR-provided June 2019 Fund Equity Report; total quarterly fees are assigned to each plan on a contract count basis.

ASO Fees: includes fees for vendor administration, COBRA administration, ACA-related (PCORI), IBM Watson data analytics, EAP and WTW consulting fees.

Operational Expenses: includes expenses for items such as staff salaries, supplies, etc.

Pharmacy drug rebates are shown based on the period to which rebates are attributable; prior quarters to be updated with actual FY20 rebates when received; estimated rebates based on WTW analysis of expected rebates under ESI contract effective July 2019 and actual rebates through FY20 Q1; active/non-Medicare eligible retiree rebates assigned to each plan on a contract count basis; may differ from actual payments received during FY2020 due to payment timing lag.

4

State of DelawareHealth Plan Quarterly Financial ReportingGlossary of Important Health Care Terms

Terms directly tied to cost tracking

Terminology Acronym DefinitionAdministrative Services Only ASO When an organization funds its own employee benefit plan, such as a health

insurance program, and it hires an outside firm to perform specific administrative services. Also referred to as “self-funded”. Currently, the GHIP has ASO contracts with Aetna, Highmark and Express Scripts.

Capitation n/a Fixed payment amount (per member) to a physician or group of physicians for a

defined set of services for a defined set of members. Fixed or “capitated” payment per member provides physician with an incentive for meeting quality and cost efficiency outcomes, since the physician is responsible for any costs incurred above the capitated amount. May be risk adjusted based on the demographics of the member population or changes in the member population. Often used for bundled payments or other value-based payments .

Consumer Driven Health Plan CDHP Allows members to use health savings accounts (HSA), health reimbursement

accounts (HRA) , or other similar medical payment products to pay routine health

care expenses directly. GHIP currently offers a CDHP with HRA .

Coverage Gap Discount Program CGDP One of the funding components of an EGWP . Manufacturers provide discounts

on covered Part D brand prescription drugs to Medicare beneficiaries while in the coverage gap.

Employee EE A person employed for wages or salary.Employer Group Waiver Plans EGWP A Center for Medicare Service (CMS) approved program for both employers and

unions. An employer may contract directly with CMS or go through an approved TPA, such as ESI, to establish the plan. They are usually Self Funded, are integrated with Medicare Part D, and sometimes include a fully insured “wrapper” around the plan to cover non-Medicare Part D prescription drugs. GHIP currently contracts with ESI as the TPA and includes a "wrapper," which is referred to as an enhanced benefit.

Fiscal Year FY A year as reckoned for taxing or accounting purposes. GHIP fiscal year runs from

July 1st through June 30th.Health Maintenance Organization HMO A form of health insurance combining a range of coverages in a group basis. A

group of doctors and other medical professionals offer care through the HMO for a flat monthly rate. However, only visits to professionals within the HMO network are covered by the policy. All visits, prescriptions and other care must be cleared by the HMO in order to be covered. A primary physician within the HMO handles referrals.

5


Health Reimbursement Account HRA Employer-funded account that reimburses employees for out-of-pocket medical

expenses. Employees can choose how to use their HRA funds to pay for medical expenses, but the employer can determine what expenses are reimbursable by the HRA (e.g., employers often designate prescription drug expenses as ineligible for reimbursement by an HRA). Funds are owned by the employer and are tax-deductible to the employee. GHIP only offers HRA to employees and non-Medicare eligible retirees who enroll in the CDH Gold plan.

High Cost Claimant HCC An insured who incurs claims over a catastrophic claim limit during the plan year.

For purposes of cost tracking, this threshold is $100K.Per Employee Per Month PEPM A monthly cost basis measured on an employee/contract/subscriber levelPer Employee Per Year PEPY A yearly cost basis measured on an employee/contract/subscriber levelPer Member Per Month PMPM A monthly cost basis measured on a member levelPer Member Per Year PMPY A yearly cost basis measured on a member levelPatient-Centered Outcomes Research Trust Fund

Fee

PCORI The Patient-Centered Outcomes Research Trust Fund fee is a fee on plan

sponsors of self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI). The institute will assist, through research, patients, clinicians, purchasers and policy-makers, in making informed health decisions by advancing the quality and relevance of evidence-based medicine. The institute will compile and distribute comparative clinical effectiveness research findings. This fee is part of the Affordable Care Act legislation.

6


Terms directly tied to cost tracking

Terminology Acronym DefinitionPoint-of-Service POS A type of managed care plan that is a hybrid of HMO and PPO plans. Like

an HMO, participants designate an in-network physician to be their primary care provider. But like a PPO, patients may go outside of the provider network for health care services. GHIP only offers this type of plan to Port of Wilmington employees.

Preferred Provider

Organization

PPO A health care organization composed of physicians, hospitals, or other

providers which provides health care services at a reduced fee. A PPO is similar to an HMO, but care is paid for as it is received instead of in advance in the form of a scheduled fee. PPOs may also offer more flexibility by allowing for visits to out-of-network professionals at a greater expense to the policy holder. Visits within the network require only the payment of a small fee. There is often a deductible for out-of-network expenses and a higher co-payment.

Transitional

Reinsurance Fee

TRF Fee collected by the transitional reinsurance program to fund reinsurance

payments to issuers of non-grandfathered reinsurance-eligible individual market plans, the administrative costs of operating the reinsurance program, and the General Fund of the U.S. Treasury for the 2014, 2015, and 2016 benefit years. This fee is part of the Affordable Care Act legislation, and ends after the 2016 benefit year.

Year to Date YTD A period, starting from the beginning of the current year (either the calendar

year or fiscal year) and continuing up to the present day. For this financial reporting document, YTD refers to the time period of July 1, 2019 to June 30, 2020

7

Medical and Prescription Drug Dashboard - Total Member PopulationPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)

1. Quality Metrics*

0%

20%

40%

60%

80%

100%

% Asthma Patients Asthma Drug % Diabetes Patients HbA1c Tests % Diabetes Patients LDL Tests

Previous Current*Quality Metrics are based on Incurred Rolling Year.

3. Well Care and Preventive Visits 4. Medical Plan Eligibility

Previous Current Trend Benchmark

Visits Per 1000 Well Baby 5,854.0 5,715.5 -2.4% 5,430.4

Visits Per 1000 Well Child 902.5 849.4 -5.9% 778.1

Visits Per 1000 Prevent Adult 428.9427.4 0.4% 362.0

Previous Current Trend

Average Employees 71,020 72,503 2%

Average Members 125,442 127,371 2%

Family Size 1.8 1.8 -1%

Member Age 42.9 43.0 0%

Members % Male 45% 45% 0% pts

6. Cost Sharing

Out-of-Pocket as a % of Allowed Amount

Previous Current

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Medical Rx Total

4%

6%

4%4%

6%

4%

2. High Cost Claimants*Total Net Payments

Non-HCCs76%

HCCs24%

Previous

Non-HCCs75%

HCCs25%

Current

*Members with >=$100,000 in Medical and Rx Net Payments


Patients 1,028 1,113 8%

Patients per 1,000 7.6 8.1 7%

Payments (in millions) $201.8 $216.7 7%

Payment per Patient $196,281 $194,738 -1%

5. Price and UseTrends

-4%

-2%

0%2%

4%

6%

IP Price IP Use LOS OP Price OP Use ER Use Rx Price (All) Rx Use (All)

Inpatient Current Benchmark Trend

Allowed per Admit $23,552 $30,969 5%

Admits per 1,000 81.5 54.5 -3%

Days LOS 5.3 4.4 3%

Outpatient

Allowed per Service $128 $131 2%

Services PMPY 42.4 30.7 2%

Emergency Room Visits per 1,000 349 226 0%

Prescription Drugs

Allowed/Days Supply $2 -5%

Days Supply PMPY 655 3%

Specialty Drugs



All Prescription Drugs

Allowed/Days Supply $4 $4 2%

Days Supply PMPY 667 365 3% Represents a lower than -3% comparison to the benchmark

Represents a comparison to the benchmark within +/-3%

Represents a higher than 3% comparison to the benchmark

1 of 9Apr 24, 2020

Medical and Prescription Drug Dashboard - Total Member PopulationPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)

7. Top Medical Conditions (by cost) 8. Screening Rates 9. Chronic Condition Prevalence

$0.0M$5.0M

$10.0M$15.0M$20.0M$25.0M$30.0M$35.0M$40.0M

0

20,000

40,000

60,000

80,000

100,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Med

Patients M

ed

Allowed Amount Med ▲ Patients Med

ConditionAllowed

Amount MedPatients

MedMed Allowed

/Patient

1 Prevent/Admin Hlth Encounters $37,891,752 84,691 $447

2 Osteoarthritis $35,018,085 14,113 $2,481

3 Spinal/Back Disord, Low Back $29,732,716 16,809 $1,769

4 Chemotherapy Encounters $28,351,120 635 $44,647

5 Arthropathies/Joint Disord NEC $25,802,232 31,848 $810

6 Pregnancy without Delivery $22,671,557 2,681 $8,456

7 Coronary Artery Disease $21,894,457 6,141 $3,565

8 Gastroint Disord, NEC $21,517,507 16,482 $1,306

9 Renal Function Failure $21,427,967 3,716 $5,766

10 Respiratory Disord, NEC $21,125,627 16,105 $1,312

% with Annual Screenings

Previous Current Benchmark

0% 20% 40% 60%

Cholesterol

CervicalCancer

BreastCancer

ColonCancer

37%

29%

40%

15%

37%

28%

41%

15%

50%

31%

51%

17%

Patients per 1,000


0 80 160 240

Asthma

CoronaryArteryDisease

Diabetes

Hypertension

Osteoarthritis

Depression

Low BackDisorder

41

44

122

198

99

77

120

41

45

120

196

102

85

122

21

11

56

82

36

44

65

10. Prescription Drug MetricsTop 10 Therapeutic Classes (by cost)

$0.0M$5.0M

$10.0M$15.0M$20.0M$25.0M$30.0M$35.0M$40.0M$45.0M

0

4,0008,000

12,00016,000

20,00024,000

28,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Rx

Patients R

x

Allowed Amount Rx ▲ Patients Rx

Therapeutic ClassAllowed

Amount RxPatients

RxRx Allowed

/Patient

1 Immunosuppressants, NEC $39,809,068 1,245 $31,975

2 Antidiabetic Agents, Misc $25,244,953 10,166 $2,483

3 Molecular Targeted Therapy $19,321,417 208 $92,891

4 Antidiabetic Agents, Insulins $18,081,857 3,495 $5,174

5 Biological Response Modifiers $16,263,854 181 $89,856

6 Coag/Anticoag, Anticoagulants $13,883,614 4,674 $2,970

7 Adrenals & Comb, NEC $9,879,439 26,181 $377

8 Stimulant, Amphetamine Type $9,527,295 5,603 $1,700

9 Antivirals, NEC $8,042,364 9,616 $836

10 Misc Therapeutic Agents, NEC $7,982,334 6,528 $1,223


0% 20% 40% 60% 80% 100% 120%

Scripts % Generic

Generic EfficiencyRate

Days Supply % MailOrder

Allowed Amount %Specialty

81%

96%

15%

38%

82%

97%

15%

42%

84%

96%

N/A

N/A

2 of 9Apr 24, 2020

State of Delaware Medical and Prescription Drug Dashboard - ActivesPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)

1. Quality Metrics*

0%

20%

40%

60%

80%

100%







Visits Per 1000 Prevent Adult 498.5497.4 0.2% 328.0




Family Size 2.3 2.3 -1%

Member Age 32.9 32.8 0%


6. Cost Sharing


Previous Current

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Medical Rx Total

6%

7%

6%6%7%

6%


Non-HCCs75%

HCCs25%

Previous

Non-HCCs76%

HCCs24%

Current



Patients 744 752 1%

Patients per 1,000 7.5 7.6 1%

Payments (in millions) $138.9 $137.2 -1%

Payment per Patient $186,651 $182,426 -2%


-8%-4%0%

4%8%

IP PriceIP Use

LOSOP Price

OP UseER Use

Rx Price (All)Rx Use (All)



Admits per 1,000 52.6 53.2 -8%

Days LOS 4.6 4.2 2%

Outpatient



Emergency Room Visits per 1,000 273 225 -2%

Prescription Drugs



Specialty Drugs





Days Supply PMPY 393 329 2% Represents a lower than -3% comparison to the benchmark



3 of 9Apr 24, 2020

State of Delaware Medical and Prescription Drug Dashboard - ActivesPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)


$0.0M$4.0M$8.0M

$12.0M$16.0M$20.0M$24.0M$28.0M$32.0M

0

10,00020,000

30,00040,000

50,00060,000

70,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Med

Patients M

ed


ConditionAllowed

Amount MedPatients

MedMed Allowed

/Patient


2 Pregnancy without Delivery $22,108,808 2,599 $8,507

3 Osteoarthritis $15,065,927 5,274 $2,857





8 Newborns, w/wo Complication $12,142,898 1,137 $10,680


10 Spinal/Back Disord, Ex Low $10,161,257 8,216 $1,237



0% 20% 40% 60%

Cholesterol

CervicalCancer

BreastCancer

ColonCancer

53%

31%

56%

16%

54%

30%

57%

16%

50%

31%

51%

17%

Patients per 1,000


0 40 80 120

Asthma


Diabetes

Hypertension

Osteoarthritis

Depression

Low BackDisorder

39

14

76

111

52

74

90

38

14

73

110

53

83

94

21

9

48

70

30

43

60


$0.0M

$4.0M$8.0M

$12.0M$16.0M

$20.0M$24.0M

$28.0M

02,0004,0006,0008,00010,00012,00014,00016,00018,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Rx

Patients R

x



Amount RxPatients

RxRx Allowed

/Patient

1 Immunosuppressants, NEC $23,508,526 704 $33,393


3 Stimulant, Amphetamine Type $8,310,968 4,861 $1,710


5 Antivirals, NEC $5,846,379 7,192 $813





10 Antidiabetic Ag, SGLT Inhibitr $3,477,386 922 $3,772


0% 20% 40% 60% 80% 100% 120%

Scripts % Generic




80%

95%

13%

40%

81%

97%

13%

45%

84%

96%

N/A

N/A

4 of 9Apr 24, 2020

Medical and Prescription Drug Dashboard - Early RetireesPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)

1. Quality Metrics*

0%

20%

40%

60%

80%

100%







Visits Per 1000 Prevent Adult 504.1 511.1 1.4% 461.0




Family Size 1.6 1.6 2%

Member Age 50.5 49.6 -2%


6. Cost Sharing


Previous Current

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Medical Rx Total

4%

6%

4%

4%

6%

4%


Non-HCCs63%

HCCs37%

Previous

Non-HCCs60%

HCCs40%

Current



Patients 237 267 13%

Patients per 1,000 19.9 22.5 13%


Payment per Patient $165,464 $187,206 13%


-4%

0%

4%8%

12%

16%




Admits per 1,000 79.7 63.0 -1%

Days LOS 6.1 5.1 7%

Outpatient



Emergency Room Visits per 1,000 366 233 -1%

Prescription Drugs


Days Supply PMPY 775 -2%

Specialty Drugs





Days Supply PMPY 792 650 -2% Represents a lower than -3% comparison to the benchmark



5 of 9Apr 24, 2020

Medical and Prescription Drug Dashboard - Early RetireesPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)


$0.0M

$1.0M

$2.0M

$3.0M

$4.0M

$5.0M

$6.0M

01,0002,0003,0004,0005,0006,0007,0008,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Med

Patients M

ed


ConditionAllowed

Amount MedPatients

MedMed Allowed

/Patient


2 Osteoarthritis $4,534,898 1,428 $3,176



5 Coronary Artery Disease $3,409,651 478 $7,133

6 Renal Function Failure $2,793,403 260 $10,744


8 Cancer - Breast $2,459,123 190 $12,943





0% 20% 40% 60% 80%

Cholesterol

CervicalCancer

BreastCancer

ColonCancer

66%

25%

59%

16%

65%

25%

58%

17%

50%

31%

51%

17%

Patients per 1,000


0 80 160 240

Asthma


Diabetes

Hypertension

Osteoarthritis

Depression

Low BackDisorder

35

37

158

231

119

74

127

38

40

163

232

120

85

131

21

26

111

165

77

44

91


$0.0M$0.5M$1.0M$1.5M$2.0M$2.5M$3.0M$3.5M$4.0M$4.5M

0

5001,000

1,5002,000

2,5003,000

3,500

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Rx

Patients R

x



Amount RxPatients

RxRx Allowed

/Patient



3 Antidiabetic Agents, Insulins $1,898,684 392 $4,844



6 Antidiabetic Ag, SGLT Inhibitr $963,315 270 $3,568

7 Adrenals & Comb, NEC $830,066 2,229 $372

8 CNS Agents, Misc. $793,686 286 $2,775

9 Antihyperlipidemic Drugs, NEC $750,675 3,365 $223

10 Antivirals, NEC $724,559 698 $1,038


0% 20% 40% 60% 80% 100% 120%

Scripts % Generic




80%

96%

14%

42%

81%

97%

14%

48%

84%

96%

N/A

N/A

6 of 9Apr 24, 2020

Medical and Prescription Drug Dashboard - Medicare RetireesPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)

1. Quality Metrics*

0%

20%

40%

60%

80%

100%





Visits Per 1000 Prevent Adult 236.1 242.7 2.8% 444.0




Family Size 1.0 1.0 1%

Member Age 73.1 72.9 0%


6. Cost Sharing


Previous Current

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Medical Rx Total

0%

6%

2%

0%

5%

2%


Non-HCCs87%

HCCs13%

Previous

Non-HCCs85%

HCCs15%

Current



Patients 154 182 18%

Patients per 1,000 5.9 6.7 15%


Payment per Patient $136,994 $144,550 6%


0%0%1%2%2%2%3%4%




Admits per 1,000 169.9 55.5 0%

Days LOS 5.9 4.5 3%

Outpatient



Emergency Room Visits per 1,000 561 226 3%

Prescription Drugs


Days Supply PMPY 1,493 3%

Specialty Drugs





Days Supply PMPY 1,515 378 3% Represents a lower than -3% comparison to the benchmark



7 of 9Apr 24, 2020

Medical and Prescription Drug Dashboard - Medicare RetireesPrevious Period: Apr 2018 - Mar 2019 (Paid)Current Period: Apr 2019 - Mar 2020 (Paid)


$0.0M$2.0M$4.0M$6.0M$8.0M

$10.0M$12.0M$14.0M$16.0M

0

2,000

4,000

6,000

8,000

10,000

12,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Med

Patients M

ed


ConditionAllowed

Amount MedPatients

MedMed Allowed

/Patient

1 Osteoarthritis $14,230,582 6,919 $2,057



4 Renal Function Failure $9,992,376 2,404 $4,157

5 Eye Disorders, Degenerative $9,135,085 8,212 $1,112




9 Cardiac Arrhythmias $7,421,108 4,505 $1,647

10 Cerebrovascular Disease $6,706,751 3,098 $2,165



0% 20% 40% 60%

Cholesterol

CervicalCancer

BreastCancer

ColonCancer

8%

10%

11%

13%

8%

13%

12%

12%

50%

31%

51%

17%

Patients per 1,000


0 200 400 600

Asthma


Diabetes

Hypertension

Osteoarthritis

Depression

Low BackDisorder

49

145

258

467

249

79

212

50

147

255

460

256

85

207

22

12

62

91

39

46

71


$0.0M

$2.0M$4.0M

$6.0M$8.0M

$10.0M$12.0M

$14.0M

02,0004,0006,0008,00010,00012,00014,00016,00018,000

1 2 3 4 5 6 7 8 9 10

Allo

wed

Am

ount

Rx

Patients R

x



Amount RxPatients

RxRx Allowed

/Patient




4 Coag/Anticoag, Anticoagulants $9,822,954 3,179 $3,090



7 Antihyperlipidemic Drugs, NEC $4,387,733 15,631 $281


9 Gastrointestinal Drug Misc,NEC $3,469,308 6,831 $508



0% 20% 40% 60% 80% 100% 120%

Scripts % Generic




83%

97%

17%

35%

84%

98%

17%

39%

84%

96%

N/A

N/A

8 of 9Apr 24, 2020

Medical and Prescription Drug Dashboard - Medicare Retirees

Dashboard Glossary

GeneralClaims are completed for claims incurred but not yet recorded (IBNR)

Benchmark represents 2018 U.S. Total MarketScan norms that are age, gender, geographic, and/or severity adjusted as appropriate

PMPY stands for Per Member Per Year and is weighted based on the number of months a member was enrolled in medical benefits

Allowed Amount (Allowed) is the amount of submitted charges eligible for payment for medical and prescription drug claims; it is the amount eligible after applying pricing guidelines, but before deducting third party, copayment, coinsurance, or deductible amounts

Net Payment (Payment) is the net amount paid by the company for medical and prescription drug claims; it represents the amount after all pricing guidelines have been applied, and all third party, copayment, coinsurance, and deductible amounts have been subtracted

Inpatient (IP) represents claims for services provided under medical coverage in an acute inpatient setting; acute inpatient settings include inpatient hospitals, birthing centers, inpatient psychiatric facilities, and residential substance abuse treatment facilities

Outpatient (OP) represents claims for medical services provided in any non-inpatient setting

Prescription Drug (Rx) represents any claim paid under the pharmacy benefit

Patients represents any member with a claim for the service (e.g., medical or prescription drug) being reported during the time period

1. Well Care and Preventive Visits

2. High Cost Claimants

High Cost Claimants (HCCs) are members with $100,000 or more in medical and prescription drug net paymentsincurred during the year

Non-High Cost Claimants (HCCs) are members with less than $100,000 in medical and prescription drug netpayments incurred during the year

6. Price and UseCurrent represents your Price or Use rate in the Current year

Benchmark represents the U.S. Total MarketScan norm for the Price or Use rate

The Symbol next to the Benchmark represents your Current rate compared to the Norm

The Trend represents your year-over-year trend for the Price or Use rate

7. Cost SharingThe cost sharing percentage represents Out-of-Pocket divided by Allowed Amounts

Out-of-Pocket represents the amount paid out-of-pocket by the member for facility, professional, and prescription drug services; this generally includes coinsurance, copayment, and deductible amounts

8. Top Medical Conditions (by cost)Conditions represent Truven Health Clinical Condition groupings, based on ICD-9 and ICD-10 diagnosis codes

Clinical conditions include medical claims (i.e., prescription drug is not included)

Note: The clinical condition of Signs/Symptoms/Oth Cond, NEC is excluded from this exhibit

3. Quality Metrics

4. Medical Plan EligibilityAverage Employees represents the number of employees with medical coverage; each employee is counted

once for each month of their eligibility, then the total is averaged across the total number of months of eligibilityduring the time period

Average Members represents the number of members with medical coverage; each member is counted once foreach month of their eligibility, then the total is averaged across the total number of months of eligibility during thetime period

Family Size represents the average number of covered members per subscriber

Member Age represents the average age of covered members during the year

Members % Male represents the number of male members as a percent of total members

9. Screening RatesCholesterol identifies lipid screening tests for males aged 35+ years and females aged 45+ years; lipid

screening tests include lipid panels, serum cholesterol tests, blood lipoprotein tests (e.g., HDL, LDL), andtriglyceride tests [source for age and gender criteria: US Preventive Services Task Force]

Cervical Cancer identifies the percentage of females aged 21 to 64 who received cervical cancer screeningservices [source for age, gender, procedure, diagnosis, and revenue code criteria: NCQA HEDIS 2014]

Breast Cancer identifies the percentage of females aged 50 to 74 who received mammography services [sourcefor age, gender, diagnosis, procedure, and revenue code criteria: NCQA HEDIS 2014]

Colon Cancer identifies the percentage of adults aged 50 to 75 who received colon cancer screening services[source for age, diagnosis and procedure criteria: NCQA HEDIS 2014]

10. Chronic Condition PrevalenceConditions represent Truven Health Clinical Condition groupings, based on ICD-9 and ICD-10 diagnosis codes

Chronic conditions identified based on medical claims

11. Prescription Drug MetricsTherapeutic Class represents the Redbook Therapeutic Class Intermediary

5. Risk ScoreThe Member Risk Score represents the DCG non-rescaled concurrent score

The Member Risk Score is produced using the Verisk DCG® model

This model measures the health risk of a population relative to the national average as of the time the model was developed (i.e., 100)

Scripts % Generic is the number of prescriptions filled with a generic drug, expressed as a percentage of all prescriptions filled

Generic Efficiency Rate is the number of prescriptions filled with a generic drug, expressed as a percentage of all prescriptions filled that could have been filled with a generic drug

Days Supply % Mail Order is the percent of all prescription days supply filled via mail order

Allowed Amount % Specialty is the percent of total prescription drug allowed amounts that were for medications considered to be specialty drugs (identified using Truven Health Service Categories)

9 of 9Apr 24, 2020


The State of Delaware

Group Health Insurance Plan

May 7, 2020


This document was prepared for the State of Delaware’s sole and exclusive use and on the basis agreed by the State. It was not prepared for use by any other party and may not address their

needs, concerns or objectives. This document should not be disclosed or distributed to any third party other than as agreed by the State of Delaware and Willis Towers Watson in writing. We do not

assume any responsibility, or accept any duty of care or liability to any third party who may obtain a copy of this presentation and any reliance placed by such party on it is entirely at their own risk.

Long-term Projections as of FY20 Q3

The data and assumptions in this report reflect information available as of 5/72020 and the estimates are specific to the

State of Delaware GHIP. Due to the high degree of uncertainty associated with the COVID-19 pandemic, results may vary

from the estimates provided.


Today’s discussion

▪ GHIP long term health care cost projections▪ COVID-19 update▪ Next steps▪ Appendix

© 2020 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.1

willistowerswatson.comwillistowerswatson.com

GHIP long term health care cost projections



GHIP long term health care cost projections (FY20 Q3 update)FY20 recast and FY21 projected budget▪ Willis Towers Watson (WTW) revised GHIP financial projections based on updated claims experience through March

2020 (FY20 Q3):▪ Recast FY20 budget of $849.2M is up 0.2% ($1.6M) from FY20 Q2 update of $847.6M

▪ Budget increase mainly driven by unfavorable claims experience (medical and pharmacy) during FY20 Q3▪ Offset by increase in expected rebate payments due to continued spike in pharmacy claims and continued

increase in earned rebate percentage▪ FY20 budget includes $1.2M prospective reinsurance true-up received in August 2019 (excludes $5.2M

CY2018 financial reconciliation payment received in January 2020)▪ Based on pricing assumptions and methodology consistent with Q2 – does not reflect potential impact

of COVID-19 pandemic

▪ Projected FY21 budget of $902.5M down slightly ($0.8M) from FY20 Q2 update of $903.3M▪ Projected FY21 budget represents a 6.3% increase over FY20 budget recast


Component ($ millions) Description FY20 FY21

FY20 Q2 $847.6 $903.3

Claims Experience Claims experience updated through FY20 Q3 $5.9 $2.9

Enrollment Expected claims and premium increase due to growth in covered population $0.0 $0.0

Updated Other RevenuesIncludes revised EGWP payments, pharmacy rebates and participating group fees (excludes $5.2M EGWP financial reconciliation payment received January 2020)

($4.2) ($3.7)

FY20 Q3 $849.2 $902.5

3


GHIP long term health care cost projections (FY20 Q3 update)FY20 recast and FY21 projected budget – claims experience


▪ On a rolling 12-month basis, gross per employee claims through FY20 Q3 are 5.1% higher than the prior period

▪ Medical trend: 3%; Rx trend: 10%

GHIP Quarterly Claims Per Employee/Retiree1

1Based on combined active, pre-65 retiree, and post-65 Medicare retiree gross medical and pharmacy claims provided by Highmark, Aetna, and ESI; does not include offsets from drug rebates and EGWP payments *Denotes quarter with seven ESI invoices

35% experience period weight 65% experience period weight

WTW recommended annual trend assumption from 2/17 SEBC discussion: 5% medical, 8% pharmacy

4

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Q1* Q2 Q3* Q4 Q1* Q2 Q3* Q4 Q1* Q2 Q3* Q4 Q1* Q2* Q3 Q4 Q1* Q2* Q3

FY16 FY17 FY18 FY19 FY20

Medical Rx


GHIP long term health care cost projections (FY20 Q3 update)Premium rate increase scenarios (before reflecting impact of COVID-19)

▪ To maintain the long-term stability of the Fund, the Financial Subcommittee recommends smoothing any available surplus over a minimum of two years

▪ A rate increase at any time during FY21 is likely not possible; the Financial Subcommittee will be tasked with recommending the timing (e.g., 7/1/2021) and level of rate increase for FY22

▪ The following page shows the revised long term projections reflecting claims data through FY20 Q3 under the following scenario:

▪ Hold premium rates flat in FY21 and beyond ($14.7M projected surplus through end of FY21, $95.6M projected deficit through end of FY22)

▪ Scenario does not reflect impact of COVID-19 on GHIP operating expenses▪ Absent any impact from COVID-19, the required FY21 rate increase (effective 7/1/2020) needed to

smooth the FY20 surplus over two years would be 2.5%▪ Absent any impact from COVID-19, delaying rate increases to FY22 would require a 12.1% increase

effective 7/1/2021


Reminder: Legislative ConstraintDelaware code establishes the employee cost sharing percentage for each medical plan, and the State premium share cannot be increased without also increasing employee contributions


GHIP long term health care cost projections (FY20 Q3 update)No premium increases FY21-FY25 (before reflecting impact of COVID-19)


GHIP Costs ($ millions) FY19 Actual

FY20 Projected1,6

FY21 Projected6

FY22 Projected6

FY23 Projected6

FY24 Projected6

FY25 Projected6

Average Enrolled Members 126,360 128,147 129,428 130,722 132,029 133,349 134,682 GHIP RevenuePremium Contributions (Increasing with Enrollment)2 $817.4 $834.2 $842.6 $851.0 $859.5 $868.0 $876.7

Hold premium rates flat FY21 and beyond - - $0.0 $0.0 $0.0 $0.0 $0.0 Other Revenues3 $98.5 $121.7 $127.7 $136.0 $144.9 $154.3 $164.3 Total Operating Revenues $915.9 $955.9 $970.3 $987.0 $1,004.4 $1,022.3 $1,041.0

GHIP Expenses (Claims/Fees)Operating Expenses4 $904.0 $965.7 $1,030.2 $1,099.8 $1,174.1 $1,253.4 $1,338.1 % Change Per Member 5.1% 5.3% 5.6% 5.7% 5.7% 5.7% 5.7%

PBM Contract Renegotiation (Year 5)7 ($7.8) ($8.3) ($8.9) ($9.5) ($10.1)Adjusted Net Income (Revenue less Expense) $11.9 ($9.8) ($52.1) ($104.5) ($160.8) ($221.6) ($287.0)Balance Forward $151.8 $163.8 $154.0 $101.9 ($2.6) ($163.4) ($385.0)Ending Balance $163.8 $154.0 $101.9 ($2.6) ($163.4) ($385.0) ($672.0)- Less Claims Liability5 $58.8 $57.5 $61.3 $65.4 $69.8 $74.5 $79.5

- Less Minimum Reserve5 $24.3 $24.3 $25.9 $27.6 $29.5 $31.5 $33.6

GHIP Surplus (After Reserves/Deposits) $80.7 $72.2 $14.7 ($95.6) ($262.7) ($491.0) ($785.1)

Please refer to Appendix for FY17 and FY18 actual results (slide 16) and detailed projection footnotes (slide 17)

6

It is probable that the COVID-19 pandemic will have an impact on health care costs. In performing this

analysis to develop health care cost estimates for GHIP, we have not explicitly reflected adjustments due

to the impact of COVID-19. Due to the high degree of uncertainty associated with this pandemic, results

may vary from the estimates provided.


COVID-19 considerations





▪ COVID-19 is placing growing pressure on the health care system ▪ Employers with older populations, more tobacco users, or populations with more chronic

disease, could see higher increases▪ Assumptions that impact cost projections include:▪ How much of the population is infected, and how quickly▪ Severity of illness (level of morbidity)▪ Ability of health care delivery system to increase supply of intensive care▪ How much elective and semi-elective care is delayed or prevented

▪ Some health care services deferred during this initial wave of COVID-19 will return once treatment and movement restrictions are eased and as the public regains confidence in the safety of care delivery settings

▪ Due to system capacity, it may take many months to satisfy this pent-up demand; there will also be some deferred services that may never return to the system




Type of Care Reduction inUtilization

IllustrativeUtilization Curve

Pent-upDemand Comments

Pharmacy None► ◄NoneMost maintenance prescriptions are still being filled, althoughmore are transitioning to mail order. Fewer office visits couldreduce new prescriptions

Office Visits/ Dental Care High► ◄Low

Only highly urgent care is being delivered; most preventive care will resume but lost volume will not be recovered

Acute Emergency Care Low► ◄None

Those with less serious emergencies are avoiding care now; these cases will have resolved when current restrictions arelifted

Accidents High► ◄NoneLess travel means fewer accidents. There is no reason to believe that there will be an increase in accidents to make up forthis

Non-Urgent Procedures High► ◄High

Many non-urgent procedures are very important to patient health and will be performed later. Some in queue will have resolved and will not be performed

Cancer Care Moderate►Most care will eventually be delivered. Delay couldmean some patients will no longer be candidates for

◄Moderate intensive interventions

Transplants High► ◄LowMany transplants have been deferred. Cadaver organ supply is lower with decreased movement. Some on waiting lists will have died

Cardiac care Moderate► ?◄Unknown Hospitals are seeing fewer heart attacks and strokes; it

is unclear what the long-term consequences will be

▪ Naturally, both the volume of deferred care and the likelihood it returns will vary based upon the type of care; the table below offers insights as to the types of care for which demand is building and the possibility of its return to the system:




Estimated Change in 2020 Self-Funded Employer Health Care Spend*Level of Care Deferred to Future Year

Infection Level Low Deferral Medium Deferral High Deferral1% (e.g., rural area) -0.3% -1.5% -2.7%5% 0.4% -0.7% -1.9%10% 1.5% 0.4% -0.7%15% (e.g., metro area) 2.6% 1.4% 0.4%20% 3.5% 2.0% 1.0%

▪ Willis Towers Watson has updated and expanded its analysis of the estimated impact of COVID-19 on 2020 self-funded employer health care spend

▪ We have utilized more recent estimates of ultimate infection levels in the U.S., which vary significantly by geography and suggest that this first wave of COVID-19 will infect fewer Americans than initially expected

▪ Additionally, the updated results reflect revised assumptions related to non-infected care deferral:

▪ In most scenarios, the cost reductions due to care deferral completely offset projected cost increases associated with COVID-19 infections

▪ Further, the applicability of any scenario remains geographically specific since spike infections to date have occurred in certain geographical hot spots, while care deferral is, at least initially, more evenly spread across the states

* Reflects GHIP active and pre-65 retiree population only; Impacts reflect average morbidity levels for those people who are infected based on active employee

populations in the IBM MarketScan® Commercial Database.




▪ Through March, GHIP medical and pharmacy claims were 3.4% above budget ($22.6m), contributing to an $8.2m fund deficit YTD

▪ Delaware stay-at-home order was implemented on March 24th; impact of deferred care due to COVID-19 has begun to emerge in the April claims experience▪ April medical claims projected to be $14.5m below April budget▪ April pharmacy claims projected to be $1.7m above April budget

▪ Unlikely that claims will return to budgeted levels during the remainder of FY20 ▪ Deferred care savings expected to outpace COVID-19 expenses for GHIP▪ YTD COVID-19 claims approximately $350k based on weekly COVID-19 reports from

Highmark and Aetna; reflects COVID-19 tested and confirmed cases▪ Impact on the GHIP Fund beyond FY20 depends on many factors, including: ▪ Effectiveness of policies to mitigate spread and timing of easement of social

distancing measures▪ Level of FY20 care deferral that returns in FY21▪ Cost of new vaccine or therapeutic agents▪ Potential for new waves of COVID infection

Consider impact on GHIP long term cost projections, trend assumptions, minimum reserve, rate action planning, and other factors


COVID-19 considerationsCurrent minimum reserve methodology


▪ During March 6, 2017 meeting, SEBC approved a motion to set minimum reserve based on upper bound of 97% confidence interval of Willis Towers Watson health care trend variability tool, set annually based on final fiscal year budget▪ Confidence intervals represent the probability that the budget estimate will fall

between an upper and lower bound of a health care claims distribution ▪ The estimated confidence intervals shown are directional and intended to reflect the

potential random fluctuation in claims given the current size and risk profile of the GHIP

FY20 Cost Estimate

Variability Description Lower Bound Upper BoundExpected Value(without margin) $838,495,000

70% Confidence Interval $826,934,000 $850,056,000 90% Confidence Interval $820,147,000 $856,843,000 97% Confidence Interval $814,288,000 $862,802,000

At the 97% confidence interval level, the upper bound is $24.3M higher than the projected budget

The model does not contemplate changes in costs due to systemic events; consider holding additional minimum reserve to cover potential uptick in FY21

budget due to COVID-19


COVID-19 considerationsGHIP long term health care cost projections (FY20 Q3 update) with potential COVID-19 impact



FY20 Projected1,6

FY21 Projected6

FY22 Projected6

Average Enrolled Members 126,360 128,147 129,428 130,722 GHIP RevenuePremium Contributions (Increasing with Enrollment)2 $817.4 $834.2 $842.6 $851.0

Hold premium rates flat FY21 and beyond - - $0.0 $0.0 Other Revenues3 $98.5 $121.7 $127.7 $136.0 Total Operating Revenues $915.9 $955.9 $970.3 $987.0

GHIP Expenses (Claims/Fees)Operating Expenses4 $904.0 $940.4 $1,049.0 $1,099.8 % Change Per Member 5.1% 2.6% 10.4% 3.8%

PBM Contract Renegotiation (Year 5)7 ($7.8) ($8.3)Adjusted Net Income (Revenue less Expense) $11.9 $15.5 ($70.9) ($104.5)Balance Forward $151.8 $163.8 $179.3 $108.4 Ending Balance $163.8 $179.3 $108.4 $3.9 - Less Claims Liability5 $58.8 $57.5 $64.1 $67.2

- Less Minimum Reserve5 $24.3 $24.3 $52.4 $28.4

GHIP Surplus (After Reserves/Deposits) $80.7 $97.5 ($8.1) ($91.7)

Please refer to Appendix for FY17 and FY18 actual results (slide 16) and detailed projection footnotes (slide 17)

13

It is evident that the COVID-19

pandemic will have an impact

on health care costs. We

have used available

information and reasonable

estimation techniques to

develop health care cost

estimates for GHIP that reflect

the impact of COVID-

19. However due to the high

degree of uncertainty

associated with this pandemic,

results may vary from the

estimates provided.

▪ FY20 operating expenses reduced to reflect impact of deferred care on FY20 surplus; reduction based on actual claim levels in April with reduction in deferred care assumed for May and June

▪ FY21 operating expenses assumed to increase above normal trend levels as some care deferred in FY20 expected to return in FY21; operating expenses FY22 and beyond assumed to return to status quo projection

▪ Reduction in FY20 claims assumed to be held as additional minimum reserve in FY21 to offset potential FY21 cost increases due to COVID-19

▪ No change in long-term trend assumptions (5% medical, 8% Rx) or assumed membership growth

10.8% rate increase (7/1/21)

to eliminate $91.7m deficit

1

1

2

2

3

1

3

4

4

4


Recommended next steps

▪ Continue to monitor emerging plan experience for COVID-19 testing and treatment, care deferral by type of care, and GHIP overall

▪ Continue to monitor emerging utilization and cost savings for the GHIP initiatives adopted to date

▪ Continue to discuss timing and level of future rate action



Appendix



GHIP historical health care fund informationFY17-FY18



FY18 Actual

Average Enrolled Members 123,132 125,488 GHIP RevenuePremium Contributions (Increasing with Enrollment)2 $799.0 $810.9

Hold premium rates flat FY21+) - -

Other Revenues3 $81.6 $92.1 Total Operating Revenues $880.6 $903.0

GHIP Expenses (Claims/Fees)Operating Expenses4 $816.8 $853.9 % Change Per Member 2.6%

Excise Tax Liability5

Adjusted Net Income (Revenue less Expense) $63.8 $49.1 Balance Forward $38.9 $102.7 Ending Balance $102.7 $151.8 - Less Claims Liability6 $54.0 $58.9

- Less Minimum Reserve6 $24.0 $24.0

GHIP Surplus (After Reserves/Deposits) $24.7 $68.9

16


GHIP long term health care cost projection footnotes

Note: FY17, FY18, and FY19 actual based on final June 2017, June 2018, and June 2019 Fund Equity reports; projected operating expenses and enrollment based on experience through FY20 Q3; assumed 1% annual enrollment growth; numbers in table may not add up due to rounding

1. Includes approved design changes effective 7/1/2019 including implementation of SurgeryPlus COE ($0.5m annual savings), site-of-care steerage ($6.9m), Highmark infusion therapy program ($2.0m) and implementation of Livongo ($0.7m), as well as cost impact of passed legislation ($2.875m cost increase)

2. Includes State and employee/pensioner premium contributions; assumes 1% annual enrollment growth for FY20-FY253. Includes Rx rebates, EGWP payments, other revenues; FY20 and beyond includes estimated improvements in Rx rebates

based on best and final ESI FY20 renewal proposal, provided 1/29/2019; includes fees for participating non-State groups (assumed to increase proportionally with membership and premium growth); FY20 includes $5.2m CY2018 CMS financial reconciliation payment received January 2020.

4. FY20 and beyond includes estimated reduction in pharmacy claims as a result of best and final ESI FY20 renewal proposal, provided 1/29/2019. FY21 reflects implementation of Highmark radiation therapy authorization program ($633k annual savings per Highmark). Assumes no other program changes in FY21 and beyond.

5. FY20 Minimum Reserve levels updated with data through June 2019; FY20 Claim Liability updated with lag factors as of Dec 2019 and claims data through December 2019; future years assumed to increase with overall GHIP expense growth. Consider one-time increase in Minimum Reserve for FY21 to account for additional uncertainty associated with COVID-19 pandemic

6. FY20-FY25 projections based on 5% medical, 8% pharmacy baseline trend (before potential impact of COVID-19 pandemic); assumes 1% annual growth in GHIP membership (before potential impact of COVID-19 pandemic).

7. Reflects FY21 plan savings based on ESI year 5 traditional pharmacy BAFO renewal; assumed to increase with trend FY22 and beyond


It is probable that the COVID-19 pandemic will have an impact on health care costs. In performing this

analysis to develop health care cost estimates for GHIP, we have not explicitly reflected adjustments

due to the impact of COVID-19. Due to the high degree of uncertainty associated with this pandemic,

results may vary from the estimates provided.


Health care budget developmentAssumption and pricing analysis details

Claims Experience

Claim Offsets IBNR Exposure Inflation

Plan Design/ Vendor

Fixed Costs

Total Budget

▪ Claims experience provided by vendors (Highmark, Aetna, and ESI) reflect paid claims and enrollment for the most recent available 24 months, or two experience periods (1/1/2018 –12/31/2019)

▪ Claims experience adjusted for claim offsets from pharmacy rebates and EGWP funding▪ Incurred But Not Reported (IBNR) adjustments convert paid claims to an incurred basis based on

the lag between when a claim is incurred and when it is paid▪ Exposure adjustments convert claims experience into a per adult equivalent claims cost▪ Inflation and trend adjustments increase the claims costs to reflect expected year-over-year

increases to the cost of services▪ Plan Design adjustments applied to the claims costs to reflect any plan design changes or movement

across plans, and are based on the relative difference in actuarial value of the plans▪ Vendor adjustments reflect results from medical TPA RFP and other adopted vendor initiatives▪ Self-insured fixed costs are added to the adjusted claims cost to develop the total budget; this

includes administrative service fees and operational expenses


WTW projected total budget is based on a best estimate of projected GHIP expenses (claims, fees, etc.) and does not assume any surplus offset or deficit recoup based on current Fund balance

18


ESI pharmacy renewal – FY21 (Year 5)Summary of projected FY21 contract savings (best and final offer)

1Estimated savings for each respective contract period using allowed claims (plan and member cost sharing combined), utilization, and enrollment data for the period 10/1/2018 – 9/30/2019 and composite annual pharmacy trend rate of 6-8% (varying by generic, brand, and specialty drug categories)2 Estimated Rx allowed cost savings per footnote 1 plus estimated increase in rebates based on current drug mix; rebate improvements shown are above any anticipated rebate over-performance (true-up) for current contract3 Estimated reduction in GHIP pharmacy plan cost (net of member cost sharing) for the period 7/1/2020 – 6/30/2021 based on the pricing assumptions outlined in the Appendix


▪ ESI provided a traditional and transparent one-year renewal BAFO offers for both the Commercial and EGWP populations on January 21, 2019

▪ ESI’s traditional BAFO offer provides pricing guarantee improvements of 4% for the Commercial population and 5%

for EGWP for a combined contract improvement of $12.2M over the current terms and $5.1M over the initial offer▪ ESI’s transparent BAFO offer provides pricing guarantee improvements of 2.1% for the Commercial population and

3.4% for the EGWP population for a combined contract improvement of $7.4M over the current terms and $5.4M improvement over the initial offer▪ The transparent offer has higher costs before rebates due to added fees and lower minimum guarantees, but has potential

upside for retail pass-through

ESI One Year RenewalOffer - Traditional Commercial

FY20 InitialEGWP

CY21 InitialCommercialFY20 BAFO

EGWPCY21 BAFO

Savings before rebates1 -0.1% ($0.2M) -0.1% ($0.1M) -0.3% ($0.5M) -0.2% ($0.3M)Savings after rebates2 -3.0% ($4.3M) -2.1% ($2.8M) -4.0% ($5.6M) -5.0% ($6.7M)Plan cost reduction in FY203 $4.8M $7.8MESI One Year RenewalOffer - Transparent Commercial

FY20 InitialEGWP

CY21 InitialCommercialFY20 BAFO

EGWPCY21 BAFO

Savings before rebates1 +1.4% (+$2.5M) +1.4% (+$2.2M) +1.2% (+$2.2M) +1.2% (+$1.8M)Savings after rebates2 -1.1% ($1.6M) -0.4% ($0.5M) -2.1% ($2.9M) -3.4% ($4.5M)Plan cost reduction in FY203 $1.5M $4.6M

1919

Presented on 2/17/2020

willistowerswatson.com 20© 2020 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

COVID-19 impact modeling assumptionsAs of 5/7/2020

Severity Mild Moderate Severe Catastrophic

Morbidity Est % of members by severity level

Low 93% 4% 2% 0.4%

Medium 87% 8% 4% 0.7%

High 81% 12% 6% 1.0%

Costs by Severity Level

Severity Services Estimated Gross Cost

Mild Office visit + test $250

Moderate ER + test $2,500

Severe ER, 5-day IP stay + test $30,000

Catastrophic ER, 14-day ICU stay + test

$100,000

Change in Utilization

Service Type

Low Deferral

MediumDeferral

HighDeferral

PCP -5% -10% -15%

Specialist -5% -10% -15%

ER -5% -10% -15%

Urgent Care -5% -10% -15%

OP surgery -5% -10% -15%

Telehealth +200% +200% +200%

▪ Supply-side constraints are built into modeling, reflecting the limited capacity of health care resources (e.g., available hospital beds)

▪ The model also reflects a “substitution” effect, where

costs of some current inpatient and ICU utilization go away and are replaced with COVID-19 cases

▪ The number of units and unit costs associated with office visits, emergency room visits, and outpatient and inpatient encounters reflect an average commercial population profile underlying the IBM MarketScan® Commercial Database

1© 2020 International Business Machines Corporation

Site of Service Steerage ReportFY20, 1st Quarter Update(for Incurred Claims through December 2019)

State of DelawareMay 2019


Key Findings

• Visits to urgent care continue to increase while visits to primary care continue to decrease for similar conditions.

• On a per visit basis, net payments for non-emergent care and primary care treatable conditions have increased by 8.0% in the current 12 month reporting period driven by a 13.3% increase in net pay per visit for primary care.

• On a per visit basis, net payments for outpatient high-tech imaging at freestanding facilities decreased by 6.6% while net payments for these services at hospital locations increased by 8.6%. Utilization overall for high-tech imaging increased by 6.2% in the latest 12 month reporting period.

• In the latest 12 month reporting period, there have been notable increases for total net payments for mammograms at both hospitals (17.9%) and freestanding facilities (26.9%). There were also large increases in net payments at freestanding facilities for ultrasounds (19.1%) and x-rays (19.9%). Utilization of basic imaging at hospitals was stable while utilization of basic imaging at freestanding facilities increased markedly for mammograms and ultrasounds (12.1% and 14.8%, respectively).


Jan 17 – Dec 17 Jan 18 – Dec 18 Change

Site of Service Visits Net Payment

Allowed Amount Visits Net

PaymentAllowed Amount Visits Net

PaymentAllowed Amount

Emergency Room 12,858 $16,594,680 $18,522,058 12,894 $16,455,829 $18,244,959 36 -$138,851 -$277,099

Urgent Care 50,279 $5,211,585 $6,308,592 53,719 $5,697,881 $6,783,853 3,440 $486,296 $475,262Primary Care 153,031 $13,132,365 $15,363,072 148,451 $12,947,655 $14,989,538 -4,580 -$184,710 -$373,534

Total 216,168 $34,938,630 $40,193,722 215,064 $35,101,365 $40,018,350 -1,104 $162,735 -$175,371

Visits to Emergency Rooms, Urgent Care Centers and Primary Care Providers for Non-Emergent and Primary Care Treatable Conditions, Jan. 2017 – Dec. 2019*

*Incudes active employees, early retirees and their families. Net Payment and Allowed Amount are computed using a completion factor for claims incurred but not reported.

Jan 18 – Dec 18 Jan 19- Dec 19 Change

Site of Service Visits Net Payment

Allowed Amount Visits Net

PaymentAllowed Amount Visits Net

PaymentAllowed Amount

Emergency Room 12,894 $16,455,829 $18,244,959 13,203 $17,324,163 $19,474,047 309 $868,335 $1,229,088

Urgent Care 53,719 $5,697,881 $6,783,853 57,578 $6,344,017 $7,507,291 3,859 $646,136 $723,437Primary Care 148,451 $12,947,655 $14,989,538 144,259 $14,251,495 $16,272,781 -4,192 $1,303,839 $1,283,243

Total 215,064 $35,101,365 $40,018,350 215,040 $37,919,675 $43,254,118 -24 $2,818,310 $3,235,768


Net Pay per Visit by Site of Service, Jan. 2017 – Dec. 2019

Site of Service Period 1Jan 17 – Dec 17

Period 2Jan 18 - Dec 18

Period 3Jan 19 – Dec 19

ChangePeriod 1

to Period 2

ChangePeriod 2

to Period 3

Emergency Room $1,291 $1,276 $1,312 -1.1% 2.8%

Urgent Care $104 $106 $110 2.3% 3.9%Primary Care $86 $87 $99 1.6% 13.3%

Visits to Emergency Rooms, Urgent Care Centers and Primary Care Providers for Non-Emergent and Primary Care Treatable ConditionsJan. 2017 – Dec. 2019

Total Non-Emergent & Primary Care Treatable

Conditions

Period 1Oct 16 – Sep 17



ChangePeriod 1

to Period 2

ChangePeriod 2

to Period 3Net Pay Per Visit $162 $163 $176 1.0% 8.0%

Allowed Amount Per Visit $186 $186 $201 0.1% 8.1%


Visits per 1,000 to Emergency Rooms, Urgent Care Centers and Primary Care Providers

for Non-Emergent and Primary Care Treatable Conditions


Visits to Emergency Rooms and Urgent Care for Top 15 Primary Care Treatable Conditions*Jan. 2018 – Dec. 2019

*Top conditions were determined by ranking disease summary groups by the combined volume of visits to emergency rooms and urgent care centers during the latest rolling year period. Green highlighted fields indicate a decrease in ER Visits and an increase in Urgent Care Visits.

Visits Net Pay per Visit

Net Pay Visits Net Pay per Visit



Net Pay

Acute upper respiratory infections of multiple and unspecified sites 469 $828 $388,274 3,017 $102 $307,567 455 $748 $340,181 3,254 $108 $350,214 -14 -3.0% 237 7.9%Abdominal and pelvic pain 2,553 $1,493 $3,810,922 691 $107 $73,977 2,779 $1,488 $4,135,912 814 $113 $91,630 226 8.9% 123 17.8%Pain in throat and chest 1,387 $1,354 $1,878,244 217 $106 $23,018 1,598 $1,460 $2,332,429 265 $121 $32,053 211 15.2% 48 22.1%Suppurative and unspecified otitis media 142 $585 $83,097 1,389 $100 $138,839 152 $635 $96,513 1,540 $104 $160,327 10 7.0% 151 10.9%Acute bronchitis 92 $1,114 $102,478 1,165 $98 $113,805 83 $1,297 $107,681 1,265 $100 $126,907 -9 -9.8% 100 8.6%Cellulitis and acute lymphangitis 351 $1,181 $414,376 619 $111 $68,925 388 $1,543 $598,544 696 $110 $76,498 37 10.5% 77 12.4%Cutaneous abscess, furuncle and carbuncle 200 $1,079 $215,720 244 $119 $29,095 194 $1,148 $222,651 280 $111 $31,120 -6 -3.0% 36 14.8%Acute nasopharyngitis 42 $589 $24,746 317 $107 $33,840 14 $311 $4,357 395 $109 $43,061 -28 -66.7% 78 24.6%Bronchitis, not specified as acute or chronic 96 $942 $90,408 301 $143 $43,023 88 $972 $85,562 254 $141 $35,755 -8 -8.3% -47 -15.6%Other symptoms and signs involving the digestive system and abdomen 131 $1,313 $171,985 144 $105 $15,126 149 $1,331 $198,301 192 $110 $21,140 18 13.7% 48 33.3%Nonsuppurative otitis media 30 $705 $21,148 290 $102 $29,560 53 $510 $27,026 237 $106 $25,013 23 76.7% -53 -18.3%Gastritis and duodenitis 130 $1,963 $255,236 41 $126 $5,158 120 $1,713 $205,530 49 $126 $6,188 -10 -7.7% 8 19.5%Diseases of pulp and periapical tissues 67 $870 $58,301 75 $82 $6,166 53 $1,070 $56,727 93 $84 $7,778 -14 -20.9% 18 24.0%Gastro-esophageal reflux disease 58 $1,348 $78,183 58 $107 $6,215 76 $1,164 $88,481 67 $123 $8,263 18 31.0% 9 15.5%Impetigo 18 $518 $9,316 95 $93 $8,843 19 $586 $11,143 121 $102 $12,392 1 5.6% 26 27.4%

Totals 5,766 $1,318 $7,602,433 8,663 $104 $903,155 6,221 $1,368 $8,511,037 9,522 $108 $1,028,341 455 7.9% 859 9.9%

Top

15 P

rimar

y Ca

re T

reat

able

Con

ditio

ns

Diagnosis Summary Group

Urgent Care FacilityEmergency RoomUrgent Care FacilityEmergency RoomJan 19 - Dec 19Jan 18 - Dec 18 Change

in ER Visits

% Change in ER Visits

Change in

Urgent Care Visits

% Change in Urgent

Care Visits


Visits to Emergency Rooms and Urgent Care for Top 15 Non-Emergent Conditions* Jan. 2018 – Dec. 2019

*Top conditions were determined by ranking disease summary groups by the combined volume of visits to emergency rooms and urgent care centers during the latest rolling year period. Green highlighted fields indicate a decrease in ER Visits and an increase in Urgent Care Visits.





Net Pay

Acute pharyngitis 292 $817 $238,689 5,362 $100 $537,716 264 $765 $202,038 5,347 $104 $554,664 -28 -9.6% -15 -0.3%Acute sinusitis 64 $807 $51,669 2,912 $102 $295,575 75 $564 $42,306 3,390 $103 $350,583 11 17.2% 478 16.4%Cough 476 $351 $166,973 1,411 $98 $137,765 392 $380 $149,154 1,927 $98 $188,668 -84 -17.6% 516 36.6%Other joint disorder, not elsewhere classified 657 $636 $417,563 880 $102 $90,127 686 $615 $421,584 968 $109 $105,270 29 4.4% 88 10.0%Other and unspecified soft tissue disorders, not elsewhere classified 640 $566 $362,298 735 $102 $74,766 714 $539 $384,862 817 $108 $88,398 74 11.6% 82 11.2%Dorsalgia 700 $1,142 $799,467 577 $105 $60,575 682 $1,168 $796,668 611 $105 $64,447 -18 -2.6% 34 5.9%Headache 711 $1,162 $826,455 261 $116 $30,238 719 $1,192 $857,399 290 $114 $32,953 8 1.1% 29 11.1%Nausea and vomiting 608 $1,164 $707,814 316 $103 $32,610 588 $1,239 $728,453 370 $108 $39,787 -20 -3.3% 54 17.1%Chronic sinusitis 38 $764 $29,022 865 $92 $79,881 43 $1,262 $54,259 827 $91 $75,591 5 13.2% -38 -4.4%Conjunctivitis 55 $426 $23,430 766 $104 $79,636 44 $538 $23,664 813 $107 $86,697 -11 -20.0% 47 6.1%Dizziness and giddiness 611 $1,603 $979,453 178 $104 $18,586 611 $1,730 $1,057,104 216 $109 $23,550 0 0.0% 38 21.3%Influenza due to unidentified influenza virus 217 $894 $193,901 705 $113 $79,638 131 $850 $111,362 576 $123 $70,868 -86 -39.6% -129 -18.3%Pain associated with micturition 39 $993 $38,726 504 $96 $48,169 49 $746 $36,566 565 $104 $58,638 10 25.6% 61 12.1%Essential (primary) hypertension 332 $827 $274,620 155 $103 $16,002 371 $795 $295,024 143 $100 $14,293 39 11.7% -12 -7.7%Suppurative and unspecified otitis media 51 $536 $27,323 331 $110 $36,392 51 $762 $38,859 392 $111 $43,326 0 0.0% 61 18.4%

Totals 5,491 $936 $5,137,403 15,958 $101 $1,617,678 5,420 $959 $5,199,302 17,252 $104 $1,797,734 -71 -1.3% 1,294 8.1%

Top

15 N

on-E

mer

gent

Con

ditio

ns


Emergency Room Urgent Care FacilityJan 19 - Dec 19

Emergency Room Urgent Care FacilityJan 18 - Dec 18 Change

in ER Visits

% Change in ER Visits

Change in

Urgent Care Visits

% Change in Urgent

Care Visits


Visits to Primary Care Providers and Urgent Care for Top Primary Care Treatable Conditions*Jan. 2018 – Dec. 2019

*Top conditions were determined by ranking disease summary groups by absolute decreases in visits in primary care offices during the latest rolling year period. Highlighted rows indicate a decrease in PCP visits and an increase in urgent care visits.





Net Pay

Vasomotor and allergic rhinitis 1,806 $33.68 $60,827.10 7 $95.83 $670.82 1,091 $54.49 $59,446.29 11 $102.25 $1,124.74-715 -39.6% 4 57.1%

Acute bronchitis 1,651 $51.95 $85,771.45 1,165 $97.69 $113,805.36 1,373 $61.37 $84,261.52 1,265 $100.32 $126,907.36-278 -16.8% 100 8.6%

Acute upper respiratory infections of multiple and unspecified sites

4,978 $49.69 $247,344.72 3,017 $101.94 $307,566.68 4,765 $61.12 $291,241.453254 107.626 350214.14

-213 -4.3% 237 7.9%

Encounter for supervision of normal pregnancy 908 $68.40 $62,108.51 1 $78.99 $78.99 743 $79.37 $58,973.32 2 $65.65 $131.30-165 -18.2% 1 100.0%

Nonsuppurative otitis media 937 $55.20 $51,720.59 290 $101.93 $29,560.31 777 $64.61 $50,201.77 237 $105.54 $25,013.34-160 -17.1% -53 -18.3%

Other viral infection characterized by skin & muc 341 $55.31 $18,861.06 61 $92.58 $5,647.46 189 $66.53 $12,573.73 41 $107.49 $4,407.23-152 -44.6% -20 -32.8%

Bronchitis, not specified as acute or chronic 608 $55.39 $33,678.50 301 $142.93 $43,022.61 504 $67.79 $34,168.32 254 $140.77 $35,754.80-104 -17.1% -47 -15.6%

Cellulitis and acute lymphangitis 887 $53.45 $47,411.70 619 $111.35 $68,924.82 803 $64.32 $51,645.78 696 $109.91 $76,497.98-84 -9.5% 77 12.4%

Cutaneous abscess, furuncle and carbuncle 372 $64.34 $23,932.66 244 $119.24 $29,094.63 306 $70.02 $21,425.11 280 $111.14 $31,120.27-66 -17.7% 36 14.8%

Other chronic obstructive pulmonary disease 317 $66.97 $21,227.94 4 $103.94 $415.74 267 $71.63 $19,125.82 2 $102.00 $204.00-50 -15.8% -2 -50.0%

Total Primary Care Treatable12,805 $51 $652,884 5,709 $105 $598,787 10,818 $63 $683,063 6,042 $108 $651,375 -1,987 -15.5% 333 5.8%


Top

Prim

ary

Care

Tre

atab

le

Urgent Care FacilityJan 18 - Dec 18 Jan 19 - Dec 19PCP Office Visits Urgent Care Facility PCP Office Visits

Change: Urgent Care

Visits% Change: PCP Visits

%Change: Urgent

Care VisitsChange: PCP

Visits


Visits to Primary Care Providers and Urgent Care for Top Non-Emergent Conditions*Jan. 2018 – Dec. 2019

*Top conditions were determined by ranking disease summary groups by absolute decreases in visits in primary care offices during the latest rolling year period. Highlighted rows indicate a decrease in PCP visits and an increase in urgent care visits.





Net Pay

Acute pharyngitis6,112 $61 $371,443 5,362 $100 $537,716 5,555 $76 $424,862 5,347 $104 $554,664 -557 -9.1% -15 -0.3%

Other joint disorder, not elsewhere classified3,837 $64 $244,069 880 $102 $90,127 3,374 $68 $228,381 968 $109 $105,270 -463 -12.1% 88 10.0%

Influenza due to unidentified influenza virus858 $49 $41,773 705 $113 $79,638 450 $73 $32,922 576 $123 $70,868 -408 -47.6% -129 -18.3%

Acute sinusitis3,870 $50 $191,998 2,912 $102 $295,575 3,500 $62 $216,886 3,390 $103 $350,583 -370 -9.6% 478 16.4%

Essential (primary) hypertension16,528 $60 $991,493 155 $103 $16,002 16,187 $69 $1,117,384 143 $100 $14,293 -341 -2.1% -12 -7.7%

Encounter for other special exam w/o complaint, suspected or reported dx

18,756 $107 $2,014,450 12 $77 $930 18,485 $113 $2,093,869 19 65 1,244 -271 -1.4% 7 58.3%

Symptoms and signs concerning food and fluid intake

322 $53 $17,073 1 109 109 61 $87 $5,297 -261 -81.1% -1 -100.0%

Other and unspecified soft tissue disorders, not elsewhere classified

1,940 $54 $104,785 735 102 74,766 1,696 $65 $110,672 817 108 88,398 -244 -12.6% 82 11.2%

Encounter for pregnancy test and childbirth and childcare instruction

1,651 $49 $81,577 52 29 1,498 1,414 $55 $78,422 26 27 703 -237 -14.4% -26 -50.0%

Encounter for screening for infectious and parasitic diseases

1,792 $10 $17,119 93 $17 $1,588 1,582 $10 $15,498 59 $40 $2,382 -210 -11.7% -34 -36.6%

Total Non-Emergent55,666 $73 $4,075,781 10,907 $101 $1,097,950 52,304 $83 $4,324,193 11,345 $105 $1,188,405 -3,362 -6.0% 438 4.0%

Top

Non

-Em

erge

nt


Jan 18 - Dec 18 Jan 19 - Dec 19PCP Office Visits Urgent Care Facility PCP Office Visits Urgent Care Facility

Change: PCP Visits

Change: Urgent Care

Visits

%Change: Urgent

Care Visits% Change: PCP Visits

Hospital Affiliated Outpatient and Freestanding Facility High Tech Imaging Utilization and Costs

Watson Health © IBM Corporation 2019

11


Visits to Hospitals and Freestanding Facilitiesfor Outpatient High-Tech Imaging Services*

Jan. 2017 – Dec. 2019

*Incudes active employees, early retirees and their families. Net Payment and Allowed Amount are computed using a completion factor for claims incurred but not reported. Excludes PET Scans.


Site of Service Visits Net Payment Allowed Amount Visits Net Payment Allowed

Amount Visits Net Payment Allowed Amount

Hospital Outpatient 12,012 $14,659,357 $15,207,487 11,669 $16,514,949 $17,157,213 -343 $1,855,591 $1,949,726

Freestanding Facility 7,767 $3,310,877 $3,469,573 7,506 $3,316,060 $3,428,896 -261 $5,183 -$40,677

Total 19,779 $17,970,234 $18,677,061 19,175 $19,831,008 $20,586,109 -604 $1,860,774 $1,909,048


Site of Service Visits Net Payment Allowed Amount Visits Net Payment Allowed

Amount Visits Net Payment Allowed Amount

Hospital Outpatient 11,669 $16,514,949 $17,157,213 12,222 $18,784,370 $19,549,934 553 $2,269,422 $2,392,721

Freestanding Facility 7,506 $3,316,060 $3,428,896 8,142 $3,360,965 $3,450,007 636 $44,905 $21,111

Total 19,175 $19,831,008 $20,586,109 20,364 22,145,335 22,999,940 1,189 $2,314,327 $2,413,831


Net Pay per Visit by Site of Servicefor Outpatient High-Tech Imaging ServicesJan. 2017 – Dec. 2019

Site of Service Period 1Jan 17 – Dec 17



ChangePeriod 1

to Period 2

ChangePeriod 2

to Period 3

Hospital Outpatient $1,220 $1,415 $1,537 16.0% 8.6%

Freestanding Facility $426 $442 $413 3.6% -6.6%

Visits to Hospitals and Freestanding Facilitiesfor Outpatient High-Tech Imaging ServicesJan. 2019 – Dec. 2019

Total High-Tech Imaging Services




ChangePeriod 1

to Period 2

ChangePeriod 2

to Period 3

Net Pay Per Visit $909 $1,034 $1,087 13.8% 5.2%Allowed Amount Per Visit $944 $1,074 $1,129 13.7% 5.2%


Visits per 1,000 to Hospitals and Freestanding Facilities for Outpatient High-Tech Imaging Services

0.65 0.64 0.67

0.0

0.2

0.4

0.6

0.8

Jan 17- Dec 18 Jan 18 - Dec 18 Jan 19 - Dec 19

Freestanding Facility to Outpatient Hospital Ratio

for High Tech Imaging Services

Hospital Affiliated Outpatient and Freestanding Facility Basic Imaging Utilization and Costs


15


Basic Imaging Utilization and Costby Site of Service and Selected Service Categories

Jan 18 – Dec 18 Jan 19 – Dec 19 Trend

Visits Net Pay Visits Net Pay Visits Net Pay

Hospital(Outpatient Imaging)

Mammograms 8,878 $2,469,375 8,977 $2,911,819 1.1% 17.9%

Ultrasounds 9,339 $2,817,807 9,445 $3,024,685 1.1% 7.3%

X-Rays 13,615 $1,684,807.29 13,527 $1,832,779 -0.6% 8.8%

Total 30,361 $7,066,076 30,401 $7,860,242 0.1% 11.2%

Freestanding Facility

Mammograms 5,853 $1,130,668 6,560 $1,434,335 12.1% 26.9%

Ultrasounds 14,323 $2,446,306 16,447 $2,912,669 14.8% 19.1%

X-Rays 19,543 $899,521 20,479 $1,078,911 4.8% 19.9%

Total 39,349 $4,616,621 43,044 $5,598,400 9.4% 21.3%

Hospital Affiliated Labs and Preferred Labs Utilization and Costs


18


Lab Services Utilization and Costby Site of Service and Selected Service Categories

Jan 18 – Dec 18 Jan 19 – Dec 19 Trend

Visits Net Pay Visits Net Payper Visit

Visits Net Pay

Hospital (Outpatient Lab) Chemistry 21,778 $2,439,777 20,595 $2,251,832 -5.4% -7.7%

Hematology 14,342 $512,327 14,146 $487,013 -1.4% -4.9%

Immunology 3,457 $427,826 3,860 $455,630 11.7% 6.5%

Microbiology 7,773 $1,007,444 7,382 $1,126,931 -5.0% 11.9%

Other 13,072 $339,670 10,443 $377,060 -20.1% 11.0%

Pathology 5,630 $1,209,804 5,833 $1,319,486 3.6% 9.1%

Urinalysis 1,801 $38,123 1,845 $38,618 2.4% 1.3%

Preferred Lab Chemistry 52,896 $1,656,816 59,493 $2,392,478 12.5% 12.3%

Hematology 20,235 $125,214 23,011 $171,300 13.7% 11.7%

Immunology 10,592 $392,706 13,133 $562,133 24.0% 27.8%

Microbiology 19,730 $944,148 22,853 $1,257,863 15.8% 17.3%

Other 882 $63,728 1,059 $95,536 20.1% 43.9%

Pathology 6,619 $528,146 7,724 $587,406 16.7% 6.9%

Urinalysis 10,171 $32,402 11,666 $41,646 14.7% 11.2%


$109$34

$118$153

$36

$226

$21$31 $6 $38 $48$87 $73

$3$0

$100

$200

$300

Chemistry Hematology Immunology Microbiology Other Pathology Urinalysis

Net Pay Per Visit forLab Visits

Jan 19 - Dec 19

Hospital Preferred Lab

publicmeetings.delaware.govwillistowerswatson.com WebEx: Overview and Best Practices The May 7, 2020...

Documents

Transcript of publicmeetings.delaware.govwillistowerswatson.com WebEx: Overview and Best Practices The May 7, 2020...