Wednesday, January 20, 2010

Employee Benefits Under Discussion

Today the State Employee Benefits Advisory Committee met (SEBAC). This committee functions only in an advisory capacity. SEBAC usually meets a couple of weeks before the State Employee Benefits Committee (SEBC), the actual decision making body for the employee health plans. The SEBAC is provided some information in advance of the SEBC meeting and allowed to discuss issues. The SEBAC is also given time on each SEBC agenda to give comment on the issues at hand.

At the SEBAC meeting we were given a preview of the SEBC agenda for next Monday.

Medco the prescription drug administrator will give a presentation on generic drugs and speciality drugs.

There will be a discussion on three costly areas and possible savings options. First, the plans expenditures on fertility drugs and fertility procedures such as in vitro fertilization be reviewed. Fertility drugs and procedures cost the plan about $2 million annually. A possibility of a patient cost share of 25% may be considered.

Second, bariatric surgery, procedures to aid weight loss for obese people is on the agenda. The procedures cost the plan $2.5 million annually. Again, a cost share of 25% was suggested.

Third, MedSolutions a company that administers a managed care component for radiology services will be considered again. Last year a presentation was made by MedSolutions claiming cost savings could be had by restricting the approval for tests such as MRI, CT, nuclear imaging, and PET. Last year 23,000 plan members had one of these procedures costing the plan $12.5 million. Managed care might realize a $2 million savings.

DSEA raised questions and concerns over the MedSolutions proposal at SEBAC and may do so at SEBC as well. We will be looking for information such as, is the radiology claim cost out of proportion when compared to utilization under similar health plans? How does our radiology use compare with national averages? How does it compare with the state average? What procedures are the big cost drivers? Are there certain doctors, hospitals, or clinics that are cost drivers? What is the data on usage by populations within the plan? Are there areas of the state where usage is higher? What does the medical community think about the use (overuse?) of these tests in Delaware?

The above questions might be summed up as, radiology is expensive, there is a lot of use, but does that necessarily mean overuse and waste? Managed care saves money by denying access. By putting radiology under managed care will we be eliminating waste or denying needed care?

All of these cost cutting discussions are spurred by a $48.7 million general fund deficit in the health plan. Now you know why DSEA monitors SEBAC and SEBC meetings.

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