Joint Health Care Committee (JHCC) Draft Notes for the August 15, 2012, Meeting

Committee Members Present Unions: UNAC: Abel Bult-Ito, Leah Berman, Stephan Golux (Alternate) UAFT: Jane Weber, Nancy Bish (Alternate) Local 6070: J. Sowell, Kevin Purcell, Jennifer Madsen FFA: Tod Chambers Management: Donald Smith, Jim Danielson, Sandi Culver Staff Alliance: Connie Dennis (Alternate)

Committee Members Absent Unions: UNAC: Nalinaksha Bhattacharyya UAFT: Tim Powers, Dorn VanDommelen, FFA: Jim Styers, Dominic Lozano Staff Alliance: Melodee Monson, Gwenna Richardson

Staff: Erika Van Flein, Cyndee West

Guests: Lockton Consulting – David Hinckley, Lisa Sporleder

Roll was called at 10:10 a.m.

David Hinckley and Lisa Sporleder were introduced as guests.

The August 15, 2012, JHCC agenda was approved with amendments to correct the meeting date and to move up the request for proposal update by Erika Van Flein because she had to leave early.

The Meeting Minutes from June 20, 2012, will be reviewed and approved at the next regularly scheduled meeting.

Erika Van Flein reported in her request for proposal update that the RFPs for medical, dental, and pharmacy are at procurement. The vendor due date is 24 September 2012 and Tim Powers will participate on the RFP Scoring Committee as a representative of the JHCC.

Erika Van Flein commented that a wellness incentive plan design is our goal. Abel Bult-Ito commented that the JHCC has not approved a wellness incentive plan design and Jane Weber concurred. This will be an item for further discussion.

Abel Bult-Ito and Jim Danielson were nominated for chair of the JHCC. Abel Bult-Ito was elected chair with a 9 to 4 vote.

1 Cyndee West will compile fall schedules of JHCC members and will propose the meeting schedule for the fall 2012 semester.

David Hinckley gave an overview of value-based plan design, what it means, what we already have, and what could be done. The definition of value based plan design is fuzzy at best. The UA Choice plan already does some things, such as generic drugs. David Hinckley explained that some value-based plans use incentives to encourage members to adopt a high value service, increase physical activity, enroll in smoking cessation, and include provider incentives (one star or two star) that might reduce copays, which would have to be worked out with Premera. Federal law also now covers preventive services. We should discuss what ideas we might have.

Value-based components such as clinical guidelines that fall back to the doctors to implement are in an infant stage but are becoming more common. The real value is that members are compliant with their treatment, such as diabetic treatment regime, and the adherence to evidence-based treatment guidelines. Donald Smith asked whether members would not already have enough incentive? David Hinckley responded that people may not know that they are pre-diabetic, and diabetics may think they are compliant but they may not be.

Stephan Golux asked about the United Healthcare and stars system and how the incentive star is provided? David Hinckley responded that this is determined by past history, recurrence rates, and compliance of members etc., which is a statistical evaluation.

Stephan Golux also asked about specialists for rare conditions. How would this “outlier” be evaluated? David Hinckley said that value-based plans are not looking at outliers, but more at high volume diseases. Erika van Flein added that the intent is to address the bulk of chronic conditions that affect a relatively large number of members.

Abel Bult-Ito asked whether incentives are used to encourage the use of preventive benefits. David answered that three of his clients do this with different types of incentives. Abel Bult-Ito commented that if going to a wellness incentive plan design, preventive care would be an important component.

Leah Berman expressed concern about the large deductible and how they could be a disincentive even for “free” preventive care. Lower deductibles would incentivize people going to the doctor. Jane Weber concurred with these comments. Lisa Sporleder referred to other plans in the country that show that people go to the doctor less as a result. Donald Smith would appreciate seeing these studies and asked whether lower deductibles would result in more unnecessary visits? Leah Berman commented that it is hard to know what visits are unnecessary.

The new numbers of headcounts in different UA Choice plan options from open enrollment were provided in a pdf file attached to the agenda. Details were discussed by David Hinckley. Member contributions appear to be an important driver for the changes in headcount in plans. Stephan Golux commented that choices might also be affected by perceived external trends. The prediction is that next year we could see a continued change of plan options downward and increased opt-outs. Abel Bult-Ito asked David Hinckley whether there will be a deficit in employee contributions? David Hinckley will look at the effects of 33% increase in HPHP (compared to 25%) and increase in opt-outs (from 11% to 12%) relative to the model used to set the current fiscal year members contribution rates and report these at the next meeting.

Abel Bult-Ito requested that the value-based plan design be back on agenda for the next meeting.

2 The detailed Alere report and ROI of the program will be rescheduled for the September meeting.

The Plan Participant Communication on Preventive Services was provided as an attachment to the agenda and it was briefly discussed.

The JHCC briefly discussed potential FY14 plan design changes under consideration. Donald Smith commented that plan design change talking points were presented at the last meeting and he has no definitive answers. The “no opt-outs” option has received complaints from employees. Abel Bult-Ito commented that opt-outs is a negotiated item and should not be discussed at the JHCC. Donald Smith disagreed.

Leah Berman asked whether there was any feedback on dropping the 500 plan. No comments have been received.

Leah Berman asked whether having plans with different levels of coverage would be an option? Donald Smith asked whether we want to steer people to certain plans.

Donald Smith briefly reported on the Health Care Taskforce. Tomorrow this taskforce is expected to formulate recommendations. On site clinics and joining state of Alaska health plans have been discussed. The taskforce looked at other employers – lower rates have lower levels of coverage and mandate biometrics, which would be controversial at UA. Donald Smith expects to be able to present the taskforce’s recommendations to the JHCC at the next meeting and this will be added to the agenda.

David Hinckley discussed the HRA, HSA, and FSA options, which were summarized in a spreadsheet attached to the agenda. The HSA uses an aggregate family deductible, which generally means that the family deductible is in effect; each individual is subject to the family deductible until that is met. You can have an HSA and be in an FSA for dependent care. You can have an HRA and an HSA.

The RFPs include the HRA and HSA options in the medical RFP but are also presented in separate components to allow companies that specialize in these components to able to respond to the RFP.

David Hinckley went over the national health care reform update that was attached to the agenda.

JHCC chair Abel Bult-Ito recapped the meeting action items to include Cyndee West arranging the fall meeting schedule, David Hinckley providing an estimate of employee contributions to the health plan with the new headcount numbers, and agenda items for the next meeting to include value-base plan design, FY14 UA Choice plan design, detailed Alere report, and the Health Care Task Force recommendations.

Lisa Sporleder was thanked for her service to the JHCC.

The meeting was adjourned at 11:37pm