PEBB BOARD AGENDA APRIL 20, 2021 Click Here to Join the Meeting

HEALTH POLICY AND ANALYTICS Public Employees’ Benefit Board Kate Brown, Governor

Vice Chair Shaun Parkman will convene a public meeting of the PEBB Board on Tuesday, April 20, 2021, at 9:30 a.m. The meeting will be held via TEAMS.

PEBB BOARD AGENDA APRIL 20, 2021 Click here to join the meeting

I. 9:30 a.m. – 9:35 a.m. Welcome & Approval of the March 16, 2021 meeting minutes. Attachment 1 ACTION Shaun Parkman, Vice Chair

II. 9:35 a.m. – 10:00 a.m. Centers of Excellence Attachment 2 ACTION Jenny Marks – WTW & Margaret Smith-Isa, Program Development Coordinator

III. 10:00 a.m. – 10:15 a.m. WW Update on Enhanced Offerings Attachment 3 ACTION Ashley Brown, Client Success Executive, Health Solutions and Nicole Campagna

IV. 10:15 a.m. – 11:15 a.m. Renewal Summary Medical/Pharmacy, Dental, Vision and Attachment 4 Optional Benefits– Round 3 ACTION Nick Albert, and Mitch Nigro, Mercer Health & Benefits, LLC

11:15 a.m. – 11:25 a.m. BREAK

V. 11:25 a.m. - 11:55 a.m. Renewal Summary Medical/Pharmacy, Dental, Vision and Attachment 4 Optional Benefits– Round 3 continued ACTION Nick Albert, and Mitch Nigro, Mercer Health & Benefits, LLC

VI. 11:55 a.m. – 12:25 p.m. Consultant RFP Attachment 5 ACTION Brian Olson, Contracts Team Manager and Claudia Grimm, Contracts Specialist

VII. 12:25 -p.m. – 12:30 p.m. PEBB Mandatory Open Enrollment Attachment 6 Information Ali Hassoun, Director Public Employees’ Benefit Board Page 2 of 2

VIII. 12:30 p.m. – 12:35 p.m. Public Comment and Other Business

Adjourn

PB Attachment 1 Minutes from March 16, 2021 PEBB Board Meeting April 20, 2021

Public Employees’ Benefit Board Meeting Minutes March 16, 2021

The Public Employees’ Benefit Board held a regular meeting on March 16, 2021 via video conference. Chair Kimberly Hendricks called the meeting to order at 9:30 a.m.

Attendees

Board Members: Kimberly Hendricks, Chair Shaun Parkman, Vice Chair Kim Harman Siobhan Martin Kate Nass Mark Perlman Jeremy Vandehey

Board Members Excused/Absent: Dana Hargunani Senator Betsy Johnson (non-voting member) Representative Andrea Salinas (non-voting member)

PEBB Staff: Ali Hassoun, Director Damian Brayko, Deputy Director Cindy Bowman, Director of Operations Margaret Smith Isa, Program Development Coordinator Glenn Baly, Policy Program Liaison Rose Mann, Board Policy and Planning Coordinator

Mercer Consultants: Nick Albert, Mercer Health and Benefits, LLC Mitchell Nigro, Mercer Health and Benefits, LLC

   

Page 1 of 3 PB Attachment 1 Minutes from March 16, 2021 PEBB Board Meeting April 20, 2021

I. Approval of February 16, 2021 Board meeting minutes (Attachment 1)

Chair Kimberly Hendricks called for a motion to approve the February 16, 2021 PEBB Board Meeting Minutes.

MOTION

Siobhan Martin moved to approve the minutes from February 16, 2021, PEBB Board meeting. Shaun Parkman seconded the motion. The motion carried.

II. Director’s Report

Ali Hassoun, Director reported to the Board on the following: • Consultant RFP – in process and will be discussed at the April 20 Board meeting. • Joint OEBB/PEBB Health Equity Workgroup – Siobhan Martin and Shaun Parkman will represent PEBB and Susan Rieke-Smith and Tom Syltebo will represent OEBB on the workgroup. The workgroup will have its first meeting in May. • Legislative Update

III. Medical, Dental and Vision Renewals Round 2 (Attachment 2)

Nick Albert and Mitch Nigro, Mercer Health and Benefits, LLC led the Board in a discussion of the medical, dental and vision renewals.

MOTION

Siobhan Martin moved to approve recommendation of consultants of a $35,000 benefit maximum per year for Advanced Reproductive Treatment (ART) to include IVF and IUI and to provide this benefit as any other service without co-insurance, which would allow all members to receive treatment without additional cost. Mark Perlman seconded the motion. The motion carried.

IV. PEBB Admin. Fee Increase (Attachment 3)

Ali Hassoun, Director reported to the Board that staff is requesting an increase to 1.15% from 0.90% for the 2022 Plan Year allowing PEBB to fund the new bodies of work to support the Mission and long-term goals of the Board and fund an appropriate response to the Secretary of State’s audit findings.

Page 2 of 3 PB Attachment 1 Minutes from March 16, 2021 PEBB Board Meeting April 20, 2021

MOTION

Siobhan Martin moved to accept the recommendation staff to increase the Admin. Fee to 1.15% for plan year 2022. Kim Harman seconded the motion. The motion carried.

V. WebMD HTHU

Melissa Voigt, Vice President of Client Experience and Maureen Convey, Strategic Executive Account, Staywell led the Board in a discussion of enhanced programs that have been added to HTHU under WebMD.

Brian Olson reminded the PEBB Member Advisory Committee (PMAC) will be making a recommendation in the near future to the Board about what it thinks the future of the Health Engagement Model program should look like and this will include a wellness platform based on a review of evidence done with Mercer.

MOTION

Shaun Parkman moved to accept the staff recommendation to continue with the HTHU program in 2022 via the WebMD portal along with transition to a global pricing structure and added that there be included in the contract performance measure. Kate Nass seconded the motion. The motion carried.

VI. Other Business and Public Comment

Written public comment was received from Greg Santiago and was read by Chair Kimberly Hendricks.

There being no public comment nor further business to come before the Board, Chair Hendricks adjourned the meeting at 12:20 p.m.

Page 3 of 3 Innovation Workgroup Initiative: Centers of Excellence for musculoskeletal procedures PEBB / OEBB

April 20, 2021

. In 2019, the Innovation Workgroup reviewed cost drivers within the combined PEBB/OEBB populations . Musculoskeletal procedures (hip/knee/joint replacement and back/spine procedures) were identified as a top cost driver, representing 4% of spend ($63M) . Additional detailed reviews of musculoskeletal procedures performed on PEBB/OEBB members identified variation in cost, quality and outcomes . Opportunity exists to save $5 – 15M for PEBB/OEBB combined as well as provide better quality and outcomes for members by establishing a Centers of Excellence strategy for selected musculoskeletal procedures . The Innovation Workgroup seeks to establish an aligned PEBB/OEBB strategy to identify Centers of Excellence for selected procedures, targeting an implementation date of October 2022 / January 2023 . Innovation Workgroup Staff, Consultants and PEBB/OEBB’s carrier partners will work collaboratively to identify selected facilities and surgeons to participate . Member support, communication and benefit design will be a key consideration in the strategy . The purpose of today’s discussion is to provide a brief background and seek agreement from the PEBB/OEBB Boards to continue work on this initiative

willistowerswatson.com 1 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Background — OEBB/PEBB Musculoskeletal Procedures

Variation in Cost Spend and Volume . Between the 25th and 75th percentile, . Neck fusion surgery: $33k to $69k . 4% ($63M) of PEBB and OEBB health care spending . Spine fusion surgery: $69k to $159k is for back/spine knee/hip surgeries . Knee replacement episodes: $31k to $78k . More than 1,300 procedures each year . Hospital reimbursement cap will reduce some variation, but not all

Variation in Quality Opportunity to triage care . Only 71% of PEBB/OEBB surgeries were performed in . 30% of back/spine and hip/knee procedures are facilities above the 70th percentile in quality believed to be medically unnecessary . One of the top three most used hospitals in Oregon for . In many cases — particularly for spine procedures- back/neck/spine procedures is in the lower 10th to 25th outcomes would have been similar to non-surgical percentile for quality score treatment

Complications Savings Opportunity . Savings are possible through . 3 – 5% of PEBB/OEBB procedures had a complication or re-admission — similar to market average . reducing unnecessary surgeries complication rates . lower complication rates . aggressive reimbursement for MSK services — 150% of . Best in class complications rate is <1.0% Medicare or lower

Data is the 2018/2019 full plan year data. This data does not reflect facilities impacted by Medicare reference pricing willistowerswatson.com 2 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Variation in Quality of Oregon Hospitals Hip/Knee Back/Spine Procedures

. Quality scores vary significantly by hospital . In looking at the top 10 inpatient hospitals providing hip/knee and back/spine procedures to PEBB/OEBB members, 30% of members had procedures completed at facilities with quality scores below the 75% metric . Physician quality scores can vary significantly within hospitals . A facility with a high aggregate quality score will have individual surgeons with varying performance/quality scores (see example below for Salem Hospital) . A best-in-class COE will identify quality metric targets for both facilities and surgeons

Hospital quality score distribution for Physician quality score distribution for all OEBB/PEBB’s top 10 facilities providing hip/knee surgeons at Salem Hospital (hip/knee back/spine procedures procedures)

13% 30% 66% 16% 50% 4% 0% 20%

Quality scores: 0-49% 50%-74% 75%-84% 85%+ 0-49% 50%-74% 75%-84% 85%+ Quality data and analytics provided by Quantros, Inc.

willistowerswatson.com 3 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Best in Class Features

. Best in class COEs provide better outcomes and lower costs

Value to the PEBB/OEBB Value to the Member . Ensure quality of care . Identification of highest performing . Equitable access to the best quality rated surgeons and facilities based on a broad providers with an exceptional care experience: data set, multiple quality sources and quicker recovery, less lost time, better quality of life, lower complication rates, and fewer benchmarks readmissions . Higher member satisfaction . Favorable reimbursement with selected . Concierge service handles all medical data quality providers: bundles with warranties collection, appointment setting, travel that are lower than traditional reimbursement arrangements, and follow-up care coordination (typically 150% of Medicare or lower) . Peace of mind — knowing that surgeons have been vetted as high quality . Decision Support and early engagement to . Reduced cost-sharing . Deductibles, copays can be waived or reduced to ensure conservative therapies are tried first provide incentive for use . Additional value adds . Aligned approach between PEBB and OEBB . Travel benefit for patient and family member, in driving innovation integration with primary care physicians, fewer doctor visits

willistowerswatson.com 4 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Calculating ROI for a COE program Illustrative Savings Example

Participation Scenario Net Savings ROI 30% Participation $4,800,000 1.9

50% Participation $9,700,000 3.9

70% Participation $14,600,000 5.8

What drives participation? . Incentive for the member is a primary diver of participation: . Passive/voluntary . Medium/moderate plan design steerage (waive cost-sharing or deductible) . Mandatory . Travel benefit if appropriate . Early communication with member (pre-surgery) . Communication from plan sponsor — PEBB/OEBB . Member concierge support, guidance and travel arrangement and benefit for member and family if needed

willistowerswatson.com 5 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Next Steps in Building a Custom COE Network with Existing Carrier Partners Establish Criteria for Selection Benefit Design Measure Results . Use Bree Collaborative criteria and . Review incentive design options with . Establish reporting frequency carrier-recommended criteria to identify PEBB/OEBB . Reporting metrics to align with potential COE providers . Mandatory versus voluntary? outcomes targets and performance . Identify volume threshold . Waive cost-sharing? guarantees . Identify quality metrics (use carriers’ . Establish travel/support benefit . Measure results and refine approach data or outside data such as Quantros) . Determine aligned metrics between PEBB/OEBB carriers . Identify outcomes/guarantee measures Establish measurement April – August 2021 January – April 2022 metrics in the criteria phase 1 2 3 4 5

Contracting Implementation/ Member Education . Identify facilities and providers for inclusion and ability to . Develop member education outreach meet criteria . Outline care triage plan to conservative therapy and . Establish bundled payment consistent across PEBB/OEBB member education and support program . Carrier to identify members likely to seek services . Willingness of facility/provider to accept bundle

July – December 2021 April – October 2022 willistowerswatson.com 6 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Responsibilities

Innovation Workgroup Carrier partners OEBB/PEBB Staff and Consultants . Ensure alignment of metrics . Identify facilities and across carriers in identifying surgeons for potential providers and measuring participation performance . Approve recommendations . Negotiate reimbursement: . Ensure alignment in presented by Innovation bundle and warranty with reimbursement bundle and Workgroup selected providers warranty . Approve incentive design . Monitor COE facility and . Compare carriers’ internal and travel benefit which may surgeon performance quality and outcomes data differ between PEBB and . Provide decision support with third party sources to OEBB and early engagement to ensure highest quality . Understand impact to members to ensure providers are selected members; approve member conservative therapies are . Ensure health equity in outreach and education tried first program design and strategy strategy . Provide reporting and . Provide updates to guarantees of performance Innovation Workgroup and to PEBB/OEBB

willistowerswatson.com 7 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Appendix

willistowerswatson.com 8 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 COE ROI calculation assumptions

Assumptions . Illustrative savings range between $5M and $15M for PEBB/OEBB combined . COE Vendors often guarantee at least a 1 to 1 ROI . Savings are calculated based on assumed avoidance and lower episode cost . Assumes reduced reimbursement level for bundle . Also assumes a modest steerage incentive design . Savings and ROI are sensitive to program participation

willistowerswatson.com 9 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 COE — Establishing selection requirements

. All facilities typically go through an extensive review process . Meets volume thresholds . Meets clinical eligibility requirements (e.g., accreditations, participation in safety and quality improvement organizations as well as quality improvement programs, documented PT protocols) ̵ Additional program requirements would apply for joint replacements and spine surgeries . Meets cost efficiency and network access criteria . Proven ability to collect, analyze and report data . Proven ability to maintain staffing and protocol list . Facility must disclose and explain any closures or suspensions . Could be delegated to Providence/Moda with IWG oversight to ensure alignment

willistowerswatson.com 10 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Quality Data Available at the Individual Provider Level Salem Hospital 380051 | Salem, OR Clinical Category: Joint Replacement Performance Period: Q3 2017 - Q2 2020

Quantros Analytics Utilization Analytics

Composite Quality Score Clinically Adjusted Cost

$50,000

$40,000 25 75 $30,000

$20,000

$10,000 Q3 17 Q4 17 Q118 Q2 18 Q3 18 Q4 18 Q119 Q2 19 Q3 19 Q4 19 Q120 10 90

98.7 Physician National Average

0 Joint Replacement 100 n = 294 Clinically Adjusted Length of Stay

3.0 EXCELLENT

2.5 Mortality Complications Readmissions Patient Safety Inpatient Quality

2.0 92.0 90.2 97.4 97.0 --

1.5 Q3 17 Q4 17 Q118 Q2 18 Q3 18 Q4 18 Q119 Q2 19 Q3 19 Q4 19 Q120

EXCELLENT EXCELLENT EXCELLENT EXCELLENT NO DATA Physician Days National Average

The Composite Quality Score (percentile-based) assesses overall quality performance by measuring multiple key performance indicators. A Higher Score indicates better performance.

Quality data and analytics provided by Quantros, Inc.

willistowerswatson.com 11 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Complication Rates for Target Procedures

. A recent review of PEBB/OEBB data indicates that there were 1,522 targeted hip/knee and back/spine procedures (July 2019 – June 2020) . Complications . Up to 80 members during this time experienced a complication or readmission related to their procedure . PEBB/OEBB complication rate is 3.2% – 5.3% ̵ Based on procedure complication flags and review of admissions within 30 days following the original procedure service date . Best in class complication rates are <1.0%

willistowerswatson.com 12 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Bundled Payments

. Reimbursement method used by COE vendors for an episode of care . Variation in PEBB/OEBB costs for select episodes of care was reviewed in Innovation Workgroup (September/October 2019) . Spinal Fusion episodes ranged from a low of $69k to a high of $159k . Knee replacement episodes ranged from a low of $31k to a high of $78k . The hospital reimbursement cap should reduce much of this variation in cost, but not all . Not all facilities are subject to the cap (ambulatory surgery centers, facilities outside Oregon and/or not subject to the cap per legislative rules) . Variation in Medicare rates by facilities that are subject to the cap

Pros for Bundled Payments Cons for Bundled Payments . Sets a consistent price for services . Can be a downside risk for the provider if the price is not . Price includes all services associated with the set correctly or care not managed optimally procedure . Not an approach that manages the total cost of care, just . Price typically includes a warranty for adverse the cost of care for selected procedures outcomes . In a full downside and upside risk shared savings model, . Removes incentives for a provider to provide more might divert focus from other opportunities that could care than necessary yield better savings . Requires provider and facility to coordinate care for . Not all health plan claims systems can easily optimal outcomes and efficiency accommodate bundled payment methodology and . Value based payment model prevent duplicate payment for services that are covered under the bundle willistowerswatson.com 13 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 Disclaimer

This report was prepared for your sole and exclusive use and on the basis agreed with Oregon Educators Benefit Board (OEBB) and the Innovation Workgroup. It was not prepared for use by any other party and may not address their needs, concerns or objectives. This report should not be disclosed or distributed to any third-party other than as agreed with you 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 report and any reliance placed by such party on it is entirely at their own risk

willistowerswatson.com 14 © 2021 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. https://wtwonline.sharepoint.com/sites/tctclient_612555_oebb2021HB/Documents/OEBB_PEBB_Center%20of%20Excellence_April%20Board%20Meetings.pptx?web=1 WW Programs: Digital 360 and WW for Diabetes

April 20, 2021 It’s not about what you weigh. It’s about you.

WW empowers me to eat what I love, do what moves me, and shift my mindset. I love that WW is making the mind-body

connection for me. —Carolina J., member Agenda

• Digital 360 • WW for Diabetes • Pricing New! Introducing Digital 360

Introducing Digital 360

A new product for an audience who wants more than Digital alone -- to meet the needs of a digitally-savvy, always-on, on-the-go member. Powered by new, inspiring WW Coaches.

Our digital app PLUS on-demand, surround-sound motivation and accountability through a Coach-centric experience. All delivered in the WW app.

• Follow aspirational, digitally-native Coaches who provide inspiration and engagement through on-demand and live content and experiences

• Access tips, hacks and advice via always-on content such as pre-recorded videos, posts in Coach feeds, podcasts and more

• Enjoy special events and 10-minute DailyCoach Live sessions Exclusive Digital 360 content series examples

Weighing In with ‘The Essentials’: Weekly, WalkTALKS Dr. Allison Grupski’ deep dive videos exploring An on-demand walk & learn Nothing's off limits, the overarching theme or audio experience. topic in a more in-depth anonymous member Episodes include: confessions, no question is ● Oprah way. Release 4 new videos ● Matthew McConaughey a month. off the table, all too real WW ● Sanjay Gupta confessions. ● Gabby Bernstein ● Dr. Torri Love (WW member) WalkTALKS Consumer Launch Insights

● The current mix of sign-ups ○ 9% Workshops ○ 78% Digital ○ 13% D360 D360: What ● Of those Digital 360 sign-ups, 32% of sign-ups are new members! we Know ○ 50% of members switched from Digital ○ 20% of members switched from Workshops ● Satisfaction of D360 is high at 83%. Only 11% of members feel it is not meeting expectations ● We expect the mix to favor D360 more as awareness grows ● Over 50 clients have conﬁrmed turning Digital 360 in March and April; number increases daily. Digital 360: What members are saying! WW New Members are: Ecosystem ● Sharing that they are extremely satisﬁed when they are engaged in Digital 360 program features!

● Loving Digital 360’s always-on program ○ 80% of members say that the CoachLIVE features provide more value to their membership ○ CoachLIVE Coach ratings are a 4.9 out of 5! ○ Members feel seen, and appreciate the community that makes them feel involved and motivated ○ They are loving getting the live coaching from the convenience of their homes

● Excited about new features ○ Spotlight Coach expertise ○ Podcast content, WalkTalks, etc ○ Built-in community support ○ More video content WW for Diabetes Today’s overview

WW overview The program and clinical evidence

Health care cost of diabetes Impact of diabetes on employers

Introduction WW for diabetes

Clinical trial 12-month published data Nutrition therapy and weight loss Impact on type 2 diabetes

Weight-loss and diabetes nutrition therapy 5%–10%

weight loss Blood sugar control (A1c), better outcomes

Long Term Effects of a Lifestyle Intervention on Weight and Cardiovascular Risk Factors in Individuals with Type 2 Diabetes Mellitus: Four Year Results of the Look AHEAD Trial. Arch Intern Med. 2010. Standards of Medical Care in Diabetes – 2014 American Diabetes Association. What’s in it for people with

type 2 diabetes

Why is it important? Studies show lowering A1c can:

Reduce Slow the the risk Increase life Improve progression of diabetes expectancy overall of the disease complications health

Centers for Disease Control; http://www.cdc.gov/healthyweight/losing_weight/index.html The UK Prospective Diabetes Study (UKPDS): UK prospective diabetes study; Diabetologoa, 1999; 34:877-890. Reduction in Weight and Cardiovascular Disease Risk Factors in Individuals with Type 2 Diabetes One-year results of the Look AHEAD trial; Diabetes Care’ Volume 30, Number 6, June 2007. We understand the challenges for people with type 2 diabetes

There’s a lot to manage; it’s stressful and wears on me.

• What am I allowed to eat?

• Can losing weight and activity affect my blood sugar?

• I’ve got a lot of weight to lose and I’ve tried before.

• How and when should I exercise?

• I’m taking multiple medications.

• Can I eat fruit? WW for Diabetes In a year long study, participants following WW for Diabetes:

Combining personalized coaching HbA1c from % of body weight from credentialed professionals with baseline lost + .2% - 1.8% our WW program to address the + .2% - -.32% .32% - 4% unique needs of people with type 2 -0.40% -0.30% -0.20% -0.10% -0.00% 0.10% 0.20% -0.0% -0.5% -1.0% -2.0% -1.5% -2.0% -2.5% -3.0% -3.5% -4.0% diabetes WW Group Standard Care Group

WW Wellness Certified Diabetes Care and Education Workshops + Digital Specialist • Support and accountability • Personal food plan and unlimited follow-up coaching from a from weekly Workshops dedicated CDCES/RD + • Tailored materials to address weight loss Convenient online and mobile • & diabetes healthy living tools to help stay on track between Workshops • Weekly CDCES emails to tailor Workshop room topics to members with type 2 diabetes Role of the Certified Diabetes Care and Education Specialist (CDCES) Certified Diabetes Care and Education Specialists (CDCES) are healthcare professionals that are certified in diabetes education/management.

• WW employs only registered dietitians to serve as CDCES.

• WW for Diabetes members are provided their own CDCES that sticks with them for the life of their membership.

• Members develop a personal, ongoing relationship with their CDCES, who understands their individual history, needs, and goals. Unlimited 1:1 Coaching from a dedicated CDCES

Initial call with CDCES • Personal relationship with same CDCES for member’s length of membership • Understanding of history, needs, and goals • Tailored food plan based on individual needs and basic diabetes education • Improve overall health Follow up call with CDCES • Progress plan check and review • Impact of plan on diabetes management • Activity • Next steps and future needs Ongoing support and communication tailored to member’s needs • Unlimited support and individualized guidance from CDCES • Advise on managing activity and blood sugar levels • Emails on how weekly Workshop topic may apply to type 2 diabetes WW for Diabetes complements existing disease management programs

Traditional disease WW for Diabetes focus: management focus: Manage the weight Manage the condition

• Set overall treatment plans • Personal coaching from a certiﬁed and goals. diabetes care and education specialist (CDCES). • Manage exam and medication regimens. • Personalized SmartPoints meal plan tailored • Educate on diabetes and how to manage to lifestyle needs of a member with diabetes. the condition. • Weekly newsletter that helps the member • Manage disease over the long term to apply Workshop topics to their diabetes prevent acute episodes/complications. program. What members are telling us

Members report Members report Members report better blood sugar levels and reduction of reduction in A1c weight loss medications

• “My last A1c was 7.4 that’d • “22 lb lost and • “My glucose was 136–so I did not use from 8.9” feeling great!” my insulin last night and it was 108 this a.m.” • “Good news is my A1c is • “I’ve reached my ﬁrst 10% down to 5.8” goal” • “Reduced my Metformin”

• “My A1c was down • “Lost 40 lb” • “I have cut my blood pressure to 5.9 from the last reading medication in half hoping to in June (6.2)” decrease the Metformin at my next appointment”

Note: results vary from member to member.

20 Effects on glycemic control and weight of a modiﬁed commercial weight control program with people with type 2 diabetes

12-month published results

Primary Objective Endpoints Primary change in HbA1c relative To determine whether participation in to baseline secondary changes in: the WW plan for people with type 2 diabetes results in greater improvement • Fasting blood glucose in blood glucose control relative to a control group receiving standard • Body weight (% loss) diabetes nutrition education. • Cardiovascular risk factors

• DDS (diabetes distress scale)

O’Neill P, Miller-Kovach K, Tuerk P, et al. Randomized controlled trial of a nationally vailable weight control program tailored for adults with type 2 diabetes. Obesity. November 2016. 24 (11): 2269-2277. Relation of A1c to weight change

Every 1% of Correlations weight change was between %WL associated with: and A1c change – 0.11 A1c change %WL predicted for the groups in WW group A1c change combined were – 0.065 A1c change signiﬁcant at each in standard time point care group

O’Neill P, Miller-Kovach K, Tuerk P, et al. Randomized controlled trial of a nationally available weight control program tailored for adults with type 2 diabetes. Obesity. November 2016. 24 (11): 2269-2277. Conclusions Participants with diabetes who received WW adapted for type 2 diabetes showed greater improvements in glycemic control and weight compared to participants receiving standard care.

• At study end, the A1c of WW participants had decreased 0.32 whereas that of standard care participants rose by 0.20 despite receiving diabetic nutrition education and ongoing diabetes management. • Nearly twice as many WW participants as standard care participants achieved A1c below 7.0% and decreased diabetes medications. • Superior improvement among WW participants not solely attributable to greater weight loss, as their drop in A1c per unit of weight loss was almost twice that of standard care

Subjects with diabetes in the WW intervention, when compared to standard care: • Had greater reductions in diabetes-related distress overall (per the DDS [diabetes distress scale]), and on all subscales (emotional burden, physician-related distress, regimen-related distress, interpersonal distress)

• By the end of the trial, the mean score of the WW group fell into the category “little or no diabetes distress,” while the standard5 care group remained in the category of “moderate diabetes distress”

• Showed signiﬁcantly greater increases in weight-related quality of life (per the IWQOL-Lite) overall, and on the subscales of physical function, sex life, and work. A treatment effect was not found on the self-esteem or public-distress domains

There were no differences between groups on: Changes in a more general measure of quality of life (the SF-36) and a brief measure of depression (PHQ-9)

Holland-Carter L, Tuerk PW, Wadden TA, et al. Impact on psychosocial outcomes of a nationally available weight management program tailored for individuals with type 2 diabetes: Results of a randomized controlled trial. J Diabetes Complications. 2017 May;31(5):891-897. doi: 10.1016/j.j diacomp.2017.01.022. 24 Snapshot of WW membership types

UNLIMITED WORKSHOPS DIGITAL DIGITAL 360 WW FOR DIABETES KURBO + DIGITAL

SOLO SUSTAINER ANYTIME CONNECTOR CRAVING REAL CONTACT THOSE WITH TYPE 2 FOR KIDS AND (In Person or Virtual) DIABETES TEENS

•Access to proprietary All the great features of All the great features of the All the great features of the • Combines a fun mobile

myWW+ program and the WW app, PLUS WW app, PLUS WW app, PLUS app experience with SmartPoints weight loss weekly 1:1 video system inclusive of activity, • Relatable, authentic, • In addition to physical • Combines personalized coaching to help kids mindset, hydration & sleep aspirational, expert WW workshops, access to 1,600 coaching from credentialed build healthier habits •Trackers that make losing Coaches virtual workshops weekly, professionals with our WW • Traffic light food weight just a few taps away • Daily Coach interaction and allowing members to pick program to address the classification system •Weekly Check-in and live sessions (CoachLive) times that fit their schedule unique needs of people with licensed from Stanford, Progress Report • On-demand and live and join with friends and type 2 diabetes backed by 30 years of •Frictionless features - Meal classes, content and family • Includes tailored materials research Planning, What’s In Your experiences • Each workshop offers proven and curated content related • Responsive, Fridge?, personalized • Member-to-member behavior change tools to type 2 Diabetes personalized messaging recipes, & barcode scanner inspiration via an • Familiar community & support • 1:1 guidance from a Certified • On-demand workouts, always-on, like-minded • Private Wellness Check-in Diabetes Educator for the audio coaching & mindset community (in-person or virtual) length of the membership tools • Classes from weight loss • Group, Coach-led goal setting • Support and accountability • 24/7 Coach chat for and wellness experts and additional coaching from weekly Workshops (in on-the-fly advice • Coach-led challenges throughout the week person or virtual) • Rewards, recognition, gamification Does not include Digital 360 Does not include Digital 360 25

25 Questions?

26 Contract Renewal Pricing Pricing Overview

2021 2021 2022 - 2023 Current Program Proposed Program Proposed Program January 1, 2021 - December 31, 2021 June 1, 2021 - December 31, 2021 January 1, 2022 - December 31, 2023 Population Size* 122,490 122,490 122,490 Program Offerings Digital Digital Digital Digital + Workshop Digital 360 ** Digital 360 Kurbo Digital + Workshop Digital + Workshop WW for Diabetes** WW for Diabetes** Kurbo Kurbo Annual Program Value $3,705,900 $3,993,300 $3,993,300 PEBB Annual Program $1,518,900 $1,518,900 $1,598,900 Cost (59% Savings) (62% Savings) (60% Savings)

*Please see Population Overview on next slide. PEBB provides updated population size at the beginning of each year to calculate pricing for each carrier. **These programs are being offered during designated plan year at no additional cost. Population Overview

Kaiser Moda Providence 2020 Total Subscribers/Spouse-Partners 18+ 19,367 12,412 72,422 104,201 Dependent Children 10+ 3,442 2,513 12,334 18,289 Carrier Total 22,809 14,925 84,756 122,490 Percentage of cost per carrier 19% 12% 69%

• 2020 Plan Year Population Size: 113,734 • 2021 Plan Year Population Size: 121,094 • 2022 Plan Year Population Size: 122,490 WW Pricing Continued

• Invoicing will remain on a quarterly schedule to each carrier and will be determined by the % of the population enrolled in each plan.

• Contract duration up to 2 years (PEBB and carriers have the option to lock in the annual pricing for up to 2 contract periods).

• *On-going pricing commitment WW will contractually agree to cap future contract renewal spend increases to 3.4% to align with state requirements and to streamline budget planning.

*An exception to this commitment would be made if the base population size increases by >2%, or if PEBB determines that they would like to add a future WW product offering to their program. Next Steps

● WW Recommends turning on Digital 360 and WW for Diabetes as of June 1, 2021 for no additional program cost in 2021.

● New pricing would begin January 1, 2022 for Digital 360 (WW for Diabetes is still included at no additional cost).

● PEBB to review renewal recommendations for 2021 - 2023 ○ Decision due May 7th for a June 1st launch

31 Questions?

Appendix

34 What experts and science say

• Long-term lifestyle interventions among overweight or obese adults with type 2 diabetes may reduce long-term disability, leading to an effect on disability-free life expectancy. When a large

Impact of Intensive Lifestyle Intervention on Disability-Free Life Expectancy: The Look AHEAD Study. Diabetes Care. 2018 May; 41(5): 1040-1048. https://doi.org/10.2337/dc17-2110 healthcare/ hospital system • A loss of 5–10% of body weight can improve ﬁtness, reduce HbA1c levels, improve cardiovascular disease (CVD) risk factors, and implemented WW decrease use of diabetes, hypertension, and lipid-lowering medications. [Weight Watchers], Additional beneﬁts of weight loss include reduction of depression symptoms and remission or reduced severity of obstructive sleep apnea. 50% of Workshop Greater clinical improvements are observed with greater weight loss. members achieved at

Weight Management in Type 2 Diabetes: Current and Emerging Approaches to Treatment. Diabetes Care. 2015 Jun; 38(6): 1161-1172. https://doi.org/10.2337/dc14-1630 least 5% weight loss in 12 weeks. • In overweight and obese patients with type 2 diabetes, modest and sustained weight loss has been shown to improve glycemic control and to reduce the need for glucose-lowering medications. Obesity Management for the Treatment of Type 2 Diabetes:Standards of Medical Care in Diabetes—2018. https://doi.org/10.2337/DC18-S007 What experts and science say

• Intensive lifestyle programs (ongoing, with frequent follow-up) are required to achieve signiﬁcant reductions in excess body weight and improvements in A1c, blood pressure, and lipids…Long-term maintenance of weight, following weight reduction, is possible, but research suggests it requires an intensive program with long-term support. Nutrition Therapy Recommendations for the Management of Adults With Diabetes. Diabetes Care. 2013 Nov; 36(11): 3821–3842. doi: 10.2337/dc13-2042

• Diabetes nutrition therapy can result in cost savings and improved outcomes such as reduction in A1c. Nutrition Therapy Recommendations for the Management of Adults With Diabetes. Diabetes Care. 2013 Nov; 36(11): 3821–3842. doi: 10.2337/dc13-2042 Diabetes epidemic in the US

~20%

Are undiagnosed

34.2 88 90–95%

Million with Million with of all diabetes diabetes pre-diabetes cases are type 2

Centers for Disease Control and Prevention. National Diabetes Statistics Report, 2020. https://www.cdc.gov/diabetes/pdfs/data/statistics/national-diabetes-statistics-report.pdf 37 Cost of diabetes

Average diabetes cost Direct cost of diabetes, which includes the ($ Billions) $237 cost of hospital and emergency care, ofﬁce

Billion visits, and medications. +26%

Indirect cost of diabetes, which includes $90 cost for absenteeism, reduced productivity, Billion unemployment caused by diabetes-related disability, and lost productivity due to early mortality.

Medical expenditures for people with diabetes vs. 2.3x those without diabetes.

Economic Costs of Diabetes in the U.S. in 2017. Diabetes Care. 2018;41:917–928. https://doi.org/10.2337/dci18-0007 38 Impact of diabetes on employers

Employers’ annual cost for employees with diabetes

Total cost of insulin and other medications Of all healthcare costs are incurred to control blood sugar($ Billions) 24% by people with diabetes +45%

14 Sick days Million

114 Work days with reduced performance Million

Work days lost due to unemployment 182 Million disability attributed to diabetes

Economic Costs of Diabetes in the U.S. in 2017. Diabetes Care. 2018;41:917–928. https://doi.org/10.2337/dci18-0007 39 Protocol summary Study enrollment

12-month prospective, randomized, controlled, parallel group, multicenter clinical trial.

Baseline Week 13 Week 26 Week 39 follow up follow up follow up Week 52

Participants End of Randomized to trial WW4D Screening

Participants Randomized End of to SC trial

N=563 Standard care condition One session of in-person diabetic nutrition education with a registered dietitian, with follow-up written educational materials

Recommended meal plan

• 500 kcal/day deﬁcit • CHO:130 grams minimum per day or ~ 50% of caloric needs • Balanced intake from fruits, vegetables, whole grains, legumes, and low-fat milk • At least ½ of all grains coming from whole grains • Aim for at least 14 grams of ﬁber per day • Limit added sugars and sweetened beverages, including alcohol

Standard care participants completing the study received one-year membership in the standard WW plan (in-person and online) and one phone CDE consultation. Fasting plasma glucose (mg/dl) over time

42 HbA1c% over time

43 % subject achieving HbA1c <7.0

40%

Standard care WW 30%

20% Percent

10%

0% 3 6 9 12 Month Body weight (%) over time

45 >5% weight loss at 12 months

46 Attachment 4

2022 Round 3 Renewal Reponses

Oregon Public Employees’ Benefit Board April 20, 2021

Nick Albert Mitch Nigro

Photo by Mitchell Nigro welcome to brighter 1 Round 3 Best and Final Offers (Negotiated) + Composite Rates

2 Administrative Fee Follow-ups – Plan Efficiency Metrics

3 Fertility follow-ups

4 Decisions to be made

5 Next Steps

Triple Aim Improve the quality of care Improve the patient experience Deliver care more efficiently

Improving Behavioral Health systems & Address social determinants Maintain a sustainable cost growth increase value and pay for performance of health and equity

Social OHA Guiding Innovation with Collaborative Access Patient-centered Health equity determinants of Principles accountability partnerships health

An innovative Accessible and PEBB delivery system Promotion of understandable Appropriate Vision in communities A focus on health and information about provider, health statewide that improving quality wellness through costs, outcomes, plan and consumer Benefits that are uses evidence- and outcomes, not consumer and other health incentives that affordable to based medicine just providing education, healthy data that is encourage the right employers to maximize health care behaviors, and available for care at the right and employees health and use informed choices informed decision- time and place dollars wisely making

Health Patients Delivery System Plan Sponsor and Administrator Plan Success Measure Areas

Stakeholders Decision Making Priority Populations Health Equity Metrics Bridge and Long The Board acknowledges that Based on Health The priority populations Three strategies to address Term Benefit members are the most important Equity Lens include: quality, inequities, & Strategies stakeholder in achieving health disparities: • The Board and OHA • Black, Indigenous, The Board believes that its equity, and that the voice of the will make policy and People of Color, and • Reporting on a bridge strategies can be members, particularly from the operational decisions American Indian/Alaska standard set of quality designed to enhance priority populations, will need to through the lens of Natives measures health equity for the PEBB be proactively sought and health equity, members, and those amplified incorporating our • People with low • Monitoring for strategies include: incomes unintended The Board believes that all strategies, consequences • Advocacy services stakeholders, including itself, stakeholders, priority • People who identify as need to incorporate health equity populations, and health LGBTQ+ • Improving equity • Expert medical opinion strategies, including: equity metrics • People with disabilities • Centers of excellence • Members • The Board expects that PEBB’s carriers, • People living in rural • Digital health solutions • Board vendors, and areas The Board believes that its consultants will also • OHA • Consider addition of long-term strategy for make their policy and Veterans, Multi- advancing value based • Elected officials, including operational decisions Generational, Women, care payments and the legislators through a health equity and People with visible Coordinated Care Model lens for the PEBB • Benefit carriers and vendors and invisible disabilities, can be designed to population per feedback from the enhance health equity • Health systems, providers, Board Retreat and staff • Consultants

March April

• Board voted to extend • Removal of infertility diagnosis requirement to receive coverage coverage of COVID-19 related treatment until the • Fertility-related decisions • Approval of $35,000 annual maximum end of the month following for Assisted Reproductive Technologies the end of the national • Move coverage of artificial insemination (including IUI) under the public health emergency for cap Providence and Moda • No member cost share for services covered under the cap • Members will have normal cost share • This decision aligns all for basic treatment of infertility, including diagnostic testing to PEBB plans determine underlying cause

Vendor / Plan 2021 Fee / 2022 Original 2022 BAFO Fee / % Increase Total PEBB savings Premium Fee / Premium Premium from 2021 compared to original Providence – Statewide $57.29 $59.27 $59.27 3.5% $0 Providence – Choice $75.44 $78.02 $76.52 1.4% ($340,000) Moda – Base Medical $78.32 $80.63 $78.32 0.0% ($190,000) Moda – Moda3601 $4.38 $4.51 $4.51 3.0% $0 Moda Dental $6.36 $6.46 $6.46 1.6% $0 VSP $1.19 $1.19 $1.15 -3.4% ($20,000) Kaiser medical $1,500 $1,541 $1,493 -0.4% ($5,970,000) Kaiser dental $117 $117 $117 0.0% $0.00 Willamette $107 $107 $107 0.0% $0.00 Total savings ($6,520,000)

• Total value of best and final offers: $6.52m in savings

• While PEBB’s carriers provided more competitive pricing for the BAFO, Mercer benchmarking shows the value of competitive marketing is above and beyond what was finally offered

Composite Rate Composite Rate % Change Year Using Prior Year’s Using Plan Year’s From Prior March Census % Change March Census Composite 2014 $1,333.58 $1,327.47 2015 $1,321.53 -0.9% $1,313.06 -1.5% 2016 $1,356.47 2.6% $1,347.31 2.0% 2017 $1,416.93 4.5% $1,405.13 3.6% 2018 $1,464.20 3.3% $1,452.68 2.5% 2019 $1,513.98 3.4% $1,495.83 2.2% 2020 (w/Premium Tax and 2.676% $1,594.86 5.3% $1,588.17 4.9% funding assessment) 2021 (w/Premium Tax and -0.855% $1,607.63 0.8% $1,597.78 0.2% funding assessment) 2022 (w/Premium Tax) $1,662.54 3.4% 2022 (w/Premium Tax and Plan Changes) $1,659.37 3.2%

• Projected composite rate with board-approved plan changes and Mercer- recommended plan changes is below the 3.4% limitation • PEBB has approximately $1.9m buffer compared to the 3.4% limitation

Status Quo With Plan Changes Premium/ Total Projected Premium Total Projected Line of Admin Fee Carrier Accrual rate 2022 Active /Accrual Rate 2022 Active Coverage Increase increase Premiums Increase Premiums Providence - Statewide Medical / Rx 3.5% 3.4% $379,200,000 2.5% $376,000,000 Providence - Choice Medical / Rx 1.4% 5.9% $336,500,000 5.6% $335,400,000 Kaiser Medical / Rx n/a -0.4% $189,100,000 0.2% $190,200,000 Moda (includes Moda360) Medical / Rx 0.7% -0.3% $118,000,000 0.4% $118,800,000 Moda / DDOR Dental 1.6% 2.8% $50,700,000 2.8% $50,700,000 Willamette Dental Group Dental n/a 0.0% $15,800,000 0.0% $15,800,000 Kaiser Dental n/a 0.0% $9,100,000 0.0% $9,100,000 VSP Vision -3.4% -1.7% $11,000,000 -0.2% $11,200,000 The Standard Basic Life n/a 0.0% $1,100,000 0.0% $1,100,000 Total $1,110,500,000 $1,108,300,000 Final Composite Change 3.4% 3.2%

Carrier Line of Coverage Fee Increase ASI Flex 0.0% Coverage is not included in BHS COBRA / Retiree Admin 0.0% the composite rate Cascade Centers EAP 0.0%

• There are two components of plan “value” 1. Are the total normalized costs of the CCM plans lower than the Statewide plan? - Normalization refers to the process of adjusting underlying claims data by the risk scores of the underlying population. It’s necessary in order to provide apples-to-apples comparisons of plan performance 2. Do the CCMs more effectively manage yearly trend in comparison to the Statewide plan? • Both of these components need to be compared to the extra cost of the CCM plans in comparison to the Statewide plan

Plan 2022 Best and Final Fee Difference From Statewide Providence – Statewide $59.27 n/a Providence – Choice $76.52 $17.25 Moda (Base + Moda360) $85.60 $24.02

Despite the higher administrative fees, the CCMs remain more efficient

Risk Adjusted Claims + Administrative Fees Data and Assumptions • Administrative fees based on actual 2020 fees paid by plan (PMPM) • The administrative fees are offset by pharmacy and facility rebates $800 • Analysis uses allowed dollars to account for differences in plan design and member cost sharing $680 $700 $654 $603 $581 $600 $556 Key Findings $527 • Moda and Providence (Choice) have lower total normalized costs $500 compared to Statewide • Moda is $128 PMPM, or 19.5% more efficient, for 2020 $400 • Choice is $74 PMPM, or 11.2% more efficient, for 2020 • These efficiency metrics account for the difference in the underlying $300 administrative fee, implying the CCM plans are worth the additional cost $200

$100 Outstanding questions • Previous Mercer analyses have shown Statewide membership to be $0 in higher cost areas of Oregon (more rural membership) 2019 Risk Adjusted Claims + Admin 2020 Risk Adjusted Claims + Admin • This analysis only adjusts for member risk scores, and does not adjust for underlying cost differences by geography Moda Providence Statewide • The efficiency noted in this analysis is rooted in the relative cost Per-Member-Per-Month Costs Moda Providence Statewide difference between the CCM plans and Statewide Net Administrative Fees $35 $23 $12 • It does not provide insight into the absolute dollar values PEBB is paying to the carriers (e.g., the $76.52 PEPM for Choice) 2019 Adjusted Claims $521 $581 $669 2020 Adjusted Claims $491 $558 $643 • Kaiser excluded due to risk score issue within data warehouse

Annualized over the past five years, the CCM plans have outperformed Statewide by 0.5%-1.5% on trend

Average Plan 2015 2016 2017 2018 2019 (2014 - 2019) Data and Assumptions • Due to COVID-19 pandemic, 2020 Providence Statewide 9.1% 8.8% 4.2% 10.1% 1.7% 6.8% was excluded Providence Choice 7.3% 8.1% 5.7% 4.4% 3.6% 5.8% • Data is using paid medical and Moda 5.6% 9.3% 2.1% 1.6% n/a pharmacy claims, not adjusted for Rx rebates Self-insured CCM Plans 8.0% 6.2% 4.2% 3.2% 5.8% • Data does not risk adjust for Statewide 9.1% 8.8% 4.2% 10.1% 1.7% 6.8% underlying membership

Key Findings Actual Choice Trend compared to Choice trended at • The yearly trend increases on the Statewide Choice plan have historically been 0.5%-1.5% below the Statewide plan $1,288 $1,267 $1,300 • This equates to a PEPM range of $6.17 to $18.51 $1,200 $1,150 $1,234 $1,103 $1,191 • The trend savings do not make up for $1,100 $1,140 the additional administrative fee $1,014 charged for the Choice plan $1,079 • Moda’s yearly trend increases are $1,000 $929 lower, however, they are still not $997 above and beyond their $900 $929 administrative fee

$800 2014 2015 2016 2017 2018 2019

Choice PEPM (actual) Choice PEPM (trended at Statewide)

Total Normalized Yearly Trend Cost Increases

• Choice and Moda have lower • Between 2014 and 2019, Choice total normalized costs compared and Moda outperformed to Statewide Statewide by 0.5%-1.5% on • Both plans exhibit lower total yearly trend increases costs above and beyond their • This differential was not enough higher admin fees in relation to to justify the higher Statewide administrative fees being charged by both plans

OUTSTANDING QUESTIONS AND TOPICS

Out-of-network Kaiser premium Claims “buckets” for coverage impact medical & pharmacy

OUTCOMES

Mercer requested Kaiser quoted a premium Mercer spent time with each geographic access reports impact of +0.58% for the vendor to discuss logistics for Providence, Moda, and proposed fertility benefit of the benefit. One topic that Kaiser showing the in- design, in line with came up was the network fertility providers Mercer’s +0.62% impact for “bucketing” of the claims. within 45 miles the self-insured plans See the next slide for further discussion

• Due to differences within each carriers’ claim systems, there are preferences for how the $35,000 annual benefit will apply

• Some carriers require a separate “bucket” of dollars between medical and pharmacy

• Mercer’s original proposal assumed a $10,000 medical benefit and $25,000 pharmacy benefit

Kaiser Moda Providence Providence

• Kaiser’s system requires a separate • Moda would prefer one bucket, not • Providence is working internally to bucket for medical vs. pharmacy necessarily split between medical confirm if they could administer one and pharmacy, as this would be in bucket of claims the best interest of each unique • Philosophically they agree it would member be in the best interest of each unique • They could administer a separate member to have one bucket, bucket, similar to the current benefits however, operationally it may be a provided to OEBB challenge

• After further discussions with Mercer clinicians and the carriers, Mercer recommends changing the medical benefit to $25,000 and the pharmacy benefit to $10,000, if a separate bucket is ultimately needed

• This would apply to the Kaiser plan design only, and would not affect the premium impact (+0.58%)

• The Board will need to decide whether to have separate claims buckets for Moda and Providence, however, Mercer would like additional conversation with carriers to explore capabilities before a formal vote

Providence (PHP): • 58% of the population is within 45 miles of at least 1 in-network fertility treatment specialist. • 9 counties have 90% or greater access for their populations. 43% of the entire population live in these 9 counties.

Moda • 52% of the population is within 45 miles of at least 1 in-network Providence fertility treatment specialist. • 7 counties have 90% or greater access for their populations. 38% of the entire population live in these 7 counties

Kaiser • Within Kaiser’s service area, 88% of the population is within 45 miles of an in-network fertility specialist.

Note: The above only reflects in-network coverage. Adding out of network coverage would increase Moda accessibility to members on the Moda and Providence plans.

Over 90% of population is within 45 miles of at least 1 specialist

Under 50% of population is within 45 miles of at least 1 specialist Medical/Rx Decision Required Fertility coverage for OON providers

Decision: Whether to extend the Mercer’s • Given the challenges with fertility provider access outside coverage for artificial insemination and of the I-5 corridor, Mercer recommends providing this ART to out-of-network providers Recommendation benefit for out-of-network fertility providers

Background and Considerations Member Impact and Cost Alignment with PEBB Vision

• Based on the GeoAccess results • 42% of Providence membership does • Providing more accessible benefits presented on the prior page, there will not have access within 45 miles be access issues for in-network • Patient-centered fertility specialists across southern • 48% of Moda members does not have and eastern Oregon access within 45 miles • Health equity across all PEBB membership, regardless of location • Providing fertility coverage for out-of- network providers will increase access for more rural communities and would not likely have a significant cost impact

• These members would likely seek care regardless, but would be doing so at greater inconvenience to themselves

20 Medical/Rx Decision Required Providence standard contact changes

• Accept all of Providence’s standard contract changes that Decision: Whether to accept Mercer’s enhance the member experience with nominal cost Providence’s standard proposed contact • Decline Providence’s Osteopathic manipulation, changes for 1/1/2022 Recommendation Biofeedback and eviCore proposal, as they limit benefits and add potential member confusion

Background and Considerations Member Impact and Cost Alignment with PEBB Vision • Accept Pain Management recommendation that moves this benefit to • Accept changes nominal cost impacts • Patient-centered be covered under normal outpatient services and removes the limits while enhancing the member experience through richer benefits • Ensures treatment is affordable for all • Accept Applied Behavioral Analysis to remove the exclusion around members neurofeedback based on mental health • Decline Biofeedback recommendation parity laws as this puts a limit (10 per lifetime) on • Accept coverage for wigs for drug-induced the number of visits alopecia (i.e. cancer patients) • Accept Kaia Health musculoskeletal digital • Decline implementing eviCore at this health point solution time due to the needed • Decline Biofeedback cap on visits communication and education to • Decline Osteopathic Manipulation as it ensure the member experience is not leads to learner benefits with possible member confusion having two charges vs. disrupted one

Decision: Whether to accept additional Mercer’s • Accept all proposed plan changes as they have minimal proposed plan changes by Moda for cost impacts that lower members cost shares while 1/1/2022 Recommendation increasing access to care

Background and Considerations Member Impact and Cost Alignment with PEBB Vision • Aligning cost shares for • All recommended plan changes have minimal cost impact while increasing the • Aligns with Governor Brown’s and generic/preferred specialty generic members access to care OHA’s principle of improving health copays to $10 to incentivize the use of equity by increasing access for biosimilars • Cost sharing for generics +0.01% members • Steerage to COEs for emerging • Cell and gene therapies COEs have cellular and gene therapies potential cost savings • Ensures treatment is affordable for all members • Coordinated specialty behavioral • Behavioral Health programs +0.02% health programs that are generally not • Innovation with covering procedures • Disease management for pain +0.01% covered by commercial insurance but typically covered only by Medicaid, but covered by Medicaid • All changes have already been priced have proven benefits to members into the composite rate • Provide reimbursement for members receiving comprehensive treatment for • If the Board does not accept any/all of the changes, Mercer would revise the pain management and potential opioid composite rate addiction

Decision: Whether to accept Mercer’s • Accept all Moda 360 enhancements for 2021 as most are aimed at closing gaps in care while steering members to enhancements to the Moda 360 platform Recommendation higher quality health care

Background and Considerations Member Impact and Cost Alignment with PEBB Vision • Dental Integration, expand Moda 360 • All recommended changes have no • Steering members to higher quality to those on Delta Dental to help close member cost impacts, steer members facilities while closing gaps in care gaps in care to lower cost facilities and are aimed • Advanced Imaging Steerage to lower at closing gaps in care • Ensuring members are receiving care cost facilities at the lowest-cost possible setting • Integrating Dental into the plan has while not compromising quality Chronic Kidney Disease Management • fixed cost of $0.46 PEPM to engage members and intervene as • Patient-centered a preventative measure • Enhanced Musculoskeletal Program • Ensures treatment is affordable for all digital health point solution members

• Effective 1/1/2022, Alternative Care Services (except for massage therapy) will be considered Essential Health Benefits (EHBs)

• The regulations stipulate spinal manipulations (chiropractic manipulation) and acupuncture must be covered up to 20 visits and 12 visits, respectively

• For PEBB, this means the removal of the current alternative care dollar limit of $1,000 and providing plan designs with those visit limits instead

• Mercer worked with each carrier to design a benefit as close to current benefits as possible

Plan Current Benefits Proposed Benefits Estimated cost impact

• Chiropractic/Naturopath/Acupuncture: • Naturopath moves to office visit copay ($5) • Current PMPM: $8.74 Kaiser $10 copay, $1,000 max • Chiropractic: $20 copay, 20 visit limit • Proposed PMPM: $8.15 Deductible • Massage: $25 copay, included in $1,000 • Acupuncture: $20 copay, 12 visit limit max • Massage: $25 copay, 12 visit limit • Estimated savings: $0.59 PMPM, or $3k

• Chiropractic/Naturopath/Acupuncture: • Naturopath moves to office visit copay ($5) • Current PMPM: $6.01 $10 copay, $1,000 max • Chiropractic: $20 copay, 20 visit limit • Proposed PMPM: $5.77 Kaiser HMO • Massage is not covered • Acupuncture: $20 copay, 12 visit limit • Estimated savings: $0.24 PMPM, or $5k

• Chiropractic manipulation, acupuncture, • Chiropractic: $10 copay, 20 visit limit • No impact Providence and massage: $10 copay, $1,000 max • Acupuncture: $10 copay, 12 visit limit Choice • Massage: $10 copay, $1,000 max

• Chiropractic manipulation, acupuncture, • Chiropractic: $10 copay, 20 visit limit • No Impact Moda and massage: $10 copay, $1,000 max • Acupuncture: $10 copay, 12 visit limit • Massage: $10 copay, $1,000 max

Statewide Alternative care is covered under a 60 visit limit maximum, thus, no changes are required • No Impact

Decision: The removal of the $1,000 cap is • Remove the $1,000 max for spinal manipulation mandatory, but Board to decide whether to Mercer’s (chiropractic care) and acupuncture accept Mercer and carrier’s recommended Recommendation • Impose visit limits for both services visit limits and copay structure • Benefits outlined on the prior page

Background and Member Impact and Cost Alignment with PEBB Vision Considerations • A separate 12 visit limit for • Appropriate provider, health plan and • Changes to Oregon Essential Health acupuncture and 20 visit limit for consumer incentives that encourage benefits (EHBs) for 1/1/2022 requires spinal manipulation is a more the right care at the right time and PEBB to revise the spinal generous benefit than the existing place manipulation and acupuncture benefit $1,000 combined benefit maximum • Both benefits are considered EHBs • The carriers determined each of these • Benefits that are affordable to effective 1/1/2022, which means visit limits is similar to a $1,000 annual employers and employees PEBB must remove the dollar limits maximum for those services • There is a small percentage of • Providence, Moda, and Kaiser all members who utilize both services, in have combinations of $1,000 which case, the separate maximums maximums for alternative care would be a richer benefit benefits, including the two in question

Decision: Whether to accept Moda’s Mercer’s • Accept Moda’s recommendation of using OHSU as a COE proposal of creating a COE for facial for all facial feminization surgeries feminization Recommendation

Background and Considerations Member Impact and Cost Alignment with PEBB Vision • Based on Moda analysis, no providers • Cost impacts are indeterminate but Ensuring members have access to in the state of Oregon meet the • ensure the highest quality of the appropriate care, while desired clinical guidelines for facial treatment for members feminization. However, OHSU did balancing PEBB fiscal come close. responsibility • Moda is exploring contracting with other out of network providers but at this time, they are only recommending OHSU.

Decision: To add Vision Therapy to the Mercer’s • Add Vision Therapy to the VSP as there is minimal cost impact nor is it covered under any of the current medical current VSP plans Recommendation plans

Background and Considerations Member Impact and Cost Alignment with PEBB Vision • Vision therapy that provides coverage for the following sensory and/or • Estimated cost impacts of this plan • Patient-centered muscular deficiency: change are +1.9% or +$200,000 • Ensures treatment is affordable and • Strabismus (turned eye) • The cost of this benefit is already accessible for all members • Dysfunctions of binocularity (eye included in the composite rate shown taming) in prior slides • Amblyopia (lazy eye) • Accommodation (eye focusing) • If the Board does not accept any/all of the changes, Mercer • Ocular motor functions (general eye would revise the composite rate movement ability) • Visual-perception-motor abilities

28 May Board meeting

Review final composite estimate based on decisions in April meeting • Alternative care benefit changes • Any deviations from Mercer-recommended changes Review potential funding assessment options

30 Providence 2022 contract & benefit changes

Benefit changes Explanation Mercer Recommendation Osteopathic • Separate the service from the office visit copay when assessed by the PCP. The • Decline this change as it leads to a manipulation osteopathic manipulation service will map to the outpatient service benefit and the leaner benefit and possible member office visit will remain with that cost share. The member would now have two confusion now having two charges separate cost shares with this change. vs. one • This would be a negative impact to members as it would be shifting cost to the members for a minimal savings to PEBB • In 2020, 2,492 claims were submitted on behalf of 597 members; 3,166 claims in 2019 on behalf of 698 members. The average cost per visit was approximately $111 Pain management • This change would move pain management from the Physical Therapy benefit, • Accept this change as it would which has a visit limitation, to be covered as an outpatient services. enhance benefits removing limitations with minimal costs Applied Behavior • Removes the exclusion around neurofeedback based on PHP’s interpretation of • Accept this change as it enhances Analysis (ABA) mental health parity laws benefits and lowers compliance risk Coverage for wigs for • Add language in the handbook explicitly stating wigs are covered for • Accept this change as it clarifies drug-induced alopecia pharmaceutical drug-induced Alopecia (e.g., cancer treatment) PHP’s existing policy Biofeedback • A mind-body technique that involves using visual or auditory feedback to gain • Decline based on limiting to 10 control over involuntary bodily functions such as blood flow, blood pressure and visits per lifetime heart rate • Limit visits to 10 visits per lifetime • In 2019 one member had 13 visits. There were no visits in 2020. eviCore • A medical necessity review program requiring the provider to notify eviCore for • Decline due to the needed codes identified as outpatient rehab services communication and education that is need to ensure provider adoption Kaia Health • A virtual pain management therapy for musculoskeletal (MSK) pain management • Accept this program as a • Fees are based on a per usage basis – an initial $200 per user per month for the preventive measure for members first three months then $20 there after. There is no charge until the member has with chronic MSK conditions their second visit.

• Moda is evaluating and proposing the following enhancements to the Moda 360 program: Consideration Explanation Cost Dental Integration • For members with both Moda Health and Delta Dental coverage, Moda 360 navigators and $0.46 PEPM care management teams will have integrated view of members’ health information • Navigators will be able to: • Identify members without recent dental claims to help connect them to a dental home • Identify lapses in frequency of preventive dental services to close gaps of care • Educate members with chronic conditions on the role oral health has in disease management Advanced • Navigators would screen prior authorizations for advanced imaging procedures requesting No associated Imaging Steerage authorization at a high cost facility cost impact • Navigators would reach out to the member to let them know of alternative lower cost facilities, and help with rescheduling if needed • Program would be voluntary for the member • Moda recommends a pilot program focusing on steerage from a few high cost facilities Chronic Kidney • This program aims to slow the progression of the disease and decrease morbidity and Moda is Disease mortality evaluating Management • The program uses predictive analytics to identify members who many need intervention vendors and will • It would engage members with education on decision making, and partners with their primary provide details care provider to evaluate the possibility of providing home dialysis for members instead of in- later office dialysis Enhanced • Moda looking to partner with a vendor to provide virtual physical therapy as an alternative to Moda is Musculoskeletal in-person care evaluating Program • The digital solution could be used to address acute and chronic musculoskeletal pain vendors and will associated with both soft tissue and joints provide details • Members could utilize these services for pre- and post-surgical intervention later Copyright © 2021 Mercer (US) Inc. All rights reserved. 32 Moda Other recommendations

• No Board action is required at this time; Mercer will provide final recommendations in coming Board meetings

Consideration Explanation Cost Cost share for • In order to further incentivize the use of generic equivalents/biosimilars, Moda proposing aligning +0.01% generic and preferred the generic/preferred specialty generic copay with the generic retail cost-share at $10 medications • This lowers the member out-of-pocket cost and incentivizes steerage to lower cost drugs Emerging cellular and • Gene therapies work to manipulate the expression of a gene or alter the biological properties of No impact currently, but gene therapies living cells to treat or cure a rare disease could save costs in • Moda is pursuing the opportunity to establish Centers of Excellence models which will steer future years recipients of gene therapies to hospital(s) with the expertise to manage these complex therapies • Moda recommends PEBB adopt member handbook language that would allow steerage to Centers of Excellence for gene therapy Coordinated specialty • Covering services that have generally not been covered by commercial insurance plans, despite +0.02% programs for their cost effectiveness behavioral health • Crisis and Transition Services (CATS) – divert children and youth from inpatient psychiatric hospitalization or emergency department boarding • Early Assessment and Support Alliance (EASA) – treatment for psychosis for youth and young adults • Assertive Community Treatment (ACT) – treatment for individuals with severe and persistent mental illness who have difficulty engaging in traditional mental health services • Intensive Children’s Treatment Services (ICTS/IOSS) – Similar to CATS, without the component of initial ED outreach • Intensive In-Home Behavioral Health Treatment (IIBHT) – Similar to ICTS/IOSS but with enhanced service levels Disease • Provides reimbursement for members receiving comprehensive treatment for pain management +0.01% Management and potential opioid addiction Programs to Treat • Programs address both psychological and physical components of pain Pain

Deductible Current Benefits Estimated PMPM Estimated cost impact Kaiser provided the following options for the alternative care benefit • • Chiropractic/Naturopath/Acupuncture: $10 copay, $1,000 $8.74 Current max Benefit: • Massage: $25 copay, included in $1,000 max • Naturopath moves to office visit copay ($5) $10.17 +$1.43 / $7,000 • Chiropractic: $10 copay, 20 visit limit Proposed 1 • Acupuncture: $10 copay, 12 visit limit • Massage: $25 copay, 12 visit limit • Naturopath moves to office visit copay ($5) $8.15 ($0.59) / ($3,000) • Chiropractic: $20 copay, 20 visit limit Proposed 2 • Acupuncture: $20 copay, 12 visit limit • Massage: $25 copay, 12 visit limit • Naturopath moves to office visit copay ($5) $7.56 ($1.18) / ($6,000) • Chiropractic: $25 copay, 20 visit limit Proposed 3 • Acupuncture: $25 copay, 12 visit limit • Massage: $25 copay, 12 visit limit • Naturopath moves to office visit copay ($5) $6.98 ($1.76) / ($8,000) • Chiropractic: $25 copay, 20 visit limit Proposed 4 • Acupuncture: $25 copay, 12 visit limit • Massage: $25 copay, 12 visit limit

Deductible Current Benefits Estimated PMPM Estimated cost impact Kaiser provided the following options for the alternative care benefit • • Chiropractic/Naturopath/Acupuncture: $10 copay, $1,000 $6.01 Current max Benefit: • Massage is not covered • Naturopath moves to office visit copay ($5) $7.79 +$1.78 / $38,000 Proposed 1 • Chiropractic: $10 copay, 20 visit limit • Acupuncture: $10 copay, 12 visit limit • Naturopath moves to office visit copay ($5) $5.77 ($0.24) / ($5,000) Proposed 2 • Chiropractic: $20 copay, 20 visit limit • Acupuncture: $20 copay, 12 visit limit • Naturopath moves to office visit copay ($5) $5.18 ($0.83) / ($18,000) Proposed 3 • Chiropractic: $25 copay, 20 visit limit • Acupuncture: $25 copay, 12 visit limit • Naturopath moves to office visit copay ($5) $4.60 ($1.41) / ($30,000) Proposed 4 • Chiropractic: $25 copay, 20 visit limit • Acupuncture: $25 copay, 12 visit limit

COVID-19 Testing COVID-19 Pre-COVID (Diagnostic Delayed Claims Estimate Treatment Baseline & Care (pre Vaccine) Related Claims Antibody) Adjustment Claims Related Claims

Separate from the primary factors above, tracking impact of COVID-19 on secondary factors such as behavioral health claims, use of telehealth, utilization management loosening, case severity due to delayed care, pressure on provider reimbursement, may be warranted, and also considered when setting trend assumptions.

COVID-19 COVID-19 Delayed Testing Treatment Care Related Related Adjustment Claims Claims

• Mercer estimates • Of those that test positive, there are • Significant reduction in elective antibody and diagnostic three treatment pathways: Mild (Home), care seen, especially testing costs to be $50- Severe (Hospitalization), Critical (ICU) pronounced in April 2020 $100, with actual rates • Emerging experience is indicating • Since June 2020, claims costs varying by carrier and site commercial hospitalizations will be have come back close to or at of service approximately 7% to 10% of confirmed expected pre-COVID levels • Additional costs for site of cases • We have not seen costs broadly testing (office visit, • Treatment pathway is correlated with rise above pre-COVID levels, emergency room, etc.) age, underlying conditions, system which may mean that a are included in the model capacity, and other factors. significant portion of deferred care was actually cancelled.

Copyright © 2021 Mercer (US) Inc. All rights reserved. Source: Chinese Center for Disease Control March 22, 2020 Albany, NY | Governor Cuomo Accepts Recommendation of Army Corps of Engineers for Four Temporary Hospital Sites in New York Vaccine Modeling

• A successful vaccine campaign will mark an inflection point and materially change assumptions regarding COVID-19 impact

• Key vaccine assumptions (can be changed within the model) • Vaccine release date • Percentage of members vaccinated • Cost

• Other vaccine-related assumptions include • Rollout of vaccine

- Model assumes vaccinations are evenly distributed over three months • Delayed care assumptions

- Factors are reduced by 1/3rds, 2/3rds, 100% over the three month rollout • Capacity for returning care increases to full capacity over the three month rollout

COVID-19 COVID-19 Vaccine Vaccine Vaccine impacts Date Claims

• Potential implementation • In 2021 the cost of the vaccine (i.e., • No reduction for the efficacy of date up to December 2022 ingredients) will be covered by the the vaccine as studies indicate • Assumes three month roll government 90%+ in of vaccinations to • For 2021 we assumed 1.5 vaccinations • Reduction in cases proportional ultimate vaccination per person (50% receive two doses, 50% to the percentage of the percentage receive one dose), and $40 vaccine members who opt for administration fee per dose (total cost of vaccinations vaccine administration is $60 per year) • Assumes delayed care no longer • For 2022 projections we have assumed occurs once population is fully the government will not cover the cost of vaccinated the vaccine (booster shot)

Source: U.S. Centers for Disease Control and Prevention

Premium Composite Coverage Category Current Plan Design Proposed Plan Design Impact Impact Exclude viscosupplementation due to lack of Medical / Rx – Viscosupplementation Plans provide coverage for robust clinical evidence supporting it’s ($300,000) -0.02% Providence and Moda Coverage viscosupplementation effectiveness Coverage for all specialty Certain specialty drugs would be allowed to Medical / Rx - Moda Specialty Lite n/a n/a drugs limited to 30-day supply refill with 90-day supply RTBC is built into provider EMR systems and Real time benefit check Medical / Rx - Moda n/a can help providers and patients find the most n/a n/a (RTBC) appropriate and lowest cost drug Moda360 is an enhanced member concierge Medical / Rx – Moda Moda 360 n/a and advocacy program with built-in $200,000 0.02% connections to digital health point solutions Optum ED Analyzer is a tool designed to Medical / Rx – Optum ED Analyzer n/a identify and mitigate emergency department ($800,000) -0.1% Providence upcoding Medical / Rx – Kaiser Vision Hardware $200 allowance every 2 years $200 allowance every year $700,000 0.07% Basic / Major Services Dental – Moda 12 months No waiting period $500,000 0.05% Waiting Period Orthodontia Waiting Dental – Moda 24 months No waiting period $200,000 0.02% Period Life / Disability – The Life Insurance Maximum $5,000 flat benefit $10,000 flat benefit $450,000 0.04% Standard • Items evaluated but ultimately rejected: • Increasing the alternative care benefit maximum • Increasing Kaiser’s vision hardware benefit beyond $200 • Keeping a 12-month waiting period on orthodontia • Total projected impact of 2021 decisions: $950K Copyright © 2021 Mercer (US) Inc. All rights reserved. 40 Glossary

• Aneuploidy is the presence of an abnormal number of chromosomes in a cell, and the risk of having a child with an aneuploidy increases as a woman ages

• Assisted Hatching is a lab technique where embryologists create a small hole in the zona pellucida (the thick transparent membrane surrounding a mammalian ovum before implantation) to improve success of implantation

• Elective Single-Embryo Transfer (eSET) occurs when only a single embryo is chosen for transfer when multiple embryos are available

• Freeze all cycle occurs when all the embryos are immediately frozen and the woman is given several months to recover before implantation rather than an immediate fresh implantation

• Frozen Embryo Transfer (FET) may be chosen if genetic testing of embryos for chromosomal abnormalities or gender selection is desired. Women desiring to avoid birth control may safely freeze embryos (cryopreserve) for later use in a FET cycle

• Gamete intra-fallopian transfer (GIFT) uses multiple eggs collected from the ovaries. The eggs are placed into a thin flexible tube (catheter) along with the sperm to be used. The gametes (both eggs and sperm) are then injected into the fallopian tubes using a surgical procedure called laparoscopy.

• Intracytoplasmic Sperm Injection (ICSI) uses only one sperm and is injected directly into the egg for fertilization.

• Pre-implantation genetic testing is a technique used to identify genetic defects in embryos created through in vitro fertilization (IVF) before pregnancy

• Preimplantation genetic diagnosis (PGD) refers specifically to when one or both genetic parents has a known genetic abnormality and testing is performed on an embryo to determine if it also carries a genetic abnormality.

• Pre-implantations Genetic Screening (PGS) is a procedure designed to assess embryos from presume chromosomally normal genetic parents are screened for aneuploidy to provide assurance that a viable embryo is transferred to reduce failed IVF and miscarriages

• Zygote intrafallopian transfer (ZIFT) combines in vitro fertilization (IVF) and GIFT. Eggs are stimulated and collected using IVF methods. Then the eggs are mixed with sperm in the lab. Fertilized eggs (zygotes) are then laparoscopically returned to the fallopian tubes where they will be carried into the uterus.

• Given the lack of robust data and existing uncertainty regarding COVID-19, Mercer presents this information with the caveat that it should be considered an informed estimate based on limited and changing anecdotal and actual information.

• The range of these financial impact estimates reflects our best thinking as of March 2021. Our estimates will change (up or down), and perhaps rapidly, and to a significant degree, as more experience and information emerges.

• Client experience should be monitored as appropriate and feasible, with adjustments made to projections as needed.

• The range of these financial impact estimates was developed on a ‘national average’ basis; we expect significant variations between employers, geographic locations, demographics, etc.

• The experience of similarly situated employers may deviate very significantly from one another.

• There are many unknowns at this time, all of which could impact our cost estimates. As these variables change and we learn more, we will update our estimates.

1. Prevalence and severity

2. Outbreak duration

3. Government actions

4. Testing protocols and availability

5. Introduction of treatment and/or vaccine

• Paid claims information provided by: Providence and Moda • Enrollment information provided by: Providence and Moda • Enrollment information by plan and tier provided by: Providence and Moda • Projections use incurred claims through December 2020 • Budget projections based off enrollment for the month of: January 2021 • Includes the following employee classes: actives, retirees, COBRA

• Mercer uses underwriting techniques, based on actuarial guidelines, to project the future plans costs for the self-funded plans. The key factor in projecting future results is the prior experience of a group, especially when the group consists of a large population. The process of forecasting past claims experience into the future takes into account plan designs, member demographics, trends and group credibility. These processes are widely accepted within the insurance market as the standard to establishing budget and premium levels that are appropriate to cover future risks. • As a starting point to developing the Jan 2022 - Dec 2022 period funding rates, Mercer collected monthly paid claims and enrollment for Oregon PEBB’s medical and pharmacy self-funded plans from the respective vendors (as previously stated in the Assumptions section). Mercer has utilized the information provided by you and/or your vendors/carriers to develop the enclosed budget projections. As such, Mercer has not independently verified this information for accuracy. • The average cost per enrolled employee was then calculated by dividing the total claims paid by the average number of enrolled employees in each plan on an incurred or lagged basis as previously state in the Assumptions section. • Once the average claims costs per employee were calculated, claims costs were projected to the Jan 2022 - Dec 2022 period by application of trend factors. The trend factors used in the projections are within the acceptable trend ranges published by Mercer's Actuarial and Financial Group. • These guidelines are published for active and retiree populations, by benefit plan and product. They fall within the framework established by the Actuarial Standards Board, which has responsibility for the development of actuarial standards of practice used by all professional organizations. The primary components of medical trend include the following: • Inflation in unit prices for the same services • Changes in utilization of the same services • Out-of-pocket leveraging • New technology/services (increases or decreases depending on the mix and cost of services) • Cost shifting from public payors (Medicare and Medicaid) to private plan payors • Population aging • After application of trend, a margin was also added. Credibility reflects a degree of confidence and accuracy in using the past group's specific information in projecting future costs. A mixture of the size of the group and the period of time the data reflects, determines a group's credibility. Generally, the larger the group and/or the longer the period of available historical information, the greater the degree of confidence and accuracy of using a past group's specific data to project the future costs. Higher margin levels are required for smaller groups since it is designed to cover the potential variation and volatility in actual cost relative to the projected costs. • The last step is the addition of the administrative fees to the projected costs. These fees include medical and pharmacy administrative costs, and the addition of stop loss premiums. The combination of the administrative fees and trended claims costs allows us to establish funding levels that are appropriate to cover future risks. It is important to remember that these projections are only estimates. As with all estimates, they are based upon the information available at the point in time and are subject to unforeseen and random events. They must be interpreted as having a likely range of variability from the point estimate.

PB Attachment 5 April 20, 2021

OEBB-PEBB Consultant RFP Update April 20, 2021 Claudia Grimm and Brian Olson, Contracts Team

Background

The Oregon Educators Benefits Board (OEBB) and the Public Employees’ Benefit Board (PEBB) last issued a Request for Proposals (RFP) for Consulting and Actuarial services in 2014. This RFP resulted in OEBB contracting with Willis Towers Watson (WTW) and PEBB contracting with Mercer Health & Benefits (Mercer). Due to recent legislation, OEBB and PEBB must go out for an RFP for these services every three years. For this reason, and upon your future approval, OEBB staff, PEBB staff, and the Office of Contracts and Procurement (OC&P) will be prepared to release a new Consultant RFP within the next several months. One new feature of this RFP about which both OEBB and PEBB Boards need to be aware is that it will result in an award of a single Consultant and Actuarial services contract for both programs.

Executive Summary This document provides a high-level summary of the joint OEBB-PEBB Consultant RFP, currently scheduled for release in July 2021, including: • Proposal Scoring and Selection Process; • Contract Negotiations and resulting Contract; and • RFP milestones.

No Board action is requested at this time.

Discussion

Staff envisions releasing an RFP consistent with the features and decision-making processes described below.

1. Joint RFP Resulting in One Contract

This RFP will result in one single Consulting and Actuarial services contract. Staff expect this contract will take the form of a Master Price Agreement and will include a separate “Work Order Contract” for each OEBB and PEBB. In addition, each Work Order Contract will include numerous types of work that will be on an as needed basis as assigned by the respective programs and their Boards.

2. Ethics, Conflict of Interest and Other Applicable Laws

Everyone participating in this project will be required to populate and sign a Conflict of Interest Certification form and return it to staff. This includes Board members, OEBB and PEBB staff, and other stakeholders at the state who may assist in evaluation and negotiations.

Page 1 of 4 PB Attachment 5 April 20, 2021

In addition, public meetings and public records laws and rules will apply to this work. Staff anticipates that selection committee meetings will occur in a public meeting setting, including finalist interviews. In addition, all your work product related to this project, including your personal notes, are public records and subject to disclosure.

3. Leadership Group for Planning and Ongoing RFP Administration

Staff proposes establishing a leadership group that will provide advice and direction to staff administering the RFP during the course of the RFP and subsequent contract negotiations. Proposed membership includes a member in a leadership position from each Board and a member of each program’s management team. Members of the Leadership Group will also be required to sign a Conflict of Interest form.

Policy direction and guidance may include, but not be limited to, the development of RFP questionnaires, scoring methodology and selection criteria, finalist interview structure., and contract negotiation advice. Members of this Leadership Group will not score proposals (responses or finalist interviews) but will have the opportunity to generally participate in these processes as a Board member, with the actual of scoring proposals and interviews being the exception.

Staff proposes the following Leadership Group membership: • OEBB-PEBB Director • OEBB Board Chair • PEBB Board Chair

4. Selection Committee Membership Staff proposes establishing a Selection Committee composed of both Board members and staff that will score certain sections of the RFP based upon their particular area of knowledge and/or subject matter expertise. As a result, Board members who sit on the Selection Committee will score a separate set of proposal responses than staff.

Proposed membership includes 6 (six) Members from each Board, with the exception of the Chairs serving on the Leadership Group. Each Board will be responsible for choosing their Selection Committee members. OEBB-PEBB expect that staff members involved in scoring may include the following programs areas: Business Operations/Communication, Financial Services and Policy/Performance Measures. Staff will also explore looking to the Oregon Health Authority for subject matter experts to score subsets of questions related to Diversity, Equity and Inclusion, as well as some types of required technical regulatory work and reporting.

5. Evaluation and Scoring of Proposals and Interviews

All Proposals will initially be screened for Responsiveness and determination of whether Minimum Qualifications have been met; this will likely be done by either OC&P staff or PEBB staff assisting with administering RFP. Only those Proposals that pass this screening will be scored.

Page 2 of 4 PB Attachment 5 April 20, 2021

Proposals will be scored independently by Selection Committee Members, who will apply the established scoring criteria to the section(s) they have been assigned. During this part of the scoring process, there can be no consulting with each other or with the Leadership Group.

Scores will be tabulated, and then the determination will be made of whether to make a Competitive Range cut (finalists). This will be a full Board discussion, upon which only the Board members on the Selection Committee will vote. Votes from both Boards will be tallied with the majority carrying the vote. Since this is a single procurement that will result in one Master Price Agreement, staff will explore whether a tie-breaking process or vote will be needed to make the Competitive Range determination. Only those Proposers that fall within the Competitive Range will be invited to interview

INTERVIEWS1

Staff will work with the Leadership Group to develop a set of interview questions which address the priorities and workplans of each Board. All Board Members will be invited to participate in the Interviews, but only members of the Selection Committee will score2 It is anticipated that staff members of the Selection Committee will also score interviews. Members of the RFP Leadership/Policy Group will be invited to facilitate the interviews, but are also exempt from scoring this portion of the process.

6. Contractor Selection and Contract Negotiations

Questionnaire and interview scores will be aggregated, and the highest scoring Proposer that meets all the non-negotiable criteria in the RFP, will be deemed the Apparent Successful Proposer (ASP) and will then advance to the Negotiation Process.

This RFP will result in one Master Price Agreement between the ASP and OHA. OEBB and PEBB will each have their own individual Work Order Contracts (individual Statements of Work) under the Master Price Agreement.

OEBB and PEBB envision having their Work Order Contracts fully executed by November 2021 to allow at least one of the programs to transition to a new Consultant.

Requested Action

Staff is not requesting specific Board action at this time.

1 All Conflict of Interest rules still apply 2 Board Members must commit to attending all of the scheduled interviews

Page 3 of 4 PB Attachment 5 April 20, 2021

RFP Milestones

Note: All dates are currently approximations, and will not be finalized until all legal and policy issues are resolved.

• May or June Board Meeting: Ask Boards for formal approval to release RFP. o Note: this date is contingent upon when staff is able to resolve final policy and legal issues • July 1: RFP release date • July 28: RFP responses due • August 2-24: Selection Committee evaluation and scoring of proposals • August 26: Finalist selection (competitive range determination) • August 30-September 3: Finalist interviews • September 10: Scoring completed; select Apparent Successful Proposer (ASP) • October 1: Contract negotiations complete • November 1: Contract effective date, allowing for transition to a new consultant for at least one program

Page 4 of 4

HEALTH POLICY AND ANALYTICS Oregon Educators Benefit Board

Kate Brown, Governor

PEBB

Mandatory Open Enrollment

2022 Plan Year

PEBB staff are in favor of a mandatory open enrollment period for this upcoming period. Here are some reasons to support our decision:

• HEM – Staff feels it’s important to not let PEBB members get use to not completing their Health Assessment with their PEBB medical carrier • FSAs – Staff understands many PEBB members didn’t read communications thoroughly and failed to re-enroll in their FSAs. Making enrollment mandatory would alleviate this. • Verification of Dependent Eligibility (DEV Screen) • Verification of Surcharges • Verification of Personal Info, Beneficiaries, Plan Choices and Dependents • Two years of a passive open enrollment period would “untrain” members to do open enrollment Overall, we feel PEBB members are probably better situated either at home or will be returning to work with adequate access to internet and computers than a year ago.