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Large Health Employer Solutions

Benefit strategies

Benefit strategies

Discover the benefit strategies that help you design a health plan with better care and lower costs.

How do we lower total cost of care?

  • Industry-leading networks: With nationwide PPO and high-performance networks, we help you balance cost, access, quality and employee experience. 
  • Enhanced performance: We’ll help you optimize performance with solutions that amplify network benefits and mitigate the trade-offs. 
  • Blue Premier: Our value-based care program offers incentives to providers to ensure patients receive the best care at the best price.  
  • Experience and expertise: We’re a trusted partner you can rely on, with the data-driven insights to build a strong health plan that’s ready for the future. 
  • Bottom-line protection: Our data-driven approach to payment integrity reduces billing and coding errors to keep costs down.

Explore the network effect on total cost of care

Linking the right provider network with the right benefits strategy is key to reducing costs. In this report, we analyze current trends that are likely to impact network performance. Then we share how employers like you can use those trends to build a smarter benefits strategy that lowers total cost of care. 

Enhance network performance

Network is the foundation of any health plan. It should be strong enough to meet today’s demands, yet flexible enough to adapt to tomorrow’s challenges. In this report, we examine how a thoughtful benefit design strategy can enhance performance, improve your total cost of care and help you deliver a health plan that balances access, quality, cost and experience.

Understand total cost of care

When you understand the full picture of total cost of care, including its components and how they work together, you can reduce costs, improve outcomes and create a better health care experience. In this report, we define what total cost of care encompasses and how employers can successfully manage all of the variables that impact the cost of your health plan.

See how we're transforming health care

We continue to chart a better path to value in health care with an emphasis on lowering costs. Download our spotlight series to learn about the work we’re doing to deliver better access to quality providers, a better experience for employees and better protection for your bottom line – all at a lower total cost of care.   

Total Cost of Care: Optimizing the cost and quality of your health care dollar

Health care is the largest employee-related expense for US businesses, and costs continue to rise. With so many factors driving increased spending, we discussed all the important factors around designing a health plan: 

  • What’s driving the rise in health care costs 
  • The four key components of total cost of care 
  • How a total cost of care approach impacts pricing and quality  
  • What we’re doing to drive value 
  • What employers can do to drive value 

[SCREEN TEXT] Managing Total Cost of Care 

Optimizing the cost and quality of your health care dollar

Hello and good morning, everyone. My name is Cortney Sanders, and I lead the communication team here in our Health care division at Blue Cross North Carolina. I will be your host for today's session, and I will help to ensure that the next hour is as rewarding and enjoyable for you as possible. So, thank you for taking your time on Election Day to join us for our special webinar, managing total cost of care – optimizing the value of your health care dollar. This is the third and final of a series of webcasts in 2022 to share the latest trends we face in health care and the Innovations to deliver better quality, affordability and an exceptional experience. Now, before I introduce our panelists, I have a few housekeeping items. First, we have a lot to cover, so in order to get the most from this hour, you may want to minimize distractions such as your cell phone and email. Second we will be asking poll questions and taking your questions along the way. When you want to submit a question, please use the Q and A feature. We will answer them as we go and also leave time at the end for those we have not addressed. This webinar is accredited by SHRM and eligible for professional development credit, as well as for continuing education credits from the NCDOI. Also at the end of today's webinar, you will be prompted to complete our survey. Your feedback on today's session is critical for future webinars, and doing so could earn you one of four $25 Amazon gift cards, so thank you in advance for your opinions. Now let's get started.

[SCREEN TEXT] Learning Objectives

  1. Healthcare cost trends
  2. What is Total Cost of Care
  3. Total Cost of Care approach to cost containment
  4. How to optimize your health plan to improve quality and affordability

With health care costs continuing to rise, we know that employers continue to look for ways to control costs and improve quality of care for your employees. Today in this webinar, we'll look at the drivers of cost explore what we mean by total cost of care, and how by taking a total cost of care approach to manage expenses you can gain a clearer picture of the solutions that can make a meaningful impact on the health of your organization's bottom line and your workforce.

It is important to note the role that each of us play in achieving affordability for us and our members. The total cost of care is more than just cutting costs. It's also about maintaining quality and balancing member satisfaction. We're glad you're here to learn about the foundations of managing costs while ensuring your members have access to the right Care at the right time. To take us through this conversation, I have with me for industry experts from Blue Cross North Carolina.

[SCREEN TEXT] Today's Panelists

Danny McCormick

Director, Cost of Care Governance, Healthcare Cost of Care Division

Kevin Hale

Sr. Manager, Actuarial Services

Cost of Cost Portfolio

Brandon Hunter

Director, Healthcare Strategy and Transformation, Value Programs

Jessica Hackney

Manager, Nationa Account

Retention, Commercial Markets


Welcome, everyone. Thank you for being here today. So first up, Danny McCormick. I'm going to start with you as the Director of cost of care governance in our Healthcare division. You came to us with over 25 years experience in value creation and finance. The last six years you've been primarily focused on cost of care, I understand. Tell me a bit about the work that you've done in the cost of care space.

Thanks, Cortney. And thanks again to everyone who's joining the webcast today as well. So the last six years I spent a lot of time doing from a Bottoms Up starting from the ground to build up a cost of care governance structure with another insurance plan over at United Healthcare. And you know over the last six years you know we took a lot of lessons learned, a lot of initiatives where we think we can make impact. And you know here at Blue Cross, and oddly enough today is my one-year anniversary since I started with Blue Coss North Carolina. I'm happy to bring some of that knowledge over from the last six years and other providers and other plans and kind of build on that with what we're going to do in terms of like managing cost of care and helping put a government structure in place to make sure that we're not only hitting these goals but every year we're finding ways to exceed them as well. We're going to turn value back to our members our employee group and also keep that quality of care up for the members as well.

Thanks for that Danny. We appreciate you joining us today. Kevin, in your senior role in Actuarial Services, your duties are specifically focused on cost of care initiatives, I understand. Can you tell me a little about that and tell me about your prior actuary experience with Willis Towers Watson working with employer clients?

Yeah, thanks Cortney. I'll start with the Willis Towers Watson one. So I'm coming from an eight-year career with a healthcare consulting firm. And there, as you can imagine, my Actuarial Services span for the clients that I worked with was anything that they needed an actuary to do. So it was setting premium rates. It was talking about employee cost share and contributions. It was doing their reserving for them when they needed an IBNR at the end of the year. It was talking about plan design changes. It was just everything they needed that they wanted an actuary to help them with. And so I only got to spend you know a pretty small portion of my time on cost of care strategies. Now at Blue Cross, I get to spend all of my time on cost of care strategy, so it's it's been an enjoyable shift for me because I'm very interested in this space. And specifically what my role is here with Blue Cross of North Carolina, it would be kind of two sides of the same coin. I deal with our cost of care initiatives, the real programs that are saving the dollars and changing the care. And so the two sides of that same coin include measuring the programs we already have in place. So hey, we thought this would save dollars. Is it actually impacting our cost like we thought it would? So measuring the impact of the programs we already have in place. The flip side of the same coin is evaluating the future programs that we're  wanting to go into place. So helping vet the programs that we want to add to our management strategy and helping evaluate how effective we think those could be.

Thanks for that overview, Kevin. Next up, Brandon. You are a veteran here having worked at Blue Cross since 2003 in various roles developing cost-containment programs, provider and vendor arrangements, and more recently, your teams are responsible for developing Blue Premiere, transforming North Carolina to value-based care. Can you talk to me a little bit about that?

Yeah, so thanks Cortney. It has been a while. I've worked here for just under 20 years. It's been very interesting as a lot of the folks on the phone, I know, have seen things evolve and particularly in the last four or five years pretty rapidly and moving from volume to value and work really closely with with folks like Danny and Kevin to make sure that we are working on the value side to still address issues related to cost of care specifically. And so my teams are responsible for design and execution of our signature value program, Blue Premiere, as you mentioned. And so I'm really excited to add to the conversation today about some of the Partnerships we have with those providers in North Carolina that are that are addressing cost issues directly while still maintaining quality. So looking forward to have that conversation.

Thanks, Brandon. Happy to have you here. And last but not least, Jessica Hackney. Jessica, I understand you just received a promotion. Congratulations. So as the manager of client retention for our national business, you've seen firsthand and felt the effects of your clients' challenges with balancing costs with quality care experience. Can you talk to me a little bit about that?

Yeah, thank you Cortney. I'm really honored to work with such a great team of folks and you know I've actually worked with national accounts for almost 10 years now. And so it's really been interesting to me that while so much has really changed in the healthcare landscape, the goals really remain the same. How do we control costs and how do we improve those health outcomes? And so I think that's the reason why we do what we do and why we're all here today, so I'm happy to be a part of the conversation.

Thanks, Jessica. Happy to have you as well. And thank you to all of our panelists today for coming on and speaking with us.

All right, so to kick us off, I'm going to ask a poll question of the audience to frame the importance of our conversation today.

[SCREEN TEXT] If the price for a gallon of gas were to increase at the same rate of healthcare spending, what would a gallon cost today?

A. $5

B. $7

C. $9

If the price of gas were to increase at the same rate of health care spending, what would a gallon of gas cost today?

Yeah, so Cortney, I'm just looking at the question on the screen. This is a pretty interesting question, so I'll answer this while everybody's putting their answers in place too. But if you think about health care spending trends in terms of gas prices, right now we'd be paying over nine dollars a gallon today for gas. And if we're looking forward by 2030, that'd be nearly $16 a gallon of gas, so obviously that is not a sustainable trend in terms of health care.

It's definitely not. That's pretty expensive.

[SCREEN TEX] U.S. health care spending grew 9.7% in 2020, reaching $4.1 trillion or $12,530 per person

20% of GDP related to health care expenditures

$8 billion spend on claims for all LOB in 2021

Yeah, just a bit. And with healthcare companies and individuals are both feeling the pressure of these increasing costs. Health care expenditures, as a matter of fact, represent 20 percent of the nation's GDP. So the cost of health care in the United States is actually rising three times faster than the rate of inflation. To put that perspective, that represents a 167 percent increase over the past 15 years. Here at Blue Cross North Carolina alone, we pay over eight billion dollars annually in medical claims for all lines of business. So that's commercial fully insured, Medicare, etc.

Yeah, and Danny when we have numbers like eight billion dollars on a page, we we have to pay attention to how we manage it and just recently there was a article that came out about how about 80 percent of medical claims may have an error in how they're billed. And so, things like our payment Integrity services are really important when we have a number like this on a page. We have to we have to do everything we can to management it.

That's exactly right Kevin. And as stewards of our customers health care dollars, we take this very seriously. But yeah at the end of the day, consumers across the country are feeling the weight of this. We're feeling the weight of this. And obviously your company as well is going to feel the weight of this.

[SCREEN TEXT] Healthcare Costs Continue to Rise

2009: $3,515 worker contribution, $9,860 employer contribution, $13,375 total

2014: $4,823 worker contribution, $12,011 employer contribution, $16,834 total

2021: $5,969 worker contribution, $16,252 employer contribution, $22,221 total

So if we're looking at last year, the employer healthcare contribution hit a high of over sixteen thousand dollars per employee per year. This represents a more than 65 percent increase in the last 10 years alone.

Yeah, that's right Danny and I think we've seen it. Our employer clients are certainly feeling the weight of this. And I think that's why we're here to really dig into what we're doing, what we all can do and then how that will impact our costs and then outcome goals mentioned earlier.

Precisely. And if you look at the slide here, the next slide that we're going to go to.

[SCREEN TEXT] Health Spending Drivers

Top 3 Total Cost of Care Drivers

Hospital Care: 31% of health spending

Physician and Clinical Services: 20% of health spending

Retail Prescription Drugs: 8% of health spending

You can see a breakdown of the top drivers of healthcare cost increases in the past year. If we pick on one of those just on the screen, hospital care alone has increased by 31percent. And all this has been worsened by the pandemic.

That's right, Danny. We've heard that COVID has impacted health care costs in more terms than monetary. Delayed care and missed care resulting in late stage diagnoses, such as cancer. For others, the isolation and uncertainty from the pandemic fostered new or worsening behavioral health issues. Can you all comment on how this concerns us and our employers?

Oh yeah. You know, as the COVID-19 and restrictions were actually lifted and employers employees started returning to work, they also returned to care. Which caused a significant spike in treatment for severe conditions, as you mentioned Cortney, and pushed utilization beyond even our expectations. So it became even more important for us to partner with our employers to manage this new care.

Yeah, Brandon. I mean spot on. I think the pandemic has spurred changes for everyone, but definitely for our employers. And we've seen some reactions from employers to kind of react to this, right? So one, you know, vendor telehealth benefits became really popular and then I think expanding the scope of those vendor telehealth benefits to include care for mental health was a really important one. Another one that comes to mind, we actually saw some employers that adopted wellness programs that were more virtual in nature. So kind of a shift from more of that on-site focus. And then finally we also saw an increase in those in-home biometric screening programs to better align with those employees that are working remotely.

[SCREEN TEXT] Cost of Care: A Puzzling Issue?


So I think this is the perfect segway to what total cost of care is with the hope that when we better understand all the elements we can create a better roadmap to lowering costs.

That's right, Cortney. And if we're looking at the screen, this puzzle has become very familiar to me to this year's. We've used this puzzle as a great way to demonstrate how we're going to tackle cost of care. So if you break cost of care down, it's actually quite meaningful. And what it does is it gives us a very focused approach in how we can bend the trend on our medical costs. At Blue Cross North Carolina, we have dedicated staff looking for new opportunities and managing towards specific goals to deliver greater savings and lower total cost of care as our organizational mission. And it's our daily responsibility in keeping health care more affordable and accessible to all of our members. And it's this puzzle that you see here that actually provides the framework that we use for the work at hand.

[SCREEN TEXT] A Total Cost of Care Approach

The Four Key Components of Total Cost of Care:

Network and Benefit Design:

  • Network discounts
  • Value-based payment arrangements
  • High-performance networks, narrow networks and centers of excellence
  • Benefit design based on your population's health

Member Engagement:

  • Advocacy and navigation
  • Health and wellness programs

Clinical Programs:

  • Population health management
  • Care management of at-risk members
  • Integrated medical and pharmacy benefits
  • Integrated physical and behavioral healthcare

Cost Protection:

  • Data and analytics
  • Pre- and post-payment reviews
  • Fraud prevention

Yeah, and when we think about about cost of care, we're talking about all of the dollars that a company is spending on their health care and health benefits. And so when we think about our concept of what are we trying to do with our total cost of care approach, it's really a simple idea. We're trying to make sure we're looking at every single piece that goes into it to lower that total cost of care. But when we start looking into each little piece, it definitely gets a lot more complex because your organization's health plans are not simple entities. They get pretty involved. And so what we've done here is kind of shown how we kind of break this multi-faceted idea into some areas. And so what you see on the page here is just kind of a way that we think of it.

We have network and benefit design and so this is a big one that includes everything from from network discounts to high-performance networks and then centers of excellence, trying to make sure we have the care going to the right places.

We think about member engagement. So it's not just the payer that is trying to help manage this care. We also want our members to be involved in how they're managing their own care and getting them, you know, on the same team.

Clinical programs, this is one that gets a lot of attention when we have specific conditions and diseases that are driving a lot of the cost. We need to address those specific conditions when they're in our populations. And so we do have a lot of focus that goes toward the clinical programs.

And then cost protection, that's one I already mentioned earlier where our payment Integrity function needs to look at claims as they come through and make sure that we are paying things the way that our policy is intended to pay, that we are reimbursing at the at the rates were intended to reimburse that, and that there's as little Fraud and Abuse as possible.

And so we have these kind of four buckets that we think of cost of care in, as you can see with many pieces underneath each puzzle piece.

Now that's a great breakdown, Kevin, too as you kind of went through the different pieces of the puzzle. And  obviously that's where we come in. So as stewards of our customers' healthcare dollars, Blue Cross is always working to keep those rising medical expenses under control. But now our cost of care process, it's evolved. And to provide a new and more focused governance approach than it has ever before. So this new lens that we're using at Blue Cross North Carolina, we want to ensure that all identified initiatives need to propose savings targets and that sort of stuff, like you know, Kevin, his actuary team comes into play too to do those validations of the savings to make sure they are performing as they should.

Danny, this sounds really interesting. Can you talk to us a little bit more about what that approach looks like for Blue Cross North Carolina?

Yeah, absolutely. So if we go the next slide, there should be a breakdown there.

[SCREEN TEXT] Cost of Care Approach

  • Data Driven Analytics
  • Ideation
  • Vetting and Selection
  • Performance Management

And you look on the screen, you see there's four main levers that we use to kind of come to the cost of care. So, cost of care, first and foremost, is and always and has been an organizational mission as part of all of our daily responsibilities here at Blue Cross North Carolina. But to take this effort to another level, we now have dedicated staff throughout the enterprise working full-time to control cost of care expenses. This focused approach is how we plan to succeed in our mission of keeping healthcare affordable and accessible by returning those savings back to our members and the employers that we serve. So when we achieve this, they're the four levers that we're looking at here on the screen.

So first is data-driven analytics, and this is analyzing the internal trends to identify areas where costs are on the rise and comparing those trends with industry benchmarks to help focus savings efforts in response to those hot spots that we identify.

Up next is ideation. And this is where we leverage expertise in various health care fields to look for new and innovative solutions to help control our medical cost while not disrupting the quality of care delivered.

After that, we've got embedded installation, and this part's pretty key because in this step we involve our key internal stakeholders to review and select initiatives that will help generate value to our expert stakeholders while being mindful of member health outcomes and any potential abrasion that they can cause.

And finally, we have performance management. And this last step in the process is where we review the medical expense reductions achieved by initiates post-deployment against those initial expectations and ensure that the value is realized there. So this is where the rubber meets the road and we say, "okay, is the thing we deployed doing what it's supposed to do to ensure it's generating value and generating savings?"

So just as an example, if we're talking about how this process has worked so far, we've identified and launched over 100 cost-saving initiatives so far in 2022 alone. So to put that perspective, this is our first year using this more focused approach, and that's already resulted in over 100 cost-saving initiatives. And these are actively delivering savings based on actual review of two performance measures for each of those initiatives. It's been validated to ensure that, again as I said before, they are doing what they're supposed to be doing.

Thanks for that, Danny, and taking us through the total cost of care framework here at Blue Cross North Carolina. So I want to bring us back to the components of total cost of care. However, due to time, I want to skip to the network and benefit design because I think we can come back to the other examples at the end.

[SCREEN TEXT] Network and Benefit Design

Network and Benefit Design:

  • Network discounts
  • Value-based payment arrangements
  • High-performance networks, narrow networks and centers of excellence
  • Benefit design based on your population's health

So Brandon, our network and benefits guide, I wanted to talk about the network because building the right network, choosing the right one, and optimizing it through benefit design and value-creating programs are critical to quality and cost control, right?

Absolutely, Cortney. And this is foundational, as you said. You know it takes a lot of work, but I've done a lot of dedication by a lot of folks to make this kind of thing work. You know the strong network delivers competitive discounts, number one, you know which is foundational to lowering the total cost of care for your membership. As networks continue to shift, however, from volume to values I mentioned earlier and solutions that Danny talked about continue to evolve and emerge, such as our centers of excellence program, as well of our high-performance networks.

[SCREEN TEXT] National Network Savings Impact

Blue Card® PPO: 4-9% lower total cost of care over carriers

High-Performance Network℠: 11% average total cost of care savings

Blue Distinction® Specialty Care: More than 20% average savings per episode

  • Better results
  • Less complications
  • Fewer readmissions

Total Care® Value-Based Care:

  • 634 thousand providers participating
  • 3x more participating providers than other carriers
  • Nearly 70 percent BCBS members with access
  • Annual $229 billion claims tied to value-based care

It's really important to consider all of those different factors when we're modeling the impact of network and benefit design to maximize those savings opportunities. And really we're well positioned here because the Blues, with our national reach and our local presence and expertise, are able to develop strong partnerships with providers, as I mentioned, that are really second to none. Nationally, cost savings start with our Blue Card PPO, delivering up to a nine percent lower cost on average than our competitors, which is an average of twenty four dollars per member per month savings over other carriers. That's pretty substantial, as you know, and a foundational contribution as I said to keeping employee benefit costs pretty low.

On top of that, our national high-performance network delivers an 11 percent total cost of care savings, on average, and up to as much as 20 percent in some markets, and makes a great plan option for those companies whose workforce is in those areas, more areas across the country than our competitors, by the way.

And if members need specialty care, our Blue Distinction centers of excellence deliver a 20 percent average savings per episode across eight high-cost specialties.

Lastly our value-based care arrangements that I mentioned earlier, across the nation over 634,000 total-care providers are delivering coordinated care to over 70 percent of Blue Cross Blue Shield members. And this accounts today for nearly 230 billion dollars in annual value-based care services.

Brandon, these numbers are phenomenal. How are we able to achieve these savings, and does it come at the expense of quality?

[SCREEN TEXT] Blue High-Performance Network℠

As much as 21% savings

Blue Premier® Value-Based Care

  • 3-year savings: $480 million 
  • Specialty care: +90% of medical expenses
  • 1.3 million members served in 2021
  • Well visits: +21% increase for children ages 3-6 vs. non-Blue Premier members


Yeah, Cortney, that's a question we get often. With a bottom line cost of care program, something we always have to keep in mind is that the fact really is that better savings actually come as a result of better quality. It's not an either or. And to achieve those savings here in North Carolina, how we do that is we build relationships with providers that ultimately incentivize better care decisions because that's really where we're here is that the point of impact here is the decisions are being made every day on care, and how can we impact that. For example, we provide specialized reporting and deep analysis to our providers for patients that have chronic care, incentivizing preventative visits and then cost management of higher levels of care, such as emergency rooms in-patient stays and specialty drugs.

But really the key is all of the incentives point toward quality outcomes, which naturally results in cost savings by ensuring that our providers have accountability for maintaining their healthy patients. And then at the end, Danny mentioned, we evaluate all of that to ensure that the programs that we design are delivering what they need to. And if they're not, then we go back to the drawing board and make adjustments as necessary.

And Brandon, I understand the results for Blue Premiere were just recently released. Tell us about your thoughts on these results and what's coming that employers should know.

So obviously very excited about the results in our third complete year of the program in 2021. And so we are seeing how providers I mentioned, they are showing us that they understand that the current cost of care is unsustainable. Our value programs, like Blue Premiere, continue to mature. Through analytic capabilities, as I mentioned, we try to build every day to share more and more deep analysis with our providers for better care coordination. But really the bottom line at the end of all of it is that more patients are getting more holistic care at a lower cost.

So that's a lot of great work impacting costs, but I'm wondering what does this look like from a day-to-day perspective.

[SCREEN TEXT] Amy needs a knee replacement. She also has diabetes.

Network and Benefit Design: For Amy's knee replacement surgery, instead of selecting her local hospital, Amy chooses a Blue Distinctions Center. By driving just 19 extra miles, the cost of Amy's surgery would be 21% lower ($31,000 vs. $37,000). And she feels better knowing that BDC's have fewer complications resulting in fewer readmissions.

Clinical Programs: Amy enrolls in he Livongo diabetes management program offered through Blue Cross NC. She reduces her A1c level with better blood sugar control and healthy food choices. She is now better managing her chronic condition with consistent touchpoints with her Livongo health coach.

Member Engagement: A Blue Cross NC nurse invites Amy to download Wellframe and educates her about her upcoming surgery. Wellframe provides appt reminders, medication reminders and condition specific content. This helps Amy maintain contact with her nurse throughout her procedure and improves her recovery post-discharge.

Cost Protection: The Blue Cross NC payment integrity service discovers that the anesthesiologist for the knee replacement mistakenly coded 12 hours of anesthesia instead of 12 units of anesthesia. This is corrected and reduces the cost of anesthesia from $1,450 to $550. 

TCoC without intervention: $47,250


TCoC with interventions: $38,550

Kevin and Jessica, I'll turn it over to you two to kind of show us what total cost of care looks like in action.

Yeah thanks, Cortney. We're gonna look at a specific member, and this example actually hits pretty close to home because I actually have a knee surgery scheduled for December 8th, so a month from today. So I I relate to Amy here who is a member that we're looking at who needs a knee replacement surgery and then she is also a diabetic member. And so we're going to take a quick look of Amy's journey through her health care and see how our different puzzle pieces of our cost of care strategy kind of work together in in Amy's example.

So we're going to start with network and benefit design, so one of the pieces that Brandon just mentioned was Blue Distinction centers. And so when Amy finds out she needs a knee replacement, you know she she knows hey there's a hospital right down the road I could go to but she logs into her Blue Cross portal and she finds out that there's actually a Blue Distinction Center that's just 19 miles away. And by driving that 19 extra miles, the cost of that surgery is going to change from 37 thousand dollars to 31 thousand dollars, not only impacting the cost of her out-of-pocket payment that she's going to be making but also the payer who's going to be covering the rest of the cost. So this Blue Distinction Center is going to have a pretty major Impact on the cost of care for Amy specifically. And then on top of that, because it's a Blue Distinction Center, she's not just going to see a lower cost for this surgery, but the reason that this cost is lowered is because it's better quality, there's fewer complications, there's fewer readmissions, and so not only is Amy going to have a lower out-of-pocket cost, she's also going to get a higher quality Care by going to this Blue Distinction Center.

Next onto the clinical program, so the other thing is that Amy as a diabetic member is is going to enroll in our diabetic program with Livongo. What it's focused on is making sure that she's using the most appropriate amount of medication to keep her diabetes under control. And what she found through this program is that by trying different dosages that she was able to lower her dosage by 40 over the year, and so there's another cost savings in connection with this diabetes management program that's helping her to manage her diabetes in the most efficient way using the least amount of health care as necessary to best manage her condition, so another clinical program that's helping Amy in her cost of care journey.

Member engagement, now this is one that we talked about earlier where we don't want Amy to passively go through this and let other people make all of her care decisions for her. We want Amy to be involved in the care process, and so we have a nurse support coordination program where she's connected with a nurse that kind of helps give Amy the information she needs to make good decisions about her own care. Another thing that this helps do through our Wellframe app is say, "Hey, let's make sure Amy gets to all of her appointments. Let's make sure Amy fills all of her prescriptions. Let's make sure that Amy is involved in managing her own condition, managing her own diabetes." As many of you know, diabetes is one that comes up a lot. A diabetic who's managing their own care is going to be a much healthier member than a diabetic who's unable to manage their condition.

And then let's talk about cost protection. So in this last bucket over here, when Amy got her surgery, her claims came through, they were paid and then as Blue Cross's payment integrity group was analyzing how  all of those payments went, they found, "Hey, wait a second. We see that there's a mistake in this anesthesiologist's coding. They coded 12 hours of anesthesia and we know this knee surgery didn't require 12 hours of anesthesia. It's actually supposed to be 12 units." And so that cost is is adjusted, and instead of being almost fifteen hundred dollars, it goes down to a little over 500 dollars. And so just an example of how Blue Cross's payment integrity group is always working behind the scenes to make sure that our services are paid for correctly and appropriately and that the providers are coding things correctly and appropriately.

And so with all these examples added up on how Amy, with her two health care conditions that she's trying to manage throughout this year, without the cost of care interactions that she has and impacts, we've got $47,000 there that would be her total cost. However, with these interventions, that cost is lower to less than $40,000, so almost nine thousand dollars of true cost impact because of the initiatives that were applied to Amy's healthcare journey. So pretty meaningful stuff here, both for the payers and for the members.

I would definitely agree. I mean just hearing the whole description of all of the programs and all the savings associated with it is really just mind-blowing. I mean it truly can add up for any company, and it it certainly does for our book of business as well. I think the other thing that we shouldn't forget about either is the fact that these savings will continue to grow as Amy continues to manage her health. I think that's worthy as well.

You know there are some other opportunities in this example that we didn't mention, and one I'd like to throw out there that we just recently rolled out was maintenance medication via mail order. So if Amy were to obtain her diabetes maintenance medication via Amazon Your Way for mail order, that program would actually look for a coupon or drug discount and if available would apply those savings. So an additional opportunity for savings for Amy. But again she's getting a lot of good quality care that's better coordinated through her journey, and so our hope is that she feels like she's not going through it alone and she has some assistance in managing her health.

[SCREEN TEXT] What are your priorities?


Jessica, that's a great point. So we've seen how Blue Cross is taking a total cost of care approach to decreasing expenses. In your experience with clients, what are you seeing are the key priorities to reducing their health care costs?

Yeah, I think that's a great question, Cortney. I think we'd actually like to poll or ask folks to enter in maybe one thing that they're thinking about focusing on in 2023 to help control cost. So I'm gonna just pause here for a couple of seconds and see what sort of answers and responses we get back.

All right, we've got a few coming in. I'm going to go ahead and talk through maybe what we're seeing on our end. So many of our clients  are looking at implementing programs to help generate savings. I would say the the top one of Interest has been really the addition of high-performance networks to their lineup of health plans for employees to choose from. And we know that this drops members, as Brandon mentioned, to a high-quality facility or provider, and that's available nationwide in over 65 markets.

Another thing that we're seeing is employers offering richer benefits for procedures obtained at a Center of Excellence. So we talked a lot about that already as well. And then, you know we're still seeing some of those lingering effects of the pandemic. So some groups are focusing on how do we get members back to preventive care. And so they're offering us incentives around preventive care compliance, or perhaps even offering additional paid time off so that folks can actually have the opportunity to get those preventive care visits taken care of.

And then finally, we've mentioned it before, but I think the expansion of behavioral health. So specifically offering mental health services via our vendor Telehealth has been popular and continues to grow in popularity to make sure that access is there.

So, Jessica, how does an employer know what's right for their company?

Yeah, I think that bottom line is data. I was a healthcare consultant in a prior role, and so we know data really drives our decision-making, so you know I would recommend that employers and consultants work with their carrier reps to see where the claims or the utilization trends is highest to really determine where their opportunities for savings are.

And then the next step is what programs are available to help drive down those costs and improve the health of the population. And so they should really be focusing on what the carrier is doing specifically to help reduce those medical expenses or premiums.

Thank you Jessica. That's great Insight. So now this concludes our standard portion of the webinar, and I'd love to open up the floor for questions.

[SCREEN TEXT] Managing Total Cost of Care 

Optimizing the cost and quality of your health care dollar


And we actually have a question in the chat right now. And this one we can either get Danny or possibly Julie Knack who is also on to answer this question. So this is related to the 80/20 rule saying that 80% of value comes from 20% of the actions taken. So with that in mind, what are the 20% of actions that you all feel have most dramatically lowered cost of care over the last few years at Blue Cross North Carolina?

Julie, do you want to take that one? Or I can. Either way.

Hey, you can take a stab at it first.

I mean I think with for there we've got accountability. I think we have targets that we set looking at trends and we look at like we want to take x amount of medical expense out every year that we think is going to help offset some of those rising trends that we see. So I think the action piece of that is the accountability that we have on our various lines of business where we know we have a certain target we've got to meet in order to generate the value that we talked about and keep health care affordable but also make sure too that you know we're still not cutting out that quality of care. I think the other actions too are just the dedicated staff that we talked about before. We've got people there who, again their full-time job is to ideate, to look at opportunities, to look at that trend data, working with Kevin and his team on the actuary side to, you know, look at some of the hot spot data that we're seeing. Is it a natural Trend or is there some opportunity there that we can look at where there may be, you know, do some tweaks or changes, do some modifications. Those people who know more about their respective fields can weigh in and help figure out ways to sort of say, "We can mitigate some of this, but there's another equally effective but cheaper alternative out there too." Again everything we do, I want to stress that we don't want to disrupt the care or the wellness of the member, but we do so to see others and different you know things we can do to help offset some of the new immersion trends that we see. So target accountability is one. I think the dedicated staff is another thing. Those are no small feats, right? Those are the ways that we sort of check ourselves to make sure we're doing what we're supposed to be doing, and I think the execution piece of it too. I mean just making sure that as we work on these different initiatives everybody knows about runway timelines, how long it takes to get something from ideation to approval and vetting and then to execution, to make sure that not only do we identify the opportunities, but we make sure we get them rolled out as quick as we can but as smoothly as we can, too.

And then, you know, in that 20 percent equation, I think that it's very important that when we do this stuff, we work with our provider and member partners, right? To let them know in advance of these changes that are coming so it doesn't just roll out and that the transition is smooth and as flawless as possible, so there's no disruption, there's no confusion in care and that if people, you know, Jessica and others on our customer service and experience side of the house, also are ready to handle any questions that come to you as well so that, again, that we just we move as one cohesive unit. And you think about an organization this size, that's no small feat. But if I look at what we've done in the past year, and I think about how long it took us to get there, united we've got there a lot faster. And I can say that from first-hand experience, it's the dedicated focus that we've got and I think it's also the willingness of the people here at Blue Cross to embrace this, uh take it personally as a responsibility and then do the best job they can to execute it. So I think in my mind, you know, doing those things well, that's going to more than help us get the 80 percent of value out of it.

And Cortney, if I could jump in too to answer Lena's question. So Danny mentioned earlier, "Hey, we've implemented over 100 programs this year." And actually, Lena, the the rule works there too because of those hundred programs we've implemented, a little less than 20 percent honestly drives about 80 percent of the value. And so it's just an idea of a few of the things in there, I've mentioned payment Integrity a few times so I'm starting to sound like a broken record, but if we're overpaying on over half of our claims that come through our system, then that's a huge opportunity for savings.

And so we have some pretty big gains in that payment Integrity space. We also have some big gains in the utilization management space. Again if every time you have a member come through, if they're receiving more care then it's actually appropriate for their condition and what they need, then that's a huge opportunity. And so those two areas are two that are on the top of our list. I could go on with another 10, but I'll keep it at those two for now. We're seeing a lot of gains in the utilization management space and the payment Integrity space.

Thanks for that Kevin. We also had a question that was entered in through the chat. It talked about incentives for providers for billing on accuracy of billing codes and claims. Are there any incentives in store for them to increase accuracy of claims?

I'm trying to think this is more of a Brandon question.

Yeah. that's what I'm thinking. Brandon, any insight from the Blue Premier perspective?

We may have lost Brandon, but I can speak a little bit about it. I think there are some incentives from a quality standpoint, accuracy, where you know, through Blue Premiere, that there are some monetary incentives in place to sort of make sure that, you know, our providers are working to do certain things well, to make sure that, you know, the quality is there, the accuracy is there, and they sort of take that ownership and become partners with us, right? To make sure that you know we're working on this together so, you know Brandon obviously can speak much more in depth about it. With my limited knowledge, I can say that I'd go our metrics in place and programs that do help, I'm going to work with the provider side of things. There's a good Premier piece of it to, you know, if they do these things, they hit these certain checks that there's incentive back to them.

Yeah, I'll add on a little bit to that answer too. Because you know, accuracy of the claim, there are less, I think, incentives specifically around. But for our ACOs that have targets to hit of "Hey, you need to manage care to this level for this year." If they are inaccurately billing their claims in a way that bumps up that cost, well then it's going to be harder for them to hit their own target. And their incentive is based on them hitting a certain target. And so, you know regardless of where the specific incentives are laid, when we have that one target for an alternate payment method provider to hit, they're going to do everything they can to hit that target. And so it's going to include accurate billing. It's going to include a lot of other pieces of their their care strategy.

Thanks for that, Kevin. I'll move on to our next question. So this one involves a partnership that we recently announced: the mental health space with Mindula. This person asked, "Is there a similar initiative that is being pursued nationally since Mindoula is for employees in the Research Triangle area? We have Blue Cross Blue Shield North Carolina for all our U.S employees."

Absolutely, Cortney. I'd be happy to take that and hello, everyone. My name is Julie Knack. I manage our health care consultants who work with many of you and go out to some of our largest ASO customers to share some of these total cost of care strategies. And I'm happy to share that we just made the announcement that we have embarked on a partnership with a partner called Mindoula who is primarily focused on serious mental illness and substance use disorder. And with that partnership, we will be able to deploy a value-based provider arrangement for members who are both in the Triangle and nationally. So, you know, the first phase of this implementation was to address an area within North Carolina that we had strong provider relationships, but we were also able to expand that nationally. So for a lot of our clients who do have out-of-state membership, they will be able to take advantage of that new program that starts the first of year 2023.

Thanks for that, Julie I really appreciate it. So I have a question here related to total cost of care, and this is for Kevin. What role does value-based care and alternative payment models play in total cost of care?

Yeah, so this one's interesting. So the the kind of tagline of this presentation is "optimizing the cost of health care." So to optimize it, you really need to have everyone involved trying to arrive at the best, the most appropriate total cost of care. If we end up in situations where our providers are happy with the way things are, um then we have a party in this process not trying to optimize the cost um and so getting our providers into these different value-based versions of care and these alternative payment methods really gets all everyone who's involved in this process all trying to work toward the same goal. And so that's why this is important for total cost of care is because when we're just trying to push from one side, um, we we won't be able to make as much progress as if we get everybody around the same table working toward the same goal. And we think that's what value-based care and alternative payment models do, is they get the providers on the same team as us rather than feeling like two different sides.

Yeah and let me add to that a little bit, Kevin. And I apologize for cutting out a second ago. My Zoom decided, apparently that I had been on long enough, so I reset. So, uh, Kevin's 100 percent right. You know we we see value programs as a lever or a tool to address total cost of care and one of the reasons that we're able to use that, particularly in two ways really, in North Carolina and then with the Total Care Program across the country, is you know we have all of the largest health systems in North Carolina and more than 850 independent PCP practices in a value-based program in North Carolina. So there's really no geographic area in the state that doesn't have value available. I mean, we have all of those those members, you know, that are being their providers being held accountable for the total cost of care and quality of those members. So particularly within the state, and then as we travel across the country, the total care program mentioned a couple a couple of numbers earlier is getting larger every day. And so really you're looking at it as fairly ubiquitous now. That if you're a member and you're in the United States, you're going to have the opportunity to  get the benefits of a value-based program, to the points that Kevin made. So uh it's not a rarity anymore and it's something, again, that we have virtually all of our providers of virtually all of our members covered by today.

Brandon, that's actually a really great segway to my next question. What plan is in place for an employer with employees not in a value-based care area?

So number one, that's rare now, as I mentioned. Sorry I jumped the gun earlier, but as I said, you know, particularly in North Carolina with the North Carolina's health system driven as you all know, if you're familiar with the environment here. And so we knew it was important to do that. The couple of things that I will say that we're trying to sort of tie up the loose ends are North Carolina is fortunate to have a still a pretty good, substantial number of independent primary care practices. And that is rare across the country, unfortunately.

But what we do in that situation is we use aggregators to bring those folks into value. You know most of those primary care practices really aren't large enough, they don't have the infrastructure to participate in a robust value program. But we do contract with a couple of uh aggregators in the state, as do a number of our fellow Blue plans across the country, to bring independent providers into value. And that, particularly focused on rural areas, and so that's that's one of the things we're focused on. And with the new renewed focus on health equity, which we believe there's a lot of opportunity in, moving into rural areas particularly where you may not have a health system, a health anchor system there, and to reward providers, incentivize providers to expand their Geographic reach. And so um while it is possible that you have a an employer that may not have an anchor health system there, the chances of there being a provider that has accountability for those members is fairly good. We'll continue to recruit in value for providers in North Carolina, and I know that our fellow Blue plans do that also, and of course we share across the Blues Network lots of information on value exchange, lots of data so that we're able to, you know, move patients in and out of those networks when necessary.

Thanks for that, Brandon. This next question is for Danny. "How do we achieve scale versus a national insurer?"

Yeah, so I think the way we do that is our local market knowledge and influence that we generate there.We've got over four million members in all 100 counties throughout the state. That allows us to leverage and execute our programs. Every Blues program across the nation has a strong relationship with the providers. They've got in-depth local market knowledge, and that allows us to create a network with a meaningful savings. Like, for example, our nationwide Blue HPN product. In more markets across the nation than our competitors. I mean that's over 65 markets and includes all the top 10 US cities. Nationally, Blue Cross has the largest hospital and physician networks, with 97 percent of all US hospitals and 85 percent of physicians are included in that portfolio. So I think that local market knowledge and the network and relationships we have with all the other Blues across the nation gives us the same footprint that you see from any probably large national provider.

Thanks for that, Danny. And I just realized there was another question in the chat from Lena, and this going back to Brandon when he was talking about the independent provider aggregators. Can you give an example of any of these? Are we able to share any names of what exactly we mean by an independent provider aggregator?

Absolutely. Yeah, so sure, just so just real quickly, um an aggregator is simply an organization that aggregates a couple of things. Aggregates financial risk, for one thing. We talk about value programs of financial accountability. Some of those aggregators will shield some of the providers from downside risk in some situation, but basically what it is is it's a company that specializes in bringing together independent providers into an ACO that normally would that don't have necessarily organic growth like a health system, like a Duke or UNC has their own ACO, but what you have is the aggregator goes into a particular geographic area and agrees, signs agreements with independent providers who then are dependent on one another for risk in creating an Accountable Care Organization.

So we have three, or actually a little bit more than three, um number one we contract with Aledade. They're a national player, probably the leader, national leader and aggregator. They have been in place since 2019. They've been very successful in North Carolina.

We have contracts with Caravan, who aggregate smaller health systems, smaller hospitals that are not part of the large uh big big eight or big nine in North Carolina because, again, uh there you do have to have a certain amount of attributed membership in order to take on Financial Risk. CCPN has been around North Carolina for a long time, sort of born in the Medicaid space, and they have a number of independent practices in North Carolina also. And then we also have, UNC has UNC Health Alliance, which includes some independent providers in addition to UNC-owned providers. And then Cone THN, also the same thing where you have a partnership between, uh Cone and the Greensboro area.

And then also some independent providers in the Triad, so um all in all there are more than a thousand of those providers aggregated. And we work with them. The aggregators help the practices transform into value-based care delivery, providing analytics, providing back office in some cases, but mostly advice on how to succeed within a value-based program. And that has been very successful in our providers, and independent providers of North Carolina have been very happy about that. And it keeps them independent. So not only does it bring them into a value situation. It also gives them the opportunity to stay independent, and they want to be because they've stayed that way to this point and obviously if they stay independent and don't join a local health system, that certainly helps from a network cost perspective.

Thank you for answering that, Brandon. We're really lucky to have these aggregators to be able to help these independent providers and practices to enter into value-based care models. Appreciate that information.


[SCREEN TEXT] Cost Continue to Rise

Cost of Care Framework

Solutions to Contain Cost

All right, so with that being said, I do not see any more questions in the Q and A, so we will be prepared to wrap this up. So just in review, in this webinar we talked about what's driving the rise in health care spending, the four components of total cost of care, and how this framework drives strategies that are critical to improving quality and costs now and in the future, and what specifically we all can do to ensure your members have access to the right care at the right time and at the right price in order to make a meaningful impact on the health of your bottom line in your workforce.

Again, please reach out to your authorized Blue Cross North Carolina representative to learn more.


Also be sure to visit our Smarter Better Health Care website where you'll find lots of great content on optimizing your health plan to better manage your total cost of care, including white papers and solution spotlights. We will publish the recording of this webinar to the website as well.


Finally, thank you for joining us today and thank you to our panelists. We sincerely appreciate your time. And do not forget to give feedback through our survey.

Have a great day, and also don't forget to vote.

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