2002-07-15 Special Called Regular Meeting and Workshop Meeting

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• The Welch CO~'pa"'y Disease Manaaement ~~ Part four of six components of a Model for Health Plan Review The traditional healthcare consulting engagement focuses on the administrative components of a plan. Contracts, fees, networks, plan design, customer service, claims administration etc. are all evaluated to determine their appropriateness to the entire employee group. -- These services are all very important. However, they do not address the actual illnesses that cause the healthcare plan expense. The study of the actual illnesses and approaches to their care is called Disease Management. After years of review and study health plan sponsors have grown to understand the "80/20" rule. Simple stated 20% of claims account for 80% of dollars. With this axiom in hand should we not focus on the 20% of claims (therefore claimants} for the most dramatic improvement in plan performance? The action of focusing on the 20% of claims is the essence of Disease Management. -~ As an example, in school districts we are always fearful of how the cost of pre-mature infants could ruin a plans performance. Given the young female demographic nature of a districts population, this is a real concern. However, in recent years without a change in demographics the incidence of pre-mature infant births has not only decreased in frequency, but in cost as well. Many years of consulting has shown that by concentrating on the 20% you will find budding problems in the 80% population. Therefore, a thorough consulting engagement should embrace: :' Discharge rate analysis - Cost impact triggers ~ Recidivision Illness prevention - Length of stay analysis Chronic illness analysis The mechanics utilized to discover disease trends within a group quickly produce risk /reward scenarios for action by the consultant and plan sponsor. Simply stated you must treat the disease to make the patient well. In our case, you must treat the prevalent diseases to make the plan well!