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Board Minutes, November 21, 2006
Public Employees’ Benefit Board
Tuesday, November 21, 2006 10:30 a.m. to 4:30 p.m. - Minutes
PEBB Board Room
775 Court St NE, Salem OR
Approved December 19, 2006

Board MembersPresent
Diane Lovell, Chair
Peter Callero
David Hartwig
Rocky King
Sue Nelson
Paul McKenna
Jeanene Smith (via conference call)
PEBB Staff Present
Bobbie Barott
Sandy Johnson
Claire Kemmerer
Lydia Lissman
Ingrid Norberg
Scott Smyth
Rebecca Sweatman
Rick Schoonover
Jean Thorne
Consultants Present
Pam Hodge, Aon
Sheri Gutzmer, Aon
Dennis Tierney, Aon
Barbara Wall, Aon
Guests Present
Gary Allen, Willamette Dental
Thandi Clements, VSP
Salley Hill, Providence
Gordon Hoberg, ODS
Ron Klein, AFLAC
Renee McDonald, Regence
Megan Myrick, Willamette Dental
Paul Pfinster, AFLAC
David Scearce, The Standard Insurance Co.
Kim Waldroff, BenefitHelp Solutions
Ryan Webster, Providence
Welcome and Approval of Minutes
Overview of Agenda
Operations Subcommittee Report
PEBB Trends
National Innovations Aligned with Vision
Trends in Evidence-Based Plan Design
Background Materials for Development of PEBB Board’s 2007 Work Plan
Identifying Board Priorities for its 2007 Work Plan
Dental RFP
Cross-subsidization in PEBB Programs
Council of Innovators Update
General Public Comment
Other Business
Welcome and Approval of Minutes/Operations Subcommittee Report
Diane Lovell called the meeting to order.  Paul McKenna moved to approve the minutes from the October 17, 2006 meeting (Bdattach.1 ) (doc). Rocky King seconded the motion.  The motion passed unanimously.
Overview of Agenda
Jean Thorne noted that much of the information being presented today is to provide a context for the Board’s decisions around priorities for its 2007 work plan.
Operations Subcommittee Report
Paul McKenna presented the Open Enrollment report and shared how smooth the process went this year.  Agencies have the latitude to accept late enrollments from their employees through November when there is good cause.  PEBB received twice as many calls during this Open Enrollment as during the 2004 Open Enrollment, but half as many as 2005. 
Budget Update:  PEBB is projecting to end the biennium with the Total Limited Expenditures very close to the total Limitation.   Kaiser incentives continue to run higher than originally projected. The Limited Expenditure projections do not include potential move costs.  If PEBB moves before the end of the biennium, another DAS division will need to cover the limitation.
Action items
  1. Member Appeal.  In August 2006 PEBB sent a letter to retirees who retired between January 1, 2005 and July 31, 2006 and who selected dental coverage only.  The letter informed the retiree that during this time some retirees were given inaccurate information regarding their benefit options.  Some were told they could select dental only upon retiring and at a later time in the future select PEBB medical coverage.  This information was incorrect and not consistent with PEBB Administrative Rules. Retirees were told in the letter that if they wished to have medical coverage anytime in the future they needed to enroll prior to November 1, 2006.  Approximately 190 letters were sent.
The retiree appeal is requesting they be allowed to continue dental coverage only and be able to enroll in PEBB medical in the future.  The member states that because of the initial incorrect information she made a decision to retire in July 2006.   She is currently receiving medical coverage under her spouse’s employment group coverage.  The member states she cannot afford to purchase the PEBB medical coverage now. 
The Subcommittee voted to deny the appeal and is recommending that the Board uphold the denial.  Open discussion followed regarding the nature of the staff error, member notification process and timeline, number of members affected and alternate coverage opportunities available to the appellant.  David Hartwig seconded the motion.  The motion passed unanimously.
  1. Consultant Contract:   Staff requested approval for a one-year (rather than two-year) renewal for the Aon contract since the new primary consultant came onboard in November.  The Subcommittee voted to support the staff request for a one-year renewal of the Aon contract and is requesting that the Board accept this recommendation.  The Board could still decide next spring to offer another one-year renewal, or to go out with an RFP at that time.  Jean Thorne shared meeting details between Aon and PEBB at which expectations and performance concerns were discussed at length.  Rocky King seconded the motion.  The motion passed unanimously.
PEBB Utilization Trends
Dennis Tierney discussed the demographic and professional service changes seen this past year (Board handout).  Data presented showed comparison from 2004 to 2006 in the following areas:
  • selected professional services per 1,000 member and average cost per service,
  • inpatient admission, length of stay and price per day, and
  • select prescription drugs, scripts per member and average price.
Consultant’s conclusions are that:
  • 2004-2005 were favorable years for cost and utilization.
  • 2006 data reflect seasonality and a partial year.
  • Utilization and costs remain favorable to premium projections for 2006.
  • PEBB’s utilization and cost components remain favorable over all.
National Innovations Aligned with Vision
Barbara Wall joined Aon in November and has worked in the health care field since 1991.  Barbara’s work experience has been with such groups as Lifewise Health Plans, Evergreen Health & Life, Premera Blue Cross of Washington, and Kaiser Foundation, to name a few. 
Barbara Wall presented information on the overall trends in healthcare and the application to PEBB’s Vision elements as follows (Bdattach.2 ) (ppt):
  • Medical Home Provider– consensus has developed for the role of the medical home provider.  PEBB is contributing to the growth of the Patient-Centered Medical Home through its carrier initiatives.
  • Evidence-based Care/Practice Guidelines– slow growth continues.  Where strong provider relationships exist, growth is faster.
  • Evidence-based Care/Pay-for-Performanceis starting to accelerate.
  • Member Self-Managementhas been historically disease-specific.  The scope of member self-management is widening beyond clinical support for a specific disease.
  • Service Integration– State agencies lead development in this area, most programs being sponsored by state Departments of Human Services.
  • Developments in Infrastructuremake steady progress.  The Federal government issued an Executive Order August of 2006 directing federal agencies to improve interoperability of agency information systems dealing with health insurance.  OHPR and the private sector have a joint initiative to identify solutions and an implementation plan to address practices and state laws that affect privacy and security.
  • Transparencyhas experienced steady progress in utilizing clinical systems and health information exchanges.  The creation of the Oregon Patient Safety Commission has been a turning point for the state.  Health information exchanges sponsored by business coalitions of purchasers are proliferating; sharing regional claims based data to report cost and quality information.
  • Managing for Quality- Improvement is variable with some areas of high performance (i.e., rapid response team for clinical assessment in hospitals).  Computerized physician order entry reduces transcription errors.  In western Oregon 11 of 57 hospitals have shared data for public disclosure with Leapfrog Group. 
Consultant’s assessment of PEBB’s position in relation to implementation of the Vision is:
  • The lines between initiatives to achieve the Vision elements are beginning to blur and efforts overlap as change in healthcare and benefit coverage accelerates.
  • PEBB’s plan for implementation of the Vision is keeping pace with developments in the industry.
  • Aon’s recommendation is to continue to implement the individual carrier work plans to execute the Vision goals.
Trends in Evidence-Based Plan Design
John Santa, MD, of the OHSU Center for Evidence-Based Policy (and previous PEBB Board member and chair), reviewed Bdattach.3  (ppt) concerning evidence-based benefit design.  He outlined the ways in which evidence has been used in developing plan designs for prescription drugs, the barriers to using evidence more broadly in benefit design and strategies for overcoming those barriers.  He specifically spoke to utilizing the Oregon Health Plan priority list (or categories based on that list) as a way to scale levels of cost-sharing, although he also indicated that a more incremental approach would be a way for PEBB to get its “foot in the water”.
Board discussion centered on the following issues:
  • If the Board would want to pursue a broader approach, the Board would need to feel confident in the work of others (vs. conducting its own research);
  • This would present challenges in communicating with members, who are used to more traditional benefit language (i.e. based on broad categories, such as inpatient, physician, etc.);
  • Members may not be accepting of trade-offs because resources have not necessarily been seen as finite (except that health insurance costs may decrease the ability to receive cost-of-living increases);
  • The health care delivery system needs to be able to administer the benefit, although providers have experience with the OHP;
  • A broader approach presents opportunities, but the Board needs to really understand the benefits and be able to articulate the rationale to members;
  • The Board needs to recreate in its own mind what it desires; this is bigger than the Vision and can’t be done within a year.
Dr. Santa noted that it is critical that there be supportive providers and clear-cut trade-offs.  Some employers are seeing this approach as being preferable to taking other actions they are facing, such as discontinuing dependent coverage.
Background Materials for Development of PEBB Board’s 2007 Work Plan
Jean Thorne shared an update on The Health Care Quality Corporation and Purchasers Coalition.  The Health Care Purchasers Coalition has begun to grow this past year and has now received a formal endorsement from the Oregon Business Council to have their members join (Intel, PGE, NW Natural, Harry & David’s, etc.).
Jean Thorne noted that the Board early on acknowledged that PEBB, by itself, would not be able to incent significant change in the health care system; other purchasers would also need to be asking for the same.  In a recent presentation on the PEBB RFP, to the Coalition, it was clear that not many groups are in a position to go through the process PEBB did.  The Purchasers Coalition is part of the National Business Coalition on Health which uses an RFI (Request for Information) called eValue8.    Health plans complete the RFI annually and the responses are reviewed against national metrics, by nationally trained scorers, and plans are communicated with on specific areas.  eValue8 asks questions in the areas of consumer engagement, provider performance measures, Leapfrog, high performance networks, community collaboration, patient safety, performance feedback, and health information technology; many of the same areas covered by the PEBB RFP.   The Purchasers Coalition has endorsed use of eValue8, which gives baseline information on quality elements.  The information gathered can be used in measuring performance locally and against national standards.  PEBB’s message is taking hold in the community.
The Purchasers Coalition felt this is an excellent tool to send a consistent message to the market about what purchasers are looking for.  The Coalition has sent letters to ten Oregon health plans asking them to participate in the RFI.  As of November 20th, six Oregon health plans have committed to participating; Kaiser, ODS, Providence, Cigna, Healthnet, and United (formerly Pacific Care).  Regence, Pacific Source, Samaritan, and Lifewise are being pursued.   
Jean Thorne reviewed the work plan for 2006 and priorities (Bdattach.4_4a_4b) (doc).  Attachment 4a includes specific staff recommendations around each of the areas already identified by the Board.
Jean Thorne discussed the possible need for the Board to meet twice of month for the next few months in order to complete the work around medical renewals, dental RFP, etc.
Identifying Board Priorities for its 2007 Work Plan
After lengthy group discussion regarding what should be priorities for the Board’s time, since some of these items are efforts that are moving forward with staff, consultants, plans, state agencies, etc.; the following are priorities for the 2007 Board Work Plan:
Items highest on the list of priorities
  • Evidence-based care– the Board agreed action is necessary, but recognize that doing something dramatic (e.g. using the OHP list) couldn’t occur prior to 2009.  There seemed to be reluctant agreement to do something incremental (e.g. lower back pain) for 2008 as a “pilot”.  Jeanene Smith noted we/the Board need to understand how the list has been revised.
  • Dental RFP– to be processed according to the current timeline.
  • Performance measures reporting– the Board agreed to discuss how the information will be used by the Board and how it can be presented for members’ use. 
Additional items that are priorities, but not as high for use of Board time
  • Other RFP(s),e.g. consultant, TPA, life/disability, vision – revisit in the spring.  Discussion needed regarding possible workload for each and whether this is the right timing.
  • Bariatric surgery– The Board expressed the need to understand what the HRC is recommending about bariatric surgery; they agreed on PEBB staff recommendations regarding reporting.
  • By-laws– Staff will continue to work on this, bringing the Board decision points as needed, with the goal of finishing this by the end of 2007.
  • Wellness– Although Diane Lovell stated the Board needs to do something in this area, Sue Nelson noted that the leadership for this really needs to come from DAS and the Governor’s Office.  Jean Thorne noted that Public Health has drafted some suggestions of what could be suggested for state agencies from the Governor’s Office.  Diane Lovell felt the Board could review those ideas.   Unions could also help provide leadership within their constituencies.
  • Plan progress in implementing Vision– The Board agreed to move to semi-annual written reports, having staff bring highlights to the Board.  It was suggested having a joint meeting with the COI twice during the year, focusing plan responses on specific topics that might be ready for a discussion (e.g. evidence-based plan design).
  • Member engagement– Several Board members suggested that members won’t engage unless there is a specific change (e.g. plan design) for them to engage in.   The Board  would like an expert to come talk with them about how to get members engaged.
Other issues to address(although not a specific priority)
  • Standard demutualization
  • GASB report – possible actions
  • OAR rewrites
Coming off the list of priorities
  • Monitoring Rx changes– Operations Subcommittee will be able to review because that is category for member services calls.
  • Weighting of tiers
  • Opt-out
  • Rural subsidies–  Data is still being collected; once presented the Board can decide whether to take any action.
  • Self-insurance expansion– The Board would like a report in the fall from the consultants about what it would take (financially, structurally) to take action on this item.
  • Pay-for-Performance– the Board wants to have staff and the COI work on this. 
Dental RFP Update
Pam Hodge presented Bdattach.5 stating that though there was some fine tuning done from last version, the document and timeline remain the same and on track.
Discussion was around areas of asking carriers for responses regarding innovative plan design, recommendations for alternative plan design [as offered by the respondent] and evidence-based care. 
Jean Thorne addressed the timeline update regarding the issue of having response time for member input.  This can still be incorporated with allowance for Board decision to happen in May.
Cross-subsidization in PEBB Programs
This item was removed from the agenda per discussion in the Board Priorities for 2007 discussion.  The topic will be reviewed at a later time if necessary.
Council of Innovators Update
Jean Thorne: COI looked at the initial report for Chronic Disease Management (CDM) and reviewed data that is still being compiled.  Plans will be pulling specific information on spinal data for PEBB population vs. Medicare or commercial populations.  The group started looking at diagnostic imaging, however, further discussion is needed around data just received.  The CDM report will be presented at the December Board Meeting. 
General Public Comment
Ron Kline, AFLAC shared with the Board information regarding Critical Illness Insurance and possibly offering this benefit in 2009.  This insurance provides coverage during an unforeseen critical event.  Currently, financial planners counsel clients to set aside three to six months of income for the possibility of a critical event.  This insurance provides cash to the individual and goes along with major medical coverage.   
Other Business
Jean Thorne distributed a handout she presented to the Oregon Business Council wellness task force regarding PEBB’s experience with changes in the prescription drug plan design and prescription drug costs.
Diane Lovell gave an update on the union work group on health insurance.  Diane was very impressed with the work done by the group.  Sue Nelson added that a lot of interest was shown regarding what unions can do to support PEBB (i.e., unions collaborating with agency management for member engagement, etc.).    
Jean Thorne talked about the suggested timing of two meetings per month from January through May.  Jean will send out an e-mail to the group soliciting preference on meeting times/dates.