PEBB Considers Plan Design Changes

July 22, 2010 -- The tension between union and management officials was virtually non-existent on Tuesday when discussions revolved around healthcare benefits for state workers in 2012 and beyond.

 

The Public Employees Benefit Board (PEBB) is focused on coming up with a new health plan design for state employees and their dependents. With medical costs rising by 10 percent annually and the state facing a $2.5 billon deficit next biennium, the likelihood of keeping current benefit levels intact appears extremely unlikely.

 

Currently employees are required to make small co-payments for healthcare services, but aren’t leveraged deductibles. Next year employees will be charged $100 for sleep studies and medical imaging procedures such as MRIs and CT scans, which will save up to $3 million. 

 

The prospect of a value-based benefit design – known as an essential benefit package -- requiring higher out-of-pocket expenses for medical treatments not considered as effective seems to hold promise. Under such a scenario, healthcare services would be tiered similar to the prioritization of Oregon Health Plan services, according to Darren Coffman, administrator of the Health Services Commission.

 

Under such a program, people wouldn’t be charged for basic diagnostic tests or immunizations to manage chronic conditions such as diabetes or coronary artery disease. But they’d pay the highest level of cost sharing for treating conditions such as chronic low back pain, a sprained ankle, acne, dental implants, a viral sore throat or a liver transplant for cancer. 

      

“This is a very exciting approach,” commented Peter Callero, a professor of sociology at Western Oregon University. “I’m very interested in bending the cost curve as much as we can.”

 

Pitney Bowes, which used a similar model, found that the use of diabetic medications increased from 9 to 22 percent, hospital admissions for employees with asthma went down by 38 percent and short-term disability for employees with diabetes was lowered by 50 percent.

 

If PEBB adopts such an approach, it’s essential to educate employees about these various options, insisted Diane Lovell, who represents the Association of Federal, State, County and Municipal Employees on the board. 

 

The medical complex -- physicians, hospitals and clinics – has a huge role to play in helping patients understand that certain treatments don’t offer the same value. “They have to buy into the logic of this and understand that it’s a rationale approach,” Callero said. “We hear so much about putting pressure on our members. But doctors are considered gods. To pull this off it can’t just be up to patients.”

 

The board meets again next Tuesday to once again talk about plan design changes.

 

Meanwhile, the board is looking at other cost-saving measures such as removing retirees from the state-run benefits program which could save up to $10.5 million and ending the rural subsidy in 18 counties for a cost savings of $4 million.