Member Update
At this time, I would like to provide you with some timely highlights as we continue to focus on improving our financial picture and the health of our members.
November Financial Report
Summary of the Plan’s November Financial Report:
- The ending cash balance for November was $77.2 million, which exceeded the projection by $37.6 million.
- Although expenses continue to exceed income, the Plan’s year to date net loss at the end of November was $62.5 million, compared with the projection of $100.1 million.
Some of the improvement is related to the Plan’s efforts to manage cash flow and reschedule administrative payments until later in the fiscal year. Actual premium receipts year to date are slightly higher than anticipated, while payments for medical and pharmacy claims for the year are slightly lower than projected, through the end of November.
As indicated previously, projections show that the Plan would run short of cash in early 2009. Although year to date financial results have been positive, and the Plan has taken steps to reduce costs or delay expenses, the next few months are still critical in terms of cash flow. The Plan will continue to closely monitor actual performance compared to projections.
Introducing Consulting Medical Director Derek Prentice, MD
I am pleased to announce that Dr. Derek Prentice has joined the State Health Plan as our part-time consulting medical director. Dr. Prentice graduated from Edinburgh University Medical School in Great Britain and completed his residency in General Practice before moving to North Carolina. For the past 29 years, he has held academic positions at Duke University Medical School and East Carolina Medical School, as well as medical management positions with major health care organizations.
Dr. Prentice will advise the Plan in the areas of pharmacy and medical management, medical policy development, and opportunities to improve quality and access to care for our members.
Chronic Disease Management
“The State of Member Health 2008: Health Trends and Interventions for Plan Members” will be released shortly. This important report builds on a 2004 publication about the presence of chronic disease in the population. The 2004 report projected an increase in the percentage of members with chronic disease to 51%. According to our update, this statistic has proven accurate. However, on the positive side, projected cost increases for members with chronic illness have not been realized. In fact, costs for services to members with targeted chronic diseases have decreased by 5% per member per year, over the past 4 years.
NC HealthSmart disease and case managements services have had a positive impact on member health and Plan costs by helping members with chronic illness better manage their condition. A comparison of the cost of care for members with a chronic illness who participated in NC HealthSmart Health Coaching services, with those who did not use Health Coaching services, indicates an $18 million dollar savings in 2007. In fact, the Plan saved $2 for every dollar spent in providing Health Coaching services.
The Plan expects incremental savings and positive health outcomes, as the NC HealthSmart program expands outreach to more members, and as we build on our successes in managing chronic disease costs. In particular, we will explore opportunities to support and encourage members to adopt or maintain a healthy lifestyle. The desired results: Lower chronic disease prevalence and lower associated costs to the member and the Plan.
Look for “The State of Member Health 2008” on our Web site, coming soon.
Pharmacy Initiatives
In our ongoing efforts to create value and quality of service for members through our pharmacy coverage, we will soon announce the launch of a new cholesterol-lowering medication adherence program. This program encourages members with high cholesterol to take their medications. A reduced copay for generic cholesterol-lowering drugs will be a major component of the program.
As new generics become available in the marketplace, the State Health Plan continues to see an increase in their use. This is reflected in our current generic dispensing rate, now at 65 % -- in contrast to a rate of 56% only two years ago. It’s important to note that the use of generics saves money for both members, in the form of lower copays, and the Plan.
Please be sure to visit this Web site often for reports, updates and information about pharmacy and other new initiatives.Back to Top
