Unique Collaboration between VEBA, Sharp HealthCare and UnitedHealthcare Expects to Save California Schools $12 Million in Benefit Renewal Costs
- Performance HMO plan encourages VEBA plan participants to seek care from providers that meet quality and cost standards
The California Schools Voluntary Employee Benefits Association (the VEBA), in partnership with Sharp HealthCare and UnitedHealthcare, expects to save its 30 participating school districts, representing almost 80,000 members, $12 million in overall benefit renewal costs for 2011.
The expected cost savings is due to anticipated enrollment in the new Performance HMO plan — developed by the VEBA Board of Directors (the Board), Sharp HealthCare and UnitedHealthcare and other care providers — to encourage VEBA health plan participants to seek care from providers that meet national quality and cost standards. The Performance HMO plan takes effect January 1, 2011.
According to Dr. Kim Myers, a member of the VEBA board and Vice Chancellor, Human Resources, San Diego Community College District, “This unique approach to health plan design will achieve savings for the Districts and the employees which exceed the 11 percent increase we would have incurred had we maintained the status quo. In this approach, employees still have the ability to choose from multiple plan options. If an employee chooses a network that is rated as having greater value (Stars) in the Performance Network, he or she will pay less than if he or she selects a network with lesser value rating. We are trying to incentivize our employees to select the most effective and efficient healthcare providers while not limiting their selection choices. This approach accomplishes that goal.”
Based on quality data from the California Office of the Patient Advocate and cost data from actual provider claims, the VEBA Board developed performance standards for medical groups in San Diego County. Under the Performance HMO plan, medical groups are divided into three networks based on how well they met the quality and cost standards. The VEBA members are encouraged to choose a provider as carefully as they would any other product or service because each network offers a different range of benefits and costs.
Among the three networks, providers in Network 1, which includes Sharp Rees-Stealy Medical Group, Sharp Community Medical Group and Sharp HealthCare’s hospitals, had the best combination of quality, patient satisfaction and cost, based on the performance standards.
“As health insurance premiums continue to rise, more employer groups are looking for ways to rein in costs while continuing to offer their employees and retirees access to high-quality care,” said David Anderson, CEO, Southern California, UnitedHealthcare, which helped craft the innovative new plan for the VEBA members and will also provide administration. “We anticipate we will see greater demand for plans like the Performance HMO in the future.”
According to Mike Murphy, President and CEO of Sharp HealthCare, “Our hospitals and affiliated medical groups have achieved excellent clinical quality outcomes and demonstrated their ability to control costs in a managed care environment for more than 25 years. While this approach is the cornerstone of new health care reform initiatives, we have been successfully operating this way for years because it’s the right thing to do for our patients.”
Fellow VEBA board member Mark Anderson, representative, Local 1931, and member of the executive board of San Diego Community College Guild, said, “The real winners here are our students, since this partnership allows more dollars to go into education instead of ever-increasing benefits.”
The Performance HMO sets national standards for provider performance by motivating providers to improve outcomes and efficiencies to increase competition, and rewards members with lower costs for using high-performing providers. Through its unique collaboration with Sharp HealthCare to provide care to members and UnitedHealthcare to implement the plan, the VEBA expects a smooth transition to the new plan.
About The VEBA
The California Schools VEBA is a trust that offers school districts and employee organizations buying power and the structure to provide control over a variety of benefit issues. Benefits trusts continue to positively influence the quality of care delivered by contracted carriers and their providers. They also help members attain superior health care choices, rate stability, portability, affordability and quality for education employees. Total participation in the trust includes 30 southern California school districts and associations. The trust serves both employees and their dependents, totaling almost 80,000 members.
Southern California VEBA Administrator, Inc. is the plan administrator and general manager for the VEBA trust. Its staff includes licensed insurance professionals specially trained as consultants, and customer service support personnel trained to answer questions, solve problems and assist VEBA members. For more information visit www.vebaonline.com
About Sharp HealthCare
A 2007 Malcolm Baldrige National Quality Award recipient, Sharp HealthCare is San Diego's most comprehensive health care delivery system. Sharp HealthCare has been widely acclaimed for its commitment to transform the health care experience for patients, physicians and staff through an organization-wide performance improvement initiative called The Sharp Experience. Sharp Community Medical Group is an association of more than 700 primary and specialty care doctors (including Graybill Medical Group in North San Diego County) who practice independently. Sharp Community Medical Group doctors admit to all Sharp hospitals and Rady Children’s Hospital, as well as Palomar Medical Center and Pomerado Hospital. Sharp Rees-Stealy Medical Group is a multispecialty group with 19 locations and more than 400 primary and specialty care doctors. Most medical centers offer primary and specialty care, urgent care, laboratory and radiology services. Sharp Rees-Stealy doctors admit primarily to Sharp Memorial Hospital and utilize other Sharp hospitals and Rady Children’s Hospital. To learn more about Sharp, visit www.sharp.com.
UnitedHealthcare provides a full spectrum of consumer-oriented health benefit plans and services to individuals, public sector employers and businesses of all sizes, including more than half of the Fortune 100 companies. The company organizes access to quality, affordable health care services on behalf of approximately 25 million individual consumers, contracting directly with more than 600,000 physicians and care professionals and 5,000 hospitals to offer them broad, convenient access to services nationwide. UnitedHealthcare is one of the businesses of UnitedHealth Group (NYSE: UNH), a diversified Fortune 50 health and well-being company.