Class 1: Consumer driven health care -> Medtronic

Question 1

What were the 3 elements of the Definity Health Plan offered by Medtronic?

Answer 1

1. Personal Care Account (PSA) aks. Health reinbursement account (HRA) -> Employer contributed, rollover, prevneative care is covered 100%—HSA is simialr but both employer and employee covered
2. Comprehensive health insurance with 3 levels of deductibles
3. Tools and resources for decision making

Question 2

What about “gatekeepeers” in the definity health plan and what did that allow consurmers?

Answer 2

There were no so consumer can make thier own decisions

Question 3

What were the cost impact to Medtronic?

Answer 3

It was cost neutral

Question 4

What is BHCAG?

Answer 4

Buyer healthcare action group, a purchase coalition.

Question 5

How was acquisition for the Definity plan by medtoric employeess?

Answer 5

13%, but stats demogrpahi stats were simialr to other plans. It was assumed younger woudl gravitate this way. Started with majority male and then 50/50

Question 6

What is price elasticity? and where does health care expenditures fall into?

Answer 6

If a small change in price is accompanied by a large change in quantity demanded, the product is said to be elastic (or responsive to price changes). On the other hand, a product is deemed inelastic if a large change in price is accompanied by a small amount of change in quantity demanded.

Healthcare is elastic. Cost sharing really decreases uses. in fact, most cost are from less serious conditions showing that people are willing to use it for small studd, since they are not “paying for it”

Question 7

How has saving for healthcare expenses been encouraged?

Answer 7

HSA/FSA/HRA

Question 8

What is CDHC? and what led to it?

Answer 8

Consumer driven healthcare. Lead due to dislike of:

• Bureoicratic policies for specialy referaals by HMO (Health Maintenance Organization)
• employers faced extra costs.
• More power by consumers to search internet
• want alternatives like accupucnture

Question 9

What were characteristics of BHCAG in Minnesota?

Answer 9

Buyer health care action group

• Very consolidtaed market with plans featuring smae providers
• Provide cosnuemrs with infromation on cost, satisfaction, and other performance differences [Initally employers feared employees would not udnerstand this data -> migration of paitients affect how providers serve
• Contarcted with ACO(Accountbale Care Organizations) comprised of phsyicians, hospitals, etc that each determined thier own policy and governing.

Question 10

What is BHCAG reinbursement system? Steps

Answer 10

1. Combine provider fee levels
2. adjust for illness level
3. Place in tier [Hold accountbale based on utilization]
4. Bid for patient,the lower would generally get more patients.

Given the RISK ADJUSTMENT PROCESS algorith, its’ not about enrolling healthy patients by managing cost well with current patients and their illness levels

Question 11

What happened to BHCAG?

Answer 11

Basically failed the game of business and big guys won, sold to regional HMO to becmoe a mianstream prodcut+

Question 12

in what ways did the 3 plans offered to Judith ( Health Partners, Medica, Definity Health) differ from each other and similaroty?

Answer 12

Similar: chose her own doc but out of network not fully covered

Different: Deductible, Max out of pocket, Ability to access providers

*Definity encoureged cneters of excellence and has PCA in in tax efficient way

Question 13

What was Medtronic philosophy of patients for their employees?

Answer 13

“Whole in mind, body, heart, and spirit”