1. 1. GEHB Paying More For Less Healthcare
2. 2. The U.S. Healthcare Environment
3. 3. Healthcare Prices Experiencing Great Moderation 0% 2% 4% 6% 8% 10% 12% 14% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 % Change In Healthcare Costs 2000-2013 Total HC Spending Private Health Insurance Premiums Household HC Spending Source: Center for Medicare and Medicaid Services National Health Expenditure Data
4. 4. Trends Opposite Of What Youd Expect From Consumer Directed Price Lull
5. 5. Before Current Agreement HealthChoice Experience Signaled Disturbing Trends
6. 6. Hospital Admissions Declined 14% 19,719 20,041 19,381 16,723 2007 2008 2009 2010 # Hospital/MHSA Admissions (Salaried) 2007-2010
7. 7. Outpatient Radiology Procedures Declined 23% 52,713 52,887 54,621 42,720 2007 2008 2009 2010 # of Radiology Scans (Salaried) 2007-2010
8. 8. ER Visits Declined 19% 71,763 71,797 70,507 57,010 2007 2008 2009 2010 # of ER Visits (Salaried) 2007-2010
9. 9. GEHB Hourly Utilization Experience Shows Identical Trends
10. 10. Hospital Admissions Down 15% 7,028 6,169 6,052 5,980 2011 2012 2013 2014
11. 11. Family Units With More Than Two Hospital Admissions Down 5% 379 326 341 360 2011 2012 2013 2014
12. 12. ER Visits Dropped For Two Years 22,589 21,411 19,870 22,743 2011 2012 2013 2014
13. 13. 2014 Spike in ER Visits Likely Due to ACA
14. 14. Outpatient Radiology Visits Down 11% 18,966 16,241 16,840 16,824 2011 2012 2013 2014
15. 15. Annual Specialty Declined Over Two Years 4.9 4.2 4.7 4.8 2011 2012 2013 2014 Annual Specialty Visits Per Family Unit
16. 16. Overall Pharmacy Use Declining... 25.4 22.5 23.3 23.1 2011 2012 2013 2014 # Prescriptions Per Active Family Unit Per Year
17. 17. ...Yet Employee Pharmacy Costs Increased 22%... $844 $946 $896 $1,032 2011 2012 2013 2014
18. 18. ...And GEs Pharmacy Cost Per Employee Dropped 11% $1,773 $1,355 $1,611 $1,608 2011 2012 2013 2014
19. 19. Significant Cost Shifting From GE To Workers
20. 20. Many More GE Families Meeting Annual Deductible 2011 2012 2013 2014 HCP 2,376 GEMB 3,842 GEHB 22,718 23,905 22,872 Total 6,218 22,718 23,905 22,872 # of Family Units Meeting Annual Deductible % of Family Units Meeting Annual Deductible 2011 2012 2013 2014 15.4% 56.4% 56.7% 54.7%
21. 21. Many More GE Families Reaching Out-Of-Pocket (OOP) Max 2011 2012 2013 2014 HCP 25 GEMB 684 GEHB 7,434 8,434 8,090 Total 709 7,434 8,434 8,090 # of Family Units Reaching OOP Max % of Family Units Reaching OOP Max 2011 2012 2013 2014 2% 18% 20% 19%
22. 22. GE HRA Program Doesnt Work For Us
23. 23. Account Balance Trends Initially Looked Positive... 2012 2013 2014 # Of Family Units with $0 HRA Balance 7,073 6,576 5,412 % of Family Units with $0 HRA Balance 17.4% 15.6% 12.9% Average HRA Account Balance $498 $730 $922
24. 24. But Significant Money Left On Table Enrollment Level Conractual HRA Contribution OOP Spending (Pre HRA) Actual HRA Usage HRA Money Left On Table Option 1 - Single $600 $876 $70 $530 (88.3%) Option 1 2 person $900 $2,171 $570 $330 (36.7%) Option 1 - Family $1,200 $2,757 $793 $407 (33.9%) Option 2- Single $600 $670 $202 $398 (66.3%) Option 2 2 person $900 $1,918 $480 $420 (46.7%) Option 2- Family $1,200 $2,609 $723 $477 (39.8%) HRA & Out-Of-Pocket Spending - 2012
25. 25. HRA Usage Improved In 2013 Significant Money Still Left On Table Enrollment Level Conractual HRA Contribution OOP Spending (Pre HRA) Actual HRA Usage HRA Money Left On Table Option 1 - Single $600 $902 $361 $239 (39.8%) Option 1 2 person $900 $2,297 $727 $173 (19.2%) Option 1 - Family $1,200 $2,890 $991 $209 (17.4%) Option 2- Single $600 $699 $278 $322 (53%) Option 2 2 person $900 $2,072 $660 $240 (26.7%) Option 2- Family $1,200 $2,735 $929 $271 (22.6%) HRA & Out-Of-Pocket Spending - 2013
26. 26. After Three Years HRA Accounts Still Underspent From 16%-50% Enrollment Level Conractual HRA Contribution OOP Spending (Pre HRA) Actual HRA Usage HRA Money Left On Table Option 1 - Single $600 $981 $354 $246 (41.0%) Option 1 2 person $900 $2,302 $725 $175 (19.4%) Option 1 - Family $1,200 $2,917 $1,004 $196 (16.3%) Option 2- Single $600 $710 $298 $302 (50.3%) Option 2 2 person $900 $2,070 $664 $236 (26.2%) Option 2- Family $1,200 $2,897 $993 $207 (17.3%) HRA & Out-Of-Pocket Spending - 2014
27. 27. Average Worker Lost $700-$1,000 In Benefit Enrollment Level Conractual HRA Contribution OOP Spending (Pre HRA) Actual HRA Usage HRA Money Left On Table Option 1 - Single $1,800 $2,759 $785 $1,015 (56.4%) Option 1 2 person $2,700 $6,770 $2,022 $678 (25.1%) Option 1 - Family $3,600 $8,564 $2,788 $812 (22.6%) Option 2- Single $1,800 $2,079 $778 $1,022 (56.8%) Option 2 2 person $2,700 $6,060 $1,804 $896 (33.2%) Option 2- Family $3,600 $8,241 $2,645 $955 (26.5%) HRA & Out-Of-Pocket Spending -2012- 2014
28. 28. Cumbersome HRA Reimbursement System Confusing to GE Families Worker goes to doctor Refuses to pay bill Doctor submits bill to GEHB GEHB declines bill (deductible not met) Worker attempts to pay bill with Wage- Works debit card WageWorks denies reimbursement(no bill is presented at time of debit card usage) Worker submits new doctors account statement to WageWorks WageWorks denies reimbursement (not an EOB with service dates) Collection company sends notice threatens adverse action against credit rating Worker sends EOB to WageWorks pays doctor from reimbursement account
29. 29. No Insured GE Employee Should Get a $149,000 Medical Bill
30. 30. GE Should Have Known Employees Typically Underspend HRAs
31. 31. Simpler HRAs Exist
32. 32. GEs Three-Card System A Gamble
33. 33. Plan Was Never Even Explained To Employees
34. 34. Other Issues With GEHB HRA GEHB HRA is medical only Inclusion of dental/vision expenses allowable under law WageWorks offers HRAs which have dental/vision coverage Must spend balance while enrolled on plan* Balance erased when you leave GE, switch to spouses insurance, or switch to Option 3 Spend-down provisions allowable under law FSA money comes first as a default Unless employees elect otherwise, FSA money is exhausted before any HRA reimbursement * GE currently allows spend-down only if you turn 65 while still enrolled on Option 1 or 2
35. 35. GE Families FSA Usage Rose Rapidly Account Balances Starting To Fall 2011 2012 2013 2014 Total FSA Accounts 4,416 10,978 10,790 10,408 GE Families FSA Contributions $6,646,054 $15,791,123 $15,888,354 $12,511,210 Even With Rising Participation Less Than 25% Of GE Families Use FSAs
36. 36. GEs Costs & Our Costs
37. 37. GEs 2014 Insurance Costs 6 % Lower Than 2011 $402 $326 $370 $374 $16 $20 $20 $18 $200 $250 $300 $350 $400 $450 2011 2012 2013 2014 Total GE Healthcare Costs (Millions) 2011-2014 Claims Less Contributions Administrative Overhead
38. 38. On A Per-Family Basis, Company Costs Down 10% $10,350 $8,516 $9,268 $9,350 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2011 2012 2013 2014 GE Healthcare Costs Per Family Unit 2011-2014 GE cost per family unit only increased 0.9% in 2014!
39. 39. Is It Really Consumer Driven?
40. 40. GEHB Claims For Pre-65 Higher Than Other Plans $10,882 $10,770 $11,269 $11,351 $9,292 $13,514 $14,304 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 2011 2012 2013 2014 Average Claims Less Contributions Per Covered Family Unit Pre-65 Retirees (Production) HCP GEMB HMO GEHB
41. 41. GE Promised To Pay 76% Of All Medical Care
42. 42. GE Families Paid 27% of Healthcare Costs in 2012 2012 Costs (GE Health Benefits for Production Employees) Estimated Cost Employee premium shares $67,800,936 OOP costs Didnt make deductible $15,346,320 OOP costs Deductible, no OOP max $40,023,984 OOP costs Made OOP Max $26,182,548 Less HRA deductions -$21,335,785 Total known Employee-paid costs $127,387,763 Total employer costs for GE Health Benefits $346,076,000 Known employee costs as % of total HC Costs 26.91%
43. 43. GE Families Paid 25% of Healthcare Costs in 2013 2012 Costs (GE Health Benefits for Production Employees) Estimated Cost Employee premium shares $70,765,632 OOP costs Didnt make deductible $15,224,760 OOP costs Deductible, no OOP max $40,668,001 OOP costs Made OOP Max $29,875,417 Less HRA deductions -$28,021,798 Total known Employee-paid costs $128,512,012 Total employer costs for GE Health Benefits $390,388,000 Known employee costs as % of total HC Costs 24.77%
44. 44. GE Families Paid 27% of Healthcare Costs in 2014 2012 Costs (GE Health Benefits for Production Employees) Estimated Cost Employee premium shares $84,245,464 OOP costs Didnt make deductible $16,540,184 OOP costs Deductible, no OOP max $39,387,240 OOP costs Made OOP Max $29,140,180 Less HRA deductions -$27,929,180 Total known Employee-paid costs $141,333,888 Total employer costs for GE Health Benefits $391,108,000 Known employee costs as % of total HC Costs 26.54%
45. 45. UE Percentage Even Higher (Before OOP Is Even Considered) GE Average (2014) Local 506 (2014) Premiums $2,024 $2,235 Claims Less Contributions $8,930 $8,966 Premiums as a Percent Of Total Claims 18.48% 19.55% Total does not Include OOP costs, which were undoubtedly higher for Local 506 due to the higher OOP maxes of higher wage bands , but cannot be calculated with data provided to union
46. 46. We Paid More Than GE Claimed 2012 2013 2014 Total Cost of GEHB $473,463,763 $518,900,012 $532,441,888 24% of Total Cost $113,631,303 $124,536,002 $127,786,053 Actual Employee Cost* $127,387,763 $128,512,012 $141,333,888 Difference $13,756,459 $3,976,009 $13,547,834 Number of Active Family Units 40,626 42,163 41,831 Difference Per Family Unit $339 $94 $324 Total In Extra HC Costs Over Company Projections $757 * Based upon partial GE disclosure of employee premium and healthcare spending
47. 47. GE Falsely Continues To Claim We Pay 24%
48. 48. Other GE Data Conflicts Which Data Does GE Believe? Provided to UE January 2015
49. 49. GE Claims That GEHB In 2013 Is As Costly As HCP In 2010 Company spend is greater now (beginning in 2013) than in 2010 under HCP GE union relations
50. 50. GE Enjoyed Three Years Of 0% Net Healthcare Cost Growth 2010 2013 Change ($) Change (%) GEs Insurance Cost Per Family Unit $9,283 $9,316 $33 0.36% Average Employers Cost Per Family Premium* $10,386 $12,489 $2,103 20.25% * Source Kaiser Family Foundation Family Premium Less Employee Contribution Large Employers While Other Large Employers Paid 20.2% More For Healthcare
51. 51. GEs Cost Per Family Unit Since 2010 Only Up 2.9% 2010 2014 Change ($) Change (%) GEs Insurance Cost Per Family Unit $9,283 $9,550 $267 2.88% Average Employers Cost Per Family Premium* $10,386 $12,742 $2,356 22.68% * Source Kaiser Family Foundation Family Premium Less Employee Contribution Large Employers Compared to 22.7% For Average Large U.S. Employer
52. 52. 2012 Switch to GEHB Brings Big Shift In Healthcare Costs GE Cost Per Covered Family -$1,856 -18.01% Increase In Cost For Each Covered Family $484 +18.24%
53. 53. GEs Industrial Profits Increased Substantially While It Enjoyed 0% Growth in Healthcare Costs $14.13 $14.07 $15.49 $16.22 $17.80 $12 $13 $14 $15 $16 $17 $18 $19 2010 2011 2012 2013 2014 GE Industrial Segment Profits (Billions) 2010-2014
54. 54. Survey Of Members Finds Widespread Dissatisfaction 1,629 UE members surveyed 94% - Would change medical plan if given opportunity 83% said deductibles top reason 60% premiums 58% copays 85% - Dissatisfied/very dissatisfied with monthly premium 75% - Dissatisfied/very dissatisfied with drug copays 74% - Dissatisfied/very dissatisfied with copays for office visits 79% consider medical cost containment a strike issue
55. 55. GE Under No Threat of Hitting Excise Tax $7,476 $8,904 $10,200 $17,317 $20,623 $17,832 $21,238 $27,500 2014 2018 (Proj) Excise Threshold (2018) HB1 Single HB1 2-Person HB1 - Family
56. 56. Why Is the U.S. (And GE) Following A Failed Healthcare Model? All data 2012 unless otherwise noted U.S. OCED Average % Of GDP spent on healthcare 16.9% 9.3% % Of healthcare spending publicly financed 48% 72% Real health expenditure growth rate 2.1% 1.6% Real growth in pharmaceutical spending -1.1% -2.2% OOP expenditure on health per capita $1,045 (#2) $586 Practicing physicians (per 1,000) 2.4 3.1 Doctor consultations (per capita) 3.9 6.4 Average hospital stay (days) 4.9 7.1 Life Expectancy 78.7 years 80.2 years Infant Mortality (2011) 6.1 3.5
57. 57. Return to HCP Data shows substantial underutilization of necessary medical care GEHB is too confusing Confusion causes workers to leave hundreds of dollars in HRA benefits on the table GEs never paid its promised 76% of healthcare costs Workers paying much more for less healthcare
58. 58. Its Not About Numbers, Its About Our Families