A governor’s task force released an interim report Dec. 21 with recommendations for short-term actions the state can take to improve public employee health benefits while lowering costs.

Formed by the governor in late May, the Health Benefits Quality and Value Task Force is comprised of state and national health policy and purchasing experts, union and employer representatives, and experts from the administration.

Jonathan Pushman, the NJSBA’s legislative advocate, represented the Association on the task force, which was charged with identifying specific near-term opportunities for reform, including best practices in health management and cost savings.

The task force recommended the following steps:

  1. Support Innovation to Improve Health Outcomes and Costs  The State Health Benefits Plan (SHBP) and School Employees Health Benefits Plan (SEHBP) spend almost $7 billion each year and should use that purchase power to drive better health outcomes at lower costs.  Chief recommendations include:
    • Well-designed and evaluated pilot programs; directly contracting with select providers or vendors for the purpose of pilot testing, surveying, and evaluating care delivery and payment innovations; continuing the direct primary care pilot while addressing implementation barriers; and a pilot focused on behavioral health, including trauma-informed care.
  2. Improve Contractor Accountability  The task force is concerned that current administrator and provider network contracts are too long, and that restrictions prevent innovation or re-negotiation.  Chief recommendations include:
    • Reduce the length of the contract term to three years with a one-year extension option; include auditing of claims data; and unbundle management of the provider networks in the current contract from claims administration.
  3. Prioritize Quality  Public employee health plans must set clear expectations for clinical quality improvement and the provider network must include metrics, goals and penalties for achieving or failing to achieve these expectations.  Chief recommendations include:
    • Make sure contracts include performance standards for clinical quality outcomes; set well-defined clinical quality metrics, and target high cost, chronic conditions and other diseases with significant disparities in health outcomes. Set clear expectations and measurements for case management programs, particularly in reducing hospital readmissions and use of emergency departments. Use care management programs for members with complex, high cost conditions.
  4. Ensure Access to Care  Public employee health plans should set much more detailed parameters for what constitutes network adequacy for mental health and substance use disorders.  Chief recommendations include:
    • Add language in the contract that clearly defines expectations for the timely access to emergent and urgent care and routine care services. Make clear the scope of services that must be covered for mental health and substance use disorders. Ensure that the behavioral health network meets member needs as defined in the vendor contract, and evaluate access to mental health services to determine their adequacy.
  5. Use Data and Analytics to Improve Outcomes and Reduce Costs  Committees need to make evidence-informed decisions about plan design and timely claims. Payment data is essential to these decisions.  Chief recommendations include:
    • Ensure that contracts for managing claims payment and administration clearly provide for real-time cost and use data. Conduct continuous analysis of this data to identify and pursue steps to lower costs across the programs. Penalize vendors who fail to produce timely data.

Combined, the SHBP and SEHBP provide medical, prescription drug and dental benefits to more than 810,000 state employees, local education employees, participating local government employees, and eligible retirees. The state’s fiscal year 2019 budget includes $3.4 billion for health benefits coverage for members of these plans, which represents about 9.1 percent of the overall state budget.

As part of a concerted effort to tackle these cost-drivers, the Murphy administration in September announced health benefit agreements with public employee unions across the board that will save the state and local governments roughly half a billion dollars over the next two years.

The short-term recommendations released late last month will build upon those efforts while the task force explores more long-term and innovative reforms for the broader health benefits system, which will culminate with the delivery of a comprehensive report to the governor.

A full copy of the interim report can be found here.

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