SHP Board of Directors Update - October/November 2022

Board of Directors Update

October/November 2022

Dear Board members,

When people are financially invested, they want a return. When people are emotionally invested, they want to contribute. - Simon Sinek, author and motivational speaker

We don’t want our employees to simply show up for their paychecks. We want them to be emotionally invested in our work. You know a big part of our focus throughout the year has been on employee engagement. And we are just wrapping up our employee engagement survey, which will measure how our steps to improve employee engagement worked.

This has been a stressful year for many people – from financial strains to the implementation of new systems, processes and projects to recruitment and retention to less opportunity for social connections with colleagues as a result of our hybrid work arrangement. Regardless of the outcome of our survey results, I know we have highly motivated employees serving our customers with all their hearts each and every day. I am realistic about how everyday strains within our work environment could affect the survey results, and am hopeful that the good work we did to improve employee engagement will have a positive reflection in the survey results.

Speaking of personal connections, talking with fellow health plan CEOs and other industry leaders at events and pre-event lunches has allowed me to share perspectives with these colleagues. As we get to know one another, we are discovering shared interests, having good conversations and building stronger alliances. Along those lines, I am excited about the potential merger with Essentia as a growth opportunity for Security Health Plan. As we announced this news, I called health plan CEOs around the state to give them a heads up and continue to enhance our relationship and alignment around industry topics.

One such industry topic that I've been asked to collaborate on a few times recently is value-based care. I was proud to represent Security Health Plan as a panelist at recent AHIP and ACHP events to talk about building value-based care agreements as a way to reduce costs without sacrificing quality, and the hesitancy from provider systems to take on more financial risk. I applaud our own health system for being an innovator on this front. When we developed our capitated agreement several years ago, Marshfield Clinic Health System agreed to take on more risk. Then, in the face of the COVID pandemic, we saw provider systems that did not have value-based care arrangements take a harder financial hit than those that did have value-based care agreements in place. Our foresight and experience with value-based care is making us subject matter experts and leaders in the industry.

I hope to have a greater impact on our industry by achieving the big, ambitious goals we have in our new strategic plan. We received input from our management team and will present our 2023 strategic plan for your approval at our December Board meeting. I appreciate your support and engagement as we look further into the future and tackle really challenging issues. This is what will get us noticed. This is where we will find innovation. We expect to make big gains with this new approach to our strategic plan.

Sincerely,

Krista Hoglund

Chief Executive Officer

Key Performance Indicators

Commentary – Calendar YTD

For the nine months ending September 2022, Security Health Plan realized an operating margin of 3.96%, compared to target of 4.04%, an unfavorable variance of ($2.2 million). The favorable government programs performance continues to be driven by lower-than-expected claims per member in Medicare Advantage and BadgerCare Plus product lines. The underperformance of commercial products is driven by multiple factors that include higher-than-anticipated medical loss ratio (MLR) in large group, lower membership across all commercial products and unfavorable global capitation adjustments related to 2021. Administrative expenses are on track with target driven by lower costs in software and advertising.

Enrollment update

Fully-insured and self-insured employer plans:

Large employer: For groups with October effective dates, we quoted 12 opportunities and secured one group from WEA Trust, Pepin Area Schools (59 members). There were 9 group renewals and all were secured. Through October, group retention is at 87%. Our combined self-insured and fully insured membership was 38,194, 3% below last year’s actuals. Level-funded membership was 175.

Small employer: For groups with October effective dates, we quoted 12 opportunities and secured six (68 members). Of the 45 groups renewing, we retained 41 (402 members), for a retention rate 91%, about 3% higher than October 2021. Current small group adjusted membership is 5,686, which is below last year’s actuals by 14% and below forecast by 11%.

Individual and family plans: We welcomed 293 new members in October, a net loss of 126 members, for an adjusted total of 19,165 members. October attrition was at 2.16% (for comparison, October 2021 attrition was 2.33%). Enrollment is above last year’s actuals by about 24%, but is below forecast by 7%.

Medicare: We typically see less growth in Medicare during Q4. This October we had a gross membership gain of 399 Medicare Advantage members netting a gain of 95 members. Compared to last October, this is 41 more net members gained, however we remain under budgeted enrollment, now by 1,036 members or 1.6%. AEP is just beginning and we are optimistic about this year’s selling season.

Medicaid: October brought a net gain of 989 BadgerCare Plus members. This brings us 9,662 members over budgeted enrollment. We are planning for the COVID-19 health emergency to end in January with membership renewals beginning in February, triggering gradual losses in membership at that time. SSI membership is now at 252 members, or 173 over budget.

Business Update

Security Health Plan names

Mary P. Davis, M.D., as chief medical officer

Security Health Plan of Wisconsin, Inc., has named Mary P. Davis, M.D., as chief medical officer. In this role, she is responsible for programs that ensure members have all the support they need to maintain and improve their health, including getting the right care at the right time. Dr. Davis had been serving as interim CMO since 2021.

“I’m excited by the opportunity to lead such a talented team as we all work together to offer health care products that make it possible for the people we insure to maintain their best health,” said Dr. Davis.

Chief Medical Officer Mary Davis, M.D.

“I feel privileged to be able to support a health plan that’s so committed to addressing the needs of its members.”

Dr. Davis, a fellow of the American Academy of Family Physicians, has been a consultant and provided support to health plans with managing their medical spending. She has held CMO roles at health plans including Scott and White, Network Health Plan, Dean Health Plan and MCS, Inc., in Puerto Rico.

“I am totally confident in Dr. Davis’s expertise and leadership skills,” said Security Health Plan CEO Krista Hoglund. “I like that she always puts quality and patient safety first – rather than financial considerations – in her decisions. She also has a wonderfully candid style that makes it easy for us to work together.”

Dr. Davis earned her medical degree at Temple University School of Medicine and completed her residency at the University of Wisconsin-Madison. She practiced family medicine in Columbus, Wisconsin, before she began her administrative work. She has completed additional training in coding, project management, communication and leadership and holds a Certified Physician Executive certification from the American Association of Physician Leadership.

Health Plan hires Chris Buel as vice president

of finance and chief financial officer

Security Health Plan of Wisconsin, Inc., has named Chris Buel, MBA, as vice president of finance and chief financial officer. In this role, he is accountable for actuarial services and financial leadership for the health plan.

“I’m honored to be given the opportunity to lead the finance and actuarial teams and double down on Security Health Plan’s commitment to offer the community high-quality, yet affordable, health care coverage options,” said Buel. “I believe leading by example to be an important component in producing quantifiable results and I’m eager to put that approach into practice.”

Vice President of Finance, Chief Financial Officer Chris Buel

“Chris is a great fit for our organization. He brings a very collaborative and supportive leadership style his colleagues and team members at Security and across Marshfield Clinic Health System will benefit from,” said Security Health Plan CEO Krista Hoglund. “I am impressed with his ability to lead a team and work with a variety of people in an integrated system.”

Buel has a 25-year professional background in accounting, finance and analytics. He comes to Security Health Plan from Johns Hopkins Healthcare in Hanover, Maryland, where he was senior director of finance since 2019. There he was accountable for the financial health of the health plan’s Medicare line of business, as well as risk revenue management. Prior to that, he served as vice president of finance at Network Health in Menasha; chief operations officer and vice president of finance and analytics at Molina Healthcare of Wisconsin; and chief financial officer at United Healthcare of Wisconsin.

Buel has a bachelor’s degree in accounting from Illinois State University and an master’s of business administration from Indiana Wesleyan University.