Employee health database could net major cost savings, OPM report says

The Office of Personnel Management's report on program and financial performance in fiscal 2009 includes indicators of how well the agency is meeting health and retirement benefit processing goals and offers details on how a new database to track federal employee health might work.

OPM Director John Berry has discussed the health care database the Obama administration proposed in its fiscal 2011 budget in recent weeks, telling a Senate panel on March 24 "we should have the best health database in the country."

The report described where the database will draw its information from and how it might be used. OPM will collect data from the 10 Federal Employees Health Benefits Program plans with the largest enrollments and from the biggest pharmacy benefits managers. The database will link health care claims to demographic data and provider information, and allow analysts to sort treatment and claims data based on factors like age, race and gender, as well as enrollees with chronic disease or in high-risk pools.

Such analyses will help determine areas where FEHBP costs can be better controlled, the report said.

"The magnitude of the savings is not concrete at this time," OPM staff wrote in the report. "However, just a 0.1 percent reduction in annual premium growth for three consecutive years yields savings of approximately $1.25 billion to the program over 10 years, and more specifically, $400 million in payments from the government's general fund for annuitant premiums over the same period."

While OPM reported meeting most of its performance goals for fiscal 2009, two areas where it missed the mark were the cost of processing retirement claims and customer satisfaction with those efforts. The agency had set a processing goal of $77.76 per claim in fiscal 2009, but the average was $81.97, up from $74.28 in fiscal 2008. And OPM narrowly missed its goal of an 88 percent satisfaction rate with the retirement system, with 85 percent of annuitants surveyed reporting they were satisfied with OPM's services.

The agency did beat its goal of processing retirement claims in an average of 45 days, bringing the time down to 41 days. Seventy-seven percent of FEHBP participants surveyed reported they were satisfied with the program, exceeding the 62 percent satisfaction rate industrywide. And 99 percent of Federal Long-Term Care Insurance Program participants told OPM they were satisfied with the customer service, well above the agency's goal of 90 percent.