Wellness & Consumer-Driven Health Care: Contradictory or Complementary?

Transcription

1 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care: Contradictory or Complementary? August 14,

2 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Joanne Wojcik Business Insurance Denver

3 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Panelists: Elizabeth Dudek Thomson Healthcare Stephanie Pronk RedBrick Health Mark Snyder Owens Corning Moderator: Joanne Wojcik Business Insurance

4 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Stephanie Pronk RedBrick Health Minneapolis

5 Stephanie Pronk, Chief Health Officer Consumer-Owned Health: Creating better healthcare consumers

6 Consumer-Owned Health: Creating better healthcare consumers Agenda Limitations of early Consumerism in Healthcare Future of Consumerism: Ownership Health Program Approach Advocacy Providing Guidance & Support Incentive & Financing Approach Rules & Standards Issues

7 Early Consumer-Driven Healthcare Early 2000, small start-up organizations push consumer dynamics in healthcare Financial focus through benefit design Health Reimbursement Arrangements Health Savings Accounts High-Deductible Health Plans Predicated on the notion that individuals with more skin in the game would behave in a more consumer-based manner

8 Limitations of Early CDH Plan Design Only Individual Healthcare Costs HDHP Traditional Co- Insurance DEDUCTIBLE Account & Member Portion Limited Tools Finance Traditional coinsurance provides limited financial motivation and incentives Health Limited tools and programs to help make decisions and actually improve health Advocacy No personalization or integration of data

9 Moving to the Future--Building a Consumer-Owned Health Model What would it look like? Reach out to all regardless of health status Focus attention and dollars on prevention and health maintenance Reward behaviors consistent with guidelines of evidence-based medicine Seek to understand the unique needs of individuals and maintain long-term relationships Embrace technology to tailor outreach programs and achieve the highest level of support and guidance

10 Responding to the Challenges A New Strategy: Consumer-Owned Health Goals of Consumer-Owned Health Improve health by changing unhealthy behaviors thereby reducing plan costs Use data to simplify and build confidence for each employee Reward employee behaviors that promote health

11 Enhancing Health Benefits and Improving Health Understands each individuals unique health needs Resources to change to healthy behaviors Improve health status and increase productivity Health New Strategy Advocacy Finance Incentives that reward healthy behaviors Planning for current and future health needs Behaviors reduce health plan premiums One-stop shop simplifies processes Guidance around health and benefit information Maximize the value of health benefits

12 Health Program Approach Think innovative, start smart, expand over time to help people be healthy Focus programs, tools and services across the entire health continuum Disease Risk Active Disease Low 35% Moderate 30% High 25% Acute Chronic 4 5% 4 5% Sources: Health Behavior Group, 2006 Ingenix, 2007

13 Providing Guidance and Support Consumer Health Advocates Advocates Can you help me resolve a claim? Web Phone address consumer issues Accessing the health care system Understanding benefit coverage and healthrelated support Information needed to maintain, improve or mange personal health provide tailored and personalized knowledge and guidance around health and benefit information Can you help me pick a health plan? Can you tell me how much to put in my HSA/HRA/FSA account? Do you have health coaching programs for me? Do you have financial incentives for me? Can you help me with health related questions? Can you help me with any and all benefit related questions? I got a claim denial from my health plan, but I think it should be covered, is it covered? I don't understand my health assessment score -- can you help me? I need to get my medical records transferred from Dr. A to Dr. Z. Can you help me with that?

14 Health Incentive Approach What are your goals? To build awareness and educate To take action and change behaviors To achieve, maintain and sustain health standards What type of incentive? Reward (Carrot) Penalty (Stick) Combination How do you want to use incentives? Health care benefit design Health reimbursement accounts (HRA) and health savings accounts (HAS) Cash (taxable or grossed up) Paid time off Other When is the incentive earned? Immediately Delayed Phased-in as accomplish milestones

15 HIPAA Final Wellness Program Rules The new rules apply to "group health plans" under HIPAA and are applicable to plan years beginning on or after July 1, 2007 (January 1, 2008 for calendar year plans) The final rules define a wellness program as "any program designed to promote health or prevent disease" The rules say that a plan must meet these wellness program requirements if it varies benefits, premiums, or contributions for similarly situated individuals in connection with a wellness program The final rules clarify that in order to be subject to these rules, a program must be based on an individual satisfying a standard related to a health factor to obtain a reward If the program is measured merely by participation, the program would not be subject to these rules Departments of Labor, Treasury, and Health and Human Services (the "Departments") issued final HIPAA nondiscrimination and wellness program regulations. 71 Fed. Reg , 12/16/2006.

16 Five Standards Required IF Tying Incentives to a Health Standard #1 Incentive Amount Must not exceed 20% of the cost of employee-only coverage under the plan The cost of employee-only coverage includes both employer and employee contributions The 20% limit applies to the entire family IF only the employee is eligible, the 20% limit must be based on the cost of individual coverage IF other family members are eligible, the 20% limit should be based on the cost of family coverage #2 Reasonableness Standard A program will be deemed "reasonable" Has a reasonable chance of improving health or preventing disease Not overly burdensome Not a maneuver for discriminating based on a health factor Not "highly suspect" (e.g., extreme or illegal) "Easy" to satisfy Allow experimentation in diverse ways of promoting wellness. Departments of Labor, Treasury, and Health and Human Services (the "Departments") issued final HIPAA nondiscrimination and wellness program regulations. 71 Fed. Reg , 12/16/2006.

17 Five Standards Required IF Tying Incentives to a Health Standard #3 Opportunity to Qualify Once Per Year Must give participants the opportunity to qualify for the reward at least once per year Must communicate in plan documents and strongly encouraged to communication through other forms #4 Reasonable Alternative Program must allow a "reasonable alternative standard" to any individual for whom it is unreasonably difficult due to a medical condition, or medically inadvisable, to satisfy the otherwise applicable standard May seek verification, such as a statement from the individual's physician, #5 Disclosure of Reasonable Alternative No need to design a specific alternative standard, but simply may say that the alternative is to follow the recommendations of the individual's physician regarding the health factor at issue, or the alternative can be that the health standard waved Departments of Labor, Treasury, and Health and Human Services (the "Departments") issued final HIPAA nondiscrimination and wellness program regulations. 71 Fed. Reg , 12/16/2006.

18 Other Issues to Review BEFORE Implementing Your Incentive Program American s Disability Act (ADA) certain plan practices permitted under the HIPAA rules still may violate the ADA, e.g., requiring mandatory examinations If incentives are tied to accounts (HRA or HSA) what can those dollars be used for Using a penalty approach may be subjected to other discrimination rules out lined by the Department of Labor, e.g., penalty for not participating in a disease management program Employers should consider if, and how, to include a wellness programs under: ERISA plan (and whether to offer COBRA, HIPAA certificates of coverage, etc.) How the HIPAA privacy regulations may impact disclosure of information to third parties Whether rewards under these programs are taxable Departments of Labor, Treasury, and Health and Human Services (the "Departments") issued final HIPAA nondiscrimination and wellness program regulations. 71 Fed. Reg , 12/16/2006.

19 Thank you Stephanie Pronk, Chief Health Officer RedBrick Health

20 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Elizabeth Dudek Thomson Healthcare Ann Arbor, Michigan

21 T H O M S O N H E A L T H C A R E Wellness and Consumer-Driven Health Plans Thomson Healthcare Perspective Elizabeth A. Dudek Vice President, Practice Leadership Business Insurance Online Executive Forum August 14, 2007 Medstat MercuryMD Micromedex PDR Solucient

22 T H O M S O N H E A L T H C A R E The Thomson Vision To be the global leader in providing information to professionals so they can make better decisions faster Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 22

23 T H O M S O N H E A L T H C A R E Thomson at a Glance Largest provider of information to business and professional customers Market leader in dynamic and core high-growth sectors: Healthcare, research, law, finance, accounting Revenue: $8.4 billion (69% from electronic solutions) Customers: 20 + million professionals in more than 175 countries Employees: 40,500 worldwide Listed as TOC: NYSE, TSX Market Capitalization: ~$25 billion Medstat MercuryMD Micromedex PDR Solucient * Full-Year 2005 Continuing Operations 2007 Thomson Healthcare. All rights reserved. 23

24 T H O M S O N H E A L T H C A R E Healthcare at a Glance 2,100 Employees Customers Physicians, clinicians, hospitals, employers, health plans, government, pharmaceutical manufacturers Expertise Brands PDR Micromedex Medstat MercuryMD CenterWatch NexCura and now Solucient Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 24

25 T H O M S O N H E A L T H C A R E The Thomson Healthcare Perspective MarketScan Research Database: This is a multiple year FFS ( fee-for-fee service ) Commercial claim and encounter database containing data covering approximately 13.1 active employees or their dependents (ages 0-64). CDHP norms reflect active employees across 14 employers with over 700,000 members in CDHP and who had CDHP plans in place from Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 25

26 T H O M S O N MarketScan Norms For CDHP Plans H E A L T H C A R E $6,000 $5,000 CDHP Trend: All Other Trend: 20.0% 5.5% 8.7% 6.5% $4,000 $2,963 $3,000 $2,005 $605 $2,000 $386 $3,220 $3,429 $2,406 $667 $2,538 $718 $410 $386 $1,000 $1,618 $2,358 $1,996 $2,553 $2,152 $2,711 $0 % Members 11% 89% 12% 88% 18% 82% CDHP Other CDHP Other CDHP Other Gross PMPY Medical Gross PMPY Rx Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 26

27 T H O M S O N H E A L T H C A R E CDHP Allowed Claims Costs PMPY with Norms Tracking the Cost of CDHP by Service Category Service Category Group Facility Inpatient Facility Outpatient Physician Inpatient Physician Outpatient MHSA Laboratory Outpatient Radiology Outpatient MarketScan Comp to Previous Current Trend Norm Norm $450 $400-11% $603-34% $350 $400 14% $534-25% $161 $150-7% $143 5% $400 $600 50% $507 18% $125 $150 20% $78 92% $121 $159 31% $137 16% $250 $232-7% $276-16% Other Professional Services $380 $500 32% $311 61% Prescription Drugs $600 $700 17% $703 0% Total Allowed Medical and Rx $2,837 $3,291 16% $3,293 0% Out of Pocket Rx $146 $145-1% $163-11% Out of Pocket Medical* $300 $310 3% $403-23% Page 4 Below Norm Comparable to Norm Above Norm Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 27

28 T H O M S O N MarketScan Norms For CDHP Plans DCG Risk Adjusted Costs for CDHP Options 130 H E A L T H C A R E All Other Total CDHP PMPY Gross Medical and Rx Costs Members DCG Risk Score * Actual Expected Efficiency ** CDHP 100, $1,908 $1, All Other 508, $2,428 $2, Total 609, $2,342 $2,342 *Each Relative Risk Score describes the individual's expected medical cost relative to a mean score of 100. The mean score is based on the average of the active population whose diagnosis and demographic data were used by the DCG model. ** An efficiency score > 1.0 indicates that the plan's actual cost exceeds its expected cost, based on its underlying population health risk. An efficiency score of < 1.0 indicates that the plans actual cost is less than its expected riskadjusted cost using DCG relative risk scores. Note: This analysis reflects aggregated data for 11 employers with CDHP options in Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 28

29 T H O M S O N Thomson Healthcare MarketScan CDHP Cost and Utilization Norms H E A L T H C A R E $100 Allowed Amount PMPY ER $800 Allow Amt PMPY Office Med $80 $600 $60 $40 $20 $63 $64 $60 $68 $54 $69 $400 $200 $469 $656 $549 $732 $622 $785 $0 CDHP Other CDHP Other CDHP Other $0 CDHP Other CDHP Other CDHP Other ER Visits / ,000 Visits Per 1000 Office Med 150 6, ,000 2,000 3,775 5,632 4,274 5,980 4,458 6,193 0 CDHP Other CDHP Other CDHP Other 0 CDHP Other CDHP Other CDHP Other Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 29

30 T H O M S O N Thomson Healthcare MarketScan CDHP Cost and Utilization Norms H E A L T H C A R E $750 Allow Amt PMPY Rx 400 Days Supply PMPY Rx $ $250 $386 $605 $410 $667 $386 $ $0 CDHP Other CDHP Other CDHP Other 0 CDHP Other CDHP Other CDHP Other 10,000 Scripts Per 1000 Rx 50% % Mail Order Filled For Maintenance Drugs 8,000 40% 6,000 30% 4,000 2,000 6,574 8,982 6,854 9,401 6,180 9,640 20% 10% 27.6% 27.1% 26.6% 28.1% 26.4% 27.9% 0 CDHP Other CDHP Other CDHP Other 0% CDHP Other CDHP Other CDHP Other Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 30

31 T H O M S O N Thomson Healthcare MarketScan CDHP Preventive Services Norms H E A L T H C A R E 60% 50% PSA Screening Rate 60% 50% Cervical Cancer Screening Rate 40% 40% 30% 20% 10% 18.5% 31.7% 24.3% 35.0% 28.0% 36.6% 30% 20% 10% 36.6% 42.6% 43.5% 45.8% 46.1% 46.3% 0% CDHP Other CDHP Other CDHP Other 0% CDHP Other CDHP Other CDHP Other 60% 50% Mammogram Screening Rate 60% 50% Cholesterol Screening Rate 40% 40% 30% 20% 10% 40.6% 49.5% 47.3% 50.5% 48.0% 50.3% 30% 20% 10% 16.9% 26.4% 21.7% 30.1% 22.2% 31.5% 0% 0% CDHP Other CDHP Other CDHP Other CDHP Other CDHP Other CDHP Other Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 31

32 T H O M S O N H E A L T H C A R E One Employer s Plan Results CDHP Members Non-CDHP Members 9 Months of Data Prior Current Trend Prior Current Trend Net Paid $1,740 $1,491-14% $3,386 $3,400-11% Office Visits* 4,171 3,488-16% 5,674 4,833-15% ER Visits* % % Rx Days Supply PMPM % % Net Pay/Day Supply $1.46 $1.55 6% $1.89 $1.74-8% Scripts % Mail Order 29% 30% +4% 37% 47% +27% Scripts % Generic 43% 48% +13% 43% 50% +17% * Per 1000 members Medstat MercuryMD Micromedex PDR Solucient 2007 Thomson Healthcare. All rights reserved. 32

33 T H O M S O N H E A L T H C A R E Thank you! Elizabeth.Dudek@thomson.com Medstat MercuryMD Micromedex PDR Solucient

34 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Mark Snyder Owens Corning Toledo

35 CDHP PPO Quality Review Highlights Mark Snyder, Director Benefits August 2007

36 Meet Owens Corning Manufactures insulation, shingles, cultured stone, vinyl siding, glass reinforcements, and provides handyman services Generates $6.5 billion in sales Employs 18,000 workers worldwide 13,000 in U.S. eligible for benefits Maintains 50+ manufacturing sites 180+ distribution centers 45 states Headquartered in Toledo, Ohio Introduced HRA plans in 2004 and added HSA plans in % enrollment in salaried and non-union hourly workforce

37 CDHP Impact on Cost and Utilization 2004: CDHP implementation resulted in reductions in both cost and utilization for medical and drug benefits 2005: As members became more comfortable with the plan, medical and drug costs and utilization experienced a rebound from the reduction in trends that accompanied the implementation of the CDHP 2006: CDHP cost and utilization continues to compare favorably to norms as trend declined compared to 2005

38 2005 Demographics CDHP Employees: 4,498 Members: 10,793 % Salaried & non union hourly: 57% % Union: 1% Average family size: 2.4 Average employee age: 43 Average member age: 32 Relative Risk Score: 95 Wage Band: <$30K $30-$50K $50-$100K >$100K 24% 42% 25% 9% PPO Employees: 1,624 Members: 3,857 % Salaried & non union hourly: 5% % Union: 89% Average family size: 2.4 Average employee age: 47 Average member age: 36 Relative Risk Score: 134 Wage Band: <$30K $30-$50K $50-$100K >$100K 7% 85% 7% 1% CDHP members have a lower illness burden than members in PPO. PPO members have a 41% higher risk score than members in CDHP.

39 2005 Per Member Cost Overview $3,600 $3,300 $3,000 $2,700 $2,400 $2,100 $1,800 $1,500 $1,200 $900 $600 $300 $0 $142 $116 $274 $300 $436 $456 $1,554 $1,580 CDHP DCG Adjusted Norm $230 $437 $171 $384 $644 $603 $2,286 $2,218 PPO DCG Adjusted Norm Total: $2,381 $2,479 $3,598 $3,376 Net Med OOP Med Net Rx OOP Rx Actual CDHP costs are lower than expected CDHP costs adjusted for population illness burden.

40 Question/Concern With favorable cost and utilization trends, are we achieving desirable results from a quality perspective? Our CDHP plan has been readily accepted at Owens-Corning and has been performing well. Still, I wonder how Owens-Corning s CDHP compares to our PPO plan on quality measures. Does a differences exist?

41 Quality Markers: Screening Rates 50% 40% 30% 20% Cervical Cancer Cholesterol Colon Cancer Mammogram PSA 41% 41% 30% 50% 40% 30% 20% 25% 29% 27% 50% 40% 30% 20% 18% 19% 21% 50% 40% 30% 20% 50% 49% 42% 50% 40% 30% 20% 32% 30% 30% 10% 10% 10% 10% 10% 0% 1 0% 1 0% 1 0% 1 0% 1 CDHP PPO Norm CDHP participants receive significantly more cervical cancer screens (11 percentage points) and mammograms (8 percentage points) than PPO participants. There is less of a variance between the two populations in cholesterol, colon cancer and PSA screenings. Improvements are need in both populations. NCQA targets could be used to track improvements.. The CDHP population is outperforming the PPO population in cervical cancer screens and mammograms. Cholesterol, colon, and PSA screenings are higher in the PPO.

42 Hypertension CDHP 3% 67% 30% 61% 39% Primary Care Visits Lipid Blood Tests 99% 1% 98% 2% 100 % ER Visits Admissions Complications PPO 10% 70% 20% 62% 38% 98% 2% 100 % 100% Primary Care Visits Lipid Blood Tests ER Visits Admissions Complications Only 3% of CDHP hypertension patients have not had a primary care visit in a year compared to 10% of PPO hypertension patients. Improvements in both populations are needed for lipid blood tests. Quality of care for hypertension patients is similar in the PPO and CDHP populations. *Primary Care Visit Guideline >=2; Lipid Test Guideline > 0

43 Summary of Findings The CDHP population compares favorably to norm on quality markers including: Inpatient admissions ER visits Avoidable admissions Readmissions Complicated deliveries C-sections Mammograms and cervical cancer screens The PPO population compares unfavorably to norm an quality markers, especially ER visits There is opportunity for Improvement for both populations on preventive screening rates including: mammograms, cholesterol, colon cancer, and PSA screens Quality of care for CDHP patients with coronary artery disease, asthma, hypertension, or diabetes is equal to or better than in the PPO

44 Steps We Have or Are Taking Developed a comprehensive strategy to promote wellness at Owens Corning, designed to improve quality, behaviors and costs for both CDHP and PPO plans $50 HRA incentive introduced in % of population took HRA $40 monthly non tobacco usage credit off payroll contributions introduced in 2006 in addition to tobacco cessation program free to employees and spouses. Review employee participation in key health management programs and assess prescription drug compliance More robust disease management, health management, and utilization management beginning 2008 Enhanced our communication strategy to address preventive care, PCP relationship, and drug compliance Built dashboards for each business unit and our large locations so they can pursue opportunities for health promotion and preventive services Work with vendors to set goals and initiate performance improvement plans to improve service rates for both CDHP and PPO. Match Owens Corning s demographics to US population survey data to discover how best to educate and communicate health information to plan members. Perform continual periodic assessments of programs to track program performance and provide perspective on future areas for improvement.

45 Thank You Mark Snyder Director of Benefits

46 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Audience Q&A Dudek Pronk Snyder Wojcik

47 BI Online Executive Forums Presents Wellness & Consumer-Driven Health Care Thank You for attending this BI Online Executive Forum If you wish to view this presentation again or refer a colleague, the webinar will be archived and available for viewing at: