Selling Wellness to Your CFO

Transcription

1 Selling Wellness to Your CFO Jim Wachtel National Sales Director HealthCheck360

2 Agenda Introduction CFO s Role Recent trends in healthcare benefits Key Features Required to engage CFO s Examples of outcomes and analytics

3 The CFO s Four Roles within the Company Managing and Minimizing Risk Allocating the Resource Pool Managing and Dealing with Change Fiduciary Responsibility

4 Top Three Concerns for CFO s 1.Healthcare Costs 2.The Need to Control Spending 3.Staff Morale and Motivation Source: Robert Half Management Resources

5 Healthcare Inflation 1999 to % General Inflation During this Same Period 29%

6 Where is this going? 34% of organizations are increasing employee contributions 28% of organizations are increasing company contributions 20% of respondents say they are reducing healthcare benefits 15% say they are eliminating benefits

7 Our health care costs are up 10% again! Well let s raise deductibles and increase employee contributions again.

8 Key Cost Drivers Poor lifestyle habits Ineffective management of chronic conditions Catastrophic claims cost and outcomes Lack of employee knowledge Low incentive to decrease cost

9 Cost Drivers

10 Poor Health is Preventable Over 95% of our nation s health expenditures, including most of the billions of dollars employers spend on health coverage, is committed to diagnosing and treating disease only after it becomes manifest. Source: Partnership for Prevention Researchers have estimated that preventable illness makes up approximately 70% of the burden of illness and the associated costs. Source: Fries, New England Journal of Medicine

11 Cost Area Low Risk (N=671) Medium Risk (N=504) High Risk (N=396) Short-Term $160 $288 $444 Disability Worker s $304 $325 $662 Compensation Absence $327 $455 $703 Medical & $1,544 $1,983 $4,929 Pharmacy Total $2,335 $3,052 $6,738 High Risk employees cost $4,403 more per year! Source: University of Michigan Health Management Research Center Inflation adjusted to 2009:

12 Year 0 Migration study of 43,312 Individuals Over 3 Years Year 3 Low Risk (0-2 Health Risks) 27,951 Medium Risk (3-4 Health Risks) 10,670 High Risk (5+ Health Risks) 4,691 Low Risk (0-2 Health Risks) 26,591 Medium Risk (3-4 Health Risks) 11,495 High Risk (5+ Health Risks) 5,226 Key Findings Risk profile of a population gets worse over time Number of high risk individuals increased 11.4% Number of medium risk individuals increased 7.7% Number of low risk individuals decreased 4.9% Results are a function of American lifestyle habits and the realities of age Source: University of Michigan Health Management Research Center

13 Six Key Features for Selling Wellness to the CFO 1. Outcome Based, objectively measuring risks 2. Objective Scoring clear cut scoring and measurement 3. Carrier Independent 4. Meaningful Incentives (Substantial, Understandable) 5. Supports Positive Behavioral Change (Health Coaching, Engagement Tools, Educational Resources) 6. Measured Results - Individual and Executive Reporting, Data Integration and Event Coordination (Turn Key)

14 1. Outcome Based Objective measurement is key to success Full Biometric Screen to Objectively Measure Risks Set Baseline / Track trends Real information, not a guess Importance of on-site venipuncture biometric screening Accuracy and flexibility of full panel results Objective data points to measure over time (year over year) Uncover hidden risks (Catastrophic)

15 2. Clear Cut Scoring Easy to understand scoring drives engagement and participation Scored model translates risks into compliant measurement model Long term measurement tool

16 3. Carrier Independent Carrier Programs: Risk awareness Carrier, not the client, owns the data Don t share proactive risk data with risk bearer Customization/ Flexibility Portable Being Carrier Independent allows your program to stay consistent over time

17 4. Meaningful Incentives

18 Correlation Between Value and Participation Results show a direct correlation between incentive value and participation Incentives reward those who make healthy lifestyle choices

19 Incentives Participation Engagement Health Outcomes Target: 80% participation As necessary to build momentum, support change Rewards go to those who have less risks OR are making progress in reducing risks

20 HIPAA Compliant Outcome Based Incentives Wellness Program conditions and rewards MUST comply with HIPAA Wellness Program Regulations: 1. Limit on Reward 2. Reasonably Designed To Promote Good Health or Prevent Disease 3. Annual Opportunity to Qualify For Reward 4. Reasonable Alternative Standard 5. Disclosure Required

21 5. Support Positive Behavior Change Personal Intervention Population/Social Programming

22 6. Measured Results Executive and Aggregate reporting Integrated data analytics Integration with claims data and medical management

23 Create a ROI Roadmap Participation Rates Financial Return on Investment (ROI) Clinical/Biometric Improvements Stages of change - Movement along behavior change continuum

24 Case Study 1 Claims information HRA Findings Diabetes Hypertension Heart Attack Risk 50 have claims with a diagnosis suggesting diabetes or pre-diabetes 78 have claims 9/20/2011 with a diagnosis suggesting hypertension 98 individuals have claims with a diagnosis suggesting being at risk of a heart attack 111 with glucose in diabetic range 580 with glucose in pre-diabetic range 549 individuals with elevated systolic and diastolic blood pressure readings 815with elevated cholesterol 883 with BMI readings > 30, of which 396 (44.8%) are also prediabetic Significant latent health risks in the population not previously identified! N = 1750, mfg firm

25 Traditional HC360 Intervention Process Process

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27 88% of participants selfreported a good or great health status 70% of participants scored a 71 or higher (ideal or low level of risk) 1% of participants self reported a below average or poor health status 12% of participants scored a 60 or below (high or very high risk)

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30 N = 1589 Total Total Score Counts Avg WC < $ $1, $ $ $ Total 1,589 $713.09

31 Average claims per HRA participant: 2009 $7, $6,023.68

32 Claims began trending higher in 2006 & 2007 HealthCheck360 implemented HRA, Biometric screenings, outcome based incentives, and comprehensive health coaching in 2008 Trend reduced to low single digits for two straight years 2010 actual claims demonstrated: $959,051 saving from expected trend $1,470,386 savings from industry average trend

33 Plan Year Plan Costs/Premiums per Covered Employee Plan Costs/Premiums per Covered Member $8,852 $3, $9,054 $3, $8,365 $3, $8,967 $3, $8,823 $3,782 Medical and drug costs have actually gone down on per employee and per member basis over the last five years. If medical plan costs had grown at 8% per year since , ABC Company premiums would be $7.24 million dollars higher than today. Total Wellness investment less than $1m in same period.

34 Typical Profile of New v. Repeat Participant Biometric Profile 2011 Score Avg. BMI Avg. Weight Avg. Systolic Avg. Diastolic Avg. Total Cholesterol Avg. Glucose Nicotine POS Repeat Participants % First Time Participants % Of the 612 repeat participants between 2010 and 2011, the overall average health score increased from 72.6 to There was an improvement in health score in almost every risk category (with the exception of those scoring over 96). Overall blood pressure for these same participants decreased, as did the overall cholesterol levels. Of the 40 people who were at extremely high risk for blood pressure in 2010, 30 moved to be at moderate, low, or ideal categories. Of the 173 people with high or very high cholesterol risk, nearly 45% moved to moderate, low, or ideal categories. The number of people with very high glucose levels fell 35%.

35 Cost Savings w ith HealthCheck TOTAL Trend w /out HC % 9.0% 9.0% 9.0% 9.0% Estimated Health Expenditures $ 7,200,000 $ 7,848,000 $ 8,554,320 $ 9,324,209 $ 10,163,388 $ 11,078,092 $ 46,968,009 Trend w /HC % 6.0% 5.0% 4.0% 3.0% Estimated Health Expenditures w /HC360 $ 7,200,000 $ 7,848,000 $ 8,318,880 $ 8,734,824 $ 9,084,217 $ 9,356,743 $ 43,342,664 Top Line Savings w ith Trend Reduction $ - $ 235,440 $ 589,385 $ 1,079,171 $ 1,721,349 $ 3,625,344 # of Employees on plan Participation Rate 80% 80% 85% 90% 90% Monthly Premium Contribution Incentive $ $ $ $ $ Investment in Wellness Health Risk Assessments $ 76,800 $ 76,800 $ 84,048 $ 91,662 $ 94,412 $ 423,721 Non-participant/non-qualifying contribution $ (76,800) $ (155,520) $ (153,600) $ (147,840) $ (161,280) $ (695,040) Total Investment (contribution) thru Wellness $ - $ (78,720) $ (69,552) $ (56,178) $ (66,868) $ (271,319) Net Savings with HealthCheck360 $ - $ 314,160 $ 658,937 $ 1,135,349 $ 1,788,217 $ 3,896,663 Input/Assumptions: Number of employees? 800 Average h/c cost per employee per year? $9,000 Medical cost inflation rate? 9.0% Participation rate? 80% Non-Qualification Rate yr. 2+? 20% Monthly premium incentive first year? $40 HealthCheck360 Participation Fee/pppy? $120 Enter assumptions in these fields to show various scenarios to create a self funding Health Risk Management program. Questions? Call: Jim Wachtel , or jim.wachtel@healthcheck360.com

36 Six Key Features for Selling Wellness to the CFO 1. Outcome Based, objectively measuring risks 2. Objective Scoring clear cut scoring and measurement 3. Carrier Independent 4. Meaningful Incentives (Substantial, Understandable) 5. Supports Positive Behavioral Change (Health Coaching, Engagement Tools, Educational Resources) 6. Measured Results - Individual and Executive Reporting, Data Integration and Event Coordination (Turn Key)