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Slide 1: Consumer Driven Healthcare Success Factors August 30, 2010 C. William Sharon, CEBS National CDH Practice Leader Aon Consulting Leah Martorana Benefits and Compensation Administrator Fowler White Boggs P.A. 1
Slide 2: Agenda • Aon’s Perspective on CDH Success Factors • Case Study: Fowler White Boggs P.A. 2
Slide 3: Aon CDH Experience CDH Breakdown (By Type Plan) 4% 2% Expertise • • • 350 CDH Clients HRA and HSA plans Total replacement and slice – – 279 “slice” offerings 71 full replacements Aetna Anthem BlueCross CIGNA Humana United Healthcare 7% 11% 39% 36% • All major CDH vendors – – – – – – • HRA = 137 HSA = 127 HRA full replacement = 38 HSA full replacement = 26 HRA and HSA = 15 HRA and HSA full replacement = 7 Aon’s plan in place 10 years 3
Slide 4: #1: Consumer Engagement….Not a Plan Four key building blocks for an effective program: • Consumerism – a set of techniques designed to transform members to be more effective health care consumers Account Based Health Plan Consumerism Tools • Consumer driven healthcare (CDH) – consumerism using an account-based (HRA or HSA) plan design Wellness Incentives DM Incentives 4
Slide 5: Behavior Change in Three Areas Value Purchasing Ask price of service Consider alternatives Research doctor and hospital quality Use generic Rx Urgent care vs. ER Outpatient vs. inpatient Online consultation Retail health clinics Improved Health Use preventive benefits Complete health assessment Reduce weight Stop smoking Manage stress Get biometric screenings Use online health coach Manage Chronic Use disease management program Follow evidence based guidelines Use a premium doctor Maintain personal medical record Use medical home Use center of excellence 5
Slide 6: #2: Design CDH Plan Right • Employees don’t want a “High Deductible Health Plan” • Actuarially equivalent CDH plan • Meaningful employer provided account value • 100% preventive services • No copays • Attractive out-of-pocket maximum • The greater the CDH plan enrollment the better the savings 6
Slide 7: Employee Employer Account Member Responsibility Deductible Employee Coinsurance Out-of-Pocket Maximum $2,000 in $4,000 out $750 $750 $1,500 Employee + 1 $1,500 $1,500 $3,000 20% in-network 40% out-of-network $4,000 in $8,000 out Family $2,250 $2,250 $4,500 Preventive Care covered at 100% $6,000 in $12,000 out Employee Contribution Wellness Incentive to complete health assessment, comply with DM program, no tobacco usage, etc. 7
Slide 8: #3: Long Term Strategy • Consumer behavior change does not happen overnight • 30+ years of managed care to overcome • Requires senior management commitment • Measure consumer engagement metrics • Modify plan design, wellness/DM incentives and employee communications every year or two based on consumer engagement metrics 8
Slide 9: Managed Care Health plan and provider control utilization Pre-paid health plan; low copays Plan restrictions such as preauthorization and step therapy Minimal DM and wellness; no incentives Consumerism Participant and provider manage care More “skin in the game”; health insurance to protect against risk More participant control Strong DM and wellness programs with strong incentives Large network but encouraged to use premium providers 9 Large provider network
Slide 10: Wellness Financial Incentives Continuum Less intrusive Undefined/lower ROI Reward for Activity • $ for completing a health assessment • $ for enrolling in a chronic disease management program • $ for completing an online or telephonic wellness program • $ for participation in biometric screening Most aggressive Measurable/high ROI Reward Based On Risk • Waived co-pays on diabetes medication • $ for colonoscopies • 100% benefit for compliance with EBM care • 100% benefit for preventive care Reward for Achievement • $ to maintain low cholesterol • $ to reduce cholesterol 10 points • $ to stop smoking • $ to maintain BMI below 25 • $ to hit biometric screening results • Reduced copays for use of high quality providers Reward for Adherence • Lower premium for non-smokers • $ to maintain a target BMI for 12 months • $ to maintain low blood pressure for 12 months 10
Slide 11: #4: Consumer Friendly • Simple plan design • Single “sign on” for all consumerism tools – Account, medical, Rx, wellness, and DM • Integrated administrative platform – Account, medical, Rx, wellness, and DM integrated • Visible and understandable wellness incentives • Easily accessible wellness and DM programs 11
Slide 12: #5: Employee Communications • Requires comprehensive employee communications campaign • Small group employee meetings work best – Led by trusted, credible meeting leaders • Management support necessary • Employees will be skeptical of the new program • Key employee communication tactics: – Claim examples – Online plan selector tool – What’s in it for the plan participant? 12
Slide 13: Potential CDH Program Results • Reduce health care cost trend rate without cost shifting to employee • Reduce utilization of unnecessary services – Fewer office visits, fewer scripts • Lower cost treatment setting – Generic Rx instead of brand – Urgent care instead of ER – Outpatient hospital instead of inpatient • Increase in preventive services usage • Improved wellness and DM participation 13
Slide 14: Potential CDH Program Results 100% $$$$ CDH Enrollment 80% 60% 40% 20% 10% s s iing ng v v a Sa mS m s ris er i me u su m on s on C C 5% Preventive Benefits HA Web Tools DM Generics PHR Consumer Engagement 14
Slide 15: What is Current CDH State? • 18 to 20 million CDH members – 500,000 CDH members in 2003 • Growing 20-30% per year – Increase in full replacement CDH • 45% of Fortune 500 have a CDH plan • Four drivers of CDH growth: – – – – Consumerism “tipping point” Double digit health care costs Down economy National health reform limits cost shifting and eligibility exclusions 15
Slide 16: Next Generation Consumerism • Expanded wellness/DM incentives • Medical home – Holistic primary care • Onsite clinics with wellness/DM focus • High performing networks – Steering members to best cost and quality • Medical tourism (domestic and international) • Centers of excellence for specialty services such as bariatric surgery, transplants, cancer, etc. 16
Slide 17: Fowler White Boggs P.A. CDH Case Study Leah Martorana Benefits Administrator 17
Slide 18: Why Consumer Driven Health in 2006? • 450 employees – White collar, professional, busy, minimal “self-service” • Traditional HMO and PPO plans with 50/50 enrollment • Costs increasing 14% per year from 2002 to 2005 • Low consumer engagement – Low usage of preventive services, online health assessment, web tools, etc. 18
Slide 19: Consumerism at Fowler White •2006: Implemented Consumer Driven Health Plan •2008: Eliminated HMO •2009: Introduced Healthy Pledge Premium Differential •2010: Added New HRA plan •2011: Elimination of POS Plan 19
Slide 20: New HRA Plan in 2006 • Plan design actuarially equivalent to HMO – Rich by competitive standards • 100% preventive services • High HRA fund of $1,000/2,000/3,000 • 100% coverage after deductible • Slightly lower employee contributions made the HRA plan the “best deal” 20
Slide 21: HRA Plus vs. HRA Basic Benefit HRA Plus Plan In-Network HRA Basic Plan (NEW for 2010) In-Network $500/1,000/1,500 $2,000/4,000/6,000 $3,000/6,000/ 9,000 20% AD 20% AD 20% AD 20% AD 20% AD 0% 20% AD 20% AD 21 Fund (firm pays) Deductible (before fund) Out of Pocket Max (before fund) Physician Visit Hospital Inpatient Hospital Outpatient Urgent Care Emergency Room Preventive Care Rx Retail Rx Mail $1,000/2,000/3,000 $2,500/5,000/7,500 $2,500/5,000/ 7,500 0% AD 0% AD 0% AD 0% AD 0% AD 0% 0% AD 0% AD
Slide 22: Post 2006 Changes • No changes to HRA plan in five years • Eliminated HMO and changed to Aetna in 2008 • Added wellness incentive in 2009 – (1) health assessment, (2) no tobacco, and (3) DM – $9/14/20 bi-weekly contribution differential • In 2010: – Added second “low option” HRA Basic plan – Increased wellness incentive to $20/30/40 – Added spousal surcharge – Liberalized 100% preventive service guidelines 22
Slide 23: Integrating Consumerism and Wellness • Wellness shown to yield $3 return for each $1 invested* • Ongoing Wellness Events/Programs at Fowler White: – Boot Camp – Yoga – Start! Walking Program (over 50% participation) – Biometric screenings – Lunch and Learns – Health & Benefits Fair – Smoking Cessation Program – Healthy Pledge Premium Differential – Wellness Committee Meetings – Executive Physical Reference: Adapted from WELCOA. (2006). Planning wellness: Getting off to a good start, Part I. Absolute Advantage (5)4, p. 1-92. 23
Slide 24: Fowler White Successes • CDH enrollment has increased each year since inception • Recipient of American Heart Fit Friendly designation (‘07, ‘08, ‘09, ‘10) • Winner of Jacksonville’s Healthiest 100 Award • Named one of 15 Fittest Companies in America by Mens Fitness in ‘08 • Tampa Bay Business Journal’s Healthiest Employer contest finalist 24
Slide 25: Financial and Engagement Results • Before CDH/wellness program – 14% per year cost increase average from 2002 to 2005 • After CDH/wellness program – 6% per year cost increase average from 2005 to 2009 with minimal plan design reductions – Current PEPM ($760.04 as of 7/10) is less than PEPM three years ago ($774.76 as of 7/07) – Increase in web tools usage – Increase in preventive services usage – Increase in generic Rx usage – Increase in wellness pledge (76% of participants) – Increase in wellness program participation 25
Slide 26: Fowler White Learnings • Culture can’t be changed overnight • Senior management support is a must • Enthusiasm for Wellness Program is contagious! • Communication is key - Employee Presentations - Emails & Pre-Enrollment Newsletters - One-on-Ones - Post Enrollment follow up Q&A • New Hire on-boarding is critical 26
Slide 27: Questions? 27