Return on Investment with Performance-Based Health Management

People

Helping

People

Insurance Employee Benefits Risk Management Financial

Strategies

Return on Investment with Performance-Based Health Management


Strategies

Objectives

• Explain why traditional wellness has failed• Identify the 6 best practices of a successful health • Identify the 6 best practices of a successful health management program• How to design an effective incentive strategy• Demonstrate real Return-On-Investment


Strategies

Why Traditional Wellness Has Failed

Price Waterhouse Coopers Study 71% of employers offering wellness program… few

said they are effective at lowering costs

Participation remains low <50% of those who are eligible actually participate Participation in disease management remains low…

less than 15% eligible actually participate Opt-in health coaching participation in the single digits


Strategies

The Reality

Despite the popularity and prevalence of employee wellness programs, we are not getting healthier.


Strategies

Obesity Trends * Among U.S. Adults BRFSS

(*BMI 30, or about 30 lbs. overweight for 5’4” person)

1990

2009

1999

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%


Strategies

Diabetes Trends

Diagnosed Diabetes among Adults aged ≥ 20 years

2004 2007

2009

Percent

0 - 6.5

6.6 - 8.0

8.1 - 9.4

9.5 - 11.1

> 11.2


Strategies

Life is Getting Easier


Strategies

Doing Nothing is a Losing Strategy

Migration study of 43,312 Individuals Over 3 Years

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

Year 0

Low Risk (0-2 Health Risks)

27,951

Medium Risk (3-4 Health Risks)

10,670

High Risk (5+ Health Risks)

4,691

Year 3

Low Risk (0-2 Health Risks)

26,591

Medium Risk (3-4 Health Risks)

11,495


5,226


5,226


Strategies

You Don‘t Know What You Don’t Know

HRA FindingsClaims information

Diabetes

Hypertension

• 111 with glucose in diabetic range

• 580 with glucose in pre-diabetic range• 50 have claims with a diagnosis

suggesting diabetes or pre-diabetes

• 549 individuals with elevated systolic and diastolic blood pressure readings

• 78 have claims with a diagnosis suggesting hypertension

Heart AttackRisk

• 815with elevated cholesterol

• 883 with BMI readings > 30, of which 396 (44.8%) are also pre-diabetic

• 98 individuals have claims with a diagnosis suggesting being at risk of a heart attack


Strategies

6 Best Practices


Strategies

Best Practice #1 Objective and Outcome-Based

Objective measurement is key to success

• Set baseline

• Track trends

• Real information, not a guess

Importance of on-site venipuncture biometric screening

• Objective data points to measure over time

• Participants don’t “know their numbers”

• Uncover hidden risks


Strategies

Employee Perception of Health

- 88% of participants self-reported 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)


Strategies

Best Practice #2 Clear-Cut Scoring

• Easy to understand scoring drives engagement and participation

• Scored model translates risks into compliant measurement model

• Long term measurement tool


Strategies

Personal Report

Overall WellnessDear “Participant”,

By completing this assessment, “Participant”, you have taken the first step toward a healthier lifestyle! This guide will give you valuable information to help you achieve a healthier way of life. Better health increased productivity, in both your professional and personal life.

This guide is not meant to take the place of a physician visit nor can it diagnose illness or medical problems. It is designed to give you information relating to your health risks and overall wellness. This information is provided to help you develop a plan of action to make healthy lifestyle changes. This program uses scientifically validated research to help you identify risks or behaviors that may cause or lead to chronic illness. Our program concentrates on risk factors that can be modified and that you should be able to effectively control, maintain and/or improve.

To get the most out of this guide, you may want to read it more than once.

Your Health Score is 58

Your score qualifies as High Risk. The ranges of scores are as follows:

An overall score of 71 or above indicates your lifestyle is on the right track. A score below 71 means that you might be at risk for developing certain diseases or health conditions.

Very High Risk

50 or less

High Risk

51 to 60

Moderate Risk

61 to 70

Low Risk

71 to 84

Ideal Risk

over 85


Strategies

Best Practice #3 Carrie Independent

Don’t share proactive risk data with risk bearer

Keep program consistent over time

You OWN the data

More flexibility in program design


Strategies

Best Practice #4 Meaningful Incentives

Direct Correlation Between Value & Participation

• Results for completion of Health Assessments show a direct correlation between incentive value and participation

• Incentives reward those who make healthy lifestyle choices


Strategies

Best Practice #5 Support Behavior Change

Personal Intervention Group Programming


Strategies

Best Practice #6 Measure Results

Participation Track participation by employee/dependent, location, and job codes Goal: 70% participation (minimum)

Program Engagement Track activity in health coaching, online utilization of sites, goal

tracking, classes and challenges to determine outcomes and impact

Health Risk Analysis and Migration Break out specific risk factors and risk category to track annually

Claims Analysis and Impact


Strategies

Designing an Effective Incentive Program


Strategies

Effective Incentive Design

Various studies show that 85% of people are wired to not change unless there are consequences

Myth: People won’t change Reality:

Seat belt use 30 years ago compared to today Drunk driving 30 years ago compared to today Worksite/Job safety 30 years ago compared to today


Strategies

HIPAA Compliance

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


Strategies

Example of Implementation

Year 1 - Actions Increase contribution rates by $25 per month for non-participants Offer employees $25 per month discount for participating in assessment program

Year 2 - Performance Offer $10 per month discount for repeat participants (participation incentive) Offer $15 per month discount for repeat participants who maintain a high level of

health, improve by at least 5 points on the scored algorithm, or provide a letter from

MD that states compliance with care (outcome incentive)

Year 3 and beyond- Increase premium rates as necessary- Include spouses


Strategies

Cost Difference by Participation


Strategies

Claims Experience Related to Health Score


Strategies

Repeat Participation Demonstrates Reduction in Claims Expense

*Non-Participants are costing $2,000 more than Year 1 Participants and more than $3,000 more than those continuously participating in the biometric screenings


Strategies

Medical Claims Correlation to Glucose


Strategies

Workers Comp Claims by Participation


Strategies

Workers Comp Claims Correlation to BMI


Strategies

Excess Risk Equals Excess Cost

Cost Area Low Risk (N=671)

Medium Risk

(N=504)

High Risk

(N=396)

Short-Term Disability

$160 $288 $444

Worker’s Compensation

$304 $325 $662

Absence $327 $455 $703

Medical & Pharmacy

$1,544 $1,983 $4,929

Total $2,335 $3,052 $6,738

High Risk employees cost $4,403 more per year!

Source: University of Michigan Health Management Research CenterInflation adjusted to 2009: http://www.halfhill.com/inflation.html


Strategies

Return on Investment


Strategies

Questions?

Sarah KuretzkyHealth Solutions [email protected]

888.263.4656 x1157

Documents

Return on Investment with Performance-Based Health Management