Executive War College

May 1, 2012

Kevin McArdle Senior Director and General Manager,

Laboratory Medicine

Conflicts

1

2

Agenda

3

• Program Design • Benefits Achieved • Creating a Culture of

Health

Program Design

4

• Associates as of January 2012: 10,056

– 65% KC Based

– 17% Outside KC

– 17% Outside US

• Average Tenure: 5 years

• Average Age: 36 years

• Associate Mix:

– 30% engineering

– 30% IT services

– 15% clinical

– 25% sales, operations, administrative, etc.

• Health Plan Spend 2011: $66 Million

• Covered Lives in 2011: 13,300

– 6400 associate

– 6900 dependents (4650 kids)

– 85% participation rate

Cerner as an Employer Mission:

To Contribute to the

Systemic

Improvement of

Healthcare Delivery

and the Health of

Communities

• Two onsite clinics, pharmacies, and free fitness centers

Cerner as an Employer

• Align with Cerner’s vision, mission, and culture

• Build, support and promote a healthy and productive

workforce

• Develop innovative and wellness focused benefits that

can be measurable.

– Labs and Biometrics

• Proactive view of health:

– Health and Care

– Plan for Health vs. Health Plan

• Promote joint accountability and individual engagement:

– Education, Tools, Support

• Create a ‘Culture of Health’

Cerner Health & Wellness:

Core Principles

• Step 1 – Identify

– High-cost conditions

– Targeted population

groups

– Lab values

determine some

opportunities

Strategic Approach to Managing

the Population

• Step 2 – Design

– Cost-benefit analysis

– Tailor benefits to risk

groups

– Ongoing

measurement, when

appropriate

• Step 3 – Implement

– Provide services

– Communicate

– Integrate vendors

• Step 4 – Evaluate

– Clinical impact

– Lab Trend

– Biometric

Improvement

– Financial impact

– Associate satisfaction

Population Health Management

9

10

Cerner WHQ

http://www.cdc.gov/obesity/data/trends.html

Healthe Living with Rewards

Customizable Incentive Program:

Outcomes & Activity Based

Personal

Scalable

How it works:

Subscriber & Spouse /SGDP participate

One point = $1

1000 point maximum for Subscriber • 500 points towards premium reduction

• 500 points towards HRA

1200 point maximum for Subscriber + Spouse/SGDP • 500 point towards premium reduction

• 700 points towards HRA

Flexibility:

Adjustable year to year to best manage our population health

Continually evaluated and enhanced with new offerings and activities

• Individual

Coaching

• Easy to Read

• Lab Values

• Risk factors

• Biometrics

• Set goals

with Health

Coach

• Population Management

• Clinician-focused View

• Trend Analysis

Benefits

14

Healthe Clinic Utilization

• The Healthe Clinics are capturing market share through an enhanced patient centered

experience

15

16

• The Healthe Clinics contribute to increased

productivity through decreased time away from work

Healthe Clinic Productivity Gains

2010 PMPM Cohort Analysis

Key Attributes: – Calculations based on Total Paid (Plan and Member)

– Clinic User = 1 or more Healthe Clinic Visits

– Non Users are excluded from PMPM

– Stop Loss cases have been removed 17

$657

$936

$321

$611

$492

$902

$333

$512

$393

$605

$206

$392

$-

$250

$500

$750

$1,000

Associate Spouse Child All Members

2010 Avg Total Paid PMPM by Cohort

Non KC Community User KC Community User Clinic User

Healthe Pharmacies

• Convenience:

– Adjacent to Healthe Clinics

– High fill rate

– Utilized by over 51% of the Kansas City member population in 2010

– Captured 58% of all members’ prescriptions in the Kansas City area in 2010

• Cost Containment:

– Medications purchased at a deep discount

– Savings passed on to members and the health plan

– Members typically save between 20% - 90%

– High generic dispensing rates

– High generic substitution rates

– High therapeutic substitution rates

• Member Focus:

– Medication consultations

– Alignment with the Healthe Clinic care team

Cohort Risk Factor Summary

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• Five clinical risk factors tracked during

annual screenings

• Consistent population of 2,805

associates who were active from

2007-2010

• Approximately 81% maintained or

improved health status

Creating a Culture of Health

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21

“Right Choices” in the Cafe

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“Right Choices” in the Cafe

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“Right Choices” in the Cafe

Campus Vending

Activity Tracking via FitBit

www.fitbit.com

Enable Active Associates

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27

WiThings Scale

@HealthCricket

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Not your typical

weight loss initiative

The approach

• Leverage competition and team

• Integration with other wellness

efforts (e.g., incentive programs,

dining changes)

• Clear executive support

• Engaging online & mobile

experiences which leverage PHR

Cerner has been

slimming down

30

1.8% 3.1%

18.2% 31.7%

42.5%

39.8%

21.8%

15.8%

15.7% 9.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Start Final

BMI Category Change for participants

Underweight Healthy Overweight

Obese Very Obese

• 2,600+ participants

• 21,000 lbs lost!

• 74% of participants lost weight

• 33% of cohort improved BMI

category1

• Percent of cohort overweight or

obese declined from 80% to

65%

• $500K+ savings on health plan2

• Lab Values pending cohort

cycling through 2012 plan year

1 Height data was captured for 40% of participants; 2 Based on preliminary results using BMI Point Change methodology

What’s Next?

31

More Lab testing to target the next opportunity…

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• Person-

specific

• Based on

known risk

factors

• Aligned

with core

principles

• Proactive

• Innovative

Thank You

Kevin McArdle

kmcardle@cerner.com

Arielle Bogorad

Director, Benefits Strategy & Wellness Initiatives

arielle.bogorad@cerner.com