Personal Responsibility in a Health and Wellness Program

Gary Eastes, Risk/Benefits Manager, City of Knoxville

Christine Stickler, Benefits Coordinator, City of Knoxville

New Role of a Health Plan

• A vision of health “needs to be perceived as a priority business asset and has to be recognized as having a big and important impact on the ultimate success of the enterprise. It has to be viewed as critical to the strategy of the organization.”

Dr. Catherine Baase

Global Director of Health

Dow Chemical Company

Health Program History

• From 1970’s till 2004 the City operated a traditional onsite medical clinic, poorly managed

• Many employees relied on the clinic as their only medical care

• From 1990’s till 2006 the City was in State of Tennessee medical insurance pool

• In the 5 years prior to 2006, premiums had increased 141%

Employee and Member Demographics

• City claims per member historically have been above average of Tennessee employers which forced City out of self-funding in 1990s (28.3% above BCBST norm in 2007)

• Prevalence of chronic disease significantly higher than norms (40% above HC21norms) .

• Average employee age was 4 years older than the average Tennessee employer

• Very heavily weighted with males over 40 in high risk occupations

Chronological Steps

• 2004 Closed the on-site clinic and contracted for uniformed annual exams and full time nurse to provide on-site screenings with 3 on-site offices

• 2005 Began cash incentives for exercise and tobacco-free, in fall began Disease Mgmt Incentives for 5 diseases with logs

• 2006 Left State plan, added $1000 deductible, 100% preventive coverage, lower-salary HRA contributions, included spouses in incentives

Chronological Steps

• 2007 Reopened The Health, Education and Wellness Center, fired DM vendor/made local provider DM vendor, added obesity and hyperlipids to DM, moved incentives to HRA, incentives for participation and A1C in contract, began combining data from insurance and biometrics

• 2008 Added Oxy preauth, step and OTC programs, prenatal incentive

Chronological Steps

• 2009 Added hypertension to DM, reduced DM script copays, added 2nd disease coach

• 2010 Expanded Oxy preauth to all schedule 2, increased $300 deductible to $500, made acute care at The Center available to retirees and dependents

The Leap

• Simplicity was a large contributing factor for change– Employee – easier to understand– Employer – easier to administer

The Leap

Logically, “paying people cash incentives to lose weight, quit smoking, lower their blood pressure or engage in other healthy behaviors should work. But it doesn’t. Or at least, not in the long run.”

Linda K. Riddell

Health Economy, LLC

The Leap

• For 2011, we combined all of the carrots in creating the My Health Program

• The difference in premium between My Health and Medical Only created the stick to engage more of the population to do more.

• While carrots are much better received, research studies have shown that the risk of losing is a far greater motivator than the opportunity to win.

Medical Plan Offerings

My Health Medical and prescription drug coverage Built-in rewards if you commit to health-conscious

lifestyle

Medical Only Medical and prescription drug coverage only Higher employee contributions (more out of your

paycheck) No built-in rewards

Medical Plan with City-funded Wellness Rewards

It’s working!

73% of employees enrolled

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Why My Health?

Why My Health?

“I’ve lost 40 pounds!”

-Kathy Fox, Retiree

Why My Health?

“My Health saves me money on my premiums every month. And I get money that I can use for doctor bills.”

-Philip Reyes, Maintenance Technician

Why My Health?

“The diabetes classes probably saved my life.”

-Cliff Thomas, Public Service Department

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• Lower medical premiums

• City-funded HRA dollars, up to $918/year

• Free or reduced prescription copays – For certain chronic condition medications

• Free testing supplies – For people with chronic conditions

My Health rewards

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My Health rewards

• Lower medical premiums than Medical Only– $256 to $891/year less, depending on the

deductible and network you choose

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My Health rewards

If you: You can earn:

Enroll in My Health $32/month or $384/year (employee only)$64/month or $768/year (employee + one or more dependents)

Additionally, if you:

Earn less than $30,805/year $150/year

Earn $30,805 - $41,458/year $75/year

Or your covered dependent participates in prenatal program

$200 upon delivery of baby

HRA dollars

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My Health rewards

If you: You can earn:

Enroll in My Health $32/month or $384/year (employee only)$64/month or $768/year (employee + one or more dependents)

Additionally, if you:

Earn less than $30,805/year $150/year

Earn $30,805 - $41,458/year $75/year

Or your covered dependent participates in prenatal program

$200 upon delivery of baby

HRA dollars

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My Health rewards

If you: You can earn:

Enroll in My Health $32/month or $384/year (employee only)$64/month or $768/year (employee + one or more dependents)

Additionally, if you:

Earn less than $30,805/year $150/year

Earn $30,805 - $41,458/year $75/year

Or your covered dependent participates in prenatal program

$200 upon delivery of baby

HRA dollars

HRA dollars

• Use for medical, prescription, dental, vision expenses incurred by you and eligible dependents:– Deductibles– Copays– Coinsurance– Other out-of-pocket health care expenses

• Not all expenses eligible

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HRA dollars

• Leftover HRA dollars roll over– Available as long as covered by City-

sponsored medical plan (including COBRA and retiree coverage)

• Health Care FSA participants:– FSA funds used first, then HRA

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My Health rewards

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Chronic condition medicationsfor My Health enrollees only

Non-chronic-condition medications for My Health

enrollees and ALL medications for Medical Only enrollees

Network retailpharmacy

(up to 30-day supply)

Home delivery/90 days at retail

(up to 90-daysupply)

Network retail pharmacy

(up to 30-day supply)

Home delivery/ 90 days at retail

(up to 90-day supply)

You pay…

Generic $0 $0 $5 $10

Preferred brand $5 $10 $20 $40

Non-preferred brand

$20 $40 $40 $80

Prescription drug copay discounts

My Health rewards

• Free testing supplies:– Peak flow meter (asthma and COPD) – Blood pressure cuff (hypertension)– Diabetes monitor, lancets, test strips

(diabetes)

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My Health requirements

• Complete annual health screening

• Be physically active

• Complete quarterly health education

• Manage chronic conditions

• Annual well-child visit documentation

• Prenatal program (optional)

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My Health requirements

• Receive annual health screening– At The Center– Within previous 12 months

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My Health requirements

• Be physically active at least:– 60 minutes/week (at least 3 sessions/week,

10 minutes each)

• Submit physical activity affidavit by 10th of month– Through BCBST’s BlueAccess website, OR – Via paper affidavits to The Center

• Honor System – but it’s working

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Why My Health?

“I clean everything from Cumberland to the Old City. I walk so much I went through three pairs of shoes last year .”

-Arturo Cano, Public Service Department

My Health requirements

• Quarterly health education– Lunch and learns – Internet classes– CDs, DVDs, printed literature available from

The Center

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My Health requirements

• Manage chronic conditions through The Center’s health coach program:– Asthma, chronic obesity (BMI greater than

35), congestive heart failure, COPD, coronary artery disease, diabetes, hyperlipidemia (high cholesterol), high blood pressure

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My Health requirements

• Tobacco users must:– Participate in health coach program– Complete Tobacco Certification section of

enrollment form (if enrolling in My Health for first time)

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My Health requirements

• Annual well-care visit for children– All covered children under age 26 – Documentation required (visit within past 12

months)

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My Health requirements

• Prenatal program (optional):– Enroll by 10th week of pregnancy – Receive HRA contribution upon delivery of

baby

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Why My Health?

“It’s not just a quick fix—it’s a whole lifestyle change.”

-Jason Scott, Police Department

Medical Only

• Medical and prescription drug coverage only

• Higher employee contributions than My Health– More out of your paycheck

• No built-in rewards (HRA dollars, etc.)

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Prescription Drugs

• Over-the-counter (OTC) program– If OTC alternative available, coverage is reduced

from a normal copay to 50% of the drug’s cost.

• Schedule 2 narcotics program– If a schedule 2 narcotic prescription exceeds a 60-

day supply, you must obtain prior authorization.– To fill a prescription beyond 60 days, your doctor

must be in the BCBST network and prescription must be considered medically necessary.

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Prescription Drugs

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The City of Knoxville’s Health Education &

Wellness Center

The Center

“The Center discovered I had diabetes, which I might not have known otherwise.”

-Betty Davis, Public Service Department

The Center

“The Center is more than a doctor relationship. It’s more like an advisor, where you can ask all kinds of questions.”

-Linda Clevenger, Public Service Department

The Center

• Free wellness/health coaching services– Offers health education classes– Assists with researching treatment,

medication and other self-care information

• Treatment for short-term illnesses for copay– Pay with cash, check, debit/credit card or

FSA/HRA

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The Center

• Acute care for children– Children age 13 and older can be seen at The

Center an– Ages 6-12 can be seen at a Summit Express

Clinic (SEC)

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The Center

• Operated by Summit Medical Group

• Staff follow HIPAA privacy rules; health information is confidential

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It Works!

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It Works!

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Recognitions2006: City of Knoxville’s employee health plan featured in the journal of

the College for Advanced Management of Health Benefits2006: City of Knoxville named finalist for Employer Excellence in

Value-Based Purchasing Award by the National Business Coalition on Health

2010: selected as finalist for Benefit Manager of the Year and named to the Benefits Management Honor Roll by Business Insurance.

2011: Champion Award for Excellence in Workers Compensation Risk Management, presented by National Underwriter to the City of Knoxville.

2011: Achievement Award for Excellence in Human Resources, presented by the Tennessee Municipal League to the City of Knoxville for its health program.

2011: Featured in the October issue of Public Risk.2011: Silver Pen Award presented by the Middle Tennessee chapter of

the International Association of Business Communicators (IABC) to the City of Knoxville for its benefits communication program.

New Role of a Health Plan

• A vision of health “needs to be perceived as a priority business asset and has to be recognized as having a big and important impact on the ultimate success of the enterprise. It has to be viewed as critical to the strategy of the organization.”

Dr. Catherine Baase

Global Director of Health

Dow Chemical Company

National Employer Trends

• “Value-minded employers are engaging directly with quality-focused providers to explore and test new business arrangements and collaborative approaches to health management programs, services and benefits.”

Research Study conducted by Benfield and the American Medical Group Association

National Employer Trends

• Employers with 500 or more employees vary employee premiums for smokers by an average of 12%. Employers with 20,000 or more employees vary premiums for smokers by 24%. Two-thirds of firms with 200 or more employees offered smoking cessation programs in 2011.

Mercer

National Employer Trends

• By 2012 four of five medium and large companies plan to offer financial rewards to individuals who participate in their health management programs. Use of penalties rose from 8% to 19% from 2009 to 2011, and 38% of medium and large employers expect to have penalties in place in 2012.

Towers Watson Survey

National Employer Trends

• Consumer-driven health plans are now 12% of the medical plan market.

Employee Benefit Research Institution

National Employer Trends

• “Although the top human resources executive is still the primary champion of employee benefits consumerism, we saw an uptick in respondents reporting that the CEO, president or another member of the senior leadership team is their primary advocate.”

Lenny Sanicola commenting on a survey by WorldatWork

Question/ Answer Session