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Innovative Use of Data Mining/Warehousing for Employee Activation

Business Health AgendaMarch 13, 2009

Lisa R Schmidt, CEBS

System Director, Health, Welfare and Wellness Benefits

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Reflection

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Our Belief

• It’s possible to stabilize health care spending

• Appropriate use of tactics drives best performance

• Many best-performing companies have adopted CDHPs, but for us this is just one component of a larger consumer-oriented model

• Increasing CDHP enrollment is key to moderating cost trends

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Providence’s story

• 48,000 employees, 68,000 covered lives

• Health care organization

• Multiple TPA’s, plan designs, self and fully insured plans

• Organization-wide medical trend exceeding 12% (2007)

• Spend projection in 2008 $340 million; 91% employer paid

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Providence’s story

• Wanted to understand our employee cost data

• Looked for a transparent, unbiased, integrated solution

• Actionable results based on data

• Ability to analyze and report out results in a financially sound fashion

• Wanted our own tool – chose Thomson Reuters NetEffect

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Providence’s case for wellness

• Wellness and health promotion is really about people

• Wellness/health promotion is about cost management

• You can learn about people through data

• By understanding your data, you can understand people

• Once you understand people, you can build a story

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For Every 100 Employees• 20% of healthcare expenditures are attributable to

preventable illness• 40% of healthcare expenditures are attributable to

modifiable risk• 11,500 hours of productivity per year are lost due to health

conditions

• 60 are sedentary• 25 smoke• 10 have diabetes• 50 have high cholesterol

• 24 have high blood pressure• 50 are distressed or depressed• 27 have active cardio disease

* Source: National Health Center for Health Promotion and Disease Prevention

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Selling wellness as an employee strategy

• Human resources and employees don’t speak the same language

• What really matters to your employees?

You must know your employees data in order to tell a story to inspire people to change

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Cost shifting, or total populationhealth management?

• Providence is striving to become a BEST PRACTICE employer

• We are stabilizing and reversing medical trend

• Choice of population health management over cost shifting-we chose PHM

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• Make actionable decisions based on factual data– Remove guesswork and assumptions

• Build financial support for strategy

• Drive employee change behaviors through data

New Organizational Philosophy

Our Approach-Thomson Reuters

NetEffect

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What we learned

• There are many positive actions that Providence could take to reduce the need for and/or cost of care

– Primary prevention – Health decision support– Early detection of disease – Case management– Lifestyle behavior change – Improve outcomes of care– Disease management – Promote guideline

compliance– Use data to target opportunities and prove impact of

programs

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What we learned• Our benefit trend is catastrophically unsustainable

– Revenue 4%– Costs 12%++

• Our cost sharing models are not effective

• Our costs are being driven by conditions that should be diagnosed early and treated

• Our employees are suffering from lifestyle related conditions

• We are getting older, and not better

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1414

Cost of Obesity (in millions)Providence employee benefit plans-2007 paid claims

$275.0

$31.1

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2007 Total PaidClaims

Claims Paid Relatedto Obesity*

*$370 per member per year cost for conditions related to being obese

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$30

$40

$50

2008 2011

1% Trend 6% Trend 11% Trend

Medical Cost Trend

$30

$40

$50

$60

2008 2011

1% Trend 6% Trend 11% Trend

$100

$120

$140

$160

$180

2008 2011

1% Trend 6% Trend 11% Trend

$100

$120

$140

$160

$180

2008 2011

1% Trend 6% Trend 11% Trend

Alaska

• Best Performer: 1% Trend• Average Performer: 6% Trend• Poor Performer: 11% Trend; Providence fell in this category in 2007

MM $18 MM increase

$1 MM increase

Oregon

MM$59 MM increase

$4 MM increase

California

$21MM increase

Washington

MM

MM $59 MM increase

$4 MM increase

$2 MM increase

$9 MM increase $10MM increase

$28 MM increase $28 MM increase

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Chronic Conditions

• 15.2% of Providence’s members suffer from a chronic condition• 4.8% of Providence’s claims costs are due to chronic conditions

CAD: Coronary Artery Disease; CHF: Chronic Heart FailureSelf-insured data only – Thomson Risk Profiler paid claims 6/06 – 5/07

Members Diagnosed with Chronic Conditions

0%

5%

10%

15%

20%

25%

Asthma COPD CAD & CHF Hypertension Diabetes All ChronicConditions

AK Members CA Members OR Members WA Members System-w ide Members

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Lifestyle Related Conditions

• 28% of Providence’s members endure claims related to lifestyle conditions• 20.1% of Providence’s claims costs are due to lifestyle conditions

Self-insured data only – Thomson Risk Profiler paid claims 6/06 – 5/07

Condition Analysis

0%

5%

10%

15%

20%

25%

30%

35%

Obesity Lack of PhysicalActivity

Tobacco Use Alcohol Abuse Poor NutritionPractice

NoncontrolledLipids

NoncontrolledHypertension

Stress / Anxiety /Depression

Total LifestyleRelated Condition

AK Members CA Members OR Members WA Members System-wide Members

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Segment the Population: 2007

ChronicDisease

AcuteConditions

ModerateRisk

LowRisk

CatastrophicIllness

HighRisk

LowRisk

• 58.0% (62.1%) of the population has medical claims under $1,500

• 8.4% (9.7%) of medical expenses are in this group

• 33.9% (31.4%) of the population has medical claims of $1,500 to $9,999

• 35.6% (36.6%) of medical expenses are in this group

• 7.4% (5.9%) of population has claims of $10,000-$49,999

• 37.3% (33.4%) expenses are in this group

Maintain Health Manage HealthImprove Health

Percentages in orange

represent Watson Wyatt’s

NDC norms

Source: Providence medical claims data incurred August 1, 2006, through July 31, 2007, and paid through September 30, 2007

Risk Reduction/ Self-Care

Disease and Case Management

Prevention/Early Detection/ Self-Care

• 0.7% (0.6%) of population has claims of $50,000+

• 18.7% (20.3%) expenses are in this group

Illness BurdenAllowed PMPY

0.57$534

1.45$3,875

3.09$18,564

8.85$93,191

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Your Health Rewards Program•Biometric Health Screening

•StayWell® Health Assessment

•StayWell® NextSteps® Health Coaching

•Incentive

•Free & Clear Quit for Life Tobacco Cessation

•Nurse Advice Line and Medically Reviewed Information

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Plan redesign 2009

• CDHP plan design commitment– goal: 100% HA participation for employees and spouses

• Cost sharing offset by HA participation

• HSA introduced as retirement supplement vehicle

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Introducing ProvSelect HSA

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Health Assessment participation

June 2007 through May 2008 139 completed (15.5%)

July 2008 through September 2008 76 completed (12.6%)

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Health Assessment participation

July 2008 – January 2009

615 completed (93%) 188 spouses (57%)

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Results of Work to date

• Trend results encouraging

• More accurate data revises trend

• Most progress in regions with highest employee populations

• Best performer has most integrated delivery system

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What’s next

• Address cost sharing and access issues that encourage employees to use more health care services

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Other possibilities

• Illness Burden Management

Short term strategies

Longer term strategies

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Questions??