VBBD Webinar Dec 2010

Leveraging Value Based Benefit Design to Improve

Adherence and Lower Costs While Improving

Member HealthPart One

December 8, 2010

www.scioinspire.com

© 2010 SCIOinspire Corp.

| Presentation Agenda

• Introduction and Panelists

• Defining Value Based Benefit Design

• VBBD Overview

• Lessons from Early Adopters

• Interactive Question and Answers Session

SCIOinspire Corp Proprietary & confidential. Copyright 2010 3

Webinar, Panelists

Barbara Christensen is Chief Sales and Marketing Officer for Providence Health Plans, has more than 30 years of experience in the health insurance industry. Prior to joining Providence Health Plan, she was with Kaiser Permanente. Her current duties include management of statewide sales, marketing and product development for Providence Health Plan’s commercial, individual and Medicare programs.

Marcia Bondi is Director of New Product Implementation at Highmark Blue Cross Blue Shield in Pittsburgh. For the last two years, Marcia has spearheaded the design and implementation of Highmark’s forward-thinking Value-Based design program. In June 2010, Marcia was invited and presented Highmark’s approach to Value-Based design at the prestigious AHIP conference. Prior to joining the Product Development department, Marcia spent 16 years in Highmark’s Underwriting department and oversaw the group renewals and quotes of small, middle and large employers.

David Hom is an internationally-recognized expert in the field of Value-based Benefits and Employee Wellness. He joined SCIOinspire after more than 25 years with Pitney-Bowes Corporation, where he was responsible for introducing their leading-edge programs in value-based wellness, responsible for reducing medical trend to half of the industry average over a number of years.

Moderator

Bart Bracken is a healthcare executive with more than 20 years of experience in the healthcare and disability industries as a consultant and serving in senior leadership positions with large managed care organizations and specialty entrepreneurial companies. His broad experience includes managed care operations, strategic planning, marketing, business development, product development, and program management with both private and public sector programs. He has a Master in Industrial and Labor Relations from Cornell University and a BA, magna cum laude, in Economics from St. Lawrence University


Defining Value Based Benefit Design (VBBD)

“VBBD is using plan designs and incentives to drive member engagement for high value services which can improve adherence leading to improved health status and longer term medical savings. VBBD will also identify low value services and create the right disincentives to use those services which can be adjusted based on the clinical severity.”

David Hom (President, Care Management Services, SCIOinspire Corp.)


US Healthcare Market, Trends and Solutions

Data/AnalyticsDriven Transformation

Solutions

• Data Integration• Global Delivery• Consulting

Business Process/Cost Optimization

• Recover from third parties and other payers

• Reduce payment errors• Recover complex

overpayments

Payment IntegritySolutions

• Improve effectiveness of care programs and ROI

• Improve Product Design

Care Analytics and Reporting

• Leverage technology and media

• Better value-based benefit designs tie incentives with behavior change

Member EngagementSolutions

OPPORTUNITY TO TRANSFORM

Healthcare ReformMember & Provider Engagement

Care and Wellness Management Effectiveness

Payment Integrity Legacy Cost Structures

Health Insurer Trends

Solutions


Health Plan Adoption of Value Based Benefits

2007 2008 2009

• Smaller regional plans adopted for their own associates

• Began to productize for their book of business

• Regional Health plan adoption for their own associates

• Creating products for self insured and assessing for fully insured business

• National health plans began product introductions

• Products created for specific chronic conditions e.g., Diabetes

• Trizetto announces software enhancements integrating VBBD features with claims payment

Key Milestones in the Adoption of Value Based Benefits

2010+

Four Trends:• Linking incentives to

activities, outcomes in the future

• Evaluation Methodologies

• Aligning to supply side (P4P, Tiered network)

• Solution based sales• Greater supporting

research


Health Plan

Health Plan

Plan Design Challenges

VBBD compliance goals require more detailed Clinical and Financial Reporting

Limited scope of Plan Design Technology and Systems

Plan designs are focused on copayments rather than on engaging the member throughout the care continuum• Plan changes can result in

negative ROI• Designs need to align with

physician incentives• Designs should coordinate with

care management programs (e.g., Health coaching and Disease Management)

• Prioritization

Technology and Systems• Plan designs often differ at the

member level, posing problems for administrative systems geared to group-level administration

• Systems updates take time and resources

• VBBD needs to be integrated into all communications and outreach to the member

• Need to integrate VBBD compliance goals with providers and other professionals

| 8

MARCIA BONDI

Director, New Product Implementation

EARLY ADOPTER EXPERIENCE

BackgroundInternal Drivers of VBBDProduct PackagesKey Lessons and Conclusions


Background

Highmark has offered Value-Based since 2007

• Pitney-Bowes’ success prompted market entry

• Focused on prescription drug – 8 conditions

Offered Rewards program since 2007

• Employer funded rewards program focuses on all employees and rewards for engagement

• Packages: health risk assessment, lifestyle improvement, preventive, condition management and online tools


Internal Drivers of Value Based Benefit Design

Factor Trend

% of members with unhealthy behavior and conditions Increasing

Employee cost-sharing each year Increasing

Member Engagement Lacking

Program outcomes Lacking

Ability to payout cash rewards Not sustainable

Value Based Design

• Cost effective rewards for healthy behavior through benefit design or premium

contributions


Value-Based Product – Packages

Informed Decision MakingHigher cost-sharing on low value services band not using Shared-Decision making

Reward for ResultsWorksite screenings

Risk AssessmentComplete Wellness Profile and Receive Preventive Care

Integrate Condition Management Protocol Compliance at

member levelFeature to focus on high-risk

Lower cost-sharing on high value medical services & prescription drug

Broad Population Targeted Patients

Encourage Engagement Reward for Outcomes

| 12© 2010 SCIOinspire Corp. Proprietary & Confidential. 12

Implementation Lessons

Key Lessons and Conclusions

1. Take time to design, build your product continuum and implement in phases

2. Ensure legacy systems are compatible

3. Establish evidence-based guidelines -takes time to define

4. Perform segmentation on your population to develop the right messaging

5. Ensure portal is friendly and engages, provides tools, is educational and provides benefit summary and status of protocols

1. Analyze data to determine what your population needs

2. Savings must be built into the price for mass acceptance

3. Target the right customers to steer them to the right products

4. Communications need to be robust throughout the year supporting various media types and engaging based on health personality

Key Conclusions

| 13

EARLY ADOPTER EXPERIENCEBackground and Internal DriversGoalsTiered StructureLessonsConclusions

BARBARA CHRISTENSEN

Chief Sales and Marketing Officer


Drivers

Internal Driver: The Health Leadership Task Force

• Commissioned by the Portland business community in the summer 2008

• Goal: Develop solutions and actions to keep health care costs and premium

increases closer to the CPI

• Sponsors: Major health systems and health plans

• Build on Oregon Health Plan history of collaboration


Value-Based Benefit Design Goals

1. Create a culture of health

2. Support, prevention, and health maintenance

3. Reduce financial barriers to the management of chronic care

4. Reduce the use of nationally-recognized (Wennberg/Fisher) care that, for

a population, is driven by provider-preference or supply rather than

medical evidence

5. Implement benefit design that encourages the most effective care with

more appropriate incentives

6. Achieve a 10% reduction in premium relative to a comparable open option

plan

7. Engage employers and employees in discussing plan design in a new way:

drives innovation for early adopters


Design Features: Three Tiers

PREFERENCE/SUPPLY SENSITIVE SERVICES

THE “USUAL” STUFF

DESIGNED TO BETTER MANAGE CHRONICS


Design Features: Tier 1 - Designed to better manage chronics

• No deductibles & zero or minimal co-pays

• Preventive health & wellness services

• Screening exams

• Routine immunizations

• Nutritional counseling

• Smoking deterrent medications

• Chronic care management (Depression,

CHF, CAD, Diabetes, COPD, Asthma)

• Generic Drugs

• Condition-specific labs/imaging/tests

• Primary care office visits





Design Features: Tier 2 - The “usual” stuff

• Medical services subject to the standard

deductibles/co-insurance/out-of-pocket

maximums

• Inpatient services

• X-ray

• Lab

• Maternity services

• DME

• Outpatient surgery & services

• Home health





• Preference/Supply sensitive treatments (18.4% all expenses)• Separate deductible

• Higher co-insurance

• Separate out-of-pocket maximum

• Preference/Supply sensitive treatments • Upper GI endoscopy X

• Nuclear cardiology

• Spine procedures for pain X

• Knee replacement X

• Knee Arthroscopy X

• Hip replacement X

• Shoulder surgery X

• Hysterectomy

• Emergency room Visits

• Coronary stents and angioplasty

• Coronary artery bypass surgery

• High tech imaging (CT, PET, MRI) X

Design Features: Tier 3 - Preference/Supply sensitive services




Our Customer: 6000 members

X = Additional Cost Tier

$500 co-pay in addition to

hospital & outpatient co-pays

Imaging $100


Implementation Lessons

1. Preference sensitive is lousy consumer language: customer used “additional cost tier”

• For shelf product we have used “select value” and “value level 1,2,3”

2. Allow customer to pick among treatment categories but no exception on how the

category is defined by codes. No exception panel if someone really needs the

treatment in a category.

3. Claims payment depends on correct coding by providers

4. Decision tools important so consumer can learn treatment options

5. Health Risk Assessment useful in finding chronic care members early

6. We anticipate uptick in member appeals

7. Employer, member and provider education is key

8. Important to keep both tiers 1 and 3 to achieve price point

9. Important to keep nationally recognized list in tier 3


Key Conclusions

• Decision tools important: provider usage/endorsement best

• Employers philosophically get it but prefer to not deal with noise and individual that

needs a treatment category

• Will not be mainstream soon

• Great innovation discussion


Interactive Q&A Session

Please use the messenger on your screen to submit your questions


Contact UsAnnie Welsch

Email: [email protected]

www.scioinspire.com

SCIOinspire Corp.

220 Farmington Ave, Suite 4

Farmington, CT 06032

Phone: 1.412.278.5800

Fax: 1.412.278.5810

© 2010 SCIOinspire Corp.

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