Www.fallriverconsulting.com The University of Alaska Proposed Wellness Review Services Kristen A....

www.fallriverconsulting.com

The University of AlaskaProposed Wellness Review Services

Kristen A. Russell, FSA, MAAAPresident & Founder

Fall River Consulting Group LLC

EXPERT EMPLOYEE BENEFITS & ACTUARIAL CONSULTING

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Agenda

I. BackgroundII. Fall River Six Step Trend BusterTM

StrategyIII.High Level Plan ReviewIV.Wellness Review Services


Fall River Background


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Fall River BackgroundWe are a boutique actuarial consulting firm in Denver, CO5 W-2 Employees and 4 Independent ContractorsMs. Russell is a member of the American Academy of Actuaries and a Fellow of the Society of ActuariesOver 16 years of experience in the employee benefits and health actuarial fields76% of the time we review a health plan we find ways employers can save money without giving up anything in terms of benefit valueEmployer clients include hospitals, schools, non-profits, technology, and professional services firms


The Fall RiverTrend BusterTM Strategy


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Craft a Long Term StrategyQuick fixes often backfire, and employees grow tired of “flavor of the month” initiatives A recent Watson Wyatt study revealed:

The average large employer experienced a 6% healthcare cost trend;Those who took focused, proactive steps to manage their healthcare costs averaged only 0.5% increases; and Those who did little to nothing to tackle their costs instead paid 10.5% increases on average.


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Engage Employees through Plan DesignEmployees are typically no more concerned about spending your healthcare dollars wisely than a teen-aged girl shopping with Dad’s money.We help firms evaluate how their plan designs can be enhanced to engage employees in the actual cost of health care so they are incented to spend your money wisely.


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Get ‘Em MovingTwo-thirds of our healthcare dollars spent on conditions preventable or treatable by lifestyle (Centers for Disease Control and Prevention). Wellness programs can achieve 300-600% ROI over 3 years, but most are haphazardly designed or only attract participation of already healthy members.We have experience designing outcome based incentive structures that incent the least healthy members to participate the most


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Create Savvy Healthcare ConsumersConsumers can estimate the price of a Honda

Accord within 3%, but are 56% off on a four day hospital stay (Harris Interactive survey).Employees cannot make wise decisions with your healthcare dollars unless they have the knowledge and tools to be informed consumers.Fall River helps employers create an education strategy to teach members how to:

Seek care in the most appropriate settingBecome an active partner in their treatment plansFind out which of their drugs have generic alternatives and how to find the lowest cost source for those prescriptions


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Mine Your DataWhen you don’t know what’s driving up your healthcare costs, it’s hard to reverse it.The claims experience data provided by a TPA and PBM is a treasure map showing how to better manage your claims, but it doesn’t do any good sitting on a shelf…Fall River takes charge of the claim management process for large employers, using our actuarial expertise to identify problematic cost drivers and benefit designs that are being abused, and reporting back regularly.


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Communicate ConstantlyAdults need to see or hear new info 7 times to absorb it.Employees need to hear things in different ways too:

Face-to-face education (WIN conducting today with Wellness Breaks, but consumer education could be added)Online information and email reminders and encouragementPrint information sent home to reach spouses – e.g. Fall River offers an optional wellness print newsletter to send home

We also keep you updated on the latest benefit strategies, wellness ideas, and compliance updates via our Fall River Journal employer newsletter.


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A recent Watson Wyatt study revealed:

The average large employer experienced a 6% healthcare cost trend;Those who took focused, proactive steps to manage their healthcare costs averaged only 0.5% increases; and Those who did little to nothing to tackle their costs instead paid 10.5% increases on average.

Which group would you rather be in?


High Level Plan Review


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Medical PEPM – 36 MonthsMedical Claims PEPM

0. 00

200. 00

400. 00

600. 00

800. 00

1, 000. 00

1, 200. 00

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

M on t h


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Trend Analysis ResultsMedical Trends Composite

Period Ending 24/24 18/18 12/12 9/9 6/6 3/3 11.38%

6/30/09 N/A 11.7% 18.0% 20.1% 21.5% 21.5% 17.8%

3/31/09 N/A 9.8% 9.9% 16.7% 19.3% 21.4% 13.9%

12/31/08 N/A 15.0% 6.5% 5.9% 14.0% 16.8% 10.3%

9/30/08 N/A N/A 5.0% 3.3% 1.0% 11.2% 3.1%

6/30/08 N/A N/A 15.5% 3.1% -0.1% -7.2% 6.0%

3/31/08 N/A N/A N/A 27.3% 9.8% 8.5% 18.2%

12/31/07 N/A N/A N/A N/A 41.7% 11.3% N/A

9/30/07 N/A N/A N/A N/A N/A 96.6% N/A


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Regression Analysis ResultsNumber of Months

Trend Value from Regression

15 Months 46.78%

15 Months 31.03%

18 Month 21.95%

21 Months 22.81%

24 Months 21.41%

27 Months 12.79%

30 Month 12.09%

33 Months 14.28%

35 Months 18.28%


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Medical UtilizationIgnore Claim report columns titled “Claims Per Employee” as they are erroneous on most all GER reports reviewedU of A population is older, more female, and with fewer kids than the norm, but the male/female split did balance a little back toward norms in the last year2008 Utilization report from Premera indicates that trend (actually change in PEPM) was reduced from 13.5% to 4.3%This is due in part to a dramatic reduction in inpatient utilization – bed days are down 21% overallLarge claims down in 2008 but still at or above norms – top 5 causes are all able to be impacted by lifestyle and wellness

Musculoskeletal, Cancer, Digestive, Circulatory, Genitourinary


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Union vs. Non-Union Stats (from 2007)

Category Union Non-UnionAverage Mem Age

37.2 34.8

Male/Female Split

50/50 46/54

IP Bed Days 300 214

Change in PMPM

28% 7%

Mem Cost Share

8.7% 10.4%

Claims Over 50K

10.3 CPT 9.4 CPT


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Disease Management - Activity

Premera’s prospective UR/CM reviews dropped dramatically in most recent, but still at norms for bookPMPM savings attributable to UR/CM dropped 18% - diminishing returns?On DM, Premera is managing more patients on a cumulative basis, but far fewer contacts in terms of:

Welcome kitsQuarterly standard of care remindersEmployee Newsletters

Number of outbound calls did increase, which is positive% of Opt Outs increased in most programsIs U of A still getting its money’s worth with Premera’s DM?


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Disease Management – Clinical Outcomes

Only detail reporting was for Diabetes, CHF, and CAD, and is greatly delayed (reviewing CY 07 stats in Nov 08)Hospital admissions and ER visits were down for diabetes and CHF but both were up for CADCategorization of members by how well they are managing disease indicated several concerns:

All CHF patients had an ER or hospital visit in the past year, meaning that’s the only way Premera found them0% of diabetics are classified as “Managing Condition Effectively” without an elevated risk of exacerbation

% of Opt Outs increased in most programsSavings calculation seems to indicate that claims dropped dramatically in 2006 after the 2005 baseline year, and then increased quite a bit again in 2007. Appears to be taking credit for reversion to the mean.


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Pharmacy ReportingTotal PEPY cost is up 6.6%, utilization (measured by days’ supply) is up 2.1%Generic dispensing rate of 54.7% is well below norms and Best in Class (Addition of 3 Tier benefit 7/1/08 should help)Employee cost share is very low at 9.7%; norm is 19.2%41.4% of scripts are maintenance drugs that are filled at retail – work to convert these to mail orderMedication adherence (Med Possession Ratio) is well below Best in ClassConsider these improvements:

Step TherapyMandatory OTCValue Based Purchasing / Evidence Based Design


Proposed Wellness Review Services


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How Fall River Can Help U of Alaska

Perform an on-site review of all wellness services and offerings with an objective eyeEvaluate offerings in context of other major university programsReview ROI calculation methodology for actuarial soundness and provide recommendations for drilling down furtherIn depth investigation of the return on various investments – what’s working best and not as well, and what are you REALLY getting for what you payProvide recommendations for strategies to increase wellness plan participation, including full legal and other details regarding outcome based incentives, as well as a review of current HRA incentiveProvide overall recommendations in context with a full actuarial cost containment strategy


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Advantages of Fall RiverMany years experience with healthcare cost containmentAn actuary can put wellness into context with larger strategyExtensive familiarity with outcome based wellness rewards and rules governing themCan conduct a lower cost ($35,000 - $50,000) overall strategy review and identify areas to dive deeper onEnsure you’re digging in the right places before spending $100K+ to digEngagement could include (if desired) quarterly review of all medical, pharmacy, and DM utilization reporting review – enables faster action than annual reviews


Questions?

Date post:	25-Dec-2015
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