1
Consumer Driven HealthcareSuccess Factors
August 30, 2010
C. William Sharon, CEBSNational CDH Practice Leader
Aon Consulting
Leah MartoranaBenefits and Compensation
Administrator Fowler White Boggs P.A.
2
Agenda
• Aon’s Perspective on CDH Success Factors
• Case Study: Fowler White Boggs P.A.
3
Aon CDH Experience
CDH Breakdown (By Type Plan) Expertise
• 350 CDH Clients• HRA and HSA plans• Total replacement and slice
– 279 “slice” offerings– 71 full replacements
• All major CDH vendors– Aetna– Anthem– BlueCross– CIGNA– Humana– United Healthcare
• Aon’s plan in place 10 years
39%
11%
36%
2%
7%
HRA = 137HSA = 127HRA full replacement = 38HSA full replacement = 26HRA and HSA = 15HRA and HSA full replacement = 7
4%
4
#1: Consumer Engagement….Not a Plan
• Consumerism– a set of techniques
designed to transform members to be more effective health care consumers
• Consumer driven healthcare (CDH)
– consumerism using an account-based (HRA or HSA) plan design
Account BasedHealth Plan
ConsumerismTools
Wellness Incentives
DM Incentives
Four key building blocks for an effective program:
5
Use preventive benefitsComplete health assessmentReduce weightStop smokingManage stressGet biometric screeningsUse online health coach
Ask price of serviceConsider alternativesResearch doctor and hospital qualityUse generic RxUrgent care vs. EROutpatient vs. inpatientOnline consultationRetail health clinics
Value PurchasingUse disease management programFollow evidence based guidelinesUse a premium doctorMaintain personal medical recordUse medical homeUse center of excellence
Behavior Change in Three Areas
Improved Health Manage Chronic
6
#2: Design CDH Plan Right
• Employees don’t want a “High Deductible Health Plan”
• Actuarially equivalent CDH plan
• Meaningful employer provided account value
• 100% preventive services
• No copays
• Attractive out-of-pocket maximum
• The greater the CDH plan enrollment the better the savings
7
Employee Employee + 1 Family
Deductible $1,500 $3,000 $4,500
20% in-network40% out-of-network
Employee Contribution Wellness Incentive to complete health assessment, comply with DM program, no tobacco usage, etc.
Employer Account
$750 $1,500 $2,250
Member Responsibility $750 $1,500 $2,250
Employee CoinsuranceOut-of-Pocket
Maximum $2,000 in$4,000 out
$4,000 in$8,000 out
$6,000 in$12,000 out
Prev
entiv
e C
are
cove
red
at 1
00%
8
#3: Long Term Strategy
• Consumer behavior change does not happen overnight
• 30+ years of managed care to overcome
• Requires senior management commitment
• Measure consumer engagement metrics
• Modify plan design, wellness/DM incentives and employee communications every year or two based on consumer engagement metrics
9
Managed Care Consumerism
Health plan and provider control utilization
Pre-paid health plan; low copays
Plan restrictions such as pre-authorization and step
therapy
Minimal DM and wellness;no incentives
Large provider network
Participant and provider manage care
More “skin in the game”; health insurance to protect
against risk
More participant control
Strong DM and wellness programs with strong
incentives
Large network but encouraged to use premium
providers
10
• $ for completing a health assessment
• $ for enrolling in a chronic disease management program
• $ for completing an online or telephonic wellness program
• $ for participation in biometric screening
Less intrusiveUndefined/lower ROI
Most aggressiveMeasurable/high ROI
Wellness Financial Incentives Continuum
• Waived co-pays on diabetes medication
• $ for colonoscopies • 100% benefit for
compliance with EBM care
• 100% benefit for preventive care
• $ to maintain low cholesterol
• $ to reduce cholesterol 10 points
• $ to stop smoking• $ to maintain BMI below
25• $ to hit biometric
screening results• Reduced copays for use
of high quality providers
• Lower premium for non-smokers
• $ to maintain a target BMI for 12 months
• $ to maintain low blood pressure for 12 months
Reward forAdherence
Reward forAchievement
Reward BasedOn Risk
Reward forActivity
11
#4: Consumer Friendly
• Simple plan design
• Single “sign on” for all consumerism tools– Account, medical, Rx, wellness, and DM
• Integrated administrative platform– Account, medical, Rx, wellness, and DM integrated
• Visible and understandable wellness incentives
• Easily accessible wellness and DM programs
12
#5: Employee Communications
• Requires comprehensive employee communications campaign
• Small group employee meetings work best– Led by trusted, credible meeting leaders
• Management support necessary
• Employees will be skeptical of the new program
• Key employee communication tactics:– Claim examples
– Online plan selector tool
– What’s in it for the plan participant?
13
Potential CDH Program Results
• Reduce health care cost trend rate without cost shifting to employee
• Reduce utilization of unnecessary services– Fewer office visits, fewer scripts
• Lower cost treatment setting– Generic Rx instead of brand
– Urgent care instead of ER
– Outpatient hospital instead of inpatient
• Increase in preventive services usage
• Improved wellness and DM participation
14
Potential CDH Program Results
$$$$$$$$
CD
H E
nrol
lmen
tC
DH
Enr
ollm
ent
5%5%
10%10%
20%20%
40%40%
60%60%
80%80%
100%100%
PreventivePreventiveBenefitsBenefits
HAHA WebWebToolsTools
DMDM GenericsGenerics PHRPHR
Consumer EngagementConsumer Engagement
Consumerism Savings
Consumerism Savings
15
What is Current CDH State?
• 18 to 20 million CDH members– 500,000 CDH members in 2003
• Growing 20-30% per year– Increase in full replacement CDH
• 45% of Fortune 500 have a CDH plan
• Four drivers of CDH growth:– Consumerism “tipping point”– Double digit health care costs– Down economy– National health reform limits cost shifting and
eligibility exclusions
16
Next Generation Consumerism
• Expanded wellness/DM incentives
• Medical home– Holistic primary care
• Onsite clinics with wellness/DM focus
• High performing networks– Steering members to best cost and quality
• Medical tourism (domestic and international)
• Centers of excellence for specialty services such as bariatric surgery, transplants, cancer, etc.
17
Fowler White Boggs P.A.CDH Case Study
Leah MartoranaBenefits Administrator
18
Why Consumer Driven Health in 2006?
• 450 employees– White collar, professional, busy, minimal “self-service”
• Traditional HMO and PPO plans with 50/50 enrollment
• Costs increasing 14% per year from 2002 to 2005
• Low consumer engagement– Low usage of preventive services, online health assessment,
web tools, etc.
19
Consumerism at Fowler White
•2006: Implemented Consumer Driven Health Plan•2008: Eliminated HMO•2009: Introduced Healthy Pledge Premium Differential•2010: Added New HRA plan•2011: Elimination of POS Plan
20
New HRA Plan in 2006
• Plan design actuarially equivalent to HMO– Rich by competitive standards
• 100% preventive services
• High HRA fund of $1,000/2,000/3,000
• 100% coverage after deductible
• Slightly lower employee contributions made the HRA plan the “best deal”
21
HRA Plus Plan HRA Basic Plan (NEW for 2010)
Benefit
In-Network In-NetworkFund (firm pays) $1,000/2,000/3,000 $500/1,000/1,500
Deductible (before fund) $2,500/5,000/7,500 $2,000/4,000/6,000
Out of Pocket Max (before fund) $2,500/5,000/ 7,500 $3,000/6,000/ 9,000
Physician Visit 0% AD 20% AD
Hospital Inpatient 0% AD 20% AD
Hospital Outpatient 0% AD 20% AD
Urgent Care 0% AD 20% AD
Emergency Room 0% AD 20% AD
Preventive Care 0% 0%
Rx Retail 0% AD 20% AD
Rx Mail 0% AD 20% AD
HRA Plus vs. HRA Basic
22
Post 2006 Changes• No changes to HRA plan in five years
• Eliminated HMO and changed to Aetna in 2008
• Added wellness incentive in 2009– (1) health assessment, (2) no tobacco, and (3) DM– $9/14/20 bi-weekly contribution differential
• In 2010:– Added second “low option” HRA Basic plan– Increased wellness incentive to $20/30/40– Added spousal surcharge– Liberalized 100% preventive service guidelines
23
Integrating Consumerism and Wellness
• Wellness shown to yield $3 return for each $1 invested*
• Ongoing Wellness Events/Programs at Fowler White:– Boot Camp– Yoga– Start! Walking Program (over 50% participation)– Biometric screenings– Lunch and Learns– Health & Benefits Fair– Smoking Cessation Program– Healthy Pledge Premium Differential– Wellness Committee Meetings– Executive Physical
Reference: Adapted from WELCOA. (2006). Planning wellness: Getting off to a good start, Part I. Absolute Advantage (5)4, p. 1-92.
24
Fowler White Successes
• CDH enrollment has increased each year since inception
• Recipient of American Heart Fit Friendly designation (‘07, ‘08, ‘09, ‘10)
• Winner of Jacksonville’s Healthiest 100 Award
• Named one of 15 Fittest Companies in America by MensFitness in ‘08
• Tampa Bay Business Journal’s Healthiest Employer contest finalist
25
Financial and Engagement Results
• Before CDH/wellness program– 14% per year cost increase average from 2002 to 2005
• After CDH/wellness program– 6% per year cost increase average from 2005 to 2009 with
minimal plan design reductions– Current PEPM ($760.04 as of 7/10) is less than PEPM
three years ago ($774.76 as of 7/07)– Increase in web tools usage– Increase in preventive services usage– Increase in generic Rx usage– Increase in wellness pledge (76% of participants)– Increase in wellness program participation
26
Fowler White Learnings
• Culture can’t be changed overnight
• Senior management support is a must
• Enthusiasm for Wellness Program is contagious!
• Communication is key- Employee Presentations- Emails & Pre-Enrollment Newsletters- One-on-Ones- Post Enrollment follow up Q&A
• New Hire on-boarding is critical
27
Questions?