1. Jim Wisdom, CFP
James L. Wisdom Insurance Services
June, 2012

2.  Skyrocketing health care costs
 Unaffordable rate hikes
 Diminished quality of life for employees
 Less hopeful health outcomes
 Less perceived value in health plan

3.  Fewer employees monitoring their health and
lifestyle
◦ Over 50% of all health care costs are due to lifestyle
 Chronic illnesses aren’t detected until the
later stages, driving up costs and lowering
employee’s overall health and productivity
 Higher absenteeism and presenteeism
 Lower employer profitability

4.  Allow employees to enjoy better health and a
better quality of life
 Employers to have a healthier, more
productive workforce
 Lower, more stable premiums over the short
and long-term
 Employers gain happier, more loyal clients

5.  Like typical health plans, a Value Based Plans
pays an insured’s claim when he/she is sick
or injured
 Unlike typical health plans, Value Based Plans
go further, rewarding members to take
actions to improve and manage their health
 The Difference? Health Insurance vs. Healthy
Insurance

6.  Remember this formula: The # of detected
conditions + the # of undiagnosed conditions
= The # of actual health conditions in a
group.
 It’s not uncommon for the # of detected
conditions to equal about one third of the
total, which means two thirds of conditions
are undiagnosed.
 See Client Example ( SeeChange Health)

7.  Undiagnosed conditions, if left undiagnosed
until later stages, result in far higher health
care claims

8.  Cervical Cancer Claims Costs
◦ Early Stage Treatment: $16,000/yr.
◦ Late Stage Treatment: $84,000
◦ Annual Difference: $68,000

9.  Breast Cancer Claims Costs
 Early Stage Treatment: $16,000/yr.
 Late Stage Treatment: $108,000/yr.
 Annual Difference: $92,000/yr.

10.  Prostate Cancer Claims Costs
 Early Stage Treatment: $13,000/yr.
 Late Stage Treatment: $54,000/yr.
 Annual Difference: $41,000/yr.

11.  Colon Cancer Claims Costs
 Early Stage Treatment: $12,000/yr.
 Late Stage Treatment: $126,000/yr.
 Annual Difference: $114,000/yr.

12.  Lower claims costs
 Lower health care premiums
 Early detection saves lives
 Early, smart intervention increases employee
health and productivity

13.  1,100 undiagnosed conditions times
$50,000 annual savings when treated early
equals $55 Million in annual savings.
 Note: From a group with 75,000 employees

14.  Promote early detection and treatment of
serious conditions
 Encourage members to see their doctor and
reward them for taking “Health Actions”

15.  Subscriber and Spouse voluntarily complete
Preventive Health Actions to receive financial
incentives
 Online Health Questionnaire
 Biometric Screening
◦ Phlebotomist ( blood draw)- 15 minute exam
 Preventive Care Exams
◦ Preventive Health Actions covered at 100% based on
age/gender specific guidelines

16.  Female Compliance Criteria
◦ 4 Age Categories ( 18-20; 21-39; 40-49; 50+)
◦ 6 Health Actions
 Online Health Questionnaire
 Biometric Screening
 Preventive Exam
 Pap Smear
 Mammogram
 Colorectal Cancer Screening

17.  Male Compliance Criteria
 2 Age Categories ( Age 18-49; 50+)
 5 Health Actions Total
◦ Online Health Questionnaire
◦ Biometric Screening
◦ Preventive Exam
◦ Colorectal Cancer Screening
◦ Prostate Cancer Screening

18.  American Heart Assn.
 American Diabetes Assn.
 American Cancer Society
 American Lung Assn.
 Nat’l Cholesterol Education Program
 U.S. Preventive Services Task Force
 Nat’l Asthma Education and Prevention
Program
 Nat’l Heart, Lung and Blood Institute

19.  Personal Dashboard allows employees to
track progress online.
 Results of Health Actions may reveal chronic
health conditions
◦ Pre-Diabetic Health Actions
◦ Diabetes Health Actions
◦ Asthma Health Actions
◦ Cardiovascular Disease Health Actions
◦ Coronary Artery Disease Health Actions

20.  Health Questionnaire + Biometric Screening +
Preventive Examination =
 1. Enhanced Benefits
 2. Health Incentive Account Deposits
 3. Deductible Credit

21.  Some plans reward members by lowering
members’ coinsurance and annual Out-of-
Pocket Maximum
 Children also get enhanced benefits when
employee and spouse ( if any) complete
Health Actions
 Added Bonus: Once employee and spouse ( if
any) complete Health Actions, all prior claims
for the calendar year are re-adjudicated at
the Enhanced benefit level.

22.  Some plans offer HIA’s
 $200-$500 in HIA funds available to both
Employee and Spouse/Domestic Partner
 Add’l financial rewards for completing Health
Actions related to specific conditions
 Available to reduce the deductible or IRS
approved medical expenses
 Unused amount may be carried over from
year to year
 Unlike HSA’s, account balance forfeited if
employee or employer leaves plan.

23.  Health Coaching
◦ Coaching Targets:
 Depression
 Smoking
 Diabetes
 Stress
 Exercise Activity
 Weight

24.  Value Based Plans have offered rate increases
averaging 1.5% over the last two years ( far
below industry norms)
 For groups of 51+, some are offering two
year rate guarantees
 Value Based Plans may be attracting a
healthier risk pool
 If this happens, Value Based Plans may
continue to experience lower rate increases
 Conversely, traditional plans may experience
higher than average rate increases

25.  Value Based Plans may be the right approach
for today’s challenges
 Other carriers are trying to catch up
 Employee choice is key with any group health
plan.
 Work with an Employee Benefits Broker who
has experience in all types of health plans (
HMO/PPO, HSA, HRA, Value Based Plans)
 Don’t forget Senior Planning ( for employees
65+)

26.  Jim Wisdom, CFP
 President
 James L. Wisdom Insurance Services
 4607 Lakeview Canyon Road- Suite 482
 Westlake Village, CA 91361
 Work: (805) 497-9264
 Cell: (818)469-6640
 Fax: (805) 435-3636
 www.wisdomhealthplans.com
 CA License #0699524