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Employee Engagement: Your Tool for Tackling Heath Care Costs

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Employee Engagement: Your Tool for Tackling Heath Care Costs

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Everyone is concerned about increasing health care costs. This interactive session will review the various triggers that drive health care and insurance costs and cover the major communication and engagement strategies that companies use to reduce their trend. Case studies to be discussed include wellness, employee engagement and communication, benefit plan design and consumerism. Successful benefit incentive programs that support communication programs and have a quantifiable return on investment will also be discussed.

Everyone is concerned about increasing health care costs. This interactive session will review the various triggers that drive health care and insurance costs and cover the major communication and engagement strategies that companies use to reduce their trend. Case studies to be discussed include wellness, employee engagement and communication, benefit plan design and consumerism. Successful benefit incentive programs that support communication programs and have a quantifiable return on investment will also be discussed.

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Employee Engagement: Your Tool for Tackling Heath Care Costs

  1. 1. Employee Engagement: Your Tool for Tackling Health Care Costs June 26-29, 2011 Las Vegas, Nevada
  2. 2. Topics we will cover <ul><li>Health Care Cost Drivers </li></ul><ul><li>Complex Marketplace strategies </li></ul><ul><li>Informed Decision Making/Value Based Purchasing/Advocacy </li></ul><ul><li>Employee Engagement </li></ul>
  3. 3.
  4. 4. Objectives for Today <ul><li>Provide ideas for you to: </li></ul><ul><ul><li>Engage your employees </li></ul></ul><ul><ul><li>Move market share to value based providers </li></ul></ul><ul><ul><li>Improve responsibility and accountability of stakeholders </li></ul></ul><ul><li>You will laugh at least twice </li></ul><ul><li>You will contribute to the discussion </li></ul><ul><li>You will learn something from another attendee </li></ul>
  5. 5. Health Care Costs <ul><li>What two things drive health care costs? </li></ul><ul><ul><li>Utilization – Number of services </li></ul></ul><ul><ul><li>Cost per unit of service </li></ul></ul>
  6. 6. Where do we spend money?
  7. 7. Who Are Stakeholders? <ul><li>Your Employees and their families </li></ul><ul><li>Your Company </li></ul><ul><ul><li>HR/Benefits team </li></ul></ul><ul><ul><li>Management team and CEO </li></ul></ul><ul><ul><li>Shareholders </li></ul></ul><ul><li>Provider Community </li></ul><ul><li>Payer </li></ul>
  8. 8. Health Care Costs <ul><li>At the heart of health care costs – every expense – is a consumer… with an enormous influence </li></ul><ul><li>You hand your employees a blank checkbook and you fund the checks that they write </li></ul>
  9. 9. Reducing health care costs <ul><li>We have to teach employees – and their families – about the consequences of their choices – and make those consequences immediate and personal. </li></ul>
  10. 10. Health Care Costs <ul><li>7.3% increase in 2011 lowest in recent year as a percentage, but increase in dollars is highest </li></ul><ul><li>90% of cost increase stemmed from higher costs per unit of service </li></ul><ul><li>Changing the trend: </li></ul><ul><ul><li>Employers with at least 50% of workers enrolled in CDHP have a two year cost trend that is 25% lower than non CDHP sponsors* </li></ul></ul><ul><ul><li>*Watson Wyatt and NBGH </li></ul></ul>
  11. 11. Health Care Costs Continue to Rise <ul><li>Milliman Medical Index reports following based on standard PPO plan: </li></ul><ul><li>A family of 4 spent $3,634 on health care in 2002 </li></ul><ul><li>In 2011, this same family will spend $8,008 </li></ul><ul><li>Increase of $364 per month – employees premium contribution as well as out-of-pocket expenses </li></ul>
  12. 12. Employers as Stakeholders <ul><li>Employers are the Primary Stakeholder in the Health Care Business </li></ul><ul><li>“ If you can’t get something good out of trouble, then all you’ve got is trouble” </li></ul><ul><ul><li>John Hiatt/Musician/Treme’ </li></ul></ul><ul><li>A buffet table of choices and options for employers – all guaranteed to taste good </li></ul>
  13. 13. Complexity of Plans <ul><li>Narrow Networks – out of pocket benefits for members reflect choices by members </li></ul><ul><ul><li>Who manages? </li></ul></ul><ul><ul><li>What criteria are used to select the providers? </li></ul></ul><ul><li>Deductibles and co-insurance increasing and based on type of service provided </li></ul><ul><ul><li>Who determines place of service? </li></ul></ul><ul><ul><li>What is “service is not available”? </li></ul></ul><ul><li>Premium contributions or health plan participation tied to HRA and biometric screening </li></ul><ul><li>Must understand and plan for consequences! </li></ul>
  14. 14. Indiana Client <ul><li>90 employees </li></ul><ul><li>New local carrier is a Catholic System comprised of 4 local hospital groups </li></ul><ul><li>Primary Care physician assigns network </li></ul><ul><li>Specialists attached to PCP </li></ul><ul><li>Not all PCPs work in all 4 hospitals </li></ul><ul><li>Provides advocacy and value based purchasing </li></ul>
  15. 15. Wisconsin Client <ul><li>National manufacturer – 5,000 employee lives </li></ul><ul><li>Self funded – salaried and union </li></ul><ul><li>Two plans – one high deductible with HAS </li></ul><ul><li>Union plan includes cost sharing for first time </li></ul><ul><li>Health risk assessment and related wellness programs </li></ul><ul><li>Advocacy and value based purchasing offered </li></ul><ul><li>Extensive employee communication and engagement program for all employees </li></ul>
  16. 16. Colorado Client <ul><li>78 Employees </li></ul><ul><li>High deductible health plan </li></ul><ul><li>CMM network with internal facilities </li></ul><ul><li>Cofinity network – formerly Sloans </li></ul><ul><li>No coverage out of network </li></ul><ul><li>Bridge Health </li></ul><ul><li>Mandatory use of Patient Care cost and quality research </li></ul>
  17. 17. Observations <ul><li>Money changes behavior </li></ul><ul><li>Administration of these plans is very difficult and specialized </li></ul><ul><li>Participants have difficulty understanding complexity and decisions </li></ul><ul><li>Providers have no clue – no connectivity to each other or to claims payment </li></ul><ul><li>How to measure true impact on claim dollars? </li></ul>
  18. 18. Plan Design Decisions <ul><li>What is your company’s strategy regarding consumerism? </li></ul><ul><li>What is your company’s strategy regarding defined benefit versus defined contribution? </li></ul><ul><li>What is your company’s strategy regarding linking healthy lifestyles and premium contributions? </li></ul><ul><li>What is your company’s strategy regarding incentives and disincentives? </li></ul>
  19. 19. Pro-active versus Re-active <ul><li>A successful cost containment strategy, simple or complex, requires a communication strategy – which takes planning and focused execution by you </li></ul><ul><li>Using a variety of mediums is a critical component – people learn differently </li></ul><ul><li>The communication must be ongoing </li></ul>
  20. 20. Idea #1 <ul><li>Create a series of simple communication pieces that employees can read quickly and remember </li></ul><ul><li>Put them everywhere </li></ul><ul><li>Get them into the hands of spouses </li></ul>
  21. 21. Value Based Purchasing <ul><li>Treatment decision support that targets procedures with high variation in frequency without corresponding benefit </li></ul><ul><ul><li>Back Surgery </li></ul></ul><ul><ul><li>Hip Replacement </li></ul></ul><ul><ul><li>Knee Replacement </li></ul></ul><ul><ul><li>C Section </li></ul></ul><ul><ul><li>Hysterectomy </li></ul></ul><ul><li>Success with this strategy requires integration between physicians and payer </li></ul><ul><li>Measurement of this strategy requires knowledge of the initial decision of the participant/patient. </li></ul>
  22. 22. System Challenges <ul><li>My doctor never has enough time for me and I don’t know what to ask him/her </li></ul><ul><li>How do I find the “best” doctor? </li></ul><ul><li>My husband is about to be discharged from the hospital and I have no idea what to do once he gets home. I have a job. </li></ul><ul><li>I just got a bill from the hospital for $3,500. I have no idea why they are billing me. I have insurance. </li></ul>
  23. 23. Provider cost/quality information <ul><li>Costs among doctors, hospitals and outpatient centers vary significantly from provider to provider in the same market in the same network </li></ul><ul><li>How to determine and communicate “value” </li></ul>
  24. 24. <ul><li>An employer with 1,000 employees “buys” 1,100 imaging procedures per year </li></ul><ul><li>If that employer could save $1,000 on each imaging procedure </li></ul><ul><li>Savings of $1,100,000 in claim costs </li></ul>Value Based Purchasing
  25. 25.
  26. 26. Arthroscopy <ul><li>CPT Code – 29873 </li></ul><ul><li>Surgical; with lateral release </li></ul><ul><li>Knee arthroscopy is a surgical procedure in which a small camera is used to examine tissues inside the knee joint. Additional instruments may be inserted to repair the knee </li></ul>
  27. 27. Facility Costs Medical Provider Community Hospital St. Mary’s Hospital Waukesha Memorial Total Price $7,400.00 $14,350.00 $12,800.00 Discount Rate 10% 15% 11% Actual Discount $740.00 $2152.50 $1408.00 Discounted Balance $6660.00 $12,197.50 $11,392.00 Applied to Deductible ($500) $500.00 $500.00 $500.00 Member Co-insurance (20%) $1232.00 $2338.90 $2178.40 Member Responsibility $1732.00 $2,838.90 $2,678.40 Employer Cost $4,928.00 $9,358.60 $8,713.60
  28. 28. Colonoscopy <ul><li>CPT Code – 45378 </li></ul><ul><li>Routine Colonoscopy </li></ul><ul><li>Colonoscopy is a medical procedure where a long, flexible, tubular instrument called the colonoscope is used to view the entire inner lining of the colon (large intestine). </li></ul>
  29. 29. Facility Costs Medical Provider Endoscopy Center Regional Hospital Hospital Surgery Center Total Price $1,640.00 $2,945.00 $7,500.00 Discount Rate 35% 35% 35% Actual Discount $574.00 $1,030.75 $2,625.00 Discounted Balance $1,066.00 $1,914.25 $4,875.00 Applied to Deductible (500) $500.00 $500.00 $500.00 Member Co-insurance (20%) $113.20 $282.85 $875.00 Member Responsibility $613.20 $782.85 $1,375.00 Employer Cost $452.80 $1,131.40 $3,500.00
  30. 30. Potential/Actual Savings Procedure Providers Potential Savings Actual Savings Colonoscopy Dr. Maltz – Mayfair Digestive Center; Dr. Guda – Center for Digestive Health; Dr. Kumar – St. Luke’s Hospital $1,577 $0 Colonoscopy Dr. Kluiber – Northshore Surgical Center Estimate Only Estimate Only Hernia Repair Dr. Beckman – Community Memorial Hospital; Dr. Beckman – Froedtert Memorial Hospital; Dr. Armstrong – Wheaton Franciscan $7,832 $7,832 Mammogram Aurora Medical Center; St. Joseph’s Hospital; St. Mary’s Hospital $51 $51 MRI Center for Diagnostic Imaging; Open Advanced MRI; Smart Choice MRI $886 $657 TOTAL $10,346 $8,540
  31. 31. Cost Comparison Requirement
  32. 32. Decisions by Members <ul><li>After receiving and discussing the cost/quality information: </li></ul><ul><ul><li>78% moved to a lower cost provider </li></ul></ul><ul><ul><li>Average savings for employee of $531 per procedure </li></ul></ul><ul><ul><li>Average savings for employer of $608 per procedure </li></ul></ul>
  33. 33. Incentive and Disincentive Plans <ul><li>Members as Stakeholders…. “You gotta do something to get something” </li></ul><ul><li>Behavior changes to reward: </li></ul><ul><ul><li>Lifestyle changes </li></ul></ul><ul><ul><li>Engagement with programs such as wellness and disease management </li></ul></ul><ul><ul><li>Value Based Purchasing </li></ul></ul>
  34. 34. Better Consumerism… Valued Based Purchasing <ul><li>Publicly available data on provider cost and quality </li></ul><ul><li>Employees making decisions based on that data </li></ul><ul><li>Employees understanding the impact of lifestyle choices on their health care and health care costs </li></ul><ul><li>Employees understanding that their decisions impact health care costs for the entire company </li></ul><ul><li>Informed patients and physicians making decisions together </li></ul>
  35. 35. Idea #2 <ul><li>Develop and promote quarterly education/communication meetings with participants that cover topics like wellness, benefits cost and/or quality and make them fun and make them mandatory . </li></ul><ul><li>You have mandatory safety meetings, why not mandatory health care/insurance meetings? </li></ul>
  36. 36. Sample meeting topics <ul><li>Benefits quiz show – with prizes </li></ul><ul><li>How to exercise effectively to lose weight </li></ul><ul><li>How to find the doctor that you’ve always wanted </li></ul><ul><li>Making wise health care choices – for you </li></ul>
  37. 37. Successful Communication Plans <ul><li>Year-round </li></ul><ul><li>Communicate a goal and communicate progress towards that goal </li></ul><ul><li>Have a spousal component </li></ul><ul><li>Involve senior management </li></ul><ul><li>Use multiple mediums </li></ul><ul><li>Keep them simple </li></ul>
  38. 38. Beliefs drive Behaviors
  39. 39. Beliefs drive Behaviors <ul><li>A doctor’s office visit costs $10.00 </li></ul>
  40. 40. Beliefs drive Behaviors <ul><li>The insurance company is paying the bill </li></ul>
  41. 41. Cost & Quality <ul><li>Cost </li></ul><ul><ul><li>Outpatient! </li></ul></ul><ul><ul><li>Two numbers impact costs: billed charges and contracted rates </li></ul></ul><ul><ul><li>Patients need specific procedure or revenue codes </li></ul></ul><ul><ul><li>How many variables to measure? </li></ul></ul><ul><ul><li>Ranges are only marginally useful </li></ul></ul><ul><ul><li>How current is publicly available data? </li></ul></ul><ul><ul><li>The member needs help knowing how to use the information – e.g. talking to their physician about changing facilities </li></ul></ul>
  42. 42.
  43. 43.
  44. 44. Cost & Quality <ul><li>Quality </li></ul><ul><ul><li>This is very difficult </li></ul></ul><ul><ul><li>Participants need help defining quality </li></ul></ul><ul><ul><li>Public data relates to major illnesses and treatments, not outpatient procedures </li></ul></ul><ul><ul><li>Public data can b e in conflict, not current and debated by the physician or hospital </li></ul></ul><ul><ul><li>Case mix adjusting, physician referral patterns and other external factors can influence “quality data” </li></ul></ul>
  45. 45. Sources for Quality Data <ul><li>www.leapfrog.com </li></ul><ul><li>www.healthgrades.com </li></ul><ul><li>www.docboard/org/aim </li></ul><ul><li>www.vitals.com </li></ul>
  46. 46. It’s a Long Journey <ul><li>What we’ve learned at Patient Care </li></ul><ul><ul><li>Larger deductibles and increased out of pockets costs do make employees more interested in cost comparisons </li></ul></ul><ul><ul><li>Once an elective procedure has been recommended, people typically do not want to change physicians </li></ul></ul><ul><ul><li>The major opportunity to improve purchasing is in the outpatient area </li></ul></ul><ul><ul><li>More interest in cost than quality </li></ul></ul><ul><ul><li>Technology tools provide limited data with which to make a decision </li></ul></ul><ul><ul><li>Choosing more expensive care has to cost consumers more </li></ul></ul>
  47. 47. Keys to Success <ul><li>Boost consumers’ health literacy </li></ul><ul><li>Develop a company goal and a strategy to support </li></ul><ul><li>Identify benchmarks to measure success </li></ul><ul><li>Communicate the goals and strategy to employees and dependents </li></ul><ul><li>Measure based on benchmarks </li></ul><ul><li>Communicate results </li></ul>

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