2014 Strategies & Tactics for Effective Benefit Plan Management

RETIREMENT & HEALTHC ARE PLAN MANAGEMENT C ONFERENC E JUNE 9, 2014

L. Thompson & P. Barron - Pomco Group 1

Agenda

• Introduction

• Important healthcare facts

• A Holistic Approach

• Innovative Options

• Member Engagement

• Why it matters?

• Q&A

2

Introduction

• Healthcare is in a period of flux – thanks to ACA

• Change is needed and uncertainty is driving it

• The Self funded space is stable & growing

• Understanding the environment & your specific goals is critical

• No strategy can deliver results without proper preparation

• Knowing your options will drive success

3

Some ACA Questions &Answers

• 8 million enrolled?

• How many uninsured’s?

• How many switching or forced to change plans?

• How many have actually paid?

• How many are young?

• How many are subsidized?

• What plans are most popular?

• This figure is estimated

• Unknown

• Unknown

• HHS estimates 80%

• President says 35% studies say 28%

• Studies show 83% nationally

• 82% are in Bronze or Sliver

4

ACA Challenges

• Short term

• Will enrollment be favorable?

• How many will keep paying?

• Will there be enough providers to treat newly covered?

• How much will subsidy actually cost?

• Will exchange rates go up for 2015?

• What will 2014 trend be?

• Long Term

• Will there be sticker shock at deductible/OOP?

• Will renewals be strong?

• Will provider attrition affect care?

• Will small employers dump plans?

• Will penalties start to drive participation?

• Will losses tank some plans?

5

Healthcare Facts

• ACA will/is causing serious disruption in the individual and small group space

• All the studies show very little disruption in the larger group space

• Government programs will grow significantly

• We will still have a large uninsured population

33 61

3

24

51 21

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Health Coverage 2020

Uninsured

Medicare

Individual

Exchnage

Medicaid

SHOP

Employer

6

Large Group Stability (200+)

• 99% of firms over 200 employees offer health insurance

• This stat has been constant since 1999

• Studies show no significant change in the future

• Nearly 60% Self Insure their plans (growing)

• Most offer multiple lines of coverage

• 43% have grandfathered plans

• 77% of employees in firms are eligible

• 80% take the offered coverage

• 28% offer retiree coverage

• 55% have Health risk Assessments & biometric screening

• 99% offer at least 1 wellness program

• 32% over 5000 have worksite clinics & 15% over 500

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Cost Shifting - EE Contributions

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Cost Shifting -Deductibles

• Deductibles are growing

• More cost shifting to come. Exchanges have higher deductibles

• Large employers will start to raise deductibles -HDHP

• More care will require deductible first

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The Holistic Approach

• Like a balloon if we press in only one spot we shift air to another

• A health plan has to be addressed holistically

• Many facets are affected by others

• We must change several pieces at the same time to achieve a desired result

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Prominent Facets of a Health Plan

Health Plan

Admin

Stop Loss

Plan Design

Networks

Vendors Pop

Mgmt.

Clinics

Wellness

Analytics

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The Best Health Plans • Have all their key facets working in

harmony

• Are designed to drive each facet to optimum performance

• Maximize ROI in each segment

• Stay focused on plan objectives

• Change corporate culture to support these objectives

• Keep a global perspective while driving specific targets

plan

vendors

admin

12

Plan Administration

• Self funded plans have 3 choices for administration:

• Insurance company ASO

• TPA

• Self administered

• ASO’s are the most expensive and least flexible

• TPA’s are lower cost and very flexible

• In House is moderate cost and very flexible

• Today TPA’s deliver the best value in administration

13

Stop Loss/Reinsurance

• Very few employers can take their healthcare risk alone (especially with unlimited max)

• Stop loss shares that risk

• Stop loss is complex but very customizable

• Great stop loss defines self funded costs – sets financial parameters

• The 6 C’s - Carrier, contract, coverage, claims, creativity and cost

• Sometimes Captive insurers make fiscal sense but less often than most believe

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Plan Design

• A critical piece of the pie – this is the road map

• Align this with healthcare objectives

• Design dictates: • Vendors needed

• Network choice

• Stop Loss contract

• Wellness programs

• Member education & engagement

• Reporting & analytics

• Design plans that fit your corporate culture

• Plan design is the DNA of any health program

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Networks

• Traditionally there were 2 things we focused on with networks: • Provider access • Discounts

• The BUCA’s have become the leaders in networks – size drives discounts & provider participation

• BUCA networks are expensive but deliver ROI

• Reference Based pricing is starting to change some network perspectives

• RBP can be very beneficial for certain plans

• Narrow networks are another growing cost containment tool (they can be tiered too)

• ACO’s are also growing in popularity

• Some regional private networks are very competitive

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Vendors

• Healthcare delivery & admin has become very specialized due to expanding technology

• Having multiple vendors to service your plan is critical and common – no one does it all

• New vendors are entering our space regularly

• Integration is the key

• A plan has to find the best vendors with minimal disruption of data

• Some vendor overlap can be beneficial

• Plan Administrator is the best vendor guide

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Population Management

• The best performing plans have the healthiest populations

• Precise Pop Stratification is the starting point

• Set measurable benchmarks

• Identify transitional profiles & monitor closely

• Implement programs to address key target populations or disease states

• Measure results and ROI – adjust accordingly

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Clinics

• There are several types of clinics:

• On Site

• Near Site

• Shared

• Further clinics can be Occupational; Non Occupational or both

• Surprisingly clinics do not have to big or expensive to be very effective

• The key is a seasoned turnkey vendor with excellent technology

• A transparent, no markup model is always best

• Drug dispensary is a plus

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Wellness

• Member engagement is the key to success

• Engagement takes cultural buy in and support

• Programs must come from Pop Management analysis & be targeted

• Incentives & disincentives can drive behavior change – use both

• Measurement is critical & should be objective

• Less is more

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Analytics

• Plans today must have deep analytics to succeed

• Cursory reporting leads to bad decisions, ineffective programs & weak ROI

• Tools must be easy to use and online

• Drill down capabilities must be available and accessible

• Benchmarks & what if scenarios must be built in

• Less is more

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Innovative Options

• Single Source Health Management

• Stratification Methods

• Member Engagement Tools

• Technology/Connectivity

• Clinics

• Predictive Analysis

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Single Source Health Management Services

Client Health Mgmt

Services

Data Feed & Mgmt

Health Coaching

Health Risk Assessment

Biometric Screening

Reporting Onsite Clinics

Predictive Analytics

Health Mgmt Portal

Incentive Mgmt

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Identify and Manage Risk Through Data, Then People

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Integrate + Automate + Connect

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0%

20%

40%

60%

80%

Precont. Cont. Prep. Action Maint.

Readiness to Change Physical Activity, by Current Activity Level

Blood Pressure Self-Reported vs. Lab Screening

# of

Mem

bers

“Readiness to

Change” Profiling

Health “Perception

Vs Reality”

Cost Impact of

Lifestyles

Health Conditions

Member Stratification and Risk Analysis

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Comprehensive

Wellness Reports

Active Reporting

Dashboards

Wellness Transparency and Results

Incentive Program Management

• Configurable incentives – participation-based, outcomes-based, combination

• Visible to member; Reportable to employer

• Tracking of online and offline goals

• Appeals management

• Fulfillment and/or HRIS integration

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Offer Multiple

Opportunities

Earned Status

Opportunities to

Earn Incentives

Strategic Member Engagement Framework

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1 2 3 4 5 6 7 8 9 10 11 12

Everyone Risk Managed Targeted Programs Plan members

Welcome

Mailing

Predictive model (first run)

Referrals for Lab

Alerts

Comp.

Member

Report

Incentive Monitoring and Reporting

Metabolic Synd.

Comp.

Company

Report

Seminar “Blood Pressure Awareness,”

Digital Coaching, BP Rescreen

Seminar “Cholesterol: Good & Bad,” Digital

Coaching

Metabolic Syndrome Seminar, Digital Coaching: Weight

Biggest Loser Fruits & Veg

Challenge

Walking

Challenge

Calorie

Counting

Eligibility

load

Smoking Cessation

Referrals for High Risk

Referrals for Medium Risk

Mail: OTC options for Peptic

Disease

HRAs & Screenings

24/7 Physician Consultations

• Members can choose to consult with a doctor in multiple ways

*There is no guarantee that members will receive prescription (Rx) medication, diagnosis or treatment plan.

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Consultations by phone By Email * By Video 9

On Call Priority By Appointment E-Consult Video

Informational Diagnostic Diagnostic Informational Diagnostic

Talk to a doctor

immediately

24/7

informational

consultation

Get answers to

important health

and medical

questions

No diagnosis or

prescriptions

Talk to a doctor in

as little as 30

minutes

(guaranteed 1 hour)

Comprehensive

diagnostic

consultation

Obtain a diagnosis,

treatment plan and

prescription (Rx),

including refills

when appropriate*

Just like a Priority

Consultation, but

you can set a

time that fits your

schedule, starting

the next day,

Monday through

Friday

Email a doctor about

sensitive medical

issues

Secure, discreet,

HIPAA-compliant

Doctor will respond

in as little as 2-4

hours (guaranteed

within 24 hours)

No diagnosis or

prescriptions

Must be in front

of a computer to

execute video

capabilities

Available with

Priority or By

Appointment

consults only

24/7 Physician Consultations

iDR 24/7 Mobile App

• Available on all Apple devices, including the iPhone, iPad and iPod

• My Consult Center allows members to select from the four consultation options

• My Message Center allows members to securely message a doctor anytime, directly from their device

• My Health Center includes comprehensive health content on the latest health topics, medications, symptom checkers and more.

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Clinical Services

On-Site Clinics

• Single employer or multiple (shared)

• Near site capabilities

• Health and Workers comp

Clinical Services

• HRA and Biometrics

• Primary care & basic diagnostics

• Pharmacy coordinated with PBM

Reporting

• EMR and PHR online

• Integrated with wellness objectives

• Integrated cost management

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• Patient Centered

Medical Home

Medical Services

• Primary/Acute/Episodic Care • Case and Disease Management • Pharmaceutical Services • Mail Order Medication • Provider Recruitment & Management

Technology & Health

Portal

• Proprietary Electronic Medical Records System • 24/7 Nurse Line • Data Analytics & Reporting • ROI Analysis • Online Appointment “Smart” Scheduling System

Wellness • Health Risk Assessment and Biometric Screening • 185 Wellness Programs • Wellness Coaches • Online Wellness Tracking Application

Occupational Health &

Workers’ Compensation

• Pre-Employment Exams, Fit for Duty Exams • On-Site Physical Therapy • Drug Screenings • Case Management On and Off-Site

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Predict Risk and Cost Around Each Member

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8 Unique Conditions per High Risk Members

4 Unique Conditions per Medium Risk Members

190 High Risk Members

1,560 Medium Risk Members

2% High Risk Members

18% Medium Risk Members

54% Probability of a

high cost claim

$19m in future potential medical costs

Risk Profile for DEMO

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Focused Solutions on Clinical Issues

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39% Above Norm - High Blood Pressure

71% Above Norm – High Cholesterol

59% Above Norm - Diabetes Type 1

103% Above Norm – Diabetes Type 2

DEMO Standard Morbidity Ratio (SMR)

Why It Matters?

• Healthcare costs will continue to rise

• 2014 trend is estimated at over 8%

• Specialty drugs will be over $402 Billion by 2020

• US care is higher than any country

• US spent 25% more than any other country on health

• US pays more for drugs than G7 nations

• US doctors are paid 50% more than other nations

• US has a very unhealthy population

• Over 10% of total health spend is on Obesity & smoking

• 50% of adult health spending is on chronic diseases

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Why It Matters?

• US shelters employees from real healthcare costs

• US employers spent 7% of comp on health 2013

• Individuals spent 6.9% of income on health

• In 2010 US households spent 20% of their consumption on health – it was under 5% in 1929 (it is invisible to most)

• While Self insuring is a great way to start managing costs

• It is only as good as your program

• It must be holistic & integrated

• It must be factually driven & focused

• It must be scored & adjusted regularly

• It must change employee behavior

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Why it Matters?

• The right plan with the right tools can make a significant difference

• 70% of health plan costs can easily be impacted by careful management & employee behavior change

• Member engagement is critical as is cultural change

• Health Plans must be a high organizational priority

• Having the right partner is key to success – so choose wisely

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Q & A

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