healthcare trends institute: benefits trends to watch in 2014

© 2014. Healthcare Trends Institute. All Rights Reserved.

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2/4/14

Healthcare Benefits Trends to Watch in 2014 Webcast


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Today’s Agenda

ü  Healthcare Benefits Trends to Watch in 2014 is part of the Healthcare Trends Institute’s quarterly HealthChange™ Web Series

ü  We will cover several healthcare benefits topics including CDHP, exchanges, wellness plans, health IT, and more

ü  Overview of trends from the 2013 Healthcare Benefits Trends Benchmark Study from Tiffany Wirth, Executive Director, HTI

ü  Expert panel includes Healthcare Trends Institute Editorial Advisory Board members : ü  Shajmil Smith, Executive Director of Product Program

Services and Solutions, National Product Management, Kaiser Permanente

ü  Sam Robinson, National Director, U.S. Health Plan Industry, Microsoft Health and Life Sciences


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2013 Healthcare Benefits Trends Benchmark Study

ü  Polled over 300 HR executives, benefit managers, and other benefit decision-makers across the US

ü  Conducted Fall of 2013 (September-October) ü  Company size ranged from less than 50 full-time

employees, to more than 2,500

ü  Variety of of industries represented including manufacturing, government, technology, and finance & insurance

ü  Surveyed topics included employee and health benefits, defined contribution, public and private health insurance exchanges, and wellness programs


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Study Highlights

ü  The majority of respondents (59.4%) indicated they were somewhat to very familiar with Defined Contribution Plans (DCPs) as they relate to health benefits

ü  Of those respondents (36.1%)who indicated they were interested in DCPs for the future, 55.8% reported they were considering for 2015 followed by 26.9% in 2016, and 17.3%

indicated considering DCPs before the end of 2014

ü  62.1% somewhat to very familiar with public exchanges and 55.5% somewhat to very familiar with Private exchanges

ü  Of the respondents indicating they were somewhat to very familiar with exchanges, over half (51.3%) indicated they believed exchanges will help employees make more cost-conscious benefit decisions as well as offer a wider array of options for benefit plans.

ü  43.9% of companies surveyed are already using some kind of healthy lifestyle incentive/program, while 22.6% are considering for the future.

ü  To promote positive health outcomes, 61% of companies offer at least one wellness program and 43% offer employees the opportunity for health risk assessment.


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Study Key Trends

ü  Ongoing cost concerns among employers of all sizes will continue to spur change both in the form of defined contribution plans and the use of health insurance exchanges.

ü  Most employers are interested in learning more about DCPs for the future supporting the shift away from a traditional defined benefit model to manage employee healthcare

benefits and control costs.

ü  Overall, employers are more familiar with public exchanges than private exchanges. This may be due to the October 1 launch of the Federal Insurance Marketplace, which

coincided with survey data collection. As most employers surveyed provide group coverage, the awareness of public exchanges may not be as important to these

respondents.

ü  Because DCPs are starting to gain ground among employer groups, awareness of private exchanges is expected to grow in correlation with DCP use in companies.

ü  We can expect an increase in the number of companies offering at least one wellness program or health initiative as ACA wellness incentives go into effect in 2014.

Emerging Benefit Trends for a Post-Reform Healthcare Market Shajmil Smith, Executive Director in National Product Management Kaiser Permanente February 4, 2014

Contents

Market Context

Emerging Trends

Conclusion

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Market Context: Impacts from the Affordable Care Act and the continued pressure to control costs are driving changes across every sector of the healthcare marketplace

Source: Strategic Health Perspectives, 2013 8

Response to changing

healthcare market (more costs, risk,

and change)

Shift to retail healthcare marketplace

New employee benefit strategies

Continued focus on ACA implications

Focus on consumer engagement and wellness

  Overarching slowdown in revenue growth across entire industry

  Confidence in public and private exchanges increasing and defined contribution taking shape

  Employers continue movement to narrow Networks, CDHPs, and strategies that reduce coverage for certain populations

  Continued focus on rewarding healthy behavior and increasing consumer engagement

Emerging Trends: Consumer Directed Health Plans are expected to continue to grow

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  Enrollment in CDHP’s continue to increase, with an additional focus on CDHC as a Total Replacement Strategy   While only 10% of employers have moved to a total replacement strategy for CDHC, another 44% are expected

to move in in this direction over the next 3 – 5 years

  Additionally, where only 5% of employers require employees to contribute to their own HSA as prerequisite to earning a match contribution, more employers

Source: Mercer’s National Survey of Employer-Sponsored Health Plans Aon Hewett 2013 Health Care Survey

Emerging Trends: Companies are using a variety of strategies to contain insurance costs

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§  Continuing to increase co-pays/deductibles. Movement to CDHPs

§  Using narrow networks/ACOs to lower rate without or in addition to cutting benefits

§  Employers offering Medicare Group coverage are cutting retiree coverage or moving to a Connector

§  Dependents, early retirees, and part time employees to be increasingly squeezed out of coverage

§  A growing number of employers are shifting to defined contribution models and the use of private exchanges to deliver health insurance

26%

45%

59%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013

“My Company is Actively Exploring Ways to Get Out of Providing Health Insurance to our Employees”

(% Strongly Agree or Somewhat Agree)

Source: 2013 Strategic Health Perspectives Report

Emerging Trends: Companies are changing the way they approach providing healthcare

Source: Strategic Health Perspectives, 2013 11

Base: All Employer Health Benefit Decision Makers (N=313) Q910: Do you provide health insurance benefits or some type of financial contribution towards health costs to any of your employees? Q911: Which health benefit do you currently offer to your employees? Q1401: Assuming the ACA remains intact, what is your future plan for health insurance benefits for your employees? Please estimate what your company will be doing in 2015 and in 2020.

Emerging Trends: Alternative approaches to delivering care provide opportunities to engage consumers in a cost-efficient way

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•  According to the 2013 Kaiser Family Foundation Report, 35% of firms offering health benefits stated that wellness programs would be very effective at containing health insurance costs, more than any other strategy

•  Among firms offering health benefits, over half (56%) cover care received at retail clinics in the plans with the largest enrollment. Of those, 17% offer a financial incentive

Conclusion

§  Existing strategies such as movement toward CDHP’s, focus on wellness and healthy behavior, and narrowing healthcare coverage, will continue to provide opportunities to manage costs

§  A shift towards a more retail-oriented healthcare marketplace is also

emerging as a strategy that provides consumer choice and cost-efficiency opportunities

§  Post Reform, employers will need to execute strategies that respond

to the impending ACA implications, manage costs, and increase consumer engagement

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Emerging Technology Trends

SAM ROBINSON

NATIONAL DIRECTOR, U.S. HEALTH AND LIFE SCIENCES

[email protected]

Megatrends that will dominate the next decade

of CIOs see mobile as most disruptive technology over next decade

70%

of all new application development target a mobile form factor >1/3

Today 57% of enterprises will be invested in enterprise social by 2014

Social networking will follow not just people but also appliances, devices and products

>70% of CIOs will embrace a cloud-first strategy by 2016

of organizations planned to increase public cloud spending in 2013

54%

Spending on Big Data:

Percent of digital universe tagged:

3% (2020)

33%

(today)

$10 billon 2013 > $20 billion 2016

zettabytes in 2013

4 50% From 2012

Total digital content will grow =

Consumer Engagement

Engage Ac3vate

Having the mo#va#on, knowledge, confidence, and capabili#es to take a role in managing your health

Ac#ons that people take for their health and to benefit from care.

really

Xbox Fitness brings you the world’s best workouts with instant, personalized feedback, right in your home on Xbox One. ü  Train with Jillian Michaels, Tracy Anderson,

Tony Horton, Shaun T., and more! ü  Op3mize every workout with immediate

feedback on your form, power and heart rate with the all new Kinect

AcHve gaming via Xbox Fitness q  Interac3ve, fun, gaming environment that encourages movement q  Social connec3on via Xbox Live and Skype q  Kinect sensor provides real-‐3me feedback including biometric data q  Studies underway for diabetes preven3on

Smart buildings with idenHty: Meet Ingrid and Ingmar •  Integrate health into lifestyle •  Serves as:

•  Community Organizer •  Health Coach •  Storyteller

•  Gamifies Health •  Challenge •  Interac3on

•  Communica3on •  Email •  Text •  Smart Displays

•  Home/Office/Mobile


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About the Institute

Institute Programs include: ü  HealthChange™ Educational Web Series ü  HealthDifference™ Awards (Launching March 15, 2014) ü  Institute membership ü  Healthcare Trends E-newsletter ü  Defined Contribution Today E-newsletter

The mission of the Healthcare Trends Institute is to provide the latest information, news, education, resources and insights into the rapidly changing healthcare environment. This site will cover a range of topics including healthcare and employee benefits, health exchanges, insurance, and related areas of interest.

Tiffany Wirth, Executive Director Tiffany Wirth is Executive Director of the Healthcare Trends Institute. She also serves as Director of Marketing at Evolution1™. Healthcare Trends Institute 4324 20th Avenue, SW, Ste. 200, Fargo, ND 58103 P: 701.499.7215 E: [email protected]


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