Innovation and Data-Driven Strategies in Corporate Healthcare

November 14, 2018

Karen Amato R.N., CCM, CPDMVice President, Director of Health Risk Solutions

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n Learn how population data insights can help inform targeted solutions to improve employee health, productivity, and medical trend.

n Review emerging and innovative healthcare delivery, tools and technologies that are changing the approach of disease/condition management.

n Explore the impact of stress on the workforce and what employers are doing to mitigate.

n Review the shift in well-being programs to drive employee engagement and performance.

Objectives

Lockton Companies |3

Healthcare inflation is driven by price increases, not

utilization (new medical and pharmacy technologies).

Specialty medications are the fastest growing driver

of high cost.

Severity and frequency of catastrophic claims continue to increase.

Specific Cost Drivers

High-risk claimants have chronic conditions (such as coronary artery disease, diabetes, hypertension, smoking-related illness and obesity) but also include maternity, behavioral health and orthopedic conditions.

High-cost claimants are associated with specialty medicines, cancers, back conditions, trauma, premature births and complications of hospitalization and surgeries.

High-cost claimants~2% of the total population drives 50% of the costs.

High-risk claims~20% of the total population drives 80% of the costs.

The drivers of medical cost

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Source: Lockton Infolock.

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Understanding impact of chronic conditions

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5

$10,991$12,811

$28,192

$16,556

$13,857$12,720 $12,602

$19,646

Asthma Back pain Coronaryartery disease

(CAD)

Diabetes High bloodpressue

Highcholesterol

Neck pain Osteoarthritis$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

Allo

wed

am

ount

PPP

YChronic conditions drive cost

1

Lockton’s Infolock book of business

Costs represented here include comorbidities.*PPPY – Per Patient Per Year

Improving chronic conditions positively affects population health, productivity and health plan financials.

Source: Lockton Infolock®, 2018

Lockton Companies |6

Health and productivity

Source: Coventry, 2010- Most current study.

$1,500

$9,750

$1,400

$1,400

$1,400

$750

$19,000

$19,000

$9,875

$10,500

$1,000

$2,500

$11,750

$14,000

$9,675

$10,000

$10,500

$2,000

$5,850

$9,750

$2,500

$3,000

$1,750

$1,000

$5,500

$10,000

$1,400

$1,400

$1,400

$750

Depression

Obesity

Diabetes

Hypertension

Smoking

No Comorbidity

Contusions/lacerations Sprains/strains Musculoskeletal disease Fractures Burns

6

Median 12 month medical allowed amountby complicating condition and injury classification

No comorbidity

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The most common musculoskeletal conditions include: n Osteoarthritisn Back/neck pain

n Bone fracturesn Injuries n Inflammatory conditions

(i.e.) rheumatoid arthritis

Low back pain is the leading cause of

disability worldwide.

n Musculoskeletal conditions are the second largest contributor to disability globally.

n These conditions include more than 150 diagnoses relating to muscles, bones, joints, tendons and ligaments.� Often characterized by persistent pain and

limitations in mobility, dexterity and functional ability.

n The impact on individuals suffering from these conditions can include: � Lowered ability to be productive at work.� Decline in overall mental and motional well-

being.� Feeling isolated as a result of physical

limitations.

Source: World Health Organization, 2018

Musculoskeletal conditions

Lockton Companies |8

The business case for population health management

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Greater productivity

Lower risks

n Reduced absenteeism.

n Improved performance.

n Improved health outcomes.

n Personal insights and accountability for health.

n Cost-efficient plan design.

n Improved consumerism.n Less turnover.

Lowercosts

Most employers consider healthcare costs a challenge to the bottom line. The benefits of a population health strategy present a solution to this challenge.

Lockton Companies |9

Hot topics in population health management

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Targeted disease-specific management

Second medical opinion

Specialty medications

Centers of excellence

On-site clinics

Chronic conditions

Financial wellness

Precision medicine

Health and productivity

Executive physicals

Behavioral health

Pharmacogenomics

Diabetes

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Focused interventions

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Well-being solutions

n Population health programs.

n Culture of health.

n Incentive design.

n Employee communications.

Access to care solutions

n Assistance for members to find the right provider.

n New ways of interacting with the right provider.

Targeted care solutions

n Identification of high-risk, high-cost, high-complexity members.

n Interventions that improve the health outcomes of designated members.

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Access to care solutions

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On-site health solutionsn Convenience.

n Cost control.

n Geographic concentration.

n Productivity improvement.

Telemedicine

n Reduce ER overutilization.

n Offset urgent care expense.

n Efficiency for common ailments and behavioral health.

Cost transparencyn Increase health

engagement.

n Allow members to control their own costs.

n In tandem with HDHP and cost shifting.

Patientadvocacyn Assistance with

navigating complexities of healthcare system.

n Focus on quality of care.

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Targeted care solutions

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Disease managementn Apps, technology-based

monitoring systems.

n Customized real-time interventions.

n Cardiac health.

n Diabetes.

n Mental health.

n Back disorders.

Case managementn Catastrophic care

management.

n Renal care/dialysis.

n Cancer care.

n Rehabilitation.

n Home-care solutions.

n Specialty Rx case management.

Second opinion solutionsn High-cost claimants.

n High-risk claimants.

n High-complexity patients.

n High-uncertainty medical situations.

Other targetedsolutionsn Specialty Rx provider

carveout.

n Targeted chronic condition management.

n Narrow network.

n Centers of excellence.

Increasingly employers have expressed interest in adding as a carved-out solution.

66% of employers have medical decision support/second opinion services in place.

71% of employers plan to offer by 2019.

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Well-being solutions

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Population health programsn Health risk assessment.

n Biometric screening.n Health coaching.

n Health education. n Group challenges.n Preventive care.

Culture ofhealthn Mission and vision.

n Well-being committee.n Corporate policies.

n Holistic, including financial well-being.

n Enhancements to work environment.

n Middle management accountability.

Incentivedesignn Morale-based.

n Participation-based.n Progress-based.

n Outcomes-based.n Tobacco cessation.n Compliance

considerations.

Employee communicationsn Program branding.

n Varied channels.n Multi-media.

n Management support.

Lockton Companies |14

Shifting to well-being

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Employers are increasingly offering programs that address behavioral/mental, financial and social health.

Source: Fidelity 9th Annual Employer-Sponsored Health and Well-Being Survey, 2018

31%

25%

21%

17%

10%

7%

1%

28%

60%

72%

77%

90%

92%

98%

Purpose in life or "spiritual contentment"

Social connectedness

Community involvement

Job satisfaction/stress

Financial security

Emotional/mental health

Physical health

Yes Considering for the future

Lockton Companies |15

Financial stress

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7%

8%

9%

9%

11%

12%

14%

30%

34%

31%

34%

30%

36%

38%

63%

58%

61%

57%

59%

52%

48%

Problems with spouse/partner

Problems with coworkers/colleagues

Stress over cost of healthcare

Family issues

Dealing with debt payments

Stress over financial situation

Worry about future

A great deal Moderately Not at all

Workplace productivity suffers

when workers are under financial

stress.

Source: Lockton Financial Wellness Survey, 2018

Lockton Companies |16

Financial wellness: How employers can help

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Respondents stating certain programs and resources that would be ‘very helpful’ to decrease financial concerns.

Source: Lockton Financial Wellness Survey, 2018

31% 31%

26% 25% 24% 24% 24% 24% 23%20%

17%19%

14% 14%

10%

15%13%

15%

N/A

7%

Meeting with afinancial

professional

Help creatingfinancial plan

Helpeliminating orconsolidating

debt

Medicareadvice

Help planningfor healthcare

costs

Budgetingadvice

Stressmanagement

education

Investmenteducation

Advice onbenefitsselection

Informationabout HSAs

2018 2016

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Autism services•Torchlight, Rethink

College savings/student loan/financial •LEAF, Gradvisor, UBS; Ion Tuition, SoFI; Hello Wallet

Condition management•Livongo, Abacus, Hello Heart, Hinge Health

Genetic testing•Color Genomics, 23andMe, Viome

Infertility / maternity•Progyny, Ovia, Mango Health, Milk Stork

Weight loss / metabolic syndrome•Retrofit. Omada, Newtopia

Accolade•Total population health

Benevity•Charity giving

Care @ Work•Enhanced care.com model, family services

Consumer Medical•Advocacy, second opinion, medical research

Joyable •Digital mental health solutions

Sleepio•Sleep and behavioral health impact

Trending Benefits

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By vendor By vendor category

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Stress in the workplace

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37% of working adults report experiencing chronic stress at work.

Top 5 factors contributing to work stress:

1. Low salaries.2. Lack of opportunity for growth or

advancement.3. Too heavy of a workload.4. Uncertain or undefined job

expectations.5. Unrealistic job expectations.

Chronic stress leads to negative health outcomes:

n Anxiety and depression.n Difficulty with memory and

concentration.n Digestive issues.n Headaches.n Heart disease.n Sleep problems.n Weight gain.

Source: American Physiological Association Work and Well-being Survey, 2017.

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Stress management and resilience

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Employers reporting these emotional/mental health programs will be in place the following year, or considering for the future.

Source: Fidelity 9th Annual Employer-Sponsored Health and Well-Being Survey, 2018

45%

53%

71%

62%

79%

54%

62%

70%

75%

82%

Happiness programs

Teletherapy

Resiliency training

Mindfulness classes or training

Coaching/relaxation programs

2018 2017

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Stress by generation

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Source: American Physiological Association, 2017.

Younger generations report higher average levels of stress and are more likely to say stress increased in the past year.

5%

13%

25%

30%

79%

88%

93%

88%

18%

25%

36%

38%

Mature

Boomers

Gen X

Millenials

Stress increased in past year

Engage in stress management

Not doing enough to manage stress

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The dimensions of well-being

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Physical

Emotional

Intellectual

Social

Spiritual

Environmental

Occupational

Financial

Employers should think holistically and focus on all dimensions of

well-being.

Source: HHS Substance Abuse and Mental Health Services Administration

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RISK MANAGEMENT • EMPLOYEE BENEFITS • RETIREMENT SERVICES

Our Mission | To be the worldwide value and service leader in insurance brokerage, risk management, employee benefits and retirement services

Our Goal | To be the best place to do business and to work© 2018 Lockton, Inc. All rights reserved.

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Karen AmatoVP, Director of Health Risk Solutions

Lockton N.E. SeriesKamato@Lockton.com