state of wyoming labor, health, and social services ... · 30% less in health return. health...

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State of Wyoming Labor, Health, and Social Services Committee

Presentation

Harold “Hank” Gardner, MD Founder & CEO of HCMS Group LLC

May 20, 2014


Population Health Management Cloud Solutions

For Employers, Health Organizations,

and Government


Health as Human Capital Paradigm Connecting Health to Business Performance by Aligned Economic Incentives

skills

motivation

health

Rewards

Responsibilities

Day’s Pay for Day’s Work

• Wages • Benefits • Human Capital Growth

Day’s Work for Day’s Pay

• Work Ethic vs. Entitlement Attitude • Self Health Management • Good Safety Practices

Business Employers Want: Employer Workers Want:


Four Healthcare Reform Problems

That Need Solutions

30/30 10/2

5/50 50/50

The US spends 30% more on healthcare compared to similar countries and gets 30% less in health return.

Health benefit costs are increasing annually at roughly 10%, while wages are increasing by 2%.

Only 5% of an insured employee risk pool drives 50% or more of health benefit costs.

50% of the 5% group’s health benefit costs are driven by business policy design, while only 50% is driven by disease.

The Waste/Moral Hazard Problem The Opportunity Cost Problem

The Overutilization Problem The Medicalization Problem


Health as Human Capital “Big Data”

Research Reference Database (RRDb)

730 Million

Compensation Records

1.5 Million

Workforce Transition Episodes

21 Million

Work Performance

Records

9 Million

Disability Lost Time Claims

1.5 Million

Safety & WC Claims

1.5 Million

Prevention &

Wellness Program

Participants

303 Million

Health Plan Medical & RX Claims with 850,000 Medical

Provider IDs

65 Thousand

Management &

Training Records

3.7 Million People in the

RRDb


The HCMS Wyoming Health Information Network

(WHIN) Service Model


DOH

• Medicaid

• Mental Health/Substance Abuse

• CHIP Enrollment/Claims

DFS

SNAP

POWER & LIEAP

Child Care

Child Support Enforcement

A&I

State Health Plan

DWS

WIA

Voc Rehab

WDTF

Worker’s Compensation

Unemployment Insurance

DOI

WHIP

DOC

OCIO (Pending)

Dept of Education (Pending)

Board of Parole (Pending)

Military (Pending)

Data Analytics

Population Risk Analysis (Human Capital Risk Index) Program|Benefits Design & Evaluation Ad Hoc Data Analytics Data Extracts

Online Reporting (O|BI)

Policy-Level Integrated Risk Information

Management Decision Support

Healthy Families Succeed

Enroll & Assessment Health Assist High Risk

Population Job Ladder

Information Outputs Delivered with Decision

Support

WHIN/ELT (Health, Family, Workforce, Corrections, Insurance, A&I)

Healthy Families Succeed

Health and Human Services Sub-Cabinet

State Legislature

Data Inputs

HCMS Wyoming State Service Model

Data Analytics Data Management > > >

Integrated Data

Warehouse &

Research Reference Database


Wyoming State Person-Centric Integrated Database… Connecting the Dots

Medicaid

SNAP

POWER

Child Care

Department

of Corrections

Un-

employment Insurance

Workers’ Compensation

State

Health Plan

WHIN Integrated Database 275,000

Since 2001


Population Risk Analysis


The Human Capital Risk Index® (HUI) is a unique person-centric risk index that is based on the HCMS Health as Human Capital paradigm. It measures human capital risk based on lost time in addition to medical and pharmacy utilization. The HUI adjusts for population demographics and is positively correlated with employee engagement.

The HUI score is normalized to 1.0. For example, an individual with a HUI score of 2.0 carries twice as much risk as average. Used in HCMS predictive modeling, the HUI is a leading risk indicator because it assigns the entire weight of the health event right when it occurs; whereas claims cost data is a lagging risk indicator.

HCMS uses over 300 weighted indicators in calculating the Individual HUI Score.

The Human Capital Risk Index® (HUI) [Patent Pending]

Sample HUI Risk Scores


WyState Social Welfare Service Non-Disabled Adult Population Risk Analysis

Time period: 01/01/2013-12/31/2013

Population= 70,801

Average Cost= $6,682

Population= 70,801

Average HUI= 0.70


Medicaid Non-Disabled Adults Disease Cluster Analysis

Key Finding: Medicaid non-disabled adults’ co-morbidities are significantly more expensive than the primary medical disease which demands the need for a person-centric, as opposed to a disease-centric, approach.

Time Period: 01/01/2013- 12/31/13

HUI 4.2

HUI 3.1

HUI 3.1

HUI 3.6

HUI 6.5

HUI 0.5

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

Cardio Metabolic

Syndrome (N=4,690)

Maternity/Perinatal

Period (N=5,829)

Mental

Disorders/Nervous

System and Sense

Organs (N=8,783)

Musculoskeletal and

Connective

Tissue/Injury and

Poisoning (N=7,088)

Neoplasms/Cancer

(N=714)

Other Condition

(N=2,197)

Ag

gre

ga

te C

laim

an

t C

ost

Condition Cost Other Medical Cost Pharmacy Cost WC Cost


WyState Social Welfare Service Aged and Disabled Population Risk Analysis

Time period: 01/01/2013-12/31/2013

Population= 13,015


Population= 13,015

Average HUI= 3.01


Kid Care Claimants Population Risk Analysis

Time Period: 07/01/10 – 06/30/11

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

50% 30% 15% 5%

Ave

rag

e C

ost

Po

pu

lati

on

Percent of Population

Population Annual Cost

0.0

0.5

1.0

1.5

2.0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

50% 30% 15% 5%

Ave

rag

e H

UI

Po

pu

lati

on


Population HUI

Population= 6,439


Population= 6,439

Average HUI= 0.47


Wyoming Health Insurance Pool (WHIP) Population Risk Analysis

$0

$50,000

$100,000

$150,000

$200,000

$250,000

0

100

200

300

400

500

600

700

50% 30% 15% 4% 1%

Ave

rag

e I

nte

gra

ted

Co

st

Po

pu

lati

on


Population Cost (Plan Paid + Member Paid)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

0

100

200

300

400

500

600

700

50% 30% 15% 4% 1%

HU

I

Po

pu

lati

on


Population HUI

Population= 1,288


Population= 1,288

Average HUI= 2.10


Wyoming State Health Plan Population Risk Analysis

Time Period: 01/01/13 – 12/31/13

Population= 18,657 Average Cost= $7,299

Population= 18,657 Average HUI= 1.52


State Health Plan Disease Cluster Analysis

Key Finding: State Health Plan employees’ co-morbidities are significantly more expensive than the primary medical disease which demands the need for a person-centric, as opposed to a disease-centric, approach.

Time Period: 01/01/2013- 12/31/13

HUI 2.8

HUI 2.3

HUI 2.6

HUI 2.6

HUI 4.0

HUI 0.5

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

Cardio Metabolic

Syndrome (N=6,143)

Maternity/Perinatal

Period (N=718)

Mental

Disorders/Nervous

System and Sense

Organs (N=6,042)

Musculoskeletal and

Connective

Tissue/Injury and

Poisoning (N=7,611)

Neoplasms/Cancer

(N=1,789)

Other Condition

(N=3,510)

Ag

gre

ga

te C

laim

an

t C

ost

Condition Cost Other Medical Cost Pharmacy Cost WC Cost


Wyoming Healthy Frontiers “Aligned Incentives” Health Plan Pilot


HCMS Healthcare Reform Model

Free Clinical Prevention Service Clinical Decision Support for 5% Group

Ownership of Health Decisions Medical Consumerism that Bridges Primary & Specialty Care

Healthcare Reform “Your Way” A Market Solution

Incentive-Reimbursed Primary Care Whole Person

Disease Screening & Management Continuity Care

Value-Based Variable Deductible Specialty/Hospital Care

Centers of Excellence

Lost Time Disability & Workers’

Compensation

Mental Health/EAP Anxiety & Depression

Health & Wellness Eat Right, Exercise,

Don’t Smoke

One “Aligned Incentives” Health Plan

Incentive-Funded Health Account Consumer Choice: “Skin in the Game”

Clinical Prevention

• For “5% high-risk group • Independent Provider • Consumer decision support • Health as human capital outcomes


Why One Plan? Health Plan Selection Bias Modeling

Key Findings:

Using HUI and historic cost, high-risk people rationally choose richer plans

500% variance in cost from the Bronze plan to the Platinum plan, but only a 50% variance in premium.

Selection bias produces winners and losers

Employee-Only Coverage


Private Insurance Health Exchange vs. Legacy Individuals Risk Comparison

Time Period: 01/01/14 – 01/31/14


Healthy Frontiers PMPM Cost Trend

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

2011 2012

Pe

r M

em

be

r P

er

Mo

nth

Co

st

End of Pilot Program Announcement Date

(March 2012)


Healthy Frontiers Compared to Medicaid Non-Disabled Adult

Methods: WHF annualized cost on a per member per month (PMPM) basis for 109 individuals that were enrolled long enough for the following data to be collected on them. In order to accurately evaluate initial WHF Plan performance, costs are compared to Job-Mobile Adults (Non-Disabled Adults ages 18-64) in Medicaid. The average claim costs per full-year Medicaid Job-Mobile Adult claimant was $6,156.

HF Annualized

Cost

Medicaid Non-

Disabled AdultDifference

$5,216 $6,156 -15.3%


Cost Trend for Single “Aligned Incentives” Health Plan

Key Findings:

Costs decreased 20% after implementation.

Decreases in costs are accompanied by significant decreases in ER visits, inpatient days, and specialty care visits.

Decreases in cost are also accompanied by an increase in primary care visits.

Implementation

of a Single Aligned

Incentives Health Plan

From 3 Plans


Healthy Families Succeed Program (HFS)

A Job Training

& Health Management Service


Healthy Families Succeed State Services Utilization

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10 11 12 13

Pe

rce

nt

Usin

g S

om

e S

tate

Se

rvic

e

Quarters Since Enrollment in JobAssist

State Service Utilization Trend: 9.2% annual Decrease


Foster Care Young Women Pregnancy Rate Comparison Analysis

Key Finding: The total comparative pregnancy rate for Foster Care Medicaid young women was 11 times higher than privately-insured young women and almost 5 times higher than State-Health-Plan-covered young women.

14 - 15 16 - 17 18 Total

11% 25% 29% 22%

3% 7% 6% 5%

1% 3% 4% 2%Wyoming Private Insurance

Foster Care: Medicaid

State Health Plan

Age GroupPopulation


State Health Plan Single Plan Cost Modeling Analysis

Time Period: 07/01/10-06/30/11

Health Plan

Deductible

Level

Health Plan

Costs (PEPY)HUI

V|HUI

(PEPY)

V|HUI

Opportunity

(PEPY)

Enrolled

Employees

Total

V|HUI

Opportunity

Cost Savings

Opportunity

(After

Adjusting

for Risk)

HDHP $3,163 0.6 $4,923 $0 1,059 $0 $0

$750 $5,440 1.0 $5,608 $685 3,695 $2,531,085 $2,455,152

$350 $7,569 1.4 $5,607 $683 9,633 $6,583,402 $8,887,593

$11,342,745Total Estimated Savings if all Employees move to the High Deductible Plan with a Health

Savings Account


Finance

Form

Function

state of wyoming labor, health, and social services ... · 30% less in health return. health...

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