Employee Engagement:
Your Tool for Tackling Health Care Costs
June 26-29, 2011
Las Vegas, Nevada
Topics we will cover
Health Care Cost Drivers Complex Marketplace strategies Informed Decision Making/Value Based
Purchasing/Advocacy Employee Engagement
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Objectives for Today
Provide ideas for you to:Engage your employeesMove market share to value based providers Improve responsibility and accountability of stakeholders
You will laugh at least twice You will contribute to the discussion You will learn something from another attendee
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Health Care Costs
What two things drive health care costs?Utilization – Number of servicesCost per unit of service
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Where do we spend money?
Who Are Stakeholders?
Your Employees and their families Your Company
HR/Benefits teamManagement team and CEOShareholders
Provider Community Payer
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Health Care Costs
At the heart of health care costs – every expense – is a consumer… with an enormous influence
You hand your employees a blank checkbook and you fund the checks that they write
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Reducing health care costs
We have to teach employees – and their families – about the consequences of their choices – and make those consequences immediate and personal.
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Health Care Costs
7.3% increase in 2011 lowest in recent year as a percentage, but increase in dollars is highest
90% of cost increase stemmed from higher costs per unit of service
Changing the trend:Employers with at least 50% of workers enrolled in CDHP
have a two year cost trend that is 25% lower than non CDHP sponsors*
*Watson Wyatt and NBGH
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Health Care Costs Continue to Rise
Milliman Medical Index reports following based on standard PPO plan:A family of 4 spent $3,634 on health care in 2002In 2011, this same family will spend $8,008Increase of $364 per month – employees premium contribution as well as out-of-pocket expenses
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Employers as Stakeholders
Employers are the Primary Stakeholder in the Health Care Business
“If you can’t get something good out of trouble, then all you’ve got is trouble” John Hiatt/Musician/Treme’
A buffet table of choices and options for employers – all guaranteed to taste good
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Complexity of Plans
Narrow Networks – out of pocket benefits for members reflect choices by membersWho manages?What criteria are used to select the providers?
Deductibles and co-insurance increasing and based on type of service providedWho determines place of service?What is “service is not available”?
Premium contributions or health plan participation tied to HRA and biometric screening
Must understand and plan for consequences!13
Indiana Client
90 employees New local carrier is a Catholic System comprised of 4
local hospital groups Primary Care physician assigns network Specialists attached to PCP Not all PCPs work in all 4 hospitals Provides advocacy and value based purchasing
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Wisconsin Client
National manufacturer – 5,000 employee lives Self funded – salaried and union Two plans – one high deductible with HAS Union plan includes cost sharing for first time Health risk assessment and related wellness programs Advocacy and value based purchasing offered Extensive employee communication and engagement
program for all employees
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Colorado Client
78 Employees High deductible health plan CMM network with internal facilities Cofinity network – formerly Sloans No coverage out of network Bridge Health Mandatory use of Patient Care cost and quality
research
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Observations
Money changes behavior Administration of these plans is very difficult and
specialized Participants have difficulty understanding complexity
and decisions Providers have no clue – no connectivity to each other
or to claims payment How to measure true impact on claim dollars?
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Plan Design Decisions
What is your company’s strategy regarding consumerism?
What is your company’s strategy regarding defined benefit versus defined contribution?
What is your company’s strategy regarding linking healthy lifestyles and premium contributions?
What is your company’s strategy regarding incentives and disincentives?
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Pro-active versus Re-active
A successful cost containment strategy, simple or complex, requires a communication strategy – which takes planning and focused execution by you
Using a variety of mediums is a critical component – people learn differently
The communication must be ongoing
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Idea #1
Create a series of simple communication pieces that employees can read quickly and remember
Put them everywhere Get them into the hands of spouses
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Value Based Purchasing
Treatment decision support that targets procedures with high variation in frequency without corresponding benefit Back Surgery Hip Replacement Knee Replacement C Section Hysterectomy
Success with this strategy requires integration between physicians and payer
Measurement of this strategy requires knowledge of the initial decision of the participant/patient.
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System Challenges
My doctor never has enough time for me and I don’t know what to ask him/her
How do I find the “best” doctor? 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.
I just got a bill from the hospital for $3,500. I have no idea why they are billing me. I have insurance.
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Provider cost/quality information
Costs among doctors, hospitals and outpatient centers vary significantly from provider to provider in the same market in the same network
How to determine and communicate “value”
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An employer with 1,000 employees “buys” 1,100 imaging procedures per year
If that employer could save $1,000 on each imaging procedure
Savings of $1,100,000 in claim costs
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Value Based Purchasing
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Arthroscopy
CPT Code – 29873
Surgical; with lateral release
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
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Facility CostsMedical Provider Community
HospitalSt. 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
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Colonoscopy
CPT Code – 45378
Routine Colonoscopy
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).
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Facility CostsMedical 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
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Potential/Actual SavingsProcedure 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
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Cost Comparison Requirement
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Decisions by Members
After receiving and discussing the cost/quality information:78% moved to a lower cost providerAverage savings for employee of $531 per procedureAverage savings for employer of $608 per procedure
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Incentive and Disincentive Plans
Members as Stakeholders…. “You gotta do something to get something”
Behavior changes to reward:Lifestyle changesEngagement with programs such as wellness and
disease managementValue Based Purchasing
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Better Consumerism… Valued Based Purchasing
Publicly available data on provider cost and quality Employees making decisions based on that data Employees understanding the impact of lifestyle
choices on their health care and health care costs Employees understanding that their decisions impact
health care costs for the entire company Informed patients and physicians making decisions
together
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Idea #2
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.
You have mandatory safety meetings, why not mandatory health care/insurance meetings?
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Sample meeting topics
Benefits quiz show – with prizes How to exercise effectively to lose weight How to find the doctor that you’ve always wanted Making wise health care choices – for you
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Successful Communication Plans
Year-round Communicate a goal and communicate progress
towards that goal Have a spousal component Involve senior management Use multiple mediums Keep them simple
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Beliefs drive Behaviors
Beliefs drive Behaviors
A doctor’s office visit costs $10.00
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Beliefs drive Behaviors
The insurance company is paying the bill
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Cost & Quality
CostOutpatient!Two numbers impact costs: billed charges and contracted
ratesPatients need specific procedure or revenue codesHow many variables to measure?Ranges are only marginally usefulHow current is publicly available data?The member needs help knowing how to use the
information – e.g. talking to their physician about changing facilities
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Cost & Quality
QualityThis is very difficultParticipants need help defining qualityPublic data relates to major illnesses and treatments, not
outpatient proceduresPublic data can b e in conflict, not current and debated by
the physician or hospitalCase mix adjusting, physician referral patterns and other
external factors can influence “quality data”
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Sources for Quality Data
www.leapfrog.com www.healthgrades.com www.docboard/org/aim www.vitals.com
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It’s a Long Journey
What we’ve learned at Patient Care Larger deductibles and increased out of pockets costs do
make employees more interested in cost comparisons Once an elective procedure has been recommended, people
typically do not want to change physicians The major opportunity to improve purchasing is in the
outpatient area More interest in cost than quality Technology tools provide limited data with which to make a
decision Choosing more expensive care has to cost consumers more
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Keys to Success
Boost consumers’ health literacy Develop a company goal and a strategy to support Identify benchmarks to measure success Communicate the goals and strategy to employees and
dependents Measure based on benchmarks Communicate results
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