ValueBased Health Benefits An Evolutionary Journey

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Value-Based Health BenefitsAn Evolutionary
Journey

• Sandra G. Morris, R.N., M.S.N., C.M.
• Procter Gamble
• Senior Manager
• U.S. Health Benefits Design
• morris.sg_at_pg.com

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Procter Gamble

• Founded in 1837
• 140,000 employees/80 countries
• 140 manufacturing plants/40 countries
• About 34,500 U.S. employees
• Self-insured for U.S. health insurance
• Carved-out prescription drug coverage
• U.S. health benefits spend
• 400 million per year

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PG Prescription Drug Costs as a Percentage of
Total Medical Benefits Costs
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PG Prescription DrugBenefits Design History

• Employees have paid percentage
• co-insurance rather than a flat co-pay
• since the early 1990s.
• Dollar minimum and maximum
• per script for employees.
• No generic/brand differentiation.
• Open formulary.

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PG Prescription DrugBenefits Design History

• Our goal is to maintain a
• 75 company/25 employee
• cost share.
• Our design permitted achievement
• of the 75/25 goal until 2003.
• A 2004 design was needed that would
• rebalance cost share.

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Value-Based Benefit Design

• Considers the burdens presented by a health
  issue to the member and the employer.
• Considers the objective value of specific
  medical services in decreasing the members and
  the employers burdens.
• Considers the availability, effectiveness, and
  costs of alternative approaches to achieve the
  same outcome.
• Coverage and cost-share of medical services are
  based on distribution of burdens, value of the
  services in impacting them and availability of
  alternative approaches.

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Value-Based PrescriptionTiers Introduced in 2004

• Level I Medications
• primarily used to preserve life or
• major body system functions.
• 30 employee co-insurance with 6 minimum
• and 50 maximum.
• Cardiovascular, psychiatric, respiratory,
• musculoskeletal, endocrine, neurological, etc.

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Value-Based TiersIntroduced in 2004

• Level II Medications
• not typically required to preserve
• life or major body system functions.
• 50 employee co-insurance with 6 minimum
• and no maximum.
• Acne treatments, hormonal replacements,
• contraceptives, nonsedating antihistamines,
• ADD treatments for adults, antifungals,
• infertility treatments. (Hypnotic sleep aids
  added in
• 2007)

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Value-Based TiersIntroduced in 2004

• Employees own total cost
• for medications used
• primarily to enhance
• lifestyle related activities.
• Sexual function enhancers,
• appetite suppressants,
• smoking cessation enhancers,
• cosmetic enhancers, etc.

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Key Metrics to Considerin DeterminingBehavior
Changes

• Focus on the
• Change in days supply as a
• percentage of total days supply.
• Changes in average monthly utilizers.

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Key Metrics to Considerin DeterminingBehavior
Changes

• Focus on the
• Changes in the
• number of first fill prescriptions.
• Medication Possession Ratio
• as an adherence measure.

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Level II Key Findings Driven by Plan Design
2003-2004

• The number of prescriptions per class dropped in
  five out of eight categories.
• Average monthly utilizers decreased in nearly
  every category.
• The number of first fill prescriptions dropped
  in 5 out of 8 categories.

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Level II Key Findings Driven by Plan Design 2003
to 2004

• The number of scripts decreased in nearly every
  category.
• The shift to a 50/50 cost share resulted in
  decreases in the total company amount paid in
• every category except ADD/ADHD.

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Level II Key Findings Driven by Plan Design 2004
to 2005

• The trend continued for the Level II drugs as
  the
• majority of these therapeutic categories saw
  further
• decreases in both cost and utilization
  metrics.
• Oral contraceptives and ADD/ADHD drugs are the
• only two classes that remained constant.
• Direct to consumer advertising was very
• strong for these two categories.

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Level II Key Findings Driven by Plan Design 2005
to 2006

• The number of prescriptions, average monthly
  utilizers and number of first fill prescriptions
  dropped in all categories.

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Level II Key Findings Driven by Plan Design 2005
to 2006

• Total days supply decreased in nearly every
  category.
• The total company amount paid decreased in every
  category except ADD/ADHD.

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The Evolutionary Journey Continues
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PG Health Productivity Charter Team

• A multidisciplinary team (Employee Benefits
  Design,
• Global Medical, Purchasing, Legal, Finance,
  Disability,
• Workers Compensation, Employee Relations,
  Human
• Resources) was established in 2003 to develop a
  more
• holistic, data-driven, and sustainable strategy
  for
• PGs approach to health-related productivity.
• Comprehensive analyses of healthcare
• costs, absenteeism, and disability drivers
• were completed.
• Benchmarking was completed with
• numerous peer companies known for
• their focus on health.

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PG Health Productivity Charter Team

• Now developing a global Health Wellness
  strategy,
• creating a global Health Wellness
  organization
• with a supporting Business Advisory Group,
• and continuing U.S. health benefits activities
  
• already underway.
• Healthy living messaging
• to become a touch point
• throughout the work
• environment
• Cafeterias, Vending machines,
• meeting refreshments,
• business scorecards, etc.

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PG Health Productivity Charter Team

• Our global Healthy Living brand is built on
• Partnership PG wants to work with
  employees/families to maintain or improve their
  health and wellness.
• Quality PG wants to support initiatives that
  promote health care quality and help to identify
  the best health care providers to our people.
• Prevention PG wants to decrease barriers to
  preventive health care in order to reduce the
  burdens and costs of illness.
• The 2006 U.S. plan design changes reflected the
  work of the
• Charter Team and these three pillars.

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2006 U.S. Plan Design Changes

• July 2006 U.S. Care Management Program offered
  to employees and dependents age 18 and over
  enrolled in the healthcare plan.
• On-line health risk appraisal with 40 incentive
  for completion.
• 24-hour telephone access to a registered nurse
  health advocate.
• Multiple on-line personal wellness advocacy
  programs - 80 incentive for completion of weight
  loss and smoking cessation programs.
• 11 personalized condition management programs
  with 160 incentive for completion of each.

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Program Successes Thus Far
A recent PG Employee Survey finds that
96 of employees have heard or read about the
program.
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Program Successes Thus Far
More than 15,000 participants have registered
for the the program
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Program Successes Thus Far

• 11,418
• Completed Wellness Assessments
• 35 of Eligible Employees
• 8 of Eligible Family Members

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Program Successes Thus Far
1,259 Completed Personal Wellness Advocacy
Programs 6,172 Currently enrolled in a
Personal Wellness Advocacy Program
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2006 U.S. Plan Design Changes

100 preventive care coverage expanded to
include recommendations of U.S. Preventive
Services Task Force Guide to Clinical Preventive
Services (http//www.ahrq.gov/clinic/cps3dix.htm)
and Preventing Cancer, Cardiovascular
Disease, and Diabetes A Common Agenda for the
American Cancer Society, the American Diabetes
Society, and the American Heart
Association (http//caonline.amcancersoc.org/cgi/
content/full/54/4/190)
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2006 U.S. Plan Design Changes

• Employees maximum prescription
• co-insurance reduced by 50 when
• specialty pharmacy services are used
• to obtain specific prescription drugs.
• Minimum employee co-insurance reduced to 3.

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2006 U.S. Plan Design Changes

• Level IA prescription drug employee
• co-insurance reduced by 50 for
• treatment of specific medical
• diagnoses identified as drivers of
• significant lost work time and/or
• increased claim costs
• - Diabetes
• - Asthma
• - Hyperlipidemia
• - Hypertension

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Example of MedicationPossession Ratio

• When an individual presents
• two 30-day prescriptions
• to their retail pharmacy within
• a 90-day period the individuals
• clinical adherence can be expressed as
• 60/90 .667 or 67 MPR or
• adherence to medication

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Level IA Key Findings Driven by Plan Design
Medication Possession Ratio for members on Level
IA (Life-Sustaining Drugs) increased in all 4
categories from 2005 to 2006.
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Level IA Key Findings Driven by Plan Design

• The number of first fill prescriptions decreased
  from 2005 to 2006 in three therapeutic
  categories. Diabetes remained constant.
• As expected, total amount paid and amount paid
  as a percentage of total prescriptions increased
  due to the decrease in employee co-insurance for
  this category.

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Level IA Key Findings Driven by Plan Design

• The number of prescriptions as a percentage of
  total prescriptions for Diabetes,
• Asthma, and Lipid Lowering Agents increased
  from 2005 to 2006.
• Days supply as a percentage of total days
  supply increased for Diabetes, Asthma, and
• Lipid Lowering Agents.
• The number of average monthly utilizers as a
  percentage of total utilizers increased
• for all four therapeutic classes.

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Cost Share Breakdown from2003 to 2006
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Recommendations forAchieving a
Value-BasedBenefits Design

• Use a multidisciplinary
• team approach.
• Obtain and utilize comprehensive
• data from all areas of impact.
• Make sure you have insurance administrators
• (carriers) that are able to think and act
• outside of the box.
• Use your carriers experts to test ideas.

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Recommendations forAchieving a
Value-BasedBenefits Design

• Obtain employee input.
• Establish your pillars of value (distribution of
  
• burdens, value of services in impacting them
• and the availability of alternative
  approaches) and
• let them be the supporting structures for your
  
• design.
• Build a comprehensive communication strategy
• that includes all stakeholders.

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Value-Based Health BenefitsAn Evolutionary
Journey

• Questions?