Evolving Consumerism

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Evolving Consumerism
Meredith Baratz, UnitedHealthcare March 25, 2009
Confidential property of UnitedHealth Group. Do
not distribute or reproduce without the express
permission of UnitedHealth Group.
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2009 Not Business as Usual

• Economic upheaval
• Fewer businesses, fewer jobs
• Fewer people with coverage, disposable cash
• Increased cost sharing for health care
• Likely consequences in health care
• Lower utilization of health care (3 year lag)
• Increased capacity among hospitals, physicians
• Increased levels of bad debt
• Potential mitigation of pricing pressures
• Implications for employers
• More people staying in jobs for benefits
• More dependents taking coverage
• Balance billing from providers

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2009 Not Politics as Usual Either

• What to Expect from the Obama Administration
• SCHIP early win on a campaign promise
• No change in tax treatment (deductibility through
  employer plans)
• Mandate that employers provide coverage
• No changes to ERISA pre-emption
• Stimulus Package
• COBRA expansion
• Access to Medicaid for unemployed/uninsured
• Funding for health IT
• Emphasis on primary care
• Powerful, pragmatic new appointees with health
  experience

? Democrats have not been fans of Health Savings
Accounts.
But. Reform will require support across complex
stakeholder interests
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2009 Not Politics as Usual Either

• What to Expect from the States
• Medicaid reforms
• Assessments, premium taxes, provider taxes
• Attention to provider issues silent PPO
  limitations, out of network reimbursements
• Benefit mandates (eg autism coverage)
• Individual market reforms
• Exchanges (connector models) like Massachusetts
• Commercial market financials - small group
  market rates, restrictions on administrative
  spend
• High risk pools/reinsurance
• Pooled purchasing options schools, cities, state
  employees

Prevalence
Budgetary pressure Populist agenda drive
urgency for change
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Another Way to See the Challenge
Impactable, preventable health issues
Adapted from Towers Perrin Health Care Cost
Survey Sept. 2008
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Strategies to Navigate By

• Create an accountable consumer
• Consumer directed health plans
• Value based designs
• Incentive strategies (carrot/stick)
• Invest in wellness and prevention
• 100 coverage for preventive care
• Create a culture of health at work
• Assess ROI
• Control pharmacy spending
• Specialty rx management
• Eliminate coverage where OTC equivalents exist
• Increase use of generics

Wheres the problem? What works? A focus on
data-driven decisions and evidence-based medicine.
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Consumerism Works - CDH Results

• Total costs for CDH plan members were lower than
  PPO by 7 9.
• Both medical and pharmacy costs were lower in
  CDHP.
• Rx costs 18 23 lower
• Medical costs 4 8 lower.
• Most recent years (2006 to 2007), employers saved
  10 12 in their CDH plans.
• Savings in CDH are driven by changes in
  utilization, not cost-shifting to members.
• (Approximately 82 87 of savings were a result
  of utilization decreases.)

Source UHc 5 Year CDH Impact Study (12/08)
Results adjusted for health status, demographics,
geography and outliers.
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Consumerisms Next Frontier

• Transforming a wholesale industry to support the
  very personal business of health
• Delivering information, tools, services sensitive
  to individual consumer preference and need
• Engaging all stakeholders in a community around
  the individual

Healthcare.Its Personal.
Expected result better health, better value
through engagement by, and around, the individual
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Better Decisions Drive Better Value
Consumers who make better decisions receive
better care, live healthier lives and cost less.
Employers who make better decisions realize
better value.
Physicians who make better decisions deliver
superior quality and cost less.
Per Episode Cost
High Risk Chronic Illness Cost
Employer PMPM Cost
600
286
2,409 Less
29 PMPM Lower
120Lower
480
257
23,619
23,619
21,210
21,210
Worst
Best
Remaining
Best
Remaining
Best
Employers10 Less
Consumers10 - 15 Less
Physicians20 Less
UnitedHealthcare study of 88,000 chronic members
with gt3 health risk score. Engaged defined as
activation of gt80. Chronic illnesses included
asthma, diabetes, CAD/CHF.
UnitedHealthcare 2007 experience with 383
employer groups based on adoption of clinical and
consumer solutions. Adjusted PMPM comparison for
low (10th percentile) vs. high (90th percentile).
PMPM adjusted for demographic, geographic, and
catastrophic claimants.
Estimated savings based on using UnitedHealth
Premium experience. 12bn in episode spend
2005-2006. Savings based on 20 average. Actual
savings estimates would vary from 9 to 24
based on physician specialty.
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Personalizing Health for Better ResultsThe key
to changing consumer behavior is making health
personally relevant
Start with a 360 degree view of each individual.
POPULATION
Socio-economic Factors
Activation Levels
Life Stage Analysis
Individualized Factors
Young Singles Young Families Older Families Empty
Nester Chronics

• Job function
• Residence
• Salary band income
• Ethnicity
• First language
• Many other variables

• Health status
• Attitudes and preferences
• Information and service usage

Highly Activated
Informed, but
Disengaged



Population
..Understanding individual decisions,
personalize solutions for better results
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Design the Compelling Event for Consumer Decisions
Measure
Activate
Understand
Care and Coaching Plan Enhancements
Benefit and IncentivesDesigns
Communication and Change Campaigns
And / Or
And / Or

Consumer Tools / Services
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Value Based PlansNot just a plan design.
An integrated benefits strategy that inspires
healthy behavior and the achievement of specific
health goals.
How it works
Better Outcome
Consumer Activation
Economic rewards
Analytics
To remove barriers and integrate clinical
measures
To define opportunity
To support decisions
Better Health Better Cost
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Designing for Consumer Ownership and Results

• Consider a continuum that matches employer
  objectives and culture
• What health behaviors do you need to change?
• Where are you today?
• Where do you want to be 2 years from now?

Your Position Today
Position in Year Two
Rewarding for Outcome/Health Status
Rewarding for Compliance
Rewarding based On Diagnosis/Risk
Rewarding for Activity/Participation
Less intrusive Undefined/lower ROI
Most aggressive Measurable/high ROI
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State of the Art at UnitedHealthcareWhere do you
sit today?Where do you want to be? When?
Less intrusive Undefined/lower ROI
Most aggressive Measurable/high ROI

• for completing an HRA
• for enrolling in a chronic disease management
  program
• for completing an online or telephonic wellness
  program
• Lower premium for participation in biometric
  screening
• Account-based plan designs

How

• Waived co-pays on hypertension management or
  cholesterol reduction medications

• Lower premium for non-smokers
• 100 benefit for preventive care
• 100 benefit for compliance with EBM care for
  chronic conditions
• Waived co-pays for condition-specific medications
• Reduced co-pays for use of high quality providers

• contingent on biometric screening results
• Richer benefits for improvement in biometric
  measures
• Lower premiums on achieving specific health
  goals

Examples

• Definity CDH plans
• UHC Worksite Wellness
• UHC Health Rewards
• UHC SimplyEngaged (KA)

• UHC Pharmacy designs

• UHC Diabetes Health Plan
• UHC Rewards for Action
• UHC Edge plans (SB)

• UHC Vital Measures (KA)
• Individual medical underwriting

Personalized information, relevant health
coaching, on-line and telephonic resources
KA UHC Key Accounts SB UHC Small Business
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Simply Engaged

• Employer Goals
• Manage/reduce health costs
• Promote accountability for health
• Maintain health status
• Prevent health risks
• Key Program Elements
• CDH chassis strongly encouraged
• Biometric screening required
• Incentives for Health Assessment
• Incentives for completing Online Health Coaching
• Personal health record
• Full suite of consumer activation coaching,
  outreach
• Market Response
• Introduced in limited markets in 2008
• 320,000 enrollees 3/09
• Outcomes linked incentives on deck

Incentives can help preserve a positive health
status through education, continued action, and
maintenance
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Recognizing Compliance
Diabetes Health Plan Catching the Epidemic Early
A
condition-specific plan for diabetics and
pre-diabetics . Financial rewards for compliance
remove economic barriers integrated prevention
and care support remove behavioral barriers -
resulting in enhanced clinical and financial
outcomes.
Advocacy Services
Personalized Health Plan Option
UnitedHealthcare Premium Providers
Proprietary Screening Model

• Access to comprehensive diabetic education
• Administrative and clinical referral support

• Making available doctors with documented improved
  outcomes

• Removes financial barriers to care
• Provides access to world-class service
• Rewards member compliance

• Identify diabetics and pre-diabetics through
  historical claims analysis and biometric screening

Core Components of DHP
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Diabetes Health Plan The Difference Illustrated


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Personalized Support to Drive Change
Personalized Member Tracking Site

• A summary presentation of medical data from
  multiple sources (mm, lab, Rx)
• Simplified presentation of employees medical
  information
• Reminders for essential screenings and exams
• Links to trusted sources of medical information

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Creating Value
Value Based Plans Construct vs. Design
Start with knowledge
Remove non-financial barriers

• Consumer Activation Index pinpoints the
  opportunity
• Biometric screening identifies potential health
  issues

• Ensure members understand the options available
• Educate members on how to stay healthy

Remove financial barriers with designs that
Encourage and reward compliance

• Integrate medical and pharmacy
• Include incentives and plan provisions

• Reinforce optimal health care decisions

Reinforce a culture of health at the workplace
Provide access to the right doctors

• Encourage use of UnitedHealth Premium physicians
  and facilities

• Apply Change Management principles
• Integrate health and wellness across company
  operations

In two separate 2008 studies one conducted by
Forrester and one by UHG (through a third-party),
these factors were cited as necessary to enhance
compliance, engagement, and healthcare economics.