Benefits Forum 2005

1
Benefits Forum 2005 Atlanta Association of Health
Underwriters February 17, 2005
William Burke Capital Health Associates,
LLC James Price HispaniCare, a division of
DrTango
2
Agenda

• Common issues regarding wellness
• Defining a wellness program
• Critical Success Factors
• Logic for investing in wellness
• Whats different today from 1995
• An interesting client example
• Lessons learned

3
Corporate CFOs expect that healthcare costs will
be the biggest cost increase for their company.
Health Benefits Top Management Concern
Top Three ConcernsFor 1,482 CFOs at companies
with revenue of 500,000 to 1 billion Employee
healthcare plans 45 Technology
spending 20 Employee recruitment/training 11
Source Robert Half Management Resources
survey, USA Today, January 25, 2005, p. B-1)
4
Typical Issues

• How Do You Invest in a Wellness Program That
  Provides Return?
• What Is the Best Allocation of Wellness-type
  Resources?
• What Is the Timeframe Most Suited for an
  Effective Wellness
• Program to Produce Return on Investment?
• What Company Profile Is Best Suited for a
  Wellness Program?
• What Is the Best Step Taken in Implementing a
  Wellness
• Strategy That Establishes Buy-in and Results?

5
Our Assumptions

• Companies do not want to
• Invest in extending the life of a 20-year old
• Companies do want to
• Provide resources to prevent unnecessary health
  care costs
• Provide resources to prevent individuals from
  developing costly medical conditions
• Educate their employees as responsible health
  care purchasers and users
• Help employees with a chronic condition optimize
  their wellness

6
The Process to Improving Health
Awareness
Evaluation
Re-evaluation
CHALLENGE Meets Individual Needs In a Group
Dynamic
Action
7
What is a Wellness Program?
Providing programs and tools that empower People
with information that encourages and supports
them to take a more active role in their health
care
8
How Does It Work Really?
Providing programs and tools that empower People
with information that encourages and supports
them to take a more active role in their health
care

• Incentives
• Financial
• Non-financial
• Directives
• Cultural Motivators
• Benefit Plan Design

9
Segmenting your Covered Lives and Addressing each
Segments Needs
Prevention (for well people)
Disease Management
Awareness
Compliance
Population Health Management/Wellness
10
Different Approach, Different Results
Health Maintenance VS
Risk Management

• Have a problem, Fix It
• Minimal organizational commitment
• Standard Plan Design
• Willingness to allow benefit plan design to
  control costs

• Assume there is Risk
• Find It, Fix It
• Organizational Dedication
• Wellness Integrated into
• Plan Design

11
Program Complexity
Cost/Impact
Less
More
Claims Analysis
Invasive HRAs
Non-invasive HRAs
Self Assess Guides
Health Library
Predictive Modeling
Group Programs
Individualized Programs
Nutrition Exercise Evaluators
News Letters
Health Coaching
Disease Management
Health Fairs
Self- reporting Tools/Programs
Workshops
12
Factors affecting Investment in Wellness

• Industry Segment
• Budget
• Employee Turnover
• Workforce Composition
• Workers Compensation Claims
• Employee communications culture
• Medical claims
• Current benefit plan design
• Centralized Workforce

13
Critical Success Factors

• Understand Clients Goals and Objectives on Cost
  Impact
• Willingness to Invest and Timeframe for ROI
• Get Managements Sponsorship
• Develop a Communication Plan
• Measure the Program Participation and the
  Outcomes
• Reporting on the Aggregate and for the Individual
• Aggressive Follow-up on High-cost chronically
  ill enrollees
• Choice-oriented Programs
• Strong Linkage to Health Benefits
• Privacy, Privacy, Privacy

14
Changes over past 10 years

• Real healthcare costs per employee have
  tripled.so dollar value of 10 savings has
  tripled
• Realization that chronic conditions drive
  healthcare costs
• Realization that behavior change is required
• Behavior change is hard to effect
• Current health outcomes (awareness, status,
  process) are poor
• The nations workforce is becoming very
  multi-cultural
• Most people access the Internet
• Explosion of Internet-based health/wellness
  applicationsat very low costs

15
People with Chronic Conditions 31 of total
population have 64 of costs
Enrollee Cost by Age 3544, 1992 Group Health
Coop., Puget Sound
Chronic Conditions
Distribution of Enrollees 100 69 23 8 Health
Care Costs 100 36 36 28
Source Fishman, et al, Chronic Care Costs in
Managed Care, Health Affairs, May/June 1997,
page 243
16
Chronic Conditions Accumulate with Age, Driving
Costs
Enrollee Cost by Age, 1992 Group Health Coop.,
Puget Sound
People with 1 condition
Source Fishman, et al, Chronic Care Costs in
Managed Care, Health Affairs, May/June 1997,
page 243
17
Importance of Weight Management for Employers
Prevalence of Weight Status, Adults with
Commercial Insurance
Increase in Adult per Capita Medical Spending
Attributable to Weight (Commercial)
12-15 PMPM cost for typical commercial plan
Source Health Affairs, May 2003
Total Medical Expenditures due to
Overweight/Obesity 8.2
18
Relative risk of Selected Obesity-Related Diseases
Source Oster et al, The Clinical and Economic
Burden of Obesity in a Managed Care Setting, The
American Journal of Managed Care, June 2000.
19

• Probability of diabetes, newborns
• 33 all American
• 50 for Hispanics
• More than most other issues diet health driven
  by culture and language

20
Self-Management by Diabetics, NYC (2002)
Currently Very Poor
Blood Sugar Control (A1c)
Blood Pressure
Well Controlled 2
Normal High-Normal 11
Poorly controlled Dont know 98
High Dont Know 89
Cholesterol
Weekly Exercise
Normal 7
High Dont Know 93
Source NYC Vital Signs, January, 2003
21
Minorities Driving population growth with
Employer-Sponsored Insurance

• Total U.S. Population with Employer-Sponsored
  Insurance (in millions)

Source Census data HispaniCare analysis
22
Percent of ALL Adults who have sought health
information online
Source Harris Interactive, 2003 (Feb 2003 survey)
23
Smoking Cessation Program Highlights

• Web-based Smoking Cessation Program
• Online Quit Program, including
• 11 dynamic exercises
• Results stored in personal Glove Compartment
• Quit Diary to track progress
• Quit Stats money saved, cigarettes not smoked,
  life gained
• 11-week Outbound Motivational Email Campaign
• Printable Dependency Test
• Follow-up email at 1, 6 and 12 months to assess
  abstinence
• Expert-moderated chat rooms
• Public Pledges
• Gallery of Quitting Tips
• Anniversary Celebrations

24
Consumer-Directed Healthcare
Objective Help members make informed decisions,
appropriately use providers, and self-manage
25
Example Page from Lab-Test Driven HRA
Links to targeted content (driven by lab value)
within health portal
26
(No Transcript)
27
Diet Exercise Self-Management
Diet Exercise Evaluation
E-mail Newsletter (encourage change)
Food Shopping List
Wellness Management (Menu Exercise Planner)
28
Member-Personalized Weekly Newsletter
29
What We Dont Know Yet

• Net present value to the employer of each
  wellness success
• 35-year old whose BMI is reduced from 30 to 25
• 45-year old who stops smoking
• 50-year old diabetic who becomes compliant
• 40-year old depressive who responds well to
  treatment
• Value of Health Insurance with a distinctive
  wellness component to the typical employee (for
  whom minimal claims are incurred in a given
  year), in terms of recruitment, retention, sick
  days, presenteeism
• Incremental return of adding human counseling to
  web-based tools

30
Robert Wood Johnson Health e_Technologies
Research Project

• Overall Goal Rigorously evaluate the ability of
  the MiDieta (MyDiet) eHealth portal to
  facilitate improved diets, increased
  fitness-levels, and weight-loss among U.S.
  Hispanics.

Settings Managed care (AtlantiCare, BCBS-FL) and
Hospitals (Tenet, CHRISTUS) Design
Formative Research (6 m) Randomized Trial (12
m) n 500 among four groups (at
least) Subjects Overweight online Hispanics
attending clinic / enrolled in managed care plan
Currently recruiting 2-5 employers by March 31
31
As a former VP-HR, I would

• Provide my employees with information to
  understand healthcare, increase
  awareness/interest, and help them make better
  decisions
• Offer an inexpensive (but extensive-looking)
  basic wellness program/portal with
• Diet and exercise planner
• Smoking cessation
• Depression support
• Stress/anxiety
• Guides for common chronic conditions
• Increase awareness via
• Web-based Health Risk Assessment
• Personalized weekly health newsletter
• Health fairs
• Incentives

32
As a former VP-HR, I would

• Explore
• Lab-test based Health Risk Assessment
• Intensive support/tools for employees with
  chronic conditions
• Offering employees (particularly those at
  high-risk or already with a chronic condition) a
  Personal Health Record
• On-site primary care
• Document all outcomes, for future ROI discussions
  with the CFO

33
Questions

• Contacts
• Bill Burke
• [phone]
• WBurke_at_Cap-Health.com

Jim Price [phone] JPrice_at_HispaniCare.com
34
Appendix

• Slides we couldnt delete

35
Number of People in U.S. that Speak at home.
The Importance of Language
?
Source Census data HispaniCare analysis
36
Spanish!
Number of People in U.S. that Speak at home.
Source Census data HispaniCare analysis
37
INSURED Hispanics Very sick, did NOT seek medical
care
Language and culture are particularly relevant
for health issues
Percent
Source Commonwealth Fund, Feb 2003
38
INSURED - Easily understands instructions on
prescription bottle
Language and culture are particularly relevant
for health issues
Percent
Source Commonwealth Fund, Feb 2003
39
results in Sub-optimal utilization of
medications by Hispanics
Of 100 Sick, insured Spanish-speaking Hispanics
70 go to doctor, and of these, only 55
adequately understand English Instructions on
the bottle. Thus, due to these two factors
alone, Just 39 of the original 100 are getting
and properly understanding the medications they
need (100 x 0.7 x 0.55 39)
40
Go Online by race
Pew Internet Study, 2004.
41
Percent of ALL Adults who have sought health
information online
Harris Interactive 2003
42
HispaniCare

• Mission
• Provide healthcare organizations with online
• Communications,
• Marketing,
• Health improvement
• solutions
• Strategy
• Best of breed solutions
• Culturally linguistically adapt each solution
• Integrate customize