Strategic Wellness in the Workplace: The Next Lap A ValueBased Clinically Sensitive Benefits Approac

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Strategic Wellness in the Workplace The Next
LapA Value-Based Clinically Sensitive
Benefits Approach to Preserve Quality of Care and
Contain Costs
Jorge A. Font, MPH June 2007
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Outline of Workshop within the Workshop

• Value Based Benefit Design Definition by
  description
• Current versus Emerging Trends
• Pitney Bowes example, etc.
• Key Issues of Focus
• Gaining Real Commitment via producing a Business
  Case and translating to C-Suite Language
• Core Elements of Implementation
• Take Home Tools
• Key questions and ideas to work on with your
  benefit teams and partners

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Value Based Benefit Design Definition by
Description
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Where are we now? Where can we go?

• Traditional vendors arent necessarily managing
  your population risks.
• Were getting closer to using evidence-based
  health design to steer consumers to
• Appropriate and clinically effective medical
  interventions
• High performing plans and providers

• Strategic prevention treatment especially in
  the areas of metabolic syndrome and
  cardiovascular disease - will yield meaningful
  returns on investment.
• ROI data on disease prevention is maturing
  quickly. Now learn to speak CFO to make the
  business case.
• It takes a commitment from senior management,
  health plans, and providers to fix system that we
  all agree doesnt work well.
• Value-based benefits will gain momentum

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Basic Definition Premise of Value-Based Design

• Survey responses showed 65 of all of you
  understood the concept of value-based benefits,
  with employers 79.
• Definition Improving/encouraging access to
  medical services and products that demonstrate
  value in maintaining health and/or avoiding
  costly complications of disease, because
• In the current system, a patients access to
  services depends on ability to pay and
  discriminates against those with limited incomes
• Benefit designs are founded on setting
  restrictions in place rather than incenting
  positive health behaviors
• Distribution is not directed at medical need or
  highest risk
• As a result, underutilization of effective
  therapies persists in several clinical areas

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Current Benefit Design Trends Cost Sharing
ExamplesShort Term gain for Long Term loss?

• Tiered Formularies
• Premise is that the copay is set on drug price,
  not value
• Lack of Design Coverage due to misperceptions on
  real ROI. Example Smoking Cessation
• In a recent survey by NBGH, 67 of 500 Benefit
  Decision Makers said that they have a smoke free
  environment, but only 40 have a smoking
  cessation benefit for their employees.
• Cessation therapies usually not covered by
  employer, but financial consequences of bad
  health due to smoking are, i.e., MIs and
  strokes.

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Impact of Increased Cost Sharing on Utilization

• A growing body of evidence demonstrates that cost
  shifting leads to decreases in essential and
  non-essential care
• On Medication Adherence In a nationally
  representative sample of nearly 8,000 adults, the
  individuals who restricted prescription drug use
  due to cost. Of those,
• Were 76 more likely to report a significant
  decline in overall health
• Were 50 more likely to report a non-fatal
  myocardial infarctionor angina

Source Heisler M. Medical Care. 200442626-634
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Compliance with Statin Therapy Stratified by Mean
Prescription Co-payment
0 to lt10
Co-pay amount was the most important predictor of
drug discontinuation
10 to lt20
gt20
Source Ellis JJ. J Gen Intern Med
200419639-646
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Shift From One Size Fits All Cost Sharing to
Clinically Sensitive Benefits Design

• Cost sharing set on value, using scientific
  evidence, not price
• Medications
• High value services lowest copay
• Effective yet expensive middle
• Unproven for marginal benefit highest
• Provide the financial incentive to patients most
  likely to benefit from the specific intervention
• Preventive Service coverage for top areas of need
  according to your organizations data and
  potential ROI (i.e., Smoking Cessation)

Source Fendrick, Chernew. Am J Managed Care, ,
20017861 and 20061.
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Population Management Premise Only a Portion
of Your Employees May Be Treated and at Goal
Covered Lives
Risk Factors
Diagnosed
Treated
At Goal
Improved Outcomes
Decreased Cost
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Quality Gaps in Awareness/Diagnosed, Treatment
and Goal Attainment
Prevalence percentage Persons with the disease
or condition (diagnosed plus undiagnosed) as a
percentage of a population. Awareness
percentage Persons diagnosed with the disease or
condition as a percentage of prevalent
cases. Treatment percentage Persons being
treated for the disease or condition (ie, taking
prescription medicine), as a percentage of
prevalent cases. Control among treated
percentage Persons with the disease or condition
who are controlled at or below the appropriate
treatment goal, as a percentage of treated
cases. Pfizer Inc - The Health Status of the US
Workforce, 2006. NHANES 1999-2000. Available at
http//www.cdc.gov/nchs/stout/major/nhanes/NHANES
99_00.htm. Accessed January 4, 2007.
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Decreased Adherence May Lead to Overall Increased
Health Care Costs
Retrospective cohort study of population-based
sample of 137,277 patients aged lt65 y.Indicates
that the outcome is significantly higher than the
outcome for the 80-100 adherence group (P lt
0.05). Sokol MC et al. Med Care. 200543521-530.
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Population Health Management The business case
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Key Predictors for High Cost Claims Population
Management Context

• Chronic diseases
• Asthma
• Diabetes
• Cardiovascular
• Depression
• Strong association with chronic condition
  deterioration
• Low possession rates of medication used to treat
  theseconditions (compliance/adherence)
• Lack of preventive/screening utilization

Ties to Metabolic Syndrome
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The Diabetes Epidemic

• Aging of America
• Diverse ethnic groups, various incidence
• and prevalence of diabetes
• Earlier diagnosis and reclassification
• Borderline Diabetes or a touch of sugar

courtesy of Dr. Karol E. Watson, MD, PhD, UCLA
Program for Preventive Cardiology
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• University to Provide Diabetes Medicine
• By JAMES PRICHARD
• The Associated Press
• Monday, April 24, 2006 758 PM
• GRAND RAPIDS, Mich. -- Trying to slow the
  growing health care costs of diabetes, the
  University of Michigan said Monday it will
  provide most diabetes medicines free to insured
  employees and their families who need the drugs.
• The program, a two-year experiment, will cover
  about 2,000 people and is an effort to fend off
  the worst complications of a disease that is one
  of the leading causes of death in the United
  States.
• "Diabetes is an area where we know that good
  control can have a huge, huge benefit down the
  line for individuals," said university President
  Mary Sue Coleman.

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Pitney Bowes Solution Rx Access Benefit Design
Traditional Rx Benefit
New Rx Access Benefit
Tier 1
Tier 1
Most generic drugs
Most generic drugs and and all brand name drugs
for
10 Coinsurance

• Asthma
• Diabetes
• Hypertension

Tier 2
Most preferred brand name drugs, including those
for
10 Coinsurance
Tier 2

• Asthma
• Diabetes
• Hypertension

Most preferred brand name drugs
30 Coinsurance
30 Coinsurance
Tier 3
Tier 3
Non-preferred brand name drugs
Non-preferred brand name drugs, including those
for

• Asthma
• Diabetes
• Hypertension

50 Coinsurance
50 Coinsurance
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Pitney Bowes Diabetes Results

• Market Share
• Use of impacted drugs increased from 41 to 71
• 85 of people on impacted drug remained on
  treatment
• Cost Utilization
• Median total medical cost of a diabetic decreased
  6
• Office visits per 1,000 declined 4
• ER visits per 1,000 declined 35
• Pharmacy
• Decreased pharmacy costs of 7 for diabetics
• Decreased cost of drugs for complications offset
  increase in cost of diabetic drugs

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Implementation Results
6 decrease in avg annual cost of diabetes care
7 decrease in diabetes-related pharmacy costs
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Likely Effects of Value-Based Benefit Design

• Will increase value of medical services per
  dollar spent
• Allows more efficient subsidization of low income
  patients
• Not all care is subsidized, only valued care
• Expect only modest savings
• More likely to slow rate of health care cost
  growth

-Break-
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Examples of Value-Based Designs

• Expanded Preventive Services Fully covered
• Immunizations
• Smoking Cessation
• Low/no cost for evidence-based screenings
• Colonoscopy for 50 year old with family history
  of colon cancer
• High value/focused biometric (lab, etc.) testing
  for those at-risk
• Financial incentives to employees for
  participation/compliance in screenings, health
  coaching, and disease management
• Diabetes, Asthma Programs that incent positive
  health metrics with copay waivers
• Removing barriers to access to care for
  Congestive Heart Failure/Cardiovascular Disease
• Lower copays for care from Bridges to Excellence
  certified endocrinologists or cardiologists.
  Higher reimbursement for high-performing
  hospitals

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Key Issues of FocusLeadership Commitment to
Innovative ChangesIntegrated Implementation
That Can Show Change
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Issues Preventing Impactful Wellness and
Prevention at Work
Survey Feedback
1 Company commitment 2 Right Tools Needed
for Impactful Implementation
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Developing the Business Case

• Diagnosis Intervention
• Description of perceived problem
• Data Analysis
• Value proposition
• Expense reduction
• Revenue increase
• Possible interventions
• Why these interventions?
• Impact supported by data
• Established best practices
• Measurable clinical financial outcomes
• Critical success factors
• Measurement system period
• Crunching the numbers
• Cash flows
• NPV
• Implementation Vendor interface
• Communication

• Follow-up
• Critical success factors Are they being
  realized?
• Midcourse corrections
• Outcomes measurements
• Data management tools/tracking
• Meaningful reports
• Senior management ownership
• More Communication within management and to
  Employees

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Traditional ROI measurements Administrative
(heavy), Financial (lite), Clinical (lite)

• Overall Measures
• Administrative Satisfaction survey,
  responsiveness, etc.
• Participant Engagement Level of engagement by
  eligible employees (note clearly define
  engagement)
• number of HRAs vs. total eligible
• number obtaining or self-reporting biometric data
• number receiving outreach and nature of
  outreach
• number/percent of employees agreeing to
  participate in programs
• Impact participation rate x rate of efficacy
  over time
• Historically highest efficacy rate success
• High efficacy and low attendance is less
  successful than slightly lower efficacy and
  higher attendance
• The best strategy to promote retention is to
  match the interventions to each stage of change

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Measuring Financial ROI

• Financial claims expense across silos (Medical,
  Rx, WC, Disability, etc.), absenteeism,
  presenteeism, etc.
• Net present value (NPV) of Project gt0
• NPV NPVpre NPVpost
• NPVpre ? (CFt/(1k)t)
• NPVpost ? (CFt/(1k)t) - ? (It/(1k)t)
• where
• CFt cash flow spending from programs at time t
• k weighted average cost of capital (WACC)
• It intervention investments at time t

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Financial ROI Example
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Implementation is Key Consider the entire
picture
Survey Feedback
Survey Feedback

• Cost Tolerance 87.5 would pay 1- 3 pepm, Avg
  2.62

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Lay out a Well-Developed, Well-Defined Plan

• Objectives (short and long-term)
• Program criteria (smoking cessation, CVD,
  diabetes, fitness)
• Financial resources (how much you can spend)
• Human capital (who is going to do the work)
• Participation incentives (what is the magic
  point)
• Program success (how to measure)
• Ability to leverage existing vendors
• Data integration
• Follow-up/coaching

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Biometrics are Key to Measuring Clinical ROI

• Risk stratification - HbA1c levels in diabetics
• Reported aspirin use
• Beta blocker after M.I.
• Drug compliance/adherence rates
• Number of employees with Metabolic Syndrome

• JNC 7Hypertension
• Prehypertensive 120-139 mm Hg
• Stage 1 Hypertension 140-159 mm Hg
• Stage 2 Hypertension gt 160 mm Hg
• ATP IIICholesterol
• High LDL Cholesterol gt 160 mg/dL
• Borderline high LDL Cholesterol 130-159 mg/dL
• ADA GuidelinesDiabetes
• Maintain optimal metabolic outcomes
• HbA1c lt 7.0
• lt 100 mg/dLLDL
• lt 130/80 mm Hgblood pressure

Systolic blood pressure. US Department of
Health and Human Services. Expert Panel on
Detection, Evaluation, and Treatment of High
Blood Cholesterol in Adults. American Diabetes
Association.
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Implementation

• Core Elements for Meaningful Implementation

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Should HRA Be Mandatory?
Survey Feedback

• Yes 43 No 57
• If answered no, average acceptable participation
  rate is _at_65

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Are Biometrics a Must Have ?
Survey Feedback

• 93 of ERs say yes
• 7 of ERs say no
• Cost tolerance ranges from 25 to 100
• Average is 65
• 93 of you believe it should be transportable

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Employer Case Study
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Communication is Key
empower
engage
I will be informed, initiate dialogue with my
benefit partners, take responsibility for my
healthcare and my future, actively participate in
learning to improve the quality of healthcare as
much as control costs.
educate
I accept this process can improve outcomes, I
have a role in the process and can make a
difference, buying healthcare and other
benefits requires the same due diligence as other
major life purchases.
I understand how this is different, why this is
important, how this impacts me, whats at stake
if I do nothing.
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Key Questions to Ask Working with Healthcare
Partners

• Is your plan exceeding national quality standards
  set by NCQA and JCAHO and treatment guidelines as
  determined by profession organization (AHA, ACC,
  ADA)?
• Do you have data to measure impact of benefit
  design on STD, LTD, WC, FMLA?
• How will your benefit design proposals give me
  meaningful ROI across the entire spectrum of
  benefit elements?
• How will you share/receive data from other
  vendors and act upon that information?

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Wellness Vendor Evaluation

• HRA Tool (biometrics?)
• Risk stratification techniques
• Healthcare coaching model (outreach,
  interventions, consistency)
• Technology (portal, personalized programs,
  flexibility)
• Integration with employer systems and vendors
• Participation incentives (ability to administer)
• Metrics/ROI established
• Ability to utilize primary source biometric data
• Communication material quality, frequency,
  context
• Future enhancements/growth

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Tenet to Follow Treat Healthcare Spending as
Investment Strategy

• Avoid temptation to indiscriminately increase
  cost share
• Integrated database is essential
• Integrated approach
• Benefit design
• Screening/HRAs
• Care delivery
• Health plans/Care vendors
• Continuous process
• Appropriate medications, physician visits and lab
  uses are an integral part of condition management

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Wellness rules from Uncle Sam

• New HIPAA Regulations Proposed
• Apply to first plan year after July 1, 2007
• Law distinguishes between programs that reward
  satisfying a health status-related factor
• stop smoking
• BMI equal to or less than x
• ..and programs that dont
• Cash for completing an HRA
• Free wellness classes
• Free flu shots

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Wellness rules from Uncle Sam (cont.)

• If there is a reward for satisfying a health
  status-related factor, four requirements apply
• 1. The reward is limited to 20 of the total
  cost
• 2. It must be reasonable in design
• 3. It must be uniformly available (all classes
  of EEs)
• 4. The availability of an alternative must be
  disclosed.

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Take Home Tools
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Tools

• NBGH Purchasers Guide to Clinical Preventive
  Services
• Medical education materials from program sponsors
  and others
• - pharma manufacturers
• - medical associations
• - consultants/brokers
• Texas Coalition for Worksite Wellness
  (www.txworksitewellness.org)
• Integrated Benefits Institute (www.ibiweb.org)
• On-line benefit modeling programs (National
  Business Coalition on Health, Blueprint for
  Health, etc.).

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RxPOR The Pfizer Diabetes Outcomes Analyzer Can
Support Value-Based Benefit Design Decision
Making
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Summarize the Workshop

• C-Suite commitment
• Develop your strategy
• Translate health issues and opportunity to
  business language ()
• Meaningful Implementation
• Know your population and its opportunities
• Get internal support
• Find appropriate external support
• Measure, measure, measure to show ROI
• Take Home Tools
• Questions to ask
• Best Practice examples
• TCWW Website for more

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Enrico Fermi Quote

• Before I came here I was confused about this
  subject. Having listened to your lecture, I am
  still confused. But on a higher level.

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Questions ?