1 2016 HR FLORIDA CONFERENCE & EXPO
2 2016 HR FLORIDA CONFERENCE & EXPO Data-Driven Health Outcomes Strategies Doing the Math on Medical and Pharmacy Claims Presented By Kirstie Settas-Jones, MBA Vice President – Health Outcomes Practice, Southeast Region
3 2016 HR FLORIDA CONFERENCE & EXPO The three key business concerns Addressing what matters to employers Health Risks Unaddressed health risks in a population raise medical costs and impact worker productivity. Medical Costs Understanding where there is higher risk or excess medical spend is key to identifying solutions that lower medical costs. Lost Productivity Increasing health risks and higher rates of chronic conditions drive greater absenteeism and presenteeism.
4 Return on Investment based (ROI) Value of Investment based (VOI)2016 HR FLORIDA CONFERENCE & EXPO Value of investment or return on investment? Nearly two-thirds of employers said that they were value on investment based Return on Investment based (ROI) Organizations looked to justify investment in health management and wellness programs purely based on medical cost reduction. Value of Investment based (VOI) Organizations looked to justify investment based on many factors, including employee morale, worksite productivity, employee absence and workplace safety, in addition to medical cost reduction.
5 2016 HR FLORIDA CONFERENCE & EXPO Creating a culture of health trumps reducing medical costs as a priority for wellness program goals Targeted solutions are more important for ROI-focused employers Focus on VOI/ROI Differences Ranked #1 ROI-Focused VOI-Focused Improving employee health and building a culture of wellness 41% 75% Reducing your medical costs by targeting high risk/high cost individuals 17% Reducing your medical costs by making plan design changes that shift costs and risks to your employees 20% 9%
6 2016 HR FLORIDA CONFERENCE & EXPO Growing concern: medical costs in the next three years Employer concern is increasing around medical costs
7 2016 HR FLORIDA CONFERENCE & EXPO Population health management Cost distribution 80% of the people account for 20% of the costs And 20% of the people drive 80% of the cost 50% of the people account for only 3% of the costs Source: 2009 Medical Expenditure Panel Survey
8 2016 HR FLORIDA CONFERENCE & EXPO Population health management Risk and Cost Strategies Lifestyle Behavior Education Access Coordination Redirection Wellness Strategies Cost Strategies Source: 2009 Medical Expenditure Panel Survey
9 2016 HR FLORIDA CONFERENCE & EXPO Why this matters to employers today 2016 Health Benefits Landscape 2016 medical costs are expected to surpass recent trends 2016 pharmacy costs are expected to skyrocket The 2020 Cadillac Tax is looming Clients are moving to self-insurance Health data analytics are improving Health data analytics are gaining traction in the market Carriers are consolidating
10 2016 HR FLORIDA CONFERENCE & EXPO Health Outcomes Strategies for Employers Wellness Programs Employee Communications Incentive Designs Culture of Health Wellness Solutions Onsite Health Solutions Telemedicine Cost and Quality Transparency Patient Advocacy Access to Care Second Opinion Solutions Other Targeted Solutions Disease Management Case Management Targeted Solutions
11 2016 HR FLORIDA CONFERENCE & EXPO Data-Driven Wellness Analysis How many members over 50 have had a colonoscopy? How does your member risk stratification compare to benchmark?? What are your workforce demographics? What are your member demographics? Do you know your specific wellness or preventive screening Gaps in Care? Are there Gaps in Care in your LOW risk groups? Where? Are there Gaps in Care in your MEDIUM risk groups? Who? Are you looking at your health risk assessment (HRA) data? Are you looking at your biometric data? How are your people distributed? What is your plan design? Have you made recent changes Are you measuring Participation? Activity? Outcomes? What is your average employee turnover? What’s more important: lowering risks or lowering medical costs? Are you looking for ROI or VOI? What are your metrics? What wellness support are you getting from your carrier? Is your carrier currently subsidizing your wellness efforts?
12 Employee Communications2016 HR FLORIDA CONFERENCE & EXPO Wellness Strategies for Employers Health Risk Assessment Biometric Screening Condition Management Health coaching Weight Loss Walking-At-Work Wellness Programs Wellness Portal Program Branding Newsletters Multiple Channels Mobile Apps Employee Communications Participation Based Activities Based Outcomes Based Tobacco Cessation ACA Compliance Incentive Designs Senior level buy-in Include in vision Include in mission statement Wellness Committee Hold departments accountable Culture of Health
13 2016 HR FLORIDA CONFERENCE & EXPO Municipality increases adoption of preventive services Data-Driven Solutions The data: A review of preventive screening services for a large Midwest city government revealed that many of the wellness services they had been promoting internally (i.e., mammograms, screening and immunizations) were not being fully utilized. The municipality agreed that they needed to be more aggressive in how they promoted and incented the utilization of preventive screening services. Solution: The municipality was able to rationalize the cost of an onsite solution that administered these services using mobile units, and communicated results with local treating providers.
14 2016 HR FLORIDA CONFERENCE & EXPO Data-Driven Access to Care Analysis Are your members over-utilizing ER services? Are your members under-utilizing primary care office visits? How is your urgicenter use trending? Are your diabetics seeing their doctor enough? Do you have excess numbers of MRIs? CT Scans? How do you know? What percent of your members have not submitted a claim in the last year? Is that good or bad? Are an excess of opiates or pain-killers being prescribed? Where? By whom? Do you have excess hospitalizations for cardiac conditions? How would you know? Are those with other chronic conditions seeing their doctor enough? Are you paying too much for ER services compared to your marketplace? Are people seeing their primary care physician after going to the ER? Are there geographic disparities around seeking medical care? Are members utilizing generic or mail-order Rx options? Are there a disproportionate number of Saturday and Sunday ER visits? What conditions are driving hospitalization utilization? Is over-utilization occurring? Are your PBM utilization trends in line with your medical claims trends?
15 Onsite Health Solutions2016 HR FLORIDA CONFERENCE & EXPO Access to care solutions for employers Geographic concentration of employees Convenience Cost control Productivity Improvement Onsite Health Solutions Reduce ER overutilization Offset Urgent Care expense Efficiency for common ailments Telemedicine Increase health engagement Allows members to control their costs In tandem with HDHP and cost shifting Cost Transparency Telephonic assistance with navigating complexities of health care system Quality of care transparency Patient Advocacy
16 2016 HR FLORIDA CONFERENCE & EXPO Fast food chain reduces emergency room visits Data-Driven Solutions The data: A review of utilization and cost patterns for a fast food restaurant chain operating in 24 states showed an excess rate of emergency room visits and a low rate of primary care physician office visits when compared with normative values. Solution: The restaurant chain was able to make the case to hire a third- party telemedicine vendor to improve access to care for their particular population.
17 2016 HR FLORIDA CONFERENCE & EXPO Data-Driven Targeted Solutions Analysis What percent of costs are accountable by your top 5% of members? What acute conditions are disproportionately driving costs? What is your rate of elective spinal surgeries? What specialty pharmaceuticals are driving your overall costs? What percent? What diagnostic groups are most expensive for your plan? Are there significant Gaps in Care for your diabetics? Members with Congestive Heart Failure (CHF)? What chronic conditions are disproportionately driving costs? How does your cost stratification compare with comparable populations? Are cancer expenditures unnecessarily high? In line with prevalence? Are diabetics getting the care they should be? What percentage of overall costs do they account for? What populations have the highest Gaps in Care? Do you have more people taking too many different prescriptions than they should? For what chronic conditions is there an excess disease burden (Prevalence X Cost)? How costly are Complications of Pregnancies or Newborn Complications? Are you paying more for hospitalization than other employers in your area? Is arthritis a major medical cost driver for you? Pharmacy cost driver?
18 Second Opinion Solutions Other Targeted Solutions2016 HR FLORIDA CONFERENCE & EXPO Targeted solutions for employers High cost claimants High risk claimants High complexity patients High uncertainty medical situations Second Opinion Solutions Pharmacy demand management Specialty provider identification Narrow Network Other Targeted Solutions Asthma Cardiac Respiratory Diabetes Mental Health Back Disorders Disease Management Catastrophic Care Management Renal Care / Dialysis Cancer Care Rehabilitation Home Care Solutions Case Management
19 2016 HR FLORIDA CONFERENCE & EXPO Textile manufacturer identifies gap in asthma coverage The data: A review of gaps in care in several key conditions for a textiles manufacturer revealed a high level of gaps in care specifically for asthma (but not for diabetes, hypertension or coronary artery disease). Further analysis of pharmaceutical claims revealed inefficient (and potentially ineffective) prescription patterns for inhalers and other asthma medicines. Solution: This textiles manufacturer was able to rationalize the cost of a new carrier-delivered asthma disease management intervention program that integrated pharmacy data.
20 Health Outcomes Consulting2016 HR FLORIDA CONFERENCE & EXPO Health Outcomes DISCOVERY Gap Assessment STRATEGY Recommendations ACTION Solutions Implementation EVALUATION Client Data and Experience Health Outcomes Consulting A proprietary approach to help employers meet their health management business goals with tools and processes designed to customize a solution for every client.
21 2016 HR FLORIDA CONFERENCE & EXPO Data-Driven Strategies WillisMed Tracks cost and utilization trends Identifies key, high cost disease states Spotlights gaps in care for specific conditions Provides risk stratification for your population Identifies gaps in preventive care use Understand high cost claims Provides benchmark norm values for all key metrics Calculates estimated savings from narrowing gaps in care
22 2016 HR FLORIDA CONFERENCE & EXPO Your Annual Costs What are your spending? How does that compare to your competitors? Current Year Spend Membership Employees $33,925,059 6,680 2,806 Benchmarking your medical and pharmacy costs: Against your industry norms Against your year over year trend
23 2016 HR FLORIDA CONFERENCE & EXPO Costs and Utilization What is driving your overall costs? How is utilization trending? Understanding: Cost of care Access to care patterns Hospitalization costs and trends Office visits utilization compared to benchmark Number of ER visits and costs compared to marketplace Drug utilization and trends
24 2016 HR FLORIDA CONFERENCE & EXPO Pharmacy Trend Pharmacy Dashboard What is driving your overall costs? How is utilization trending? Understanding: Prescribing and utilization patterns Inflation and cost disparities Top drugs by usage Top drugs by spend Specialty medicine profile
25 2016 HR FLORIDA CONFERENCE & EXPO Health Outcomes Dashboard What is your population health profile?
26 2016 HR FLORIDA CONFERENCE & EXPO Key Conditions What conditions are driving medical costs? How do we compare to the norm? What is your organization spending on asthma? Cancer? Back Pain? Heart Disease? Depression? For what conditions are you seeing excess ER visits? Excess hospitalization? What medical conditions and situations warrant focused strategies. Are your members with acute and chronic conditions seeing their physician when they should?
27 2016 HR FLORIDA CONFERENCE & EXPO Gaps In Care What can you tell me about practice patterns and access to quality care? Identifies key risks and gaps in care for your member population, and for members with specific conditions.
28 2016 HR FLORIDA CONFERENCE & EXPO Risk Stratification How does our population compare to bench mark in terms of health risks? Do your covered members have a higher than predicted risk profile? Are there gaps in care issues for high risk and medium risk cohorts?
29 2016 HR FLORIDA CONFERENCE & EXPO High Cost Claims What conditions are driving our highest dollar claims? What conditions are driving your high dollar claims? What conditions and procedures account for the 5% of claims that drive (on average) 58% of your overall spending. What can you do about it?
30 2016 HR FLORIDA CONFERENCE & EXPO Estimated Savings Model What could we save if we closed gaps in care? Gaps in Care Opportunity Estimate For this client, based on what we know from claims experience, reduction in gaps in care would theoretically yield $1,181,790 in savings based on recent claims experience. This is 14.0% of their total spend.
31 2016 HR FLORIDA CONFERENCE & EXPO What are you trying to accomplish? Matching strategies to objectives Make a deliberate decision around your goals and objectives. Have an honest discussion around whether you are an ROI- or VOI-focused employer for wellness programs. Create a Vision and Mission Statement for your wellness and health management programs. Establish clear goals and objectives around your program that tie into your vision and mission. Identify and prioritize specific strategies for your programs. Agree on what metrics you will use to measure your success.
32 2016 HR FLORIDA CONFERENCE & EXPO Strategic Planning Looking beyond wellness Have an informed discussion around your medical cost trend What is your trend? How will the Cadillac Tax impact you? Rank the following three strategies for YOUR organization Creating a culture of health Targeting high risk and high cost members Using plan design to shift costs and risks Understand how well your members are accessing medical care Utilization analysis Identify solutions Understand your high risk and high groups Cost analysis Risk analysis Identify Solutions
33 2016 HR FLORIDA CONFERENCE & EXPO Wellness In the Murky Waters of the new EEOC Guidelines under HIPAA/ACA, GINA and ADA HIPAA/ACA ADA GINA
34 Incentives may impact ACA affordability2016 HR FLORIDA CONFERENCE & EXPO Compliance has been focused on HIPAA and ACA nondiscrimination rules which remain in effect Type of Wellness Program Health-contingent Participatory Program requirements Individuals must have the opportunity to qualify for full reward at least once per year Reward cannot exceed incentive limits The program must be designed to promote health or prevent disease Notice to employees (sample available) Available to similarly situated individuals and reasonable alternative standards offered Must be available to all similarly situated individuals Incentive limit 30% of tier of coverage if dependents can participate, otherwise 30% of self-only coverage (up to 50% for tobacco programs) No limit HIPAA Prohibits health status discrimination, but permits incentive-based wellness programs if certain rules are met ACA Increased the incentive limits Incentives may impact ACA affordability
35 2016 HR FLORIDA CONFERENCE & EXPO Implications of the EEOC final regulations are significant Completion of a health risk assessment (HRA) or biometric screening incentives/penalties Includes in-kind incentives such as raffles and drawings, PTO days, parking spot use, jeans days, special recognition awards, and “trinkets” such as T- shirts and water bottles Applies whether the wellness program is part of a group health plan or standalone Tobacco testing incentives/penalties HRA or biometric screening requirements for eligibility for coverage or specific health plan options EEOC requires employee notice 62% of employers report using penalties/ incentives for HRAs, and 55% for biometric screenings* The total limits on incentive values may be significantly less than those allowed under HIPAA/ACA, depending on the facts for a specific employer *Source: 2015/2016 Global Survey, United States.
36 EEOC rules are not in alignment with HIPAA and ACA rules2016 HR FLORIDA CONFERENCE & EXPO EEOC final regulations impacting employer sponsored wellness programs add additional layers to compliance ADA and GINA Final rules under Title I of the Americans with Disabilities Act (ADA) The ADA rules provide guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to respond to disability-related inquiries and/or undergo medical examinations. Final rules under Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA) The GINA rules address the extent to which an employer may offer an incentive to an employee to provide information about the health of the employee’s spouse as part of a health risk assessment (HRA) administered as part of a wellness program. EEOC rules are not in alignment with HIPAA and ACA rules Final notice requirements and rules apply to plan years beginning on/after January 1, 2017
37 Employee incentives only,2016 HR FLORIDA CONFERENCE & EXPO Employee incentives only, not spouse Wellness programs: Impact of ADA ADA applies if a wellness program offers incentives for disability-related inquiries or requires medical examinations of an employee, such as health risk assessments or biometric screenings regardless of whether they are participatory or health-contingent To comply with ADA, wellness program must: 1. Be “reasonably designed” to promote health or prevent disease 2. Be “voluntary” May not require employees to participate in the program May not exceed incentive limits May not deny coverage or enrollment under any group health plan to employees for non-participation or limit the extent of benefits (such as plan options which require HRA/screening) May not take any adverse action, retaliate against, or coerce employees who choose not to participate Must satisfy notice requirement 3. Meet confidentiality requirements Incentive Limit = 30% of self-only coverage of lowest cost plan Incentives are not limited to financial incentives and may also be in-kind (e.g., time-off awards, prizes, and other items of value)
38 2016 HR FLORIDA CONFERENCE & EXPO Does not apply to tobacco incentives Wellness programs: Impact of GINA GINA applies if a wellness program offers incentives to an employee for the spouse’s disclosure of his or her past or current health status, includes health assessment and biometric screening regardless if participation or health contingent To comply with GINA, wellness program must: 1. Be reasonably designed to promote health or prevent disease 2. Not exceed incentive limits 3. Not deny access to group health plan coverage solely for failure to complete an HRA or biometric screening 4. Not provide financial incentive for spouse to provide his or her own genetic information, including genetic tests 5. Require spouse to provide prior knowing, voluntary, and written authorization when sharing genetic information 6. Not condition receipt of incentive on waiver of confidentiality protections No incentive permitted for children’s medical history, but participation permissible Incentive Limit = 30% of self-only coverage of lowest cost plan
39 2016 HR FLORIDA CONFERENCE & EXPO Wellness program compliance - Common incentive program examples Program for Employees and Spouses HIPAA/ACA ADA GINA Tobacco surcharge, no nicotine screening required incentive up to 50% of the total cost of coverage in which the employee and spouse are enrolled ADA does not apply GINA does not apply Tobacco surcharge, nicotine screening required incentive up to 50% of the total cost of coverage in which the employee and spouse are enrolled incentive up to 30% of the total cost of employee-only coverage Complete HRA and biometric screenings (not outcomes based) no incentive limit because participatory only incentive up to 30% of the total cost of employee-only coverage; additive to ADA limit Nutrition class attendance reasonable accommodation only Walking program with step/distance requirement incentive up to 30% applies only to health contingent programs Key take away — even a minor change to a wellness program can impact compliance Indicates rules apply
40 2016 HR FLORIDA CONFERENCE & EXPO Wellness programs: Impact of ADA/GINA Regulations Common Questions & Open Issues What “incentives” are included when determining limit? How are incentives valued for this purpose? Lower contributions, deductibles, copays, etc. HSA/HRA seed PTO Trinkets On-site fitness, health club reimbursement, Fitbits Funded by carrier What design alternatives cause potential issues? Layered/step programs (e.g., take a HRA and then copays waived for doctor’s visits for certain conditions) Value-based programs (e.g., Rx copays waived for all employees with specific chronic conditions, or for those with chronic conditions who also participate in disease management) “Menu” of alternatives (e.g., complete 3 out of 5 components to get incentive) Health coaching (e.g., if coach is asking disability-related questions) How is a raffle prize in wellness program evaluated in applying limits? Large value of prize vs. ticket value vs. averaging value across employees
41 2016 HR FLORIDA CONFERENCE & EXPO Wellness programs: Impact of ADA/GINA Regulations Common Questions & Open Issues What “gateway” arrangements are prohibited? Are any types of “gateway” arrangements allowed? Plan eligibility enrollment restrictions vs. cost sharing within a plan Are tobacco incentive limits applicable where coaching is required? ADA rules apply to testing – ask vs. test If a company’s wellness incentive is earned in 2016 but paid in 2017, do the new EEOC incentive limits apply? Effective date is based on health plan year for which the incentive is earned Which plan should be used for the “lowest” offered (if health plan enrollment is not required for wellness incentives)? Catastrophic plan, fully-insured plan, plan that meets state requirements (Hawaii) How do you determine “cost of coverage”? COBRA rate vs. budget rate? TOTAL premium paid by employer
42 2016 HR FLORIDA CONFERENCE & EXPO Wellness programs: Impact of ADA/GINA Regulations Common Questions & Open Issues Do the GINA incentive limit rules apply to domestic partners? “Family Members” include spouses; domestic partners not referenced How do the limits apply if the employee’s incentive is contingent on spousal participation? Vice Versa? Calculating limit for employee/spouse “all-or-nothing” incentives What are the penalties for non-compliance (HIPAA/ACA and ADA/GINA)? Statutory penalties vs. litigation/damages
43 2016 HR FLORIDA CONFERENCE & EXPOThank you 2016 HR FLORIDA CONFERENCE & EXPO