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Step up introduction step up introduction Better Health Care By Design Blueprint: What It Is and How It Works The Blueprint offers insight on how to achieve greater value for your health Better Health Care By Design is willing to help. Many early adopters and health care experts came together to make this guide possible and they share a common desire to see value-based approaches adopted in health care. They are willing to be a sounding board for your questions and concerns as you move forward in establishing your own value-based design. Contact information for our support team is listed in the closing section. care investment in your own organization. This Blueprint also provides useful Getting Better Health Care By Design case studies drawn from the experience and results of early adopters. It will It’s no secret that the high cost of health care has employers and employees at show you how to get started and what you will need to assess and implement a breaking point. Employers are finding themselves unable to offer affordable the best value-based approach for you and your employees. health insurance, resulting in more employers no longer offering this benefit. Each section of this Blueprint is a stand-alone file, which can easily be downloaded and shared with your colleagues. The sections following this introduction include: Those who do offer health insurance are often forced to shift a greater percentage of costs and responsibility to employees. Many employees, particularly those with chronic conditions, find themselves unable to afford to use the health care they need to stay healthy Value-Based Design Models and productive. The impact of cost and responsibility shifting is beginning to Data Drives Design have catastrophic effects on health outcomes that determine the productivity Legal Considerations of employees and the companies that employ them. Clearly, something must be done to make health care more sustainable, Involving Health Providers effective and valuable for employees and employers alike. The good news Communicating the Benefit is that something can be done. New benefit designs reverse the downward Case Studies spiral of health and economic outcomes with a game-changing strategy: Your Support Team / Acknowledgements Understanding how chronic diseases drive up health care costs and drive down productivity Instituting strategies for risk management to prevent and manage chronic disease Better Health Care By Design blueprint | 2 step up introduction Moving from cost shifting to sharing responsibility with Blueprint on Better Health Care By Design. It will help you understand the employees—offering incentives for achieving better health problem, the solution and the practical ways to adapt its principles to the outcomes that turn the bottom line expenses of health care health insurance needs of your company or local government. into top line drivers of performance in the quest to sustain the best overall health for Addressing the Link Between Chronic Disease and Chronically High Costs employees and the best economic health for the employer Better Health Care By Design focuses on the primary and secondary Constantly assessing value by linking costs with outcomes prevention and risk management of chronic diseases—the biggest driver of These are not pie-in-the-sky concepts, but rather practical and productive costs for both employees and employers. Offering a strategically developed plans that have been designed by forward thinking companies and local package of financial and care incentives for people with chronic diseases governments in collaboration with their employees, insurance plans and increases adherence to recommended treatment and decreases the need for health care providers. They were designed and implemented by companies catastrophic care that leads to catastrophic costs. like Pitney Bowes and Marriott as well as the City of Asheville, North Carolina, The success of Better Health Care By Design depends on a counter- and Polk County, Florida. However, you don’t need to be a large employer to intuitive approach: reduce the costs of chronic disease by reducing out of realize the advantages of value-based approaches. These early adopters saw pocket expenses and other barriers to care for people living with chronic the effects of chronic disease on their profitability and performance and diseases. While counter-intuitive, this approach has been shown to work. The quickly realized that they needed a new benefit design that linked enterprise alternative of increasing out of pocket expenses for the chronically ill has value with the value of employee health. Data from their experiences clearly been shown to lead to poorer care and worse results. show that better value in health care is a direct result of benefits strategically designed to produce better health and economic outcomes. Chronic conditions are life-altering and potentially life-threatening diseases that must be constantly treated and managed if they cannot be We call this Better Health Care By Design—an approach to health prevented. While heart disease, hypertension, asthma, diabetes, cancer, benefit design that focuses on increasing value for all instead of simply arthritis and mental health affect many, there also are less prevalent chronic shifting costs. And, we believe Better Health Care by Design is both a health diseases that affect fewer but have just as great or greater impact on the effective and economically beneficial solution for many of the country’s economic stability of employees, their employers and the costs to the health employers and employees. care system. Therefore, when we look at achieving better value for health care A group of early adopters joined with interested business leaders, patient advocacy groups, insurance companies, municipal leaders, labor unions dollars, it is important to address all chronic diseases so as not to overlook the hidden costs among those most often overlooked. and providers to advance this new value-based solution. One result is this Better Health Care By Design blueprint | 3 step up introduction People living with chronic diseases already incur heavy financial burdens for Adverse health outcomes can be alleviated if cost-sharing health care. Many have more than one condition. For example, diabetes often provisions are explicitly designed with value in mind. This comes with heart disease and hypertension—and many chronic conditions approach can effectively increase adherence to important medications have a negative effect on mental health. These patients must see doctors more and complement existing disease management programs.3 often, have more procedures and use more medications in order to manage their health and maintain their productivity. Deductibles and copays quickly add up to create a significant financial barrier to care and ultimately diminish the chances of living healthy, independent and productive lives. Too many are choosing between health security and economic survival. The choice is often to forgo adherence to recommended care. This is not cost effective for patients or employers because both pay the price for poor health outcomes through lost productivity, increased utilization of catastrophic care and higher costs. TOO MANY PEOPLE ARE CHOOSING BETWEEN HEALTH SECURITY AND ECONOMIC SURVIVAL. There is compelling evidence for decreasing out of pocket costs for patients with chronic disease: Out of pocket health spending is highest among people with chronic conditions, making them particularly vulnerable to cost sharing and coverage restrictions because of their higher overall utilization and use of specific services for which benefits are limited.1 The chronically ill are forgoing the care they need. More than half (54%) of U.S. chronically ill patients did not get recommended care, fill prescriptions, or see a doctor when sick because of costs, according to Price points matter. A Brown University study reviewed mammogram coverage by 174 Medicare managed-care plans. When plans required copays of $12 to $35, there was a 6% drop in utilization in just two years. Mammography rates rose by 3% in plans that did not require copayments.4 A 2005 diabetes study found that waiving copays for ACE inhibitors taken by diabetic patients would save lives and reduce long-term costs to Medicare because there would be fewer kidney and heart-related complications.5 Benefit design is an important determinant of out of pocket costs. For many conditions, hospitalizations are the single largest component of overall health care costs but the highest out of pocket costs are typically associated with prescription drugs and physician visits. The Kaiser Family Foundation found that most patients’ cost-sharing accounts for only 5 percent of hospital services, while cost-sharing for office visits and prescription drugs average, respectively, 29 percent and 54 percent of costs.6 Faced with this evidence, forward-thinking employers, insurance companies and providers began to realize that the best way to control health care costs is to focus on better patient outcomes. In the case of people with chronic diseases and conditions, that means providing the means to adhere to doctor’s orders—not increasing the financial barriers to successful prevention and management of their chronic conditions. a November 2008 survey by The Commonwealth Fund.2 Better Health Care By Design blueprint | 4 step up introduction A New Strategic Approach: Responsibility Sharing It was obvious to health benefit design innovators that further cost shifting to patients wouldn’t lower overall costs. It was equally obvious that employers are at a breaking point. Cost is a barrier to access for patients with chronic outcomes. This conceptual shift helped benefit design innovators move from managing health care to managing healthy economic returns. Productive human capital drives business productivity and sustains financial success. disease, but so is a lack of investment in patient education, coordination and It’s Working motivation. Innovators soon developed a principle of shared responsibility Better Health Care By Design isn’t a theory. It’s a growing practice with a growing among patients, employers, insurance companies and providers that is the body of evidence as to its effectiveness. Today, employers, providers, patient cornerstone of Better Health Care By Design: advocacy groups, unions and health plans are working together to design new, improved and economically sustainable benefit designs that provide better Patients have a responsibility to take charge of their health and productivity by preventing chronic diseases value for patients and payers—and reduce the cost burden for everyone. Notice how we said “benefit designs.” When it comes to Better Health and diligently managing those that cannot be prevented Care By Design, there isn’t one design that fits all, but a set of principles and through education, awareness and adhering to medical an approach that help people design the best plan for their specific needs. All recommendations. health care is personal, and the people who make up your workforce determine Employers and insurance companies are responsible for providing patients with access to the recommended care— from preventative to treatment and ongoing management— they need to be healthy and productive. Providers are responsible for coordinating care to address co-morbidities, help patients make the best choices and encourage the best overall health outcome—not just progress against one disease or symptom but increased overall health and productivity that benefits patient and payer alike. Most importantly, shared responsibility leads to shared outcomes. It moves from the negative of making sure “everyone has skin in the game” to making sure everyone shares in the human and economic value of better health the kind of plan you’ll need to maximize the value of your investment. Later in this Blueprint, you’ll learn about the principles of Better Health Care By Design and how to adapt them to your needs. In the meantime, it is important to know that benefit design innovators have taken a wide range of actions—from simple to highly involved—but in each case their actions have produced greater value for their health care dollars. Businesses are experimenting with new models to get better value for their health care investment and save money. A growing number of companies are providing services like free check-ups and screenings as well as free or reduced copays on prescription drugs. These steps are saving their employees money, increasing worker productivity and reducing their overall health care spending. Companies such as Pitney Bowes, Toyota Motor Corp and Marriott International provide free drugs for controlling some chronic diseases; in addition Intel Corp., Walt Disney and Toyota and others have opened on-site primary care clinics Better Health Care By Design blueprint | 5 step up introduction offering annual physicals, blood pressure and cholesterol screenings that are launched a new approach to reduce the total cost of certain chronic free or well below the typical copayment for doctor’s office visits. diseases by reducing the patients’ cost barriers to their prescription 7 drugs. The plan cost the company $1 million a year, and although there The Asheville Project improved patient outcomes and reduced health care costs was higher utilization of maintenance medications, there was also lower use for rescue medications by people with asthma. An asthma drug that In 1996, the City of Asheville, North Carolina, a self-insured employer, began had previously been third tier on the prescription drug formulary, requiring to provide education and personal oversight for employees with chronic health employees to pay 50% or $62.50 of the drug cost, was moved to the first- problems such as diabetes, asthma, hypertension, and high cholesterol. tier level where employees were paying 10% or $12.50 out of pocket. As a Employees with these conditions were provided with intensive education result, more employees and their family members filled their prescriptions through the Mission–St. Joseph’s Diabetes and Health Education Center. and stuck with their treatment. Emergency room visits dropped. Within Patients were teamed with community pharmacists who made sure they were three years, the median medical cost for those with asthma fell 15% using their medications correctly. Employees, retirees and dependents with and costs for diabetic employees fell 12%. In 2007, Pitney Bowes diabetes soon began experiencing improved A1C levels (which gauge a person’s expanded their low-cost and no-cost drug plan to include osteoporosis blood sugar level), lower total health care costs, fewer sick days, and increased treatments, anti-seizure medications and prenatal supplements. Diabetic satisfaction with their pharmacists’ services. Today, the Asheville Project is and heart-attack patients also receive cholesterol-lowering statins free.10 inspiring a new health care model for individuals with chronic conditions. The In 2007, the gap between Pitney Bowes per-employee cost and the 2001 Asheville model is payer-driven and patient-centered. Employers are adopting benchmark is worth about $40 million in avoided costs.11 this approach as an additional health care benefit to empower their employees to control their chronic diseases, reduce their health risks, and ultimately lower their health care costs.8 The City of Asheville, North Carolina, reduced Marriott Corporation increased adherence to recommended treatment regimens by reducing copayments for five chronic medication classes total health care costs by a range of $1,622 to $3,356 per patient per year In 2005, Marriott Corporation, which employs 108,000 people in the U.S. and shifted their health care use from the emergency room, inpatient services alone, eliminated or reduced drug costs by 50% for individuals needing and physician office visits to prescription claims, keeping people healthier and essential drugs for chronic conditions such as cardiovascular disease, more productive.9 diabetes and asthma. The program targeted patients not taking important Pitney Bowes changed the formularies for chronic disease medication, resulting in lower medical costs overall Initially driven by unsustainable health care costs, Pitney Bowes, a $6 medications and enrolled them in a disease management program as well. Compared to a control employer that used only a disease management program, Marriott reduced nonadherence by 7–14 percent.12 billion mail-service company with 24,000 U.S. employees, in 2001 Better Health Care By Design blueprint | 6 step up introduction 1 W Hwang, W Weller, H Ireys, and G Anderson, “Out-of-Pocket Medical Spending For Care Of Chronic Conditions,” Health Affairs, (2001): Vol. 20, No. 6, 267-278. 8 American Pharmacists Association Foundation, Internet accessed Nov. 2008 at www.Aphafoundation.org/programs/Asheville_Project/. 2The Commonwealth Fund, “New Internationally Survey: More Than Half of U.S. Chronically Ill Adults Skip Needed Care Due to Costs,” Internet accessed November 2008 at www.commonwealthfund.org/newsroom/newsroom_show.ht. 9 CW Cranor, BA Buntin, DB Christensen, “The Asheville Project: Long-Term Clinical and Economic Outcomes of a Community Pharmacy Diabetes Care Project,” Journal of American Pharmaceutical Association, (2003): Vol. 43, No.2. 3 ME Chernew, MR Shah, A Wegh, SN Rosenberg, IA Juster, AB Rosen, MC Sokol, K YuIsenberg, and AM Fendrick, “Impact of Decreasing Copayments on Medication Adherence Within a Disease Management Environment,” Health Affairs, (2008): 111, Vol. 27, No.1. 10J Miller, “Beware of Barriers to Care: Pitney Bowes Increases Access to Care Through On-site Clinics and Low-Cost Drug Benefits,” Managed Health care Executive, 1 April 2008, Internet accessed Nov. 2008 at www.managedhealth careexecutive. modernmedicine.com/mhe/Cover+Article/Beware-of-barriers-to-care-Pitney-Bowesincreases-/ArticleStandard/Article/detail/507966%searchString=Pitney%20Bowes. 4 AN Trivedi, W Rakowski, and JZ Ayanian, “Effect of Cost Sharing on Screening Mammography in Medicare Health Plans,” New England Journal of Medicine, 24 Jan. 2008: 358:375-383. 5 AB Rosen, MB Hamel, MC Weinstein, DM Cutler, AM Fendrick, S Vijan, “Cost Effectiveness of Full Medicare Coverage of Angiotensin-Converting Enzyme Inhibitors for Beneficiaries with Diabetes,” Annals of Internal Medicine, (2005): Vol. 143, No. 2, 89-99. 6 Kaiser Family Foundation, “Distribution of Out of Pocket Spending for Health Care Services,” May 2006, Internet accessed Nov. 2008 at www.kff.org/insurance/ snapshot/chcm05006oth.cfm. 7 MP McQueen, “Workers Get Health Care at the Office,” Wall Street Journal, 18 Nov. 2008, Internet accessed Nov. 2008 at www. online.wsj.com/article_ email?SB122696833222435529-IMyQjAxMD14MjE2ODkxNjg4Wj.html#printMode. 11JJ Mahoney, “Value-Based Benefit Design: Using a Predictive Modeling Approach to Improve Compliance,” Supplement to Journal of Managed Care Pharmacy, (2008): Vol. 14, No. 6, S-b, Internet accessed Nov. 2008 at www.amcp.org/data/jmcp/ JMCPSuppB_S3-S8.pdf. 12ME Chernew, MR Shah, A Wegh, SN Rosenberg, IA Juster, AB Rosen, MC Sokol, K Yu-Isenberg, AM Fendrick, “Impact of Decreasing Copayments On Medication Adherence Within A Disease Management Environment,” Health Affairs, (2008): Vol. 27, Number 6, 103-112. 13J Berger and M Kushner, “An Employer Case Study,” Out of Pocket Cost Impact Forum, Hilton Chicago O’Hare Airport, 17 June 2008. Better Health Care By Design blueprint | 7 Step 1 Value-Based Design Models step 1 Value-Based Design Models Value-Based Design Models Today’s economic realities are helping propel innovative approaches to health care delivery in a way that brings more value to both the health care payer and the consumer. Although the definition of value may be somewhat subjective depending on the desired outcome, health care stakeholders are expanding its meaning to reflect the total cost of care. That definition includes the cost of disability, unscheduled absences, and presenteeism in the workplace. Health care purchasers, such as employers, governmental entities and health plans, are working to minimize financial barriers to health care services, products and activities that provide high value by lowering or waiving their associated costs. At the same time, “quality” has been redefined to include fewer medical errors, less redundancy of services, procedural efficiency and improved health outcomes, and “dividend” is emerging as a way to quantify the total improvement in health outcomes, reduction of risk and the financial cost trend. Cyndy Nayer, President and Chief Executive Officer of the Center for Health Value Innovation, reminds employers that “benefit design is not a onesize-fits-all approach. It’s a strategic investment that reflects the unique characteristics and needs of a company or community. Use the data to identify the most vulnerable populations, then use your investment strategies to increase access for better outcomes and better performance overall.” No one approach is above another. In fact, the ensuing data collection and analysis phase will very much inform what type of design best meets the needs of your employees. Furthermore, each design will present advantages and challenges along the way. It is important to carefully deliberate the implications of each design choice to ensure you have the tools and resources necessary to fully implement the model. Benefit design is not a one-sizefits-all approach. — Cyndy Nayer Medication Focused or Condition Specific Incentives To meet these new definitions, purchasers have begun to utilize a variety The condition specific benefit designs are established for people with a of health care benefit designs in order to drive the patients to use those targeted chronic disease who may benefit from adherence to particular treatments, procedures and providers that bring the greatest value to the medications to treat their condition. This model requires less data patient, the payers and our society. integration and has a broad reach among employees. It may be linked to Each of the benefit design approaches described below focuses on a mandatory condition management program. On the other hand, it may different areas within the health care continuum such as health behaviors, present challenges for some employers in that it can be more costly than a chronic condition management, medications, and provider choice. Each more focused approach that only targets individuals who are non-compliant model is coupled with incentives and disincentives to encourage appropriate or considered “under-users” of health care. It may not pay out the same health-seeking behavior. Although there are incentives such as copay level of dividend in the short term. reductions or waivers, premium reductions, and health saving contributions, not all incentives are financial. Please see the case studies for City of Springfield, Oregon, and Polk County, Florida, to learn more about successful implementation of this design. Better Health Care By Design blueprint | 2 step 1 Value-Based Design Models Patient Focused Incentives Patient focused incentives are based on a specific patient attribute such as employees or health plan participants at highest risk. For example, individuals who have already suffered from a heart attack and now are being treated for hyperlipidemia are a high risk for a second cardiac event. The advantage to this model is that the highest health risk individuals are also the highest financial drivers of immediate and long-term costs. Therefore, they may gain the greatest clinical and financial value from reducing barriers to access appropriate health care. Furthermore, if these individuals are compliant, they are more likely to reduce emergency room visits, rescue treatments and unscheduled absences. For this model, removal of cost barriers has shown a tremendous dividend for the investment, ranging from 2:1 to more than 5:1. To successfully implement this model, a significant amount of data and data integration is needed to accurately identify this subset of people. Some employees outside of the program may view this model as discriminatory, giving preferential treatment to employees who are not managing their conditions well. These kinds of perceptions can be overcome by effectively communicating the program to all employees, underscoring that the investment in employee medical travel and on-line coaches and physicians are included in the program. Generally, these preferred providers are individuals who have been shown to follow accepted guidelines, have external accreditation or certification and/ or have proven patient health outcomes. However, it is important to note that many chronic conditions do not have recognized guidelines. Provider choice incentives are often times coupled with additional incentives for the provider as well as the consumer. This design’s advantage is that it can address behavior change not only in the health care consumer but also for the providers, yielding additional positive outcomes across an entire community. Its challenge is that health care consumers may have to change their provider in order to receive the benefit, and providers must be willing to participate. Furthermore, there may be a greater reliance and need for administrative and technological data support in order to implement this design. It will also be necessary to clarify the criteria by which a provider is designated as preferred in order to ensure that it is not simply an insurance tiered network based only on costs but not health outcomes. Please see the case study for Gulfstream to learn more about their success in implementing this kind of design. health actually reduces the cost of health care for the entire company and Health Behaviors yields higher productivity among all workers. This design incentivizes employees to participate in a number of health Please see the case study for Caterpillar to learn more about their success in implementing this kind of design. and wellness activities that are a fundamental component of total health management. These may include employees filling out health risk assessments, adhering to a care plan, participating in health management programs, and Provider Choice Focused Incentives In this model, reduced copays are offered to consumers who utilize preferred health care providers. These providers may be physicians, physician assistants, nurse practitioners, hospitals or outpatient facilities. In some instances, even undergoing immunizations and preventative chronic disease screenings. This model is fairly inexpensive to implement compared to other approaches and can easily be applied across a broad population. The disadvantage to this model is that often the return on investment takes a long time—especially if it is focused on outcomes and not process. Better Health Care By Design blueprint | 3 step 1 Value-Based Design Models Inspiring Healthy Behaviors Irrespective of the benefit design model and the activity that is being incentivized, a number of financial and non-financial incentives can be tied to the desired activity. Financial “carrots” that encourage healthseeking behavior may include decreased or waived out of pocket costs, premium reductions for health care benefits, a health savings account with employer contributions and health reimbursement accounts. Non-monetary inducements may include gym memberships, home health equipment or increased paid leave. The flipside of a rewarding incentive is a disincentive that discourages non-adherent behavior. These may include increases in premiums or movement to a higher-priced or less-generous benefit design. Better Health Care By Design blueprint | 4 Step 2 Data drives design step 2 data drives design Data Drives Design Data is a fundamental element of value-based benefit design. It will guide initial decision-making, plan implementation, and ongoing assessments of the insurance design’s impact upon participants. Comprehensive data collection and rigorous analysis will give the payer a deeper understanding of the true financial cost and impact of chronic conditions on the productivity, health and health care quality for the targeted population as well as a sense of the opportunities to create better long-term health and economic value. According to Dr. Jan Berger, President and Chief Executive Officer of Health Intelligence Partners, “interpreting and using the data correctly will ensure you are properly aligning incentives to maximize valued outcomes.” When initiating the process of value-based benefit design, it is essential to organize the relevant data into key determinants and categories. This will enable the construction of a framework, guided by a logical process, that will ultimately produce Interpreting and using the data correctly will ensure you are properly aligning incentives to maximize valued outcomes. — Dr. Jan Berger well-targeted initiatives. costs. A variety of data points, both qualitative and quantitative, regarding the targeted population can be collected and utilized. In order to best assess the data needs for effective plan design, it is important that the team determine in advance what problem areas they seek to address through value-based benefit design. Payers have identified goals such as improving work force productivity, decreasing health care costs and improving medication adherence. Successfully addressing any of these issues requires baseline data to see where the targeted population stands prior to the initiation of the new plan design. Data will be vital to every step of the design and implementation of value-based insurance design—from identifying the target population to determining the impact once the plan is active. The types of data and the sources from which data are derived vary. Data elements can include: Claims data Medical data: including physician visits, emergency department visits, hospitalizations, durable medical equipment, lab testing, radiology and procedures. Pharmacy data Disability data: both short and long term. Absentee data Workers compensation Safety data: for example, back injuries due to heavy lifting Types of Data to Include Employee Assistance Program data Accurate and secure data will be necessary to create the benefit design solutions Disease Management Program Data that address the issue of significant out of pocket costs as well as the ensuing Behavioral Health Data, whether carved in or carved out clinical and financial implications that arise from the barrier of out of pocket Better Health Care By Design blueprint | 2 step 2 data drives design Biometric data: including tests such as blood pressure, blood sugar, weight, height, BMI, and cholesterol. Self-reported survey data: employee satisfaction, productivity data, and health risk assessment surveys. Self-reported functional data: such as ability to perform work functions, degree of focus, pain, etc. Demographic data: age, race, ethnicity, socio-economic (if available), and gender for individuals. For employers, industry information such as average wage. Plan design data: out of pocket costs, lifetime maximums, utilization tools, step edits, prior authorizations A primary goal of this data summit is to document agreement among all parties of the specific elements and quantity of data needed to both implement new designs and longitudinally measure results. It is important that all participants/organizations understand the goal of addressing health and economic value through implementation of value-based insurance design. By engaging each of these data holders at once, you will maximize the chances of receiving the data in a useable format. A finite timeline must be in place to ensure achievable goals can be attained. Coming to a common agreement on data element definitions and values is a second goal of the summit. Differing criteria, specifications, collection methodologies and formatting among data holders may make the integration, and therefore the usability, of the data a challenge. A single set of data requirements by source should be set and followed by all contributors. One Although data is essential to successful value-based insurance design, it data notebook with interoperability rule sets and a data dictionary should be should be noted that some of these data points might be difficult to collect. created for documentation purposes. It will also be helpful for new members of the data team that were not involved with the initial summit. Collection of Data—“The Data Summit” The final goal of the data summit is to set a data “swap schedule.” This At the beginning of the project it is important to convene health vendors and will give all participants a thorough understanding of the time requirements other business associates that are storing needed data in order to discuss the associated with the data downloads. It is important to remember that data project and create an agreed upon data infrastructure. This “data summit” sharing will not occur on a one-time basis. Although data is necessary at the should include IT and data analytics representatives as both will be necessary onset of the project in order to understand the payer’s population, ongoing to bring the data together in an integrated and usable fashion. data is necessary to track changes in the population and to evaluate the results The payer, which is the direct connection to the patient population, is an of the value-based plan design on desired outcomes. The schedule needs to important party to lead the data summit. It is generally recommended that address the “how” part of data transmission. For example, it will have to be one person take the lead on the data requirements. This person should not determined if all parties have the ability to electronically push the data to the necessarily be the only one addressing data collection and analysis but they will integrating organization or if some groups will need the integrator to pull the need to be the leader in this area. Identifying a team leader will establish clear data in. Additionally, some providers may require a more rudimentary process responsibility for this essential function and present a point of contact for all for sharing data, such as data disks. Once a process is agreed upon, all rules vendors and business associates that provide data. and schedules should be a part of the final data summit sign-off document. Better Health Care By Design blueprint | 3 step 2 data drives design Challenges Collecting Data There are a variety of challenges that can occur in the collection of data. Some, such as dealing with vendors with different collection methodologies and formatting, have been mentioned previously and can be addressed early through the data summit. Others, such as cost and privacy laws, go beyond technical issues and will be ongoing through implementation and analysis of plan results. Although daunting, overcoming these challenges is one of the most essential tasks undertaken in value-based insurance design. Although somewhat cumbersome, administrative claims data can generally be acquired. Furthermore, the rules and regulations that dictate its use are well documented. However, linking administrative claims data to data from employee surveys is often very difficult to accomplish externally. There are challenges linking these sources and the survey might require individual waivers from employees to share the data therein. These same challenges will exist with Worker’s Compensation, paid time off (PTO) or other productivity related data as source system variations often make these data difficult to link internally. More complexity occurs when trying to link medical and pharmacy administrative claims data from either different entities or different source systems. Among the challenges is uniquely identifying individuals and their claims history. A possible solution would be to have the payer provide a dataset where this is accomplished in-house and de-identified. Many health care vendors are unable or unwilling to share health care data for a variety of reasons, including the real or perceived loss of income associated with the data, “ownership” issues that translate to “data is power,” the real or perceived privacy issues, and the legitimate cost incurred passing the data to another party in a usable format. Questions persist as to who owns the health care data. Is it the patient, the health care entity or the payer of the service? Depending on the purpose that the data is being utilized for it may be all three. In some cases, state and federal law may dictate data ownership. For the purpose of plan design and health care payment, the payer does have a right to receive and utilize health care data. Below are three additional areas that may prove challenging when collecting data. With proper planning and a complete understanding of what is involved, it is possible to address these challenges to obtain the necessary data. Race/Ethnicity Data: There is some belief that collecting data on race and ethnicity is illegal under federal law. It is not. There are no federal statutes that prohibit the collection of this data, which may be vitally important to ensuring the success of a value-based insurance design. Certain races, religions and ethnicities have their own beliefs regarding illness, wellness and medical care. Therefore, the cultural communications and benefits designs may depend upon understanding who should receive the varying components based on their culture, background and preferences. Although federal law does not prohibit collection of such data, patient self-reporting of race and ethnicity has its challenges as well. Patients may question why a payer needs to collect this data or why an employer would want to study different impacts and utilization by race/ethnicity. In addition, many patients will not give this information for fear of it being utilized in a discriminatory manner. If such data is being collected from medical providers or patients and their families, the data collector should make sure that there is a set of questions that are asked in a uniform manner. Privacy and security will be a key component of education for participants. Have a written rationale for why the patient is being asked to provide the information as well as a written security procedure to ensure non-discrimination. Better Health Care By Design blueprint | 4 step 2 data drives design Privacy: The Health Insurance Portability and Accountability Act (HIPAA) includes stringent privacy and data security regulations that have created both real and perceived data challenges. Changes to HIPAA included in the 2009 stimulus legislation, which extend many regulations related to electronic health data to additional organizations, are likely to create further challenges. Protection of patient data is of paramount importance. It will be necessary to create business associate agreements or other methods to assure HIPAA and state privacy law compliance. The data summit should include individuals very familiar with the rules and regulations of data sharing (HIPAA) as well as the changes that might impact the process. There will need to be documented rules for storage, use and disclosure of any data on behalf of the payer. Further information on HIPAA regulations appears in the Legal section. Employee Participation in Survey Acquiring needed data is not easy. When access to administrative claims is not available, studies have shown that individuals will accurately report a hospitalization. However, accurate lab values are often more difficult to obtain. As with hospitalizations, an alternate source could be participantreported data. Additionally, reasons for missing work can only be captured via survey. With most employers using PTO, there is no longer a separate pool of “sick” time off. Reasons for non-adherence cannot necessarily be derived from quantitative data: non-adherence to a medication regimen could be driven by high out of pocket costs or by a patient simply not returning to the doctor to obtain a new prescription. Given these and other challenges, survey data can be the most efficient Cost: The cost of sharing data can be significant. The start-up costs of way of gathering information needed to establish a baseline among the creating a file with standard specifications to be reused can vary. The targeted population and measure impact of plan design changes. For variations include the number of data feeds being combined and how the example, a comprehensive health assessment completed by the patient when data are organized (e.g., flat file, data dictionary, non standard requests, they begin participation in the plan can provide essential data to measure number of medical vendors). Additionally, standard data checks or control changes in health outcomes. totals must be assessed on one end or the other with every pull and crossvalidated to assure all data are received. When developing and administering a survey, it is best to partner with a survey data specialist if a customized survey is needed. Otherwise, it is Once the start up costs are negotiated and agreed to, there will be a always preferable to use an existing tool to measure change. When developing cost to recreate the file on a regular basis (i.e. monthly or quarterly), with a customized survey, it will be important to validate that the questions asked implications around decisions such as appending the last file or overwriting are accurately capturing the information needed. It will also be necessary to it. The creation of the data pull and the subsequent push or pull of data obtain participants’ authorization to use their responses for most surveys. will require an individual on one side or the other to maintain and fulfill the process. This cost, as with start up costs, can vary. Ideally, a call from a known entity with useful information for the respondent will drive the best survey results. Web-administered and/or Finally, the data will need to be stored and protected in a way that mailed-in surveys tend to have low participation rates. For these formats, complies with federal and state privacy and security laws. This will add the use of incentives is encouraged to get maximum participation. Some an extra expense, with storage space being relatively inexpensive while innovative Interactive Voice Response (IVR) companies are cost effective and security may be costlier. Better Health Care By Design blueprint | 5 step 2 data drives design may be better able to capture information. However, a significant drawback Another area to consider is if people are not filling necessary medications is that some individuals do not like the intrusion of a phone call. There are for chronic conditions. costs associated in an accelerating order with any of these approaches. 5. Are there vulnerabilities associated with the population’s health status that are likely to turn into significant health Data Analysis and Interpretation While the collection of good data is important, equally significant is the and productivity expenses? 6. W here is the greatest opportunity for improvement of interpretation of the data. This is a critical second step to ensuring that the health status, health care utilization or productivity benefit design model truly meets the needs of the intended population. within the population? Questions For Consideration & Data to Analyze Decisions To Be Made 1. What is the health resources utilization of the population? 1. What are the modifiable variables that a payer can impact? Examine hospitalizations, emergency room visits, outpatient visits, testing and procedures, and pharmaceuticals. (i.e. age is not modifiable; smoking is modifiable.) 2. Knowing that there is a finite budget available for health 2. How is productivity among the population affected? benefits, where should the financial incentives associated Key data includes short- and long-term disability, unscheduled leave, and with value-based insurance design be placed in order to Workers Compensation claims. 3. How does the population’s utilization data compare to national, regional or industry-wide benchmarks? For example, a payer may consider how emergency room visit rates for maximize valued outcomes? 3. How will these changes in insurance design fit within the organizational culture? Are cultural or environmental modifications necessary? asthmatics in the population compare to the national norm. National data is available through a variety of government sources such as National As noted previously, data collection, analysis and interpretation will be key to Committee on Quality Assurance (NCQA) or the Agency for Health Care successful design and implementation of value-based insurance design. This Research and Quality’s Health Care Cost and Utilization Project. Health section has noted many of the challenges and important considerations that care vendors will have also have this information available. will arise in this endeavor. It is essential to address these issues at the outset, 4. Are there issues of under-utilization or over-utilization in the population? as they arise, in order to ensure that the final plan design ultimately achieves the desired goals of improved health and financial outcomes. Examples include people not receiving appropriate routine care and preventative care screenings (i.e. breast, cervical and colon screenings). Better Health Care By Design blueprint | 6 Step 3 legal considerations step 3 legal considerations Legal Considerations As you move to implement value-based benefit design, it is absolutely critical that you comply with all legal requirements, particularly those related to privacy and nondiscrimination. The information below is intended as an introductory checklist to help guide you through benefit design and implementation. It is not intended as nor is it a substitute for legal advice. We cannot stress enough the importance of consulting with your attorney or legal team. Privacy is one of the most important and challenging facets to successful value-based benefit design. In addition to the legal requirements, both federal and state, the issue is of paramount importance to your employees or beneficiaries. In an era of skyrocketing financial and medical identity theft, people are justifiably concerned about making sure personal information is protected. In addition, people have fears of their medical information impacting their employment if employers or coworkers were to learn of it, regardless of whether such use of the information is prohibited by law. The Health Insurance Portability and Accountability Act (HIPAA) is the primary federal law addressing medical information privacy. HIPAA was enacted in 1996 and the privacy provisions took effect in April 2003. In addition to addressing health insurance portability and access for group health plans, the law includes strict regulations on the use, transfer and security of protected health information (PHI) by “covered entities,” which include providers, health plans, and health clearinghouses. Protected information includes, but is not limited to, actual medical records and payment/billing information. The law provides specific direction on the disclosure of health information for research and public health activities. In general, data disclosures for any purpose are guided by the law’s requirement to use the minimum information necessary. In addition to these requirements, a section concerning electronic protected health information, known as the Security Rule, defines the administrative, physical and technical security measures that covered entities must have in place. The American Recovery and Reinvestment Act of 2009, generally referred to as the stimulus bill, included several provisions to significantly strengthen the privacy protections in HIPAA. Among the new rules, most of which take effect in February 2010, are an expansion of the privacy protections to business associates of covered entities and vendors of personal health records, requirements for patient notification in the event of a data breach, and, in limited circumstances, a requirement that covered entities comply with patient requests not to share certain health information with the patient’s insurer. The new provisions also include significantly increased penalties for HIPAA violations. ensure that you have a full understanding of all legal issues involved What follows is a brief list of issues to consider as you undertake valuebased benefit design. Where necessary, a bit of context has been provided. Again, you must consult with your legal advisor to ensure that you have a full understanding of all legal issues involved, particularly as regulations are issued or revised. It is also crucial to consult with your attorneys to obtain guidance on communicating with your employees about the scope of protection provided by HIPAA regulations. Better Health Care By Design blueprint | 2 step 3 legal considerations Legal and privacy issues in Value-based Benefit Design Check all state and federal privacy laws. HIPAA sets federal privacy standards for protected health information. State laws may be considerably more stringent. HIPAA in no way preempts stricter state the same way that covered entities must do. In addition, contractual agreements with business associates, including those already in place, must include the information security requirements. Business associates will also now be subject to the civil and criminal penalties for violations of the rule’s provisions. privacy laws. As noted above, the 2009 stimulus bill includes greatly Check to make sure that the outreach utilized within the increased financial penalties for violations of HIPAA, up to fines of benefit (i.e. health management vendor outreach) meets the $50,000 per violation. marketing rules contained within HIPAA. HIPAA requires covered Make sure that you communicate early and often in easily understood words that an employee’s health information is covered under privacy laws and will not be shared with their employer or fellow employees. HIPAA requires covered entities to notify employees of their privacy rights and how their information may be used. Employees should be reassured that the health care providers, insurance companies, and wellness program providers cannot reveal PHI to employers without the employee’s authorization. M ake sure that you have appropriate business associate contractual arrangements with all health care vendors and data integrators. A business associate is an organization that, on behalf of a covered entity, performs a function or activity that involves disclosure of individually identifiable health information. Examples of such functions include claims management, billing, or data analysis. Under the original provisions of HIPAA, a business associate was subject to HIPAA’s privacy provisions only as such provisions are included in the contract with the covered entity. The 2009 stimulus act requires business associates to comply with HIPAA’s Security Rule administrative, technical and physical requirements for electronic health information in entities to allow individuals to decide if they want their PHI shared for marketing purposes, although the definition of what is marketing allows for situations that do not require patient authorization. The 2009 stimulus legislation placed further restrictions on what is considered “marketing” when covered entities contact patients or beneficiaries. For example, contact about services or treatments that encourage the patient/beneficiary to buy or use a product may be considered marketing if the entity has received payment for making the communication and the treatment described is not one the patient is currently taking. Assure that you are utilizing the minimal information necessary rules within HIPAA when sharing personal health information with the value-based benefit design program and with associated vendors. Included in the 2009 stimulus bill is a requirement for the Secretary of Health and Human Services to issue guidance on the “minimum necessary” standard, which has been criticized for being too vague. The Secretary’s guidance must be issued within 18 months of the bill’s enactment, by August 2010. The law includes instruction on the minimum necessary standard until the guidelines are released. Better Health Care By Design blueprint | 3 step 3 legal considerations Have a data breach reporting process in place and make sure If the value-based design being developed includes incen- it complies with state privacy laws and HIPAA. The data breach tives, make sure the incentive structure complies with HIPAA provision included in the stimulus legislation requires notification of those wellness program nondiscrimination regulations. Guidance is whose information was compromised. For large data breaches, there are available to help employers determine plan features that could be consid- also requirements to notify the media in the affected market as well as the ered discriminatory. Generally, plan benefits can discriminate in favor of Secretary of Health and Human Services. The notification requirements individuals with health factors. If the benefits require individuals to meet include several additional provisions, including direction on the timing of a standard relating to a health factor, the nondiscrimination rules limit the notification following a breach. the maximum amount of the incentive, require that the plan be designed Make sure that there is compliance with any tax obligations to promote health or prevent disease, require that individuals be given related to the health care incentives put in place. Some the opportunity to qualify for the incentive at least once per year, require incentives may be taxable to the patient or the employer. It will be that the incentive be made available to all similarly situated individuals, necessary to ensure that any tax obligations are fully understood as the and require that a reasonable alternative standard be made available and value-based plan is designed and implemented. It will also be important communicated to plan participants. As long as the incentive structure in a to communicate clearly to the patient or employer how any such taxes will wellness program meets these conditions, it is possible to use health fac- affect them. tors as part of the plan’s value-based design. There are other legal issues to take into consideration when putting a value-based benefit design together. It is important to make sure that the design you are looking to implement complies with regulations found within the Americans with Disabilities Act, other federal regulations and any state laws you may be subject to. Better Health Care By Design blueprint | 4 Step 4 iNVOLVING HEALTH CARE PROVIDERS step 4 iNVOLVING HEALTH CARE PROVIDERS iNVOLVING HEALTH CARE PROVIDERS emphasizing to providers that this type of benefit design enables them to focus on the patient by crafting a treatment plan specific to the individual by utilizing national guidelines as a starting point where appropriate. Some of the areas where they can support this type of design include: Previous sections have addressed the types of value-based benefit design Knowledge of national guidelines for care and other value- and the associated data and legal issues. Although the primary focus of these based health care guidelines types of benefit designs is payers and health care consumers, it is important Knowledge of patient-specific costs of care not to forget the health care providers. “Providers” is a broad term that can include physicians, pharmacists, nurses, nurse practitioners, case managers, • Health care visits caseworkers, social workers and a number of other members of the health • Diagnostics care team. • Treatments, both pharmaceutical and non-pharmaceutical, with an Even as health care has evolved to place greater focus on the consumer, providers continue to play an essential role in medical care a patient receives and are rated very highly in the “trusted advisor” role. Therefore, emphasis on improved adherence by the patient. Help in creating a patient-centric, value-based care plan it is important to incorporate the provider community when developing a It will also be critical that providers be made aware of the need and value-based benefit design, which serves to complement the individualized opportunities for multidirectional communication when they are part of a care plan drawn up between provider and patient. William Ellis, Executive health care team treating a patient Director and Chief Executive Officer of the American Pharmacist Association with chronic illness. In such Foundation explains, “from a provider perspective, value means that we are circumstances, all members of the able to deliver care in a comprehensive way—from preventative services to team must be kept informed of continual management—so everyone avoids the catastrophic consequences treatment decisions and adapt their of ER visits and hospitalizations.” role as necessary. This comprehensive Persons with chronic conditions may utilize a variety of health care team approach to coordinating care providers to obtain support and education. It is important that, as patients will ultimately benefit the patient reach out and engage these various members of their health care team, they through improved health outcomes. receive consistent information. To this end, educating these providers on the In order to maximize the ability fundamentals of value-based benefit design and informing them as to ways of the health care providers to best that they can support these patients is very important. Equally important is support patients, health plans and value means that we are able to deliver care in a comprehensive way… so everyone avoids the catastrophic consequences of ER visits and hospitalizations. —William Ellis Better Health Care By Design blueprint | 2 step 4 iNVOLVING HEALTH CARE PROVIDERS pharmacy benefit managers (PBM) should work with health care providers to As was stated in an earlier section of this Blueprint, an incentive to the assure that they receive the proper education regarding the benefit and how it health care consumer is in some cases partnered with additional payment can help their patients. It is also important that the health plans and PBMs make incentives to the provider as well. In order to best utilize this type of value- available to providers at the point of care tools such as registries and electronic based benefit design, an employer needs to work with their health plan(s) patient-specific information sent to electronic medical records or e-prescribing to find out how they recognize and reward desired outcomes from providers tools in order for the appropriate conversations to occur between the patient within their network. It is not only physicians that can be rewarded within and the provider. In addition, providers should have access to comprehensive this type of plan design. On occasion, pharmacist and pharmacy incentives assessment tools for use with patients that allow for the application of evidence- and tiering have occurred. Regardless of the provider(s) that the plan may based medicine to the specific circumstances at hand. focus on, this type of plan design looks to change and reward the behavior of A second area that links providers with value-based benefit design is through the use of the provider-focused incentive design. In this type both the health care consumer and the health care provider. Some of these copay changes have been used as follows: of design, there is a decrease in out of pocket costs to the health care consumer if they utilize a practitioner that has been designated as a high Copay reduction for using physicians who agree to value practitioner. Health care providers are generally given this designation practice to evidence-based guidelines in recognition of their use of and adherence to the national guidelines, Copay reduction for use of worksite or grocery store although future models may need further adaptation to reward providers for achieving optimal outcomes in the care of patients with extraordinary needs that may fall outside the scope of current guidelines. Furthermore, the benefit design should not punish a provider and patient who work together to create a treatment plan in a situation where guidelines are lacking, competing guidelines exist or new discoveries suggest the current guidelines may be outdated. screenings, clinics, etc. Copay reduction for use of urgent care or convenient care services Companies such as Gulfstream, QuadMed, Caterpillar, Toyota, and others have successfully used these incentive designs. Better Health Care By Design blueprint | 3 Step 5 communicating the benefit step 5 communicating the benefit Communicating the Benefit The Importance of Communication Essential to the success of the new benefit design is the ability to clearly and effectively communicate its value to employees and plan participants. Mapping out a communication plan should not be considered an afterthought in the implementation phase as it is a strategic element that will maximize the benefit for both the employees and the employer. Michael S. Kushner, Risk Management Director, Polk County, Florida, and an early adopter of value-based approaches for the Polk County government explains, “effectively and repeatedly communicating with our workforce about their health, the programs available to them, and the difference it has made in the lives of their coworkers has been essential to our success.” Therefore, begin creating a communication plan and a timeline as early as six months in advance of the new benefit to ensure that the outreach is thorough and the messages and information resonate with all employees. A study conducted by the Midwest Business Group on Health found employees have the desire and confidence to play an active role in managing their health. However, their motivation to act is hindered by time, money and know-how.1 Most people are not compelled to truly understand their health benefits until they are in a position to actually need them. Value-based benefit designs reward people for taking proactive steps with their health. Therefore, consider communication tools and venues as opportunities to proactively educate and motivate employees to engage in constructive use of their benefits and adopt healthy lifestyle changes that will further enhance all facets of their lives. Relate the information in a personalized manner that connects the individual to the new program and motivates them to enroll. The targeted benefit will not be provided to each and every plan participant. Nevertheless, it will be necessary to communicate with all employees—even those not receiving the benefit—so that no one believes that some employees are receiving preferential treatment. Underscore this is “value-added” for everyone. Everyone benefits by reducing absenteeism and presenteeism, increasing worker productivity and satisfaction, and curbing health care costs overall. These types of strategies keep employee benefits sustainable and companies viable. Know Your Audience An effective communication plan begins with a firm understanding of the audience who is intended to receive it. Take time to understand the challenges and the opportunities that may exist with your employee population. Survey your employees to determine how they prefer to receive information about their health benefits, keeping in mind that you may have to rely on several forms of repeated communication to fully reach your targeted audience. Choose your words carefully when sharing information about the benefit. Prepare glossaries free of confusing jargon or acronyms that fully explain key terms. Consider that about 20% of the U.S. population is functionally illiterate. Medical 2 literacy, which includes the ability to understand prescription drug instructions, appointment slips, patient brochures, doctor’s direc communicating with our workforce… has been essential to our success. —Michael S. Kushner tions and consent forms and the Better Health Care By Design blueprint | 2 step 5 communicating the benefit ability to navigate health systems, lags even further. Approximately 40% the employees’ perspective and build a comfort level between them. Back of American patients cannot comprehend directions for taking medication their expertise with secondary information such as links or brochures from on an empty stomach. These statistics underscore the importance of not credible health care institutions located in your area and nationwide. Choose over-estimating the comprehension level of your employees and as a result such information carefully to ensure the information is easy to understand undermining the success of the new benefit even before it goes into effect. and geared to a patient audience. 3 It may be necessary to conduct communication in several languages, Oftentimes, employees have an inherent suspicion that anything coming requiring a thorough understanding of cultural connotations and barriers that from management cannot be good or truly in the best interest of the worker. may lead to a misinterpretation of your intended message. Enlisting the help Be aware of this as you choose “employee champions” who can help deflect of staff members familiar with these cultural and linguistic distinctions will negativity and dispel misgivings. If possible, recruit well-respected employees ensure your message is properly communicated and received. to be part of the communication team. These are not necessarily the leaders Covered employees are not the only audience. Consider how best to convey information to family members also covered by the benefit. Their full engagement in the benefit will also contribute to the success of the overall program. Employees who do not have the chronic conditions targeted in the value- or company management; they’re people to whom others are drawn to informally. They are individuals who help shape their peers’ work morale. What to Communicate based design will need to appreciate how it benefits them as well. Help them Value. Explain the rationale for the new benefit and why, as their employer, understand that while they are not benefiting health-wise from the program, you want them to utilize their health benefits. Health of the individual the engagement of those with the conditions is not preferential treatment, reflects the health of the company: healthy employees mean lower health but another way for the company to minimize risk, increase productivity and care costs for everyone, a more productive workforce with less absenteeism control health care costs for everyone. and presenteeism, and a sustainable business model for the company to be Who Should Communicate the Benefit— The Trust Factor more competitive overall. Privacy. Reassure workers that their privacy is being maintained. Print it and say it continually in the information you share. Let employees know The messenger is as important as the message. People are more likely to hear that they have privacy rights under federal law that protect their health and act on information shared by a trusted source. When conveying the value information. Tell them they have the opportunity to opt out of the program of benefit design approaches in health care, utilize health care professionals and that federal law limits the use of personally identifiable health such as nurses, physicians and pharmacists to help explain it. If and when information. It is important for employees to know that in the establishment providers are selected to be part of the health care support team, they should of the new health benefit, all privacy laws were followed and will continue make a point to visit work sites to better understand the work environment to be upheld not only by the employer, but also by the doctors, nurses, in which employees operate. It will help the professionals better understand Better Health Care By Design blueprint | 3 step 5 communicating the benefit pharmacists, hospitals, clinics, insurance companies and pharmacies Health suggests that employers strive to reframe employees’ perceptions helping to implement the program. All health care providers are required of the health care marketplace: higher quality can equal lower cost.4 by federal law to present employees/patients with an explanation of their Take action. Simplify and streamline the process for individuals to enroll privacy practices. Health information cannot be given to employers and in the benefit. use of personally identifiable health information for marketing is strictly limited and generally requires the employee’s prior authorization. HOW AND WHEN TO COMMUNICATE Personalize the benefit. Personalized benefits opportunity statements The communications strategy you and your colleagues implement should are a great way to relate the benefit message. These can be particularly encompass many different forms of communication—all of which are chances helpful to introduce programs with value-based design approaches because to educate and encourage employees to sign up for the new benefit. However, they help the employee or plan member understand how it affects them to the extent possible, a thorough explanation of the plan should be conducted personally. Content should include: 1) the services or drugs that they have in-person so employees and health plan participants have an opportunity to ask or should have received in the past; 2) what the associated costs were in questions. Even the most well-prepared information may not be understood or the past; 3) what the costs will be under the new model; and 4) how to interpreted correctly. Such meetings are a great opportunity to clarify points take action within the new plan. and fine-tune related communications in the future. Use examples. If personalized benefit opportunity statements are not Mix in-person communication with letters, personalized benefits opportunity possible, personalization can also occur by using examples that best mirror statements, posters, email, videos and testimonials from colleagues enrolled in the targeted population. Examples should include both genders, various the program. Include information in payroll stuffers and employee handbooks. ages and ethnicities, and the targeted chronic conditions. Value-based plan features. Not all benefits are created equal in a Company competitions or team challenges for exercise or weight management may also heighten enrollment in the new benefit and inspire value-based plan. Most individuals equate higher costs with higher quality. camaraderie among workers. Colleagues can be a good source of both peer This issue will need to be explained. The Midwest Business Group on pressure and encouragement. 1M idwest Business Group on Health, “Focus Group Research: Employees’ Readiness to Adopt Value-Based Benefit Design Strategies.” November 2008; Internet accessed April 2009 at www.mbgh.org/templates/UserFiles/Files/2008/Readiness%20to%20Change/ VBBDFindings_white%20paper_Nov_2008.pdf. 2T he Informatics Review, “Comprehension and Reading Level.” Internet accessed April 2009 at www.informatics-review.com/FAQ/reading.html. 3 Ibid. 4M idwest Business Group on Health, “Focus Group Research: Employees’ Readiness to Adopt Value-Based Benefit Design Strategies.” November 2008; Internet accessed April 2009 at www.mbgh.org/templates/UserFiles/Files/2008/Readiness%20to%20Change/ VBBDFindings_white%20paper_Nov_2008.pdf. Better Health Care By Design blueprint | 4 case studies and resources acknowledgements resources case studies Achieving new heights with improved health “Partners 2 Health is Gulfstream’s health partnership with employees,” says Bob Holben, Director of Global Total Rewards & International HR for Gulfstream Aerospace. “We value our employees and do our very best to help them take care of themselves and their families. Our health care providers know that we expect them to follow the latest evidence-based medical protocols to keep our employees healthy, and we have established incentives to encourage them to do that.” Like many companies, Gulfstream experienced burgeoning health costs inflation. However, unlike many companies, Gulfstream instituted proactive quality of care messaging and decisive actions. Increased emphasis was placed on health risk detection and proper early treatment to prevent or delay the development of the more costly co-morbidities associated with certain chronic conditions, such as diabetes, asthma and cardiovascular disease. The goal: Engage employees to take an active role in their own health care— securing appropriate preventive screenings and complying with their physician’s plan of care—to reduce the incidence of hospital inpatient admissions and lower Gulfstream’s health care cost trend. The company developed a comprehensive strategy that repositioned the employees and their primary care physicians as partners with Gulfstream in total health care management. Key components included: The plan: Who is Gulfstream? • A wholly owned subsidiary of General Dynamics • 9,000 Employees/22,000 Covered Lives • $5.0B Annual Revenues • Self-funded PPO medical plan • Fully-insured HMO & POS coverage Gulfstream believes that when all stakeholders— management, health care providers and employees— focus on improved health management, everyone wins. 1. C-Suite Buy-In. The leadership of the company shifted its focus from viewing the dollars spent on health care as simply an overhead cost to seeing those dollars as an investment opportunity in the health and productivity of the employees as well as the profitability of the company. 2. 3-Way Partnership. Employees, primary care physicians and the company work together with a common goal to improve the quality of health care being provided thereby resulting in healthier outcomes. 3. Personal Responsibility. Employees and their dependents are provided with tools and resources to understand their health benefits and work with their health providers to manage their health. 4. Meaningful Context. Employees and their dependents are provided health care education on a variety of relevant topics to help them achieve their personal health goals. Case study provided by For more information visit www.vbhealth.org. Better Health Care By Design blueprint | 2 resources case studies Key components of the program include: Results: improved care and compliance. Quick glance: Flu Shots Focus on Health and Productivity 1. Quality standards are defined by Gulfstream, • Measures over a 5 year period showed increased It wasn’t rocket science, say the folks at Gulfstream. lab tests/monitoring of HbA1C, mammography, Simple mathematics showed the incidence of flu was diabetic eye exams and lipid profiles. impacting the bottom line. Each year, an estimated using guidelines from evidence-based medicine. 2. Incentives to quality-driven clinicians for meeting established standards (20% of their annual E&M coded office charges). 3. Incentives for employees to use the quality-based physicians (reduction in office visit copays). 4. Service providers held to specific standards. • Further claims data showed reductions of 10–20% of employees lose time due to the flu— amputations, frequency of heart attacks and on average, 6 lost workdays per employee. At just strokes and overall health costs per patient in 10%, nine hundred (900) sick employees with an the diabetic population. average of 6 days of downtime is too much lost • Reduction in overall pharmaceutical costs productivity for Gulfstream. Benefits and Medical Health plans, disease management companies, (64.5% generic dispensing rate & 99.1% Department executives calculated the expected ROI etc. are also held to quality protocols and are generic substitution rate). that would result from a formal flu vaccine program measured on their ability to deliver high quality health management service. 5. Incentives for employees’ proper prevention • Reduced mastectomies in the group of women getting annual mammograms. • Improvement in physician adherence to and active treatment compliance. Employees evidence-based medicine treatment protocols must be compliant with their doctors’ orders (70% qualified for quality bonus). to help their physicians qualify as a recognized and developed the following plan: 1. Barrier removal: $0 copay for flu shots. 2. Health coaching: People were taught health behaviors (hand washing, for example) to help control the spread of flu. • $0 copay generic drugs for asthma, diabetes, 3. Flu shot “House Calls” were initiated: Sending quality-based physician and eligible to offer high cholesterol, heart disease, hypertension, nurses to the employees’ onsite work locations reduced office visit copays. anxiety and depression. to administer the flu shots increased employee 6. Mail order prescriptions offer a 90-day supply for a low copay to increase adherence to prescribed drug therapy. 7. HRAs with biometric screenings offered in a “House Call” setting throughout the 2008 improvements. $0 copay generic drugs for asthma, diabetes, high cholesterol, heart disease participation. 4. Determining the business case: Gulfstream and hypertension. projected a 3:1 return on investment for the Potential 2010 improvements and beyond. free flu vaccine program. Onsite clinic and onsite pharmacy. facility to encourage employee participation. Results of the HRA were an eye-opener for many employees. Case study provided by For more information visit www.vbhealth.org. Better Health Care By Design blueprint | 3 resources case studies Managing Risk Clusters Will Save Dollars for CATerpillar Mike Taylor understands the total costs of worksite health management. “Our trend line showed an increase in direct costs of 20% over 4 years. We wanted a targeted plan design that would identify risk early and allow us to intervene before costs skyrocketed.” Dr. Taylor, Medical Director for Health Promotion, is working with Caterpillar’s renowned research engineering staff to develop artificial intelligence technology to more robustly use medical risk factors to predict future disease. The CAT team has launched into a focused risk-management strategy that identified those at highest risk for coronary, diabetes, or stroke events. These diseases are driving the claims costs as well as disability and unscheduled absences, and the team is determined to get the trend line under control. Who is Caterpillar? • Fortune 100 company • $36B sales and revenue • 50% sales outside US • Leader in Forestry Logistics Energy Solutions • 80,000 employees/120,000 covered lives • Self-insured average age =47 • Average age of employee = 47 (male) • Employee turnover <10% The plan: 1. Develop our own Health Risk Appraisal based upon our findings. 2. Launch HRA and collaborative disease management within the exempt employee group. 3. Provide incentives to the participants by reducing monthly insurance premiums by $75 for each employee, $75 for each spouse, and $75 for each retiree under age 65. CEO Jim Owens is in favor of initiatives; sets target of 80% engagement by 2010 4. Stratify risk by cardio-metabolic indicators: Waist >40/males, >35 females Triglycerides >150 Blood pressure >130/85 Fasting glucose 110–125 Low HDL chol <40/men, <50 women. 5. Enroll in collaborative risk/disease/ case management with provider network. 6. Track clinical outcomes over time. 7. Track financial outcomes over time. Case study provided by For more information visit www.vbhealth.org. Better Health Care By Design blueprint | 4 resources case studies Value-based health delivers • 90% HRA participation • 50% of enrollees in diabetes management experienced HbA1C reduction (7.2 as compared to average of 8.7 one year previous) Quick glance: CAT design 1. Incentive: $900 reduction on yearly insurance with HRA participation (for each employee, spouse, and retiree under age 65). 2. Increase supply: remove barriers to disease/ • 96% of enrollees are measuring A1C • 72% meeting Surgeon General’s activity recommendations • 98% are on aspirin care management and EAP (resulted in 80,000 enrolled Employees, Spouses and Retirees [Bargaining unit accepted the • In the general employee group: approach 1/05]). 50% Reduction in disability days 3. Collaborative management: with providers, Smoking cessation rates of 35%, even after 3 years with integrated claims, pharmacy and selfreport database. 4. Caterpillar scorecard: shows employee improvement against CAT aggregate AND employee improvement over time. Case study provided by For more information visit www.vbhealth.org. Better Health Care By Design blueprint | 5 resources case studies Value-Based Plan Boosts Health and Reduces Sick Days “We needed to address the rising costs of diabetes,” says Ardis Belknap, Human Resource Manager for the City of Springfield, Oregon. “We knew the Asheville community model for diabetes improvement, and we worked hard to institute the model. But we wanted to do more—we wanted to provide business-based evidence that the model delivered. So we created a randomized study that could measure the results.” The study, called “EMPOWER,” also included Lane County and the City of Eugene, Oregon, and was conducted through the Oregon School of Pharmacy. Twenty-five percent of eligible employees enrolled in the program for people with Type I and Type II Diabetes. Study participants received waived out of pocket expenses for prescription medication and medical visits related to diabetes. In addition, the control group received educational materials, and the intervention group received consultations with a pharmacist consultant. Early results have been encouraging. “Participants told me they were encouraged to work with their doctor to consider alternatives to the tired approaches they had tried in the past,” says Belknap. “They were so excited about having affordable medications that leveled out their blood sugar and helped them maintain better health throughout the day.” The plan: 1. Enroll eligible employees based on a diagnosis of Type I or Type II diabetes. 2. Randomize participants into two groups: control and intervention. 3. Collect clinical data at the onset of the study (Dec 2005–Feb 2006), repeat in early 2007. Who is the City of Springfield, Oregon? • 52,864 Residents • 430 Employees • 1100 Covered Lives • $281,789,000 fiscal • Fully-insured benefit plan through PacificSource • Plan Deductible: $1500, 3-tiered prescription drug benefit: generic, preferred Ardis Belknap, a woman with extraordinary vision, inspires others to embrace the values of the City: Passion, Integrity, Results 4. Provide waiver of copayments to all participants for prescription medications and medical visits related to diabetes control. 5. Provide educational materials to control group and face-to-face consultants with pharmacists to intervention group. 6. Track clinical and financial outcomes over time. Case study provided by For more information visit www.vbhealth.org. Better Health Care By Design blueprint | 8 resources case studies The City of Springfield, Oregon has measured the improvement in diabetes management through a randomized study based upon the Asheville model. Quick glance: program’s business results 1. Hemoglobin A1C dropped 30% in the control group (comparable to other studies) and 50% control provided the platform to improve the in the intervention group with pharmacy consultants. The Asheville Model of community-based diabetes health of the citizens of Springfield. 2. Sick leave decreased by 30% for the intervention group. The Asheville model is an icon in health 3. Low-density lipoprotein (LDL) dropped more in the intervention group: improvement regarding diabetes management. • Goal: LDL concentration of less than 100 mg/dL. The City of Springfield, working with the Oregon • Baseline: 107mg/dL for control group, 101mg/dL for intervention group. School of Pharmacy, quickly understood the power • Mean changes at study end: decrease of 1.6mg/dL in control group, decrease of of the model. But the City also wanted to be the 5.8mg/dL in intervention group. leader in producing evidence that the model 4. Future plans: Build a wellness center with 2 onsite professionals; an exercise physiologist and a nurse practitioner. impacted businesses, so a randomized study was created in which enrollees would receive one of 5. Future plans: Launch a value-based depression model to improve total health management. two interventions: 1. The control group received printed educational materials. 2. The intervention group received one-on-one counseling with pharmacist experts to encourage adherence with the total health management of diabetes, including physician and lab visits, reti nal and foot exams, medication and testing, and exercise and nutrition. 3. Results: 30% decrease in sick days for the enrollees in the pharmacist–consultant group. Case study provided by For more information visit www.vbhealth.org. Better Health Care By Design blueprint | 9 resources case studies POLK COUNTY, FLORIDA PUTS VALUE-BASED HEALTH ON THE MAP In the heart of Central Florida lies Polk County, a vibrant community leading the next revolution in health care by designing health benefits that lower costs and boost productivity and performance. Michael Kushner, Risk Management Director for Polk County, is leading that charge. Mike and his colleagues have found a way to get greater value out of the County’s health care investment by removing the barriers to care for employees with chronic diseases and conditions. With a keen eye for assessing and quantifying risk, Mike had concerns about the high cost of workers’ compensation claims. Rather than dealing with the consequences of high claim costs and absenteeism among employees, Mike and his colleagues set out to mitigate risks before they became problems. By initially utilizing risk data, the County management found a high incidence of diabetic and hypertensive patients in their workforce, leading them to craft a new value-based approach for those who were already diagnosed or most at risk for developing the conditions. WHO IS POLK COUNTY, FLORIDA? • Economy largely based on agritechnology, phosphate mining and tourism • Largest citrus producer in the State of Florida • Center for many of the nation’s largest distribution companies • 581,058 residents as of 2007 • $1.7 billion county budget for 2009 • 8,000 employees and dependent lives covered by the County’s self-insured plan Preventive and routine care, counseling for nutrition and weight management, and smoking cessation programs are provided by health care professionals at the county-owned Wellness Center, a medical home for county employees. The Wellness Center doesn’t take the place of employees’ health care providers. It helps employees get the most out of their benefits through services that are tailored to their needs and the County’s requirements, such as pre-employment physicals and mandatory Department of Transportation testing. The County’s health team develops individualized care plans. Copays for diabetic and/or hypertension medication and supplies are eliminated if employees participate in a disease management program. While the approach has been strictly driven by risk mitigation to stem the tide of escalating costs, Mike and the County management team are truly striving to make a difference in the health and quality THE COUNTY MANAGEMENT IS STRIVING TO MAKE A DIFFERENCE IN THE HEALTH AND QUALITY OF LIFE OF ITS EMPLOYEES. of life of their chronically ill employees because, as Mike says, “it’s the right thing to do.” The plan: 1. Assess patients and categorize by severity of disease state. 2. Develop individualized care plans. 3. Assess patients’ overall knowledge of their disease state. 4. Routine consultations to educate, promote behavior change and set health care goals. 5. Patients retain $0 copays if actively participating in the program. Better Health Care By Design blueprint | 10 resources case studies RESULTS AND OUTCOMES Due to increased medication adherence in conjunction with routine care and behavioral changes, employees with hypertension have a decreased risk of stroke and heart attack while the diabetic population has experienced a decreased risk of kidney diseases, amputations and blindness. • Since 2004, emergency room visits have declined 7% among diabetic participants and 11% for those with hypertension. • Hospitalizations have dropped even more dramatically—22% for diabetics and 18% for those with hypertension. • The County’s high risk diabetic patient population dropped 22% from 2004 to 2008, yielding considerable savings per employee each year. • After the initial program investment and cost of waiving diabetic and hypertension medication copays, the Polk County government has seen net savings of $213,000. This amount reflects only savings from reduced hospitalizations and ER visits—and doesn’t account for net gains from increased worker productivity and reduced absenteeism. Quick glance: THE WELLNESS CENTER’S ADDED VALUE Polk County established their Wellness Center in 1997 to provide medical management to promote a healthy workforce under its Occupational Health Program. • Medical care is provided for most occupational injuries. • Services include Drug Free Workplace Program, infection control, annual TB testing and hepatitis vaccines. • In its first five years of operation, the Occupational Health Program showed a cost savings of over $5 million in workers’ compensation injury care. The Wellness Center expanded to offer employee health services for preventive care coupled with its value-based benefit design. As a result, the County reaped additional cost savings: • X-ray costs are greatly reduced through a partnership with a local hospital. • Lab costs are reduced by 75% through a local lab company. • Greatly reduced the number of primary care insurance claims and minimized employee leave time associated with doctor’s appointments. Better Health Care By Design blueprint | 11 resources acknowledgements A special thanks to the individuals who contributed their time, expertise, insight and enthusiasm to make this Blueprint possible. Dr. Jan Berger President and Chief Executive Officer Health Intelligence Partners Dr. Laura Long Vice President, Clinical Quality and Health Management BlueCross BlueShield of South Carolina Larry Boress President Midwest Business Group on Health Clare Miller Director, Partnership for Workplace Mental Health American Psychiatric Foundation Marc Boutin Executive Vice President and Chief Operating Officer National Health Council Gaylon Morris Assistant Vice President, Alliance Development Wyeth Pharmaceuticals Kimberly Calder Director, Insurance Initiatives National Multiple Sclerosis Society Cyndy Nayer President and Chief Executive Officer Center for Health Value Innovation David Chatel Executive Vice President, Advocacy National Multiple Sclerosis Society Dania Palanker Deputy Administrator, SEIU Health Care Access Trusts Service Employees International Union William Ellis Executive Director and Chief Executive Officer American Pharmacists Association Foundation Victoria Piazza Executive Director, Public Policy Wyeth Pharmaceuticals Steven First Assistant Vice President, Employee Benefits Wyeth Pharmaceuticals Julie Slezak Vice President, Enterprise Analytics CVS/Caremark Michael S. Kushner Risk Management Director Polk County, Florida Board of County Commissioners David K. Stacey Senior Vice President, National Accounts CIGNA Better Health Care By Design Blueprint | 12 resources acknowledgements Better Health Care By Design is willing to help. Many early adopters and health care experts came together to create this Blueprint. They share a common desire to see value-based approaches adopted in health care. They are willing to be a sounding board for your questions and concerns as you move forward in establishing your own value-based design. Your Support Team Dr. Jan Berger Michael S. Kushner President and Chief Executive Officer Risk Management Director Health Intelligence Partners Polk County, Florida Board of County Commissioners 3842 North Monticello Avenue 2135 Marshall Edwards Drive Chicago, Illinois 60618 Bartow, Florida 33830 [email protected] [email protected] William Ellis Cyndy Nayer Executive Director and Chief Executive Officer President and Chief Executive Officer American Pharmacists Association Foundation Center for Health Value Innovation 2215 Constitution Avenue, Northwest 12545 Olive Boulevard, Suite 232 Washington, DC 20037-2985 St. Louis, Missouri 63141 [email protected] [email protected] Better Health Care By Design blueprint | 13