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June 18-19, 2009 Sponsored by | Hyatt Regency Chicago Human Capitol Metrics of Success: Case Studies of ROI Models across Industry Type and Size John Vlajkovic Senior Health Care Consultant; Principal Hewitt Associates Agenda –Market Dynamics –Conflicting Perspective –The Key Is Measurement –Sample Analyses Can’t Ignore the Financial Burden Annual Health Care Costs per Employee Annual Employee Contributions and Out-of-Pocket Costs • Health Care Costs Double in Seven Years $9,000 $8,676 $4,000 $7,982 $8,000 $3,500 $7,583 $7,025 $7,000 $6,435 $3,000 $1,735 $5,728 $6,000 $2,500 $4,993 $5,000 $1,576 $1,458 $4,336 $2,000 $1,311 $4,000 $1,116 $1,500 $940 $3,000 $777 $1,000 $2,000 $500 $1,000 $661 $659 $791 $969 $1,158 $1,302 $1,472 2005 2006 $1,690 $1,859 2007 2008 $0 $0 2001 2002 2003 2004 2005 2006 2007 2008 2001 2002 2003 Average Employee Contribution 100% Increase Source: Hewitt Health Value Initiative™ (HHVI™) 2004 Average Employee Out-of-Pocket Costs 172% Increase The Economic Collapse Adds to the Problem The Conference Board’s CEO Challenge 2008 – Original 2008 survey completed July/August (pre-financial crisis) • Conference Board did a re-survey in September/October – With regard to people-related challenges, only two items became a higher priority in the re-survey • Cost of employee health care benefits—up 7 slots • Employee efficiency—moved up 3 slots – In contrast, these items dropped: • Being an employer of choice—down 10 • Cost of employee salaries/wages—down 4 • Diversity/cross-cultural/multi-generational—down 4 Which is Causing a Shift in Focus Which of the following statements most accurately describes your organization’s approach to health care benefit strategy today (for your active employee population)? 65% Aggressively Manage Health/Wellness/Productivity 82% Manage Purchasing Efficiency and Vendor Performance 31% 15% 2009 Exit Health Care, Invest in Health Exit Health and Health Care* *New data point 2008 2% 3% 2% 0% 2008 Which is Causing a Shift in Focus Which of the following statements most accurately describes your organization’s approach to health care benefit strategy in the next 3–5 years (for your active employee population)? 75% Aggressively Manage Health/Wellness/Productivity Manage Purchasing Efficiency and Vendor Performance 87% 6% 9% 2009 2008 14% Exit Health Care, Invest in Health 4% Exit Health and Health Care* *New data point 2008 5% 0% Unfortunately, This Conflicts with What We Know 10 = 70% 66% 20 years 2,400 33% = 130+ 10-20 years 50% 40% 25% 39M 5X 1 in 10 71% 437,000 $1.1 Trillion We Also Know That... Cost reduced Cost increased Change in Cost Follows Change in Risk $600 $400 $200 $0 -$200 -$400 -$600 3 2 1 Risks Reduced 0 1 2 3 Risks Increased – Actives: Savings per risk reduced: $231; Savings per risk avoided: $320 – Retirees<65: Savings per risk reduced: $192; Savings per risk avoided: $621 – Retirees>65: Savings per risk reduced: $214; Savings per risk avoided: $264 Source: AJHP. 15(5):341-349, 2001 The Key Is Measurement Employers are looking for useful information to determine – Which programs are effective – How vendors are performing – Whether to eliminate programs – How to refocus current programs – Which new programs should be considered and implemented – What groups to target The Key Is Measurement Yet, employer experience suggests that: – They receive a deluge of reports from different vendors • Hard to interpret into a coherent understanding of performance • Difficult to combine • Insufficient standardization and interpretation – There is a lack of information on behavior-linked elements and health status – They are challenged to connect to broader health costs (like disability and productivity) – That more data is not always better—the key is having the right data The Key Is Measurement Inputs Census and demographic data Medical and prescription drug claims data Health Risk Questionnaire (HRQ) and biometric testing results Disease management, wellness, coaching use Health Risk Analysis Tool Outputs Baseline measures - Employer-specific groups - Health status - Current behaviors Stratify results reflecting health status and behavioral risk Target specific groups, conditions, and behaviors based upon actual employer results Compliance with Prescription Medications & Paid Claims PMPY—Stratified by Level of Deductible Examine how Rx compliance and total claims vary by medical deductible. Bubble size is proportional to number of members. $6,000 $5,000 65.2%; $3,427 $4,000 $3,000 69.2%; $3,692 $2,000 71.2%; $3,485 65.2%; $2,417 $1,000 $0 60.0% 63.0% 1. $0 / $0 66.0% 2. $250 / $500 69.0% 3. $500 / $1,000 72.0% 4. $1,000 / $2,000 75.0% Compliance with Cardiovascular Medications & Paid Claims PMPY—Stratified by Participation in CAD DM Examine how compliance and claims vary for those participating in DM. Bubble size is proportional to number of members. Translucent (lighter) bubbles represent Year 1 data, and solid (darker) bubbles represent Year 2 data. $18,000 $16,000 86.1%; $14,237 $14,000 89.2%; $13,585 $12,000 $10,000 $8,000 71.8%; $8,807 73.0%; $7,123 $6,000 $4,000 $2,000 $0 60.0% 65.0% 70.0% 75.0% 80.0% N Y 85.0% 90.0% 95.0% 100.0% Health Risk—Cohort Analysis Cohort Analysis—Baseline Did employee behaviors improve? Cohort Analysis—Subsequent Years Were chronic conditions managed successfully? Cohort analysis is used to test program performance. Full population analysis can reveal the groups that contribute most to health care cost increases. The Key Is Measurement Goal is to be able to answer questions critical to health strategy – What are the top drivers of cost and excess risk? – Where are the highest segments of cost, and which have the greatest potential from intervention (conditions or groups)? – Are my programs working and working together? – Which plans, carriers, or programs are most effective? – How can limited resources best be directed to improve health risk (and costs)? Human Capital Metrics of Success: Case Studies of ROI Models across Industry Type and Size Paul Hodgins MD Medical Director GE Energy Company Profile • GE Energy Infrastructure provides solutions that powers worldwide industry. From gas and steam turbines to drilling equipment and water- processing systems • Energy has over 500 worksites in over 100 countries. Some of the larger locations are in NY, NC, SC,TX, France, Hungary, India • We have about 60,000 employees. Approximately half in the US and half outside the US • Workforce demographics – average age 44, and 87% male Health Risks at GE Energy: Employee Health Profile Overall Number of Health Behavior Risks • Energy has fewer high risk participants than the StayWell norm • Energy has more low risk participants than the norm • Overall, energy participants have fewer risks than the norm Percent at Risk 100% 25% 34% Ge Energ y N o rm Gro up B 6+ Risks s 3-5 Risks re Ca 0-2 Risks k ac 0% High Risk ol er st le ho 37% 50% 25 20 15 10 5 0 C 53% s re St 54% 75% t gh ei W 13% se ci er Ex 9% Number of Health Behavior Risks The specific risks of the high risk group: •Data from self reported Health Assessment •Back Care (25%) •Energy participants have more low risk participants than the norm and fewer high and moderate risk participants •Exercise (22%) •Goal is to reduce high and moderate risk groups •Weight (22%) •Stress (20%) •Cholesterol (19%) Health Promotion Efforts • Cancer Screening • Focus on breast and colorectal cancers • Communications campaigns • FOBT pilot • Weight Watchers reimbursements • 100% for program completion • Tobacco Cessation – Quitline with free NRT – US, Canada, India – Freshstart – Quitnet (outside US) Health Promotion Efforts • Cardiovascular screening developed by GE Energy Health Services to: – – • Lifestyle coaching – – • Raise awareness of risks for heart disease Promote healthy lifestyle changes to help prevent Cardiovascular Disease. Triggered by Health Assessment Target risks include weight, fitness, nutrition, stress, back care, cholesterol mgt etc. Quarterly Health Themes • – – 46 sites, 6000 participants Heart Health, Focus on Fitness, Cancer Prevention, Safety at Home Energy designed-action oriented CARDIOVASCULAR RISK ASSESSMENTS Metrics: Planning first • Establish program evaluation model from the start – Cost effectiveness, behavior change, employee satisfaction, productivity – Comparative groups (pre/post, participant/non-participant – Measure what matters • Determine data that will be needed • Determine methods to measure Metrics: Employee Utilization • Program participation is the first step in program evaluation • Assess participation from various angles • Be consistent, track over time Tobacco Cessation Cost of tobacco/employee = $3,783 ($2,583 for health care and $1200 for productivity) American Cancer Society Quitline® – Official launch June 2008 – 36,000 covered lives • 18.4% tobacco prevalence rate based on gender, age range and education = 6624 tobacco users • Potential cost savings: $25,058,592.00 – Projected utilization goals • 10% = 662 participants/yr • 5% = 331 participants/yr – Current Utilization (through 5/09) = 127 callers; 103 enrolled in counseling Cost savings if 103 enrollees quit for good: $389,649.00 Metrics: Program Effectiveness Behavior change – Individual behaviors • Quit smoking, increased exercise, decreased weight – Risk reduction • Moving population from high and moderate risk to low risk Clinical Outcomes – Reduction in Blood pressure, cholesterol, blood sugar – Decrease prevalence of chronic conditions – Decrease incidence/prevalence of cancer FOBT InSure FIT Program 7,900 Energy employees 50 and older eligible for test Piloted program for 2,900 employees – 336 tested; 14 detected Rolling out to all non pilot sites – 5,000 employees and interested spouses (50 yr+) – More aggressive communications to increase participation – Using same participation rates would find 30 people with possible colorectal cancer that treated The opportunity is to save lives and the $X annual spend on colorectal cancer Metrics: Program Effectiveness Cost – Direct and indirect costs – Medical and productivity – Absolute Cost and/or trend reduction Satisfaction & quality of life – – – – Vendor and program satisfaction survey Company employee satisfaction surveys Use quality of life (SF36) pre and post program Anecdotal-real life stories Metrics: Program Effectiveness Additional considerations – – – – – – Data quality Factoring all variables such as plan design changes Risk adjust groups Privacy Benchmarks Audience Communicating Outcomes Each stakeholder needs different data views Tailor message for specific audience: participation, behavior change, clinical outcomes or cost. Sr. Management Sites – – – – – Detailed – Participation • Show all sites to encourage competition – Behavior change High level Participation Cost Anecdotes Human Capital Metrics of Success: Case Studies of ROI Models across Industry Type and Size Dr. Jon Cohen Sr. Vice President & Chief Medical Officer Quest Diagnostics Incorporated Company Profile Leading provider of diagnostic testing, information and services – – – – Comprehensive Diagnostic Testing Advanced Information Technology Solutions Clinical Trials Testing Innovative Diagnostic Products – Risk Assessment Solutions to Life Insurance Industry Serving 50% of US physicians and hospitals Pioneer in bringing new tests & technology to market World leader in cancer diagnostics Touching the lives of patients 150 million times each year “Health” Profile of Quest Diagnostics Employees • • • • Piloted – 2004; Introduced – May 2005 Transition from sick care to health care Emphasizes health literacy, education and metrics Volunteer health promotion champions at major worksites Driving Lifestyle Changes Identify Health Risks – Blueprint for Wellness • Health risk assessment which includes labs & biometric screening • Financial incentives doubled participation to 61% – Colorectal Cancer Screening Promote Healthy Changes – Tobacco cessation • Reported quit rate of 38% – Physical fitness, weight, and stress management programs – Audit onsite food offerings • BU’s meeting vending machine goals increased 6% to 16% • BU’s meeting cafeteria goals increased 29% to 43% Tobacco Use Outcome – Significant Reduction in Tobacco Utilization Obesity – Is it Time to Demand More From Our Employees? Colorectal Cancer Focus on Wellness is Good for Business • Estimated ROI - $4.80 for every $1 invested • Positive driver of employee satisfaction • Public Recognition: – “Best Places to Work” – National Business Group on Health’s “Best Employers for Healthy Lifestyles” award (2005 – 2008) • Included in company balanced scorecard • Sell corporate wellness product, Blueprint for Wellness™ – 3M, Jeld-Wen, Domino’s, General Electric ROI Source: Thomson-Reuter, 2005-2008 Analysis Continuing Journey • Integrate Data – With health and disability plans • HealthyQuest 2.0 – Leverage social networks – Expanding use of PHR’s • Targeted Programs – Identify gender and ethic health disparities – Introduce programs to close the gap in care Sponsored by