A Road Map: Moving From Participation Based Wellness to Outcomes Based Wellness

U.S. Healthcare Crisis – Quick Facts

 Employers represent 1/3 of all healthcare spending
 U.S. healthcare costs exceed $3 trillion annually – more than
any other nation
 2010 healthcare costs were more than 3 times more than in
1990, and over 8 times more than in 1980
 More than 1/4 of healthcare costs are related to
obesity, overweight and physical inactivity and the associated
health problems, including heart
disease, hypertension, diabetes and some forms of cancer
 Healthcare costs of obese workers are up to 21% higher than
for non-obese workers

Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 3

Adult Obesity Rates

 Adult obesity rates increased in 16 states in the past year and did not decline in
any state.
 In 2011, 12 states had obesity rates above 30%.
 In 2007, only 1 state was above 30%
Source: Trust for America’s Health, July 2011

Childhood Obesity Rates

“Today, the state with the lowest obesity rate had the highest rate in 1995,”
Jeff Levi, Trust For America’s Health, Executive Director

Source: Trust for America’s Health, July 2011


Incentives Drive Outcomes

 Reward process or reward outcomes
 Greater incentives drive greater participation

Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com
pg. 8

U.S. Healthcare Crisis
How Employers Are Addressing

 Engaging employees in wellness is proving to be a difficult
challenge and a growing number of employers are re-thinking
their current strategies. 70% of employers plan to establish
results-based or participation-based contribution strategies in
2012.
 2010 marked a two fold increase in outcomes based design
with another 33% of employers planning to adopt an
outcomes based program in 2012.


So What Is Results Based
Wellness?

Participation Based Versus Results Based
Programs

Participation Based Results Based

Introduced over 20 years ago Introduced in 2001; final legal rules
in 2008
Biometric Screenings/Health Biometric Screenings/Health Risk
Risk Assessments Assessments

Health coaching/Disease Health coaching/Disease
Management Management
Incentives/penalties for Incentives/penalties for health
participation results
No true accountability Appeals and Alternatives
ROI is measurable over the ROI is quantifiable and easier to
long term measure

Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com 11

Why Are Outcomes Important?


Rules of the Game

GINA
HIPAA
ADA
ERISA

Source: www.dol.gov

Genetic Information
Non-Discrimination Act (GINA)

Effective
 On October 1, 2009 the IRS, DOL and CMS issued a joint final
interim regulation under GINA. The regulations affect group
health plans for the plan years beginning on or after
December 6, 2009.
What It Does
 Prohibits group health plans from collecting genetic
information either for underwriting purposes or prior to or in
connection with enrollments.

What Is Genetic Information?
The manifestation of a disease or disorder in family members,
which includes, family history.


Genetic Information
Non-Discrimination Act (GINA)

What does it mean to me as an Employer?
 If you require a completion of an HRA at the time of
enrollment, make sure that the HRA does not include FAMILY
HISTORY QUESTIONS.
 If you offer an incentive for completing an HRA, make sure
that the HRA does not include FAMILY HISTORY QUESTIONS.
 Penalty: Employers could be forced to pay as much as
$50,000 for each violation.


HIPAA and Wellness

•HIPAA requires uniform coverage and non-discrimination
1996

•Interim “bona-fide wellness rules” introduce exceptions for wellness plans
– very restrictive
2001

•Final Wellness Rules issued
•Distinction between incentives for participation and incentives
“contingent upon the satisfaction of a health standard”
2007 •Rules clarified in February, 2008 Checklist for Wellness Program

•National Health Reform solidifies regulation as law and provides for
expanded incentives/penalties tied to health lifestyle results
2010

© 2011 Bravo Wellness

HIPAA Exception – Outcomes Based

If an incentive is “contingent upon the satisfaction
of a health standard”:

It must be re-assessed at least once per year

It must be designed to promote health and wellness

It may not exceed 20% of the total cost of coverage offered
(Raised to 30% effective January 1, 2014)
It must be available to all “similarly situated individuals”,
appeals and “reasonable alternatives” must be offered
The availability of the appeal must be disclosed in all plan
materials

Healthcare Reform solidifies regulation as law and provides for
expanded incentives/penalties tied to health lifestyle results.

© 2011 Bravo Wellness

SO I HAVE COMPLIED WITH GINA AND HIPAA


Americans With Disability Act (ADA)

 Purpose: Prohibit discrimination based on disabilities
 As it applies to employers: Employer shall not require a
medical examination and shall not make medical inquiries of
an employee unless it is job related and consistent with
business
 Medical Examination includes blood tests
 Medical Inquiries include well being questions


American with Disabilities Act (ADA)
Impact on Wellness Programs

“Voluntary Wellness ADA allows medical exams as part of wellness
Programs” programs as long as participation is “voluntary”
 What is voluntary? No clear guidance

Bona Fide Plan ADA allows employers to require participation in a
Exception wellness program that is part of a “bona fide benefit
plan”, if participation helps underwrite, classify and
administer risks in benefit plans that are based on,
or not inconsistent with, state law

Key Actions to Communicate that the wellness plan is part of your
Demonstrate the Bona group health plan
Fide Plan Exception
 Include specific wellness language in SPD
Wrap and all benefits materials

 Clearly describe any rewards/penalties, and
maintain thorough program documentation


So How Does It Really Work and
and What Are The Results So Far?

SimplyWell’s Integrated Model


Successful Incentive Structures

Engineering/Manufacturing – 80% participation rate
 Premium insurance discount $80 per month/ family and $40 per month/single –
must earn quarterly point requirements to get the discount each quarter
 Health Score – first year Health Score is baseline only – second and subsequent
Health Scores must achieve score of 85 or above, or show improvement:

Improvement
Incentive
(Includes spouse)
10 points $150
20 points $300
30 points $450
For individuals who can earn an 80 $500 max per year
or above (includes spouse for a potential of
$1000)

 Offers Tobacco Cessation Program
 If family coverage, BOTH employee and spouse must participate to get
insurance premium discount


Successful Incentive Structures

Insurance Company – 95% participation rate
 Must complete the HRA and attend a Health Screening for insurance benefits
(CAUTION)
 Spouses on insurance must complete the HRA
 Must earn 5,000 points to receive reduced medical premiums (HRA and Health
Screening are only worth 200 points each)
 Premium discounts are as follows:

Discount
Group
(in annual savings)
Employees $936.00
Employees + Child(ren) $1,680.00
Employee + Spouse $2,088.00
Employee + Family $2,976.00


Health System Results
Repeat Health Scores 2006 - 2010

Health Score Changes
40%
Health 2006 % 2010 %
Score 35%
Ranges 30%
45-59 0.6% 0.8% 25%

60-69 9.5% 7.7% 20% 2006
15% 2010
70-79 30.6% 24.0%
10%
80-89 30.4% 35.5% 5%
90 & Above 28.9% 32.1% 0%
45-59 60-69 70-79 80-89 90 +

 114 (7.5%) of repeat participants with a score < 85 raised their Health
Score 5 points or more from 2009-2010
 Average Health Score in 2009 = 84.1
 Average Health Score in 2010 = 85.9

Source: Intercare Insurance Solutions • Private & Confidential yearInsurance Lic #0D80830 • intercaresolutions.com
SimplyWell Repeat Report – 2 • CA repeat health score report

Health System Results
Health Risk Trends
970 Repeat Participants Health Screening Data –
Measurable and Modifiable
Health Categories
2006 % 2010 %
High Risk
Body Composition
33.3% Female 32.5% Female
Score
28.7% Male 25.0% Male
(BMI 30+)
Blood Pressure >
13.1% 12.5%
140/90
Total Cholesterol >
47.5% 26.8%
200
LDL >130 34.7% 18.3%

Triglycerides >150 30.6% 24.4%

Glucose >100 26.8% 17.4%

Health Score > 85 43.3% 51.2%
Source: SimplyWell Aggregate Report – Repeat Risk Summary 10/13/2010


Population Health Management
Compared To The General Population

4500

4000

3500
2008
2009
3000
2010

2500

2000
SimplyWell Repeats Non-Participant Repeats


Cost vs. Risk

$5,000
$4,500
$4,000
$3,500
$3,000
Minimal Risk
$2,500
Moderate Risk
$2,000
High Risk
$1,500
$1,000
$500
$0
2008 2009 2010


Packing House Data

$12,000.00

$10,000.00

$8,000.00
Packing House
$6,000.00
National Average
$4,000.00

$2,000.00

$0.00


ESMH Results For Packing House

 Enrollment in insurance increased 5.6%
 Total health care costs PMPM decreased 12.4%

2010 2011 % Change
Average
1501 1586 +5.6%
Members
Medical Claims
$179.87 $151.29 -15.9%
Paid - PMPM
Pharmacy
Claims Paid - $26.84 $29.54 +11.1%
PMPM
Insurance
Packing House % Variance
Plan-wide
Total PMPM
$181.99 $311.89 -41.6%
Claims


ESMH Medical Utilization For Packing House
(2011 Plan Year)

Insurance %
Packing House
Plan-Wide Variance

High Cost Packing House Insurance Plan-
-58.9%
Claimant % as compared to Wide

Average Length Packing House Insurance Plan-
-42.9%
of Stay as compared to Wide

Packing House Insurance Plan-
Days/100 -77.0%
as compared to Wide
ER/1000 -5.9%
as compared to Wide
Office Visits/1000 -24.2%
as compared to Wide


Key Take Aways

 Results Based Wellness – tying employee medical plan contribution to
health outcome – is growing in prevalence
 Many ways to design the incentive and overall program
 Legally compliant requirements are foundational – GINA, HIPAA and
ADA
 Reasonable Alternative Standard is a must
 Impact on health care – on individual health and health care claims –
is promising


Keys To Success

 Partnering with the “right” results based, third party administrator
 Results based program requires objective third party administrator with the tools,
resources and support that best match the culture
 Legally compliant appeals and alternatives administration
 NOTE – results based programs incorporate venipuncture blood draws rather than
finger stick; increased accuracy

 Setting biometric targets and contribution strategy to create early
success and positive behavior change over time
 If possible, review historical biometric results and project how many employees
will meet the targets
 Obtain clinical perspective on the biometric targets
 Start “gentle” and tighten targets over time

 Include spouses – voluntary initially, require year 2 or 3
 Educate, educate, educate – combined with resources, support
and the opportunity for personal/family success


A Road Map: Moving From Participation Based Wellness to Outcomes Based Wellness

A Road Map: Moving From Participation Based Wellness to Outcomes Based Wellness

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A Road Map: Moving From Participation Based Wellness to Outcomes Based Wellness