1. Consumer Driven Healthcare
Success Factors
August 30, 2010
C. William Sharon, CEBS Leah Martorana
National CDH Practice Leader Benefits and Compensation
Aon Consulting Administrator
Fowler White Boggs P.A.
1
2. Agenda
• Aon’s Perspective on CDH Success Factors
• Case Study: Fowler White Boggs P.A.
2
3. Aon CDH Experience
CDH Breakdown (By Type Plan) Expertise
4% 2%
• 350 CDH Clients
• HRA and HSA plans
7% • Total replacement and slice
11% – 279 “slice” offerings
– 71 full replacements
39% • All major CDH vendors
– Aetna
– Anthem
36% – BlueCross
– CIGNA
– Humana
– United Healthcare
• Aon’s plan in place 10 years
HRA = 137
HSA = 127
HRA full replacement = 38
HSA full replacement = 26
HRA and HSA = 15
HRA and HSA full replacement = 7
3
4. #1: Consumer Engagement….Not a Plan
Four key building blocks for an
• Consumerism effective program:
– a set of techniques
designed to transform
members to be more
Account Based Consumerism
effective health care
Health Plan Tools
consumers
• Consumer driven
healthcare (CDH)
– consumerism using an
Wellness DM
account-based (HRA or
Incentives Incentives
HSA) plan design
4
5. Behavior Change in Three Areas
Value Purchasing Improved Health Manage Chronic
Ask price of service Use preventive Use disease
Consider alternatives benefits management
Complete health program
Research doctor and
hospital quality assessment Follow evidence
Reduce weight based guidelines
Use generic Rx
Stop smoking Use a premium
Urgent care vs. ER
doctor
Outpatient vs. Manage stress
Maintain personal
inpatient Get biometric
medical record
Online consultation screenings
Use medical home
Retail health clinics Use online health
coach Use center of
excellence
5
6. #2: Design CDH Plan Right
• Employees don’t want a “High Deductible
Health Plan”
• Actuarially equivalent CDH plan
• Meaningful employer provided account value
• 100% preventive services
• No copays
• Attractive out-of-pocket maximum
• The greater the CDH plan enrollment the
better the savings
6
7. Employee Employee + 1 Family
Employer
$750 $1,500 $2,250
Account
Preventive Care covered at 100%
Member
$750 $1,500 $2,250
Responsibility
Deductible $1,500 $3,000 $4,500
Employee 20% in-network
Coinsurance 40% out-of-network
Out-of-Pocket
Maximum $2,000 in $4,000 in $6,000 in
$4,000 out $8,000 out $12,000 out
Employee Contribution Wellness Incentive to complete health
assessment, comply with DM program, no tobacco usage, etc.
7
8. #3: Long Term Strategy
• Consumer behavior change does not happen
overnight
• 30+ years of managed care to overcome
• Requires senior management commitment
• Measure consumer engagement metrics
• Modify plan design, wellness/DM incentives
and employee communications every year or
two based on consumer engagement metrics
8
9. Managed Care Consumerism
Health plan and provider Participant and provider
control utilization manage care
More “skin in the game”;
Pre-paid health plan; low
health insurance to protect
copays
against risk
Plan restrictions such as pre-
authorization and step More participant control
therapy
Strong DM and wellness
Minimal DM and wellness;
programs with strong
no incentives
incentives
Large network but
Large provider network encouraged to use premium
providers
9
10. Wellness Financial Incentives Continuum
Less intrusive Most aggressive
Undefined/lower ROI Measurable/high ROI
Reward for Reward Based Reward for Reward for
Activity On Risk Achievement Adherence
• $ for completing a • Waived co-pays on • $ to maintain low • Lower premium for
health assessment diabetes medication cholesterol non-smokers
• $ for enrolling in a • $ for colonoscopies • $ to reduce cholesterol • $ to maintain a target
chronic disease • 100% benefit for 10 points BMI for 12 months
management program compliance with EBM • $ to stop smoking • $ to maintain low blood
• $ for completing an care • $ to maintain BMI below pressure for 12 months
online or telephonic • 100% benefit for 25
wellness program preventive care • $ to hit biometric
• $ for participation in screening results
biometric screening • Reduced copays for use
of high quality providers
10
11. #4: Consumer Friendly
• Simple plan design
• Single “sign on” for all consumerism tools
– Account, medical, Rx, wellness, and DM
• Integrated administrative platform
– Account, medical, Rx, wellness, and DM integrated
• Visible and understandable wellness incentives
• Easily accessible wellness and DM programs
11
12. #5: Employee Communications
• Requires comprehensive employee
communications campaign
• Small group employee meetings work best
– Led by trusted, credible meeting leaders
• Management support necessary
• Employees will be skeptical of the new program
• Key employee communication tactics:
– Claim examples
– Online plan selector tool
– What’s in it for the plan participant?
12
13. Potential CDH Program Results
• Reduce health care cost trend rate without
cost shifting to employee
• Reduce utilization of unnecessary services
– Fewer office visits, fewer scripts
• Lower cost treatment setting
– Generic Rx instead of brand
– Urgent care instead of ER
– Outpatient hospital instead of inpatient
• Increase in preventive services usage
• Improved wellness and DM participation
13
14. Potential CDH Program Results
100%
$$$$
CDH Enrollment
80%
60%
ss
v
viing
ng
40% Sa
a
mS
m
ris
er i
s
me
20% su m
u
C
Con s
on
10%
5%
Preventive HA Web DM Generics PHR
Benefits Tools
Consumer Engagement 14
15. What is Current CDH State?
• 18 to 20 million CDH members
– 500,000 CDH members in 2003
• Growing 20-30% per year
– Increase in full replacement CDH
• 45% of Fortune 500 have a CDH plan
• Four drivers of CDH growth:
– Consumerism “tipping point”
– Double digit health care costs
– Down economy
– National health reform limits cost shifting and
eligibility exclusions
15
16. Next Generation Consumerism
• Expanded wellness/DM incentives
• Medical home
– Holistic primary care
• Onsite clinics with wellness/DM focus
• High performing networks
– Steering members to best cost and quality
• Medical tourism (domestic and international)
• Centers of excellence for specialty services such
as bariatric surgery, transplants, cancer, etc.
16
17. Fowler White Boggs P.A.
CDH Case Study
Leah Martorana
Benefits Administrator
17
18. Why Consumer Driven Health in 2006?
• 450 employees
– White collar, professional, busy, minimal “self-service”
• Traditional HMO and PPO plans with 50/50 enrollment
• Costs increasing 14% per year from 2002 to 2005
• Low consumer engagement
– Low usage of preventive services, online health assessment,
web tools, etc.
18
19. Consumerism at Fowler White
•2006: Implemented Consumer Driven Health Plan
•2008: Eliminated HMO
•2009: Introduced Healthy Pledge Premium Differential
•2010: Added New HRA plan
•2011: Elimination of POS Plan 19
20. New HRA Plan in 2006
• Plan design actuarially equivalent to HMO
– Rich by competitive standards
• 100% preventive services
• High HRA fund of $1,000/2,000/3,000
• 100% coverage after deductible
• Slightly lower employee contributions made the
HRA plan the “best deal”
20
21. HRA Plus vs. HRA Basic
Benefit HRA Plus Plan HRA Basic Plan
(NEW for 2010)
In-Network In-Network
Fund (firm pays) $1,000/2,000/3,000 $500/1,000/1,500
Deductible (before fund) $2,500/5,000/7,500 $2,000/4,000/6,000
Out of Pocket Max (before fund) $2,500/5,000/ 7,500 $3,000/6,000/ 9,000
Physician Visit 0% AD 20% AD
Hospital Inpatient 0% AD 20% AD
Hospital Outpatient 0% AD 20% AD
Urgent Care 0% AD 20% AD
Emergency Room 0% AD 20% AD
Preventive Care 0% 0%
Rx Retail 0% AD 20% AD
Rx Mail 0% AD 20% AD
21
22. Post 2006 Changes
• No changes to HRA plan in five years
• Eliminated HMO and changed to Aetna in 2008
• Added wellness incentive in 2009
– (1) health assessment, (2) no tobacco, and (3) DM
– $9/14/20 bi-weekly contribution differential
• In 2010:
– Added second “low option” HRA Basic plan
– Increased wellness incentive to $20/30/40
– Added spousal surcharge
– Liberalized 100% preventive service guidelines
22
23. Integrating Consumerism and Wellness
• Wellness shown to yield $3 return for each $1
invested*
• Ongoing Wellness Events/Programs at Fowler White:
– Boot Camp
– Yoga
– Start! Walking Program (over 50% participation)
– Biometric screenings
– Lunch and Learns
– Health & Benefits Fair
– Smoking Cessation Program
– Healthy Pledge Premium Differential
– Wellness Committee Meetings
– Executive Physical
Reference: Adapted from WELCOA. (2006). Planning wellness: Getting off to a
good start, Part I. Absolute Advantage (5)4, p. 1-92. 23
24. Fowler White Successes
• CDH enrollment has increased each year since inception
• Recipient of American Heart Fit Friendly designation (‘07, ‘08,
‘09, ‘10)
• Winner of Jacksonville’s Healthiest 100 Award
• Named one of 15 Fittest Companies in America by Mens
Fitness in ‘08
• Tampa Bay Business Journal’s Healthiest Employer contest
finalist
24
25. Financial and Engagement Results
• Before CDH/wellness program
– 14% per year cost increase average from 2002 to 2005
• After CDH/wellness program
– 6% per year cost increase average from 2005 to 2009 with
minimal plan design reductions
– Current PEPM ($760.04 as of 7/10) is less than PEPM
three years ago ($774.76 as of 7/07)
– Increase in web tools usage
– Increase in preventive services usage
– Increase in generic Rx usage
– Increase in wellness pledge (76% of participants)
– Increase in wellness program participation
25
26. Fowler White Learnings
• Culture can’t be changed overnight
• Senior management support is a must
• Enthusiasm for Wellness Program is contagious!
• Communication is key
- Employee Presentations
- Emails & Pre-Enrollment Newsletters
- One-on-Ones
- Post Enrollment follow up Q&A
• New Hire on-boarding is critical
26
