Donald B. Thompson President Epic Insurance Solutions.
Transcript of Donald B. Thompson President Epic Insurance Solutions.
AGENDA
• How Insurance Carriers Develop Premiums
• Implementing a Successful Long Term Wellness Strategy
• Utilizing Data Analytics to support your Wellness Plan
• Empowering and Educating Employees
Health Insurance Premium
Health Insurance Premiums are a reflection of the underlying cost of care. When the cost of medical services such as doctors visits, hospital stays, and medical devices increase, these cost drive a corresponding increase in premiums
• Federal data shows that over the past 20 years health cost have increased by an average of 7.2% annually and premium increases have averaged 7.1% annually
• Calculating health insurance premiums is a process driven by three main factors
– Cost of medical benefits (claims / expected future claims) 80%
– Administrative cost (selling expense, administering the plan, profit)15%
– Premium Tax (including new ACA taxes)5%
What Drives Premium?
Increased Utilization and Higher Prices for Medical Services– Accounts for approximately 70% of the increase each year
Demand for New Technologies– One of our nation’s strengths lies in our ability to bring forth innovation. The newest treatments are typically much more
expensive than current ones
Provider Consolidation– Providers are banding together which typically reduces competition. In addition, these providers demand higher
reimbursements driving up the premium cost
Cost Shifting– From Public Programs such as Medicaid and Medicare to those with private coverage
Medical Liability– It is estimated that .10 of every premium dollar is spent on medical liability and defensive medicine
Regulations, Mandated Benefits & Taxes– State & Federal regulations, benefit mandates, and taxes increase the cost of coverage
Affordability of Coverage
– Health Insurance premiums continue to increase 8-9% per year and at this pace will double over the next 8 years.
– The average cost per employee is quickly approaching $12,000 annually
– Deductible and Out of Pocket exposure continue to increase placing a larger burden an employee’s budget for care
Lifestyle choices lead to increase costs for All
– Many health problems are a result of an unhealthy lifestyle; smoking, lack of exercise, poor diet, excess stress, etc.
– Lost productivity due to absenteeism, depression, and stress cost companies $70 billion annually
– Cost of Care for Unhealthy employee behaviors cost U.S. employers an average of $670 per employee each year
Opportunity
– Researchers have estimated that preventable illness make up approximately 70% of the burden of illness and the associated costs in this country.
– Implementing a successful wellness plan can have a significant impact on an employees health and an employers bottom line
• Improved productivity as healthy employees tend to perform better
• Reduction in sick leave absenteeism
• Improved reputation as a company who cares about their employees – aids in recruiting and community perception
• Improved employee morale and stronger employee retention
Sources: Society for Human Resource Management, The World Health Organization, The Wellness Councils of America,
Workplace Wellness - Why
Workplace Wellness TrendsMany employers have begun their Wellness Journey with tactics that can help improve employee health and productivity, but the plans effectiveness are difficult to measure.
• Weight management programs
• Health fairs
• On Site Flu Shots
• Health risk assessments
• Smoking cessation programs
• Education classes
• Subsidized use of fitness facilities
• Internal policies/programs that promote healthy behavior
• Wellness Day off
What is the next step to enhance the Program and produce measurable results?
• Policy changes that affect the health of employees
• Outcome based Incentives, Cash, Credits in HSA, HRA, FSA
• Outcomes based employee medical premium differentials
• Mandatory enrollment in the Wellness Program to be eligible for the medical plan
• Integrating your Medical / Rx claims data with your Wellness reporting on a single platform
Creating a Workplace Wellness Program
Workplace Wellness programs should be long-term strategies that help improve the quality of employees’ lives, reduce benefit costs, and increase productivity through sustained improvements in workforce health.
Top Management Support & Participation– Management must understand the benefits of the program
– Link health promotion to business goals, values and strategic priorities
Create a Wellness Team– Individuals who will have a role in program development, implementation and evaluation– Develop a program that is responsive to the needs of all participants
Tailor Your Initiatives to Employee Needs– Employee interest surveys– Health risk assessments– Claims data analysis to determine current employee disease risks– Biometric testing
Create an Annual Plan– An annual operating plan should include a mission statement for the program, along with specific, measurable short- and long-
term goals. – A means to evaluate the effectiveness of the program.
Creating a Workplace Wellness Program
Choose Appropriate Programs and Initiatives– Select health initiatives that are relevant to the data you collected.
– Address specific risk factors of employees
– Programs are in line with what management and employee culture
Create an Annual Operating Plan– Vision statement outlining what you are trying to achieve with the program
– Goals for the program
– A timeline, budget, communication plan, implementation plan
– Evaluation – measuring success of the program
Create a Supportive Environment– Provide employees with ongoing encouragement, support, opportunities and rewards
– Offer healthy food choices in your vending machines
– Reward healthy achievements
Consistently Evaluate Outcomes– Take a close look at your goals and objectives, and determine whether you have achieved the desired result
– Evaluation allows you to celebrate achieved goals and discontinue efforts that are not as successful
– Surveying employees again can be effective – after participating in the wellness program thus far, they can provide feedback about what they liked, what they would change, etc.
Creating a Workplace Wellness Program
Implementing a wellness plan can be a difficult process. Depending on your current culture and employee readiness for change, a three year strategy may be necessary to ensure the success of the plan.
Participation Phase - Year 1– Start slow and communicate heavily
– Get Employee Buy In
– Promote Program and Drive Engagement with Rewards
Engagement Phase - Year 2– Employee and Leadership Accountability
– Set Goals– Personal Alternatives– Reward Improvement
Outcomes Phase - Year 3– Continued Employee and Leadership Accountability
– Outcomes Based Rewards / Premium– Integrate Data Analytics– Design Health Plan around known drivers of claims
Data Analytics
Reviewing and understanding your healthcare data and claims information is instrumental to your cost-controlling strategy.
– Carrier Data is available depending on an employers size and funding arrangement, fully insured/self-funded
– Traditional carrier data is somewhat limited but the Health Carriers have started producing reports that are much more detailed
– Wellness Programs that include Personal Wellness Assessments and Blood Profiles can also be a good, but a limited data source
– Integrating your medical and Rx claims data with your Wellness reporting on a single platform can enhance your ability to understand risk, create actionable plans, and measure the ROI of the plan
Integration
Clinical Services/Health Coaching/Disease Mgt
HealthRisk Assessment
Biometrics/Lab Data
Claims Data Integration
Data Analytics & Predictive Modeling
Based on an employers size and the current carrier in force,
– Data can be utilized in a manner to predict future claims– Review member gaps in care & pharmacy compliance– Negotiate fully insured premiums or stop loss contracts with carriers at an employer’s renewal.
Raw Carrier Data Create Predictive Model Apply to Health Plan Medical Claims Drill Down Capability
Forecast Cost & Risk Rx Claims Forecasting Reports
for each member Member Eligibility Data Analytics
Predict Clinical Events HRA
Identify Gaps in Care Lab Results
Data Analytics
Identifying Trends
Data analysis allows employers to identify disease trends that impact their population.
• Spikes in utilization• Gaps in evidence-based care standards• Disease prevalence• Admission rates• ER & Urgent Care Utilization• Rx Utilization
Budgeting
Data analysis platforms can help employers get a handle on current and future cost.
• Allow for employers to make adjustments for risk to their plan• Measure plan performance• Refine wellness strategies• Track trends in cost• Establish pricing assumptions• Aids in the underwriting & premium negotiation process
Data Analytics
Wellness Program Effectiveness
If employers better understand the overall health of their population, they can
• Allocate resources focusing on their unique needs• Assess the programs participation, utilization, and effectiveness• Identify initiatives that work• Track ROI
Data Clarity and Transparency
• Empowers employers to make informed decisions about premiums• Accurately quantify risk of their populations• Assist in benefit plan designing• Steering Employees to more affordable providers
Empower & EducateIn addition to developing a robust wellness Program, how can we help employees understand their impact on healthcare cost and empower them with tools to make educated decisions.
Dedicate time during Open Enrollment and throughout the year– Mandatory Meetings– Invite Spouses if they are eligible for coverage– Consider one on one meetings with employees to review their plans
Educate Employees – Discuss how a premium increase impacts their take home pay – If your company is self-insured make the employees aware of that– If you are large enough to receive claims data, share a summary of that data. – Share benchmarking with the employees showing them how their claims compare to other similar companies
Review Transparency Tools– Inform employees that the same service at different provider locations can vary dramatically in cost– Utilize the tools that the Carriers offer online and incentivize employees to do so– Look into Companies that will help steer employees to lower cost providers, Compass, Healthcare Bluebook, etc.– Review the cost of services like the ER compared to Urgent Care and their PCP.– Consider Tele-medicine for some types of treatment to reduce cost