Beyond Competition—Beyond Outcomes

Exploring why greater cooperation among employers, carriers, and service providers in managing the total impact of health, disability, and absence is critical to reducing costs for employers and improving health for employees.

On behalf of the Integrated Benefits Institute, the National Business Coalition on Health, and Liberty Mutual, we are pleased to introduce this white paper, Beyond Competition—Beyond Outcomes. On the final day of the 2010 IBI/NBCH Health and Productivity Forum in San Antonio, Texas, participants attended a panel discussion convened to explore why greater cooperation among employers, carriers, and service providers in managing the total impact of health, disability, and absence is critical to reducing costs for employers and improving health for employees. Broad consensus emerged describing opportunities as well as challenges and barriers to more effective care delivery, improved health-related productivity, and cost reduction. Discussion of these issues provided thoughtful insights into a complex and potentially rewarding issue. We urge you to share this white paper with your colleagues and coworkers interested in finding new ways to address the management of health and productivity in the workplace.

Regards,

Thomas Parry, Ph.D. Andrew Webber Daniel Lyons Integrated Benefits National Business Liberty Mutual Institute Coalition on Health Insurance Company

Executive Summary: On February 10, 2010, representatives from KeyBank, Fresno Unified School District, Towers Watson, CIGNA, Liberty Mutual Group, and Medco Health Solutions, participated in a panel discussion Beyond Competition—Beyond Outcomes, to explore why greater cooperation and coordination among employers, carriers, and service providers in managing the total impact of ill health is critical to reducing costs in benefits delivery as a whole while improving the health of employees.

Each panelist brought a unique perspective to the issue; consensus emerged around four major areas of concern and opportunity:

1. Make stakeholders accountable for collaborative problem-solving. Employers, employees, and suppliers all need to be engaged in addressing issues of care delivery, disease prevention, and workplace wellness and safety. The employer needs to drive this engagement through commitment to diverse strategies including convening supplier summits to improve collaboration and data sharing and promoting employee participation in prevention, health, and wellness.

2. Move beyond “siloed” services to integrated delivery. Integrated services and care delivery may improve communication and lead to reduced costs. Integrating services can be adopted over time, in a step-wise process. It is critical that employers devise a strategy that works for their organization and communicate and promote its framework to employees and suppliers alike.

3. Combine data for meaningful and actionable analysis. Data aggregation and analysis is the only way to develop a comprehensive understanding of issues affecting the employer and its workforce. While supplier reluctance to share data with competitors may be an issue at the outset, the employer is in a position of strength in terms of soliciting collaboration and cooperation while appropriately protecting privacy and confidentiality.

4. Move from retrospective to prospective care delivery with a focus on prevention and wellness. Simply addressing episodes of care is no longer a viable solution to workforce care and productivity management. Seventy percent of acute episodes1 occur in individuals who present as “well.” Early intervention may affect the trajectory of disease and, over time, costs.

Panelists recognized that while some proposals discussed might produce results quickly, change in the way benefits are administered and delivered requires a long-term commitment. With a clear plan for implementation with meaningful metrics, employers, suppliers, carriers, consultants, and brokers can move beyond competition to the overall improvement of workplace health and productivity—for the benefit of employees and their families, as well as the employer’s bottom line.

PANELISTS:

• Randall K. Abbott Towers Watson

• Edward Crouch, M.D. Liberty Mutual Group

• Andrew De La Torre Fresno Unified School District

• Richard A. Feifer, M.D., M.P.H., F.A.C.P. Medco Health Solutions Inc.

• Nicholas J. Gettas, M.D. CIGNA Middle/Regional Accounts

• Irene Immerman KeyBank

• Daniel Lyons Liberty Mutual Group

• Mary Tavarozzi Towers Watson

Beyond Competition—Beyond Outcomes

Beyond Competition—Beyond Outcomes

1. New York Times, November 2007

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1. Engage StakeholdersMake stakeholders accountable for collaborative problem solving.If there were a single point upon which every speaker was in agreement, it is the necessity to include employers, employees, suppliers, and sometimes unions to develop mutual solutions to solve workplace health and productivity issues. Engagement might mean different things depending upon the parties’ perspectives.

Employers

• Maximize outcomes from suppliers

• Aggregate data, refine process initiatives

• Promote wellness

• Offer assessments and screenings

Employees

• Understand benefits

• Complete risk assessments

• Participate in programs offered

• Engage family in employer offerings

Suppliers

• Collaborate to improve outcomes

• Understand employer concerns

• Adopt an employee- centric approach

• Seek partnership opportunities

• Innovate for new approaches

Supplier summits offer an opportunity for expanded engagement.The subject of supplier summits as useful venues for identifying next steps to improve outcomes were a recurrent theme. One of the Liberty Mutual panelists offered some specific suggestions:

• Before a summit, identify your suppliers to one another and the services they offer • Inform all suppliers of anticipated benchmarks or performance guarantees • Obtain 360-degree feedback prior to the first supplier summit • Introduce stakeholders beforehand to share common problem areas or overlap and identify opportunities for cooperation Edward Crouch, M.D. elaborated on the 360-degree feedback loop by describing a supplier summit in which participants were asked to catalog specific strengths and opportunities for each of the other suppliers prior to the summit meeting. The organization convening the summit then shared information submitted by each participant with the others.

While this initially created a certain level of discomfort, the actual summit took place in an open and productive atmosphere.

As part of their supplier summits, panelists KeyBank and Fresno Unified School District (FUSD) made clear to invitees that communication guidelines, performance guarantees, and evidence-based outcomes or benchmarks would arise from these meetings.

“We learned that we could affect behavior through plan design. By taking a holistic look at all programs and all participants,

we were able to identify commonalities and consolidate numerous disparate plans and vendors into a uniform nationwide program.”Irene ImmermanSenior Vice President, Employee Benefits ManagerKeyBank

FUSD created a Joint Health Management Board on which labor unions, teachers, administrators, retirees, and suppliers shared roles as well as decision-making responsibility to pursue common goals. Andrew De La Torre, Director of Benefits and Risk Management, described how they established a “blueprint” of key focus areas:

• Data analytics • Supplier engagement, oversight, and accountability • Creation of an internal stakeholder interface • Development of a comprehensive communication strategy for participants, suppliers, and administrators • Improved care-provider engagement, including hospitals, PCPs, and community resources

Supplier summits provide opportunities to bring greater coordination to benefits delivery and communication of issues and data, including agreements on appropriate employee/patient handoffs from one program to another.

Engagement is reinforced by leveraging each “teachable moment.”In another arena of engagement, Medco Health Solutions encouraged employers to consider each touchpoint that their health services providers have with their members to be an invaluable “teachable moment.”

Richard Feifer, M.D., emphasized that this perspective is especially important for member-initiated contact. During these interactions with the health care and benefits system, members are more focused on their health and are more receptive to out-reach and offers to engage them in important health programs and initiatives. Each of these interactions should be viewed as an engagement opportunity, across all of an employer’s health services providers.

Employers should not be satisfied with simply enabling such coordination of member engagement, adds Dr. Feifer. They must pay close attention to deployment through ongoing reporting to ensure that the points of collaboration are optimally utilized. 2. Move beyond “siloed” services to integrated deliveryIntegrating delivery may improve communication and reduce costs.Panelists generally agreed that integrating service delivery to employers and employees was a positive strategy in improving workplace productivity and reducing costs.

The Towers Watson panelists endorsed service integration and supplier collabora-tion. But they delivered cautionary messages in terms of employers who rush in to collaborative relationships without a clear understanding of the benefits and risks.They identified specific benefits from increased supplier collaboration including:• Reductions in disability durations and cost • Better data for the employer on what works and doesn’t work • Increased employee engagement and participation • Potentially, fewer suppliers to manage.

“It is vital for providers of health benefit services to understand not only their particular area of interest, but also the critical

objectives that other providers need to accomplish on behalf of their common employer-client.” Richard Feifer, M.D., M.P.H., F.A.C.P.Vice President for Program DevelopmentMedco Health Solutions Inc.

ENGAGEMENT AT KEYBANK:• Responsibility and risk sharing by:

- Employer - Employee - Vendors

• Robust preventive coverage• Consumer-directed health plan• Wellness programs• Vendor summits

Beyond Competition—Beyond Outcomes4

Mary Tavarozzi, National Practice Leader for Total Absence and Disability Management, recommended setting realistic goals and timelines for transition from one level of coordination to a more comprehensive effort.

Integrating delivery is not an all-or-nothing solution.Dr. Feifer described a step-wise approach to integration for employers unable or unwilling to totally integrate suppliers and programs simultaneously. He suggested a basic level of integration could be as simple as regular two-way exchanges of claims and eligibility data with referrals based on benefits program offerings.

In an advanced state of integration employees might find:• A single gateway for access to all services • Co-location of service providers • Integrated service teams • Elimination of duplicative activities • “Warm” transfers from one provider to another • Integrated reporting.

Dr. Crouch touched on barriers employers face in obtaining meaningful data. He reported the experience of one employer in identifying employees for participation in a disease management program and those who remained participants after 12 months. Although nearly 25 percent of the employer’s total population was identified as potential participants in the program, 15 percent were actually invited and after 12 months, only 1.7 percent of the total population remained active participants.

Panelists from all groups acknowledged that attainment of integrated collabora-tion among suppliers is still in its infancy, and challenges and barriers exist at every stage of the process. Employers need a detailed strategy for supplier coordination and collaboration with clearly articulated goals around data and process integration, employee participation or engagement, with specific benchmarks or endpoints for measuring success.

3. Aggregate data for meaningful analysis and actionData aggregation and analysis may yield measureable benefits.Quantitative or qualitative analysis of an organization’s health and productivity is nearly impossible without comprehensive information, presented in a meaningful fashion.

Obtaining meaningful data is made more difficult from the employer perspective because information is aggregated, stored, and reported from many disparate sources—medical plan, dental, and prescription providers, short- and long-term disability carriers and leave administrators, payroll departments, employee assistance and behavioral health administrators. In fact, many employers’ first priority is in organizing around this issue.

Elements of the coordination challenge were addressed by Towers Watson’s Randall Abbott. He described care gap technology, which, in an ideal configuration, would analyze claims data and biometric data along with demographic data to alert employees and physicians to care and treatment opportunities as well as prevention and condition management. He described care coordination using predictive

“Be very cautious of any vendor who offers to ‘build whatever you want.’ Ask if the offer will include performance,

implementation, and cost guarantees.” Mary Tavarozzi, PrincipalTowers Watson

SUPPLIER COLLABORATION—A PROACTIVE APPROACH: Towers Watson recommended that the supplier community be more proactive in anticipating the need for collabora-tion and cooperation by:• Improving “plug and play”

capabilities• Creating data-sharing templates or

processes• Training staff to identify opportuni-

ties for collaboration with other vendors

• Asking more questions of customers about their health and productivity challenges, programs, and strategy

modeling to deliver preventive, wellness, and management services across the spectrum of employees from the healthy to those at risk and others with chronic conditions. The result would be integrated care for all.

He also advocated for a future holistic approach to care delivery characterized as the “medical home” model, which is discussed in greater detail at the Journal of the American Academy of Pediatrics.2

Resistance to data sharing may be encountered.Information and data sharing were recognized as huge opportunities for greater collaboration and integration of benefits and services to: • Improve identification of risk and trends • Understand the full costs of ill health • Address issues before they become acute • Identify areas of overlap and duplication • Establish performance measures and benchmarks • Provide better care coordination • Improve risk analysis

Some service providers and suppliers may be uncomfortable with sharing what, to some, is proprietary information. Questions about legal compliance issues may arise around data sharing and the employer must assure compliance with regulations attendant privacy and confidentiality. But, from the employer perspective, engaging suppliers as partners in developing meaningful data to observe trends and reduce costs is integral to establishing or continuing professional relationships.

4. Move from Retrospective to Prospective Care Delivery with a Focus on Prevention and WellnessSimply addressing episodes of care is not a long-term solution.Abbott spoke to the importance of moving from retrospective care following episodic events affecting employees’ health and wellness to predictive or real-time care coordination.

Using technology, service providers, primary and specialty caregivers, and employers have opportunities to deliver targeted care and education not only to chronic or acute patients but also to those who may be, as yet, healthy or minimally at risk. Abbott suggested that offering preventive education to engage healthy employees is critical to keeping them healthy and reducing progression to more serious or chronic conditions.

Early intervention may affect the trajectory of disease.Nicholas Gettas, M.D., Chief Medical Officer for CIGNA, was another panelist committed to an approach to workplace health based on early identification and intervention. He expanded on CIGNA’s premise that early engagement can affect the trajectory of disease and disability. Observing that lifestyle choices overwhelmingly determine chronic illness, 70 percent of which is preventable or reversible, he said involving healthy employees through education, biometric screenings, and health assessments can reduce future expenditures.

“When we created our Joint Health Management Board, we knew our first priority was to get a better handle on

our data and what it meant. We were data challenged!” Andrew De La Torre,Director, Benefits & Risk ManagementFresno Unified School District

“By redirecting some health care dollars to earlier intervention or engagement, especially among healthy employees,

you’d find value in terms of outcomes realized.”Randall AbbottSenior ConsultantTowers Watson

Beyond Competition—Beyond Outcomes

2. American Academy of Pediatrics. National Center for Medical Home Implementation. URL: http://www.medicalhomeinfo.org/. Accessed June 7, 2010.

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He addressed a presumption that employees, or patients, move serially from healthy to at-risk to acute or chronic. However, according to Gettas, data suggests otherwise—the “5/50 Principle.” He reported that 5 percent of participants will account for more than 50 percent of claims costs, and most patients move directly from healthy to acute or chronic.3 A common example he described involves diabetes, in which 40 percent go undiagnosed until they have a costly event.4

Dr. Crouch looked at benefits integration from a disability management perspective. He pointed out that 70 percent of claims coming through Liberty Mutual’s claims centers were “well,” prior to an episodic illness or event. There is a huge untapped opportunity to engage claimants at this point in their future wellness. Dr. Crouch also noted that very early access to all of the accumulated clinical data at the onset of a short-term disability claim is a very significant benefit of supplier collaboration.

Through collaboration, new approaches to disability management can be achieved by actionable feedback and communication between all of the partners.

Expanded collaboration will likely yield short- and longer-term benefits.Opportunities that could arise from expanded collaboration and integration of supplier services might include: • Identification of new best practices to build employee trust and promote more effective utilization of appropriate service providers and services offered by various suppliers • Standards for data warehousing that encourage collaboration while protecting privacy • Establishment of templates and standards for plug-and-play capability • Better education and training for employers, employees, and providers • The identification and standardization of outcomes metrics. Panelists suggested that provider awareness, training, and communication offer opportunities for short-term benefits. They also recognized that some of the proposals discussed would affect workplace health and productivity over time. The panel reached consensus that developing a clear plan for implementation and meaningful metrics to define success were vital. Employers, suppliers, carriers, consultants, and brokers can move beyond competition to the overall improvement of workplace health and productivity—for the benefit of employees and their families.

Issues For Further Discussion: Dr. Crouch summarized additional issues, which also were identified by other panelists such as:

• Confidentiality standards

• Process issues (plug-and-play models)

• Data compatibility

• Supplier reluctance around data sharing

• Legal, regulatory, and legislative opportunities

“If you identify 80 percent of an at-risk population, but engage only 10 percent, your program will fail; however, if you

identify only 10 percent, but obtain active engagement from 80 percent, the program is a huge success.”Nicholas Gettas, M.D.Chief Medical Officer, CIGNA Middle/Regional Accounts,

“It is rocket science! It is going to take time.”

Edward Crouch, M.D.Liberty Mutual Group

3. Mercer HR Consulting. March 2005.4. www.caldiabetes.org. Accessed August 13, 2010.

AppendixRandall K. Abbott—Senior Consultant and Practice Leader in Health and Group Benefits, Towers Watson, Boston. Mr. Abbott has over 30 years’ experience in the areas of health benefits strategy, workforce health improvement, population health management, and care/condition coordination management.

Edward Crouch, M.D.—Group Benefits Vice President and National Medical Director, Liberty Mutual Group, Boston. Dr. Crouch has been responsible for the clinical, vocational, and specialty management of Liberty’s STD, LTD, FMLA, IDM, and Group Life products at Liberty Mutual for 13 years. He is board certified in internal medicine and has 13 years of practice and 11 years of clinical teaching experience.

Andrew De La Torre—Director, Benefits & Risk Management, Fresno Unified School District, Fresno, Calif. Mr. De La Torre is responsible for the daily operations of the District’s self-funded health, workers’ compensation, and general liability funds. During his seven-year tenure as director of employee benefits, Mr. De La Torre was active in the formation of the Joint Health Management Board and serves as a member.

Richard A. Feifer, M.D., M.P.H., F.A.C.P.—Vice President of Program Development—Care Enhancing Solutions, Medco Health Solutions Inc., Franklin Lakes, N.J. Dr. Feifer is responsible for enhancing the client value of Medco’s existing solutions, ensuring the program’s clinical integrity, supporting Medco clients, and driving program innovations. He is a board-certified internist experienced in primary care, geriatrics, and urgent care.

Nicholas J. Gettas, M.D.—Chief Medical Officer, CIGNA Middle/Regional Accounts, Philadelphia. Dr. Gettas is responsible for the overall outcomes of CIGNA's quality, utilization management and accreditation programs, with responsibilities spanning sales, network, and total medical cost management. Dr. Gettas is a board-certified family physician.

Irene Immerman—Senior Vice President, Employee Benefits Manager, KeyBank, Cleveland. Ms. Immerman has over 30 years’ experience in human resources with KeyBank and its predecessor banks. She is responsible for managing all of KeyBank’s benefit plans including health, welfare, and the cash-balance and 401(k) retirement plans.

Daniel Lyons—Vice President National Sales—Group Benefits & IDM Practice Leader, Liberty Mutual Group, Boston. Mr. Lyons is responsible for the development of new business, ongoing account management, and retention of In-force National Account customers.

Mary L. Tavarozzi—Principal and National Practice Leader for Total Absence and Disability Management, Towers Watson, New York. Ms. Tavarozzi is nationally recognized for her work in managed disability program design, cost management, FMLA administration, and the development of integrated health and productivity strategy and processes.

Beyond Competition—Beyond Outcomes8

About Liberty MutualBoston-based Liberty Mutual Group is a diversified global insurer and the fifth largest property and casualty insurer in the U.S. based on 2008 direct written premium. The Company also ranks 71st on the Fortune 500 list of largest corporations in the U.S. based on 2009 revenue. As of December 31, 2009, Liberty Mutual Group had $109.5 billion in consolidated assets, $95.0 billion in consolidated liabilities, and $31.1 billion in annual consolidated revenue.

Liberty Mutual Group offers a wide range of insurance products and services, including personal automobile, homeowners, workers compensation, commercial multiple peril, commercial automobile, general liability, global specialty, group disability, assumed reinsurance, fire, and surety. Liberty Mutual Group employs over 45,000 people in more than 900 offices throughout the world.

About Integrated Benefits InstituteThe Integrated Benefits Institute (IBI) provides employers and their supplier partners with resources for demonstrating the business value of health. As a pioneer, leader and nonprofit supplier of health and productivity research, measurement and benchmarking, IBI is the trusted source for benefits performance analysis, practical solutions, and forums for information and education. IBI’s programs, resources and expert networks advance understanding about the link between—and the impact of—health-related productivity on corporate America’s bottom line.

From its offices in San Francisco, IBI has been in the forefront, leading businesses from concept to reality in integrating health, absence and disability management benefits as an investment in a productive workforce. IBI’s independent, cutting-edge approach and innovations consistently provide added value to a prestigious roster of employers, from leading corporations to small companies as well as their benefits management business partners.

About National Business Coalition on HealthThe National Business Coalition on Health (NBCH) is a non-profit 501(c)6, membership organization of purchaser-led health care coalitions headquartered in Washington, D.C. Its 60 member coalitions represent over 7,000 employers and approximately 25 million employees and their dependents. They are dedicated to value-based purchasing of health care services through the collective action of public and private purchasers. NBCH seeks to accelerate the nation’s progress toward safe, efficient, high-quality health care and improved health for all Americans. Providing expertise and resources to its member coalitions, NBCH spreads the tenets and practical applications of community health reform to areas where employers have yet to organize their purchasing power. NBCH pursues national purchasing initiatives to offer turnkey health care products and services to community coalitions and their member employers. NBCH members are dedicated to being a vehicle for meaningful change in the health care system of the United States.