National Behavioral Consortium

PRICING STRATEGIES AND VALUE

Discussion Leader: Tom BjornsonFounder & CEO, Claremont Behavioral Services

January 23 , 2008

What’s an EAP? Objectives? Place at Table?

• Counseling Benefit?

• Productivity Tool?

• Focus on Outcome Metrics vs. Process

Versions of EAP:

• Disability Plan Sponsored- Ceridian

• Health Plan Sponsored- Blue Cross of California- Aetna- Cigna

• Large MBHO- Magellan- Value Options

• Regional MBHO- NBC Founders

• Agency-based- Family Services

• Regional EAP- Chestnut- Claremont

• Internal Staff ModelsMedicalHuman Resources

Problem Identification and Referral Triggers

Case Consultations

Managers, HR, Labor Leaders

Self Referral

Promotion, Awareness, and Perceived Value

Employees & Family Members

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Initial Response & Case Handling Coordination

EAP Counseling

Life Management

Disease Management

Critical Incident

Health Promotion &

Wellness

As Needed, Behavioral Health Benefits and On-Going Care

Case Closure

EAP Best Practices

Summary of Internal Referral Triggers

Benefit Admin. & Disease Management

Identifying depression, stress, anxiety, physical conditions (high blood pressure, back conditions); then managing improvement

Best Practices, AA& Legal Compliance

Ameliorating employee complaints regarding employment practices like harassment and supervisory methods

Critical Incidents & Trauma Response

Responding to traumatic events, co-worker accidents, robberies, natural disasters

Work Performance Management

Execution of progressive discipline programs to address work performance problems; and facilitating a skillful management response

Labor-Management Collaboration

Labor contract administration, handling grievances and finding ways to collaboratively resolve work issues and discipline situations

Internal Security & Threat Management

Proactively and routinely identifying and handling employee threats of violence or other disruptive behaviors

Absence Management

Addressing causes of time away from work, including issues of co-morbidity; and engaging conditions requiring commitment to change

Administrative Financial Events

Responding to wage garnishments, early access to retirement accounts, tax liens and other financial crises

DFW & Drug Testing

Identifying, treating & managing substance abuse cases to clear outcomes

Employee Retention & Turnover

Focusing on retaining the top 20% of the workforce and managing improvement in the bottom 20%

Workers’ Comp & Safety

Prevention, early intervention, case-finding & return-to-work support

Organizational ChangeSupport

Minimizing negative employee impacts of mergers, downsizing, acquisitions, major policy changes

Goals for EAP Relationship

• Cost Transparency & Alignment of Motives for Increasing Utilization

• Embedding Stakeholder Use of Referral Triggers

• Interface – Disease Management, Health Promotion & Behavioral Benefits

Capitation Conflicts with EAP Role

• Capitation = Taking risk against program use• Misaligned Motives & Commodity Services• Declining Utilization by At Risk Individuals• Management Services – “Lost in Translation”• Low Expectations & Cynicism = Lack of Internal Support• Cost of Treating vs. Cost of Not Treating

Performance Based Pricing Models

• Case Rate: Variability Based on Utilization - e.g. $500 per clinical case and $125 per work life case

• Claremont’s Model: Capitated Retainer, plus Fee for Service Counseling Visits- e.g. $1.75 PEPM for all program services, plus $85 per

visit actually used- Performance Guarantee: Management Referrals

Risk Sharing: Based on Employer Metrics & Outcomes

Rate Comparison with Current EAP Vendor

* Claremont’s Utilization Goal

Current Rate $2.25 PEPM

Clinical Utilization 3%

Number of Visits Per Case 1.9

Current Vendor’s Rate & Results

Claremont’s Performance RateUtilization Level Performance Rate ($1.40 PEPM + $87/Visit)

3% $1.81 PEPM

6% $2.23 PEPM

9%* $2.64 PEPM

12% $3.05 PEPM

15% $3.47 PEPM

Performance Guarantee for Management Referrals: A pre-determined number employees will be referred to EAP by management each year. A refund of $400 for each “case” below this guaranteed level will be made, if required:

• Number of guaranteed management referrals is generally 1% of the employee population;

• Performance Guarantee only available if the group selects Performance Pricing.

Performance Guarantee

Pricing Implications• Basis for Role Change and Market Perception of Value

• Market Need & Cost Impacts Well Documented

• Different Value Story for Benefits’-Overcome Cynicism & Practices

EAP Clinical Outcomes• For what?• How many?• To what outcomes?

EAP & Employer Metrics

Need for Internal Ownership, Planning & Stakeholder Engagement