The CDHP Implementation Experience Briefing for 2 nd National Consumer Driven Healthcare Summit...

The CDHP Implementation Experience

Briefing for 2nd National Consumer Driven Healthcare Summit

September 26, 2007

Melinda Beeuwkes Buntin, Ph.D. The RAND Corporation

(Roland McDevitt, Ryan Lore, and Hayoung Park also contributed to this presentation).

Copyright © Watson Wyatt Worldwide. All rights reserved

2

Agenda

Overview of study and participating employers Employers' goals and challenges Employee communication Information tools and resources Lessons learned and future role of CDHPs


3

Overview of study

Study of CDHPs – Adopted by 42 employers– 2003 through 2007

CDHP defined as – Deductible of at least $500 for single coverage– With or without an HRA or HSA – Emphasize consumer engagement

Reports will focus on – Cost and quality outcomes– Implementation experience

RAND Corporation/Watson Wyatt with funding from– California HealthCare Foundation – Robert Wood Johnson Foundation


4

The 42 participating employers offered 58 high-deductible plans

0 2 4 6 8 10 12 14 16 18 20

2006

2005

2003-04

2002 orbefore

No account

HRA

HSA

Number of plans adopted in each time period

HD

HP

imp

lem

ent

atio

n ye

ar

NOTE: Some employers offered multiple plan designs with the same account type (i.e. three HRA options with different deductibles). These plans are counted only once for each employer.


5

Member cost sharing varies in HRA, HSA and no account plans (ranked by average deductible)

Deductible No account HRA HSA

Lowest third $500 $869 $1,088

Middle third $500 $1,393 $1,230

Highest third $1,000 $1,738 $1,925

Employer account contribution

Lowest third $0 $456 $125

Middle third $0 $694 $240

Highest third $0 $800 $313

Bridge (deductible –employer contribution)

Lowest third $500 $413 $963

Middle third $500 $699 $990

Highest third $1,000 $938 $1,613


6

2006 CDHP penetration rates ranged widely (8 employers went to full replacement)

0%10%20%30%40%50%60%70%80%90%100%

0 5 10 15 20 25 30 35 40 45

Penetration ranking of employer (lowest to highest)

200

6 C

DH

P p

enet

ratio

n ra

te


7

Key ways employers can influence penetration level of CDHPs

0% 20% 40% 60% 80% 100%

Average penetration level for CDHPs (excluding full-replacement firms)

DeductibleLess than $1,000$1,000 - 1,499$1,500 or more

Eliminate popular plan

YesNo

6+ months0-5 months

Advance communication


8

Only one CDHP in the study does not pay for preventive services before the deductible is satisfied

89

3

3

5

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Preventive servicescovered same as other

medical services

$20 copay perpreventive service visit

Preventive services paidat 100% with an annual

dollar limit

Preventive services paidat 100%

Percent of Employers


9

Financial incentives are often offered to engage employees

13

24

53

16

18

13

13

13

0% 20% 40% 60% 80% 100%

Health coaching

Lifestyle behaviorchange programs

Health riskappraisals

Diseasemanagement

Employee only Employee and spouse No financial incentive

92%

84%

66%

58%



10

Agenda



11

Cost control, consumer engagement top goals identified in open-ended interviews with HR executives

5

20

17

59

12

10

27

61

7

0% 20% 40% 60% 80% 100%

Quality

Other

Plan choice

Consumerengagement

Cost control

Principal goal Secondary goal

Percent of HR Executives

85%

78%

27%

15%

12%


12

Communication biggest challenge cited by HR executives during initial rollout and open enrollment

10

90

0% 20% 40% 60% 80% 100%

Administration

Communication



13

Agenda



14

Multiple communication modes used -- rollout through enrollment

33

26

13

67

64

39 51

21

8

62

26

5

0% 25% 50% 75% 100%

Office Mailings

Webcasts

Mail Home

Email

Face-to-Face Mtgs

Website

Employees Only Employees & Spouses


90%

85%

75%

75%

52%

38%


15

Multiple communication modes used -- 1st year of CDHP operation

28

59

10

49

18

28

54

10

56

8

21

10

0% 25% 50% 75% 100%

Office Mail

Webcasts

Face-to-Face Mtgs

Mail Home

Emails

Website

Employees Only Employees & Spouses


82%

69%

36%

39%

59%

66%


16

Over half of employers involved employees in creating communication materials

23

23

31

38

0% 20% 40% 60% 80% 100%

Task force/Advisoryboard

Focus groups afterimplementation

Pre-launch survey

Early focus groups



17

Nearly 80% of employers used external help for communication and rollout

26

31

33

64

59

0% 20% 40% 60% 80% 100%

Webcasts/Webinars

DVDs or Videos

Face-to-Face Mtgs

CommunicationStrategy

Written Material



18

Implementation costs were substantial for external help, staffing, and advance communication

Mean Range (25th-75th percentile)

Estimated external cost of consulting and other labor, per employee

$10.95 $1.55-$13.89

Estimated external cost of producing materials, per employee

$7.48 $1.38-$11.11

Annual full time equivalents (FTEs) devoted to implementation

3.4 FTEs 1-3 FTEs

Number of months of communication of CDHP in advance of enrollment

4.3 months 2-6 months


19

Agenda



20

Information is key to consumer engagement

HR Executives emphasized consumer engagement:

– “How do people get the information they need to make good choices?”

– “How many people are seeing highly-efficient providers, and how can that behavior be rewarded?”

– “[We need to] get people to take health risk assessments, push people towards healthy behaviors, then see if these people reduce their medical costs.”


21

HR Executives’ overall ratings of information tools is low

N=41

10

5

0% 25% 50% 75% 100%

Quality of care fromspecific providers

Cost of care fromspecific providers

Good Excellent



22

Only five tools used to introduce the CDHP rated highly

90

58

65

66

54

0% 25% 50% 75% 100%

Health risk appraisaltool

Calls to corporatebenefit dept

Plan cost calculators

Website

Online providerdirectory

Excellent or Good Satisfactory to Poor

Percent of Employers Offering

100%

92%

89%

79%

78%


23

Many respondents rated prescription drug information as excellent or good

52

68

71

0% 25% 50% 75% 100%

Online therapeuticalternatives

Online formulary

Online drug costs


N=38


92%

81%

78%


24

Fewer respondents rated information about hospital cost and quality as excellent or good

19

24

37

34

13

0% 25% 50% 75% 100%

Comparisons bycondition or procedure

Condition-specificcosts

Cost comparison ofhospitals

Quality comparisons ofhospitals

Procedure-specificcosts


N=38


76%

73%

77%

71%

65%


25

Very few respondents rated information about physician cost and quality as excellent or good

11

11

14

14

16

0% 25% 50% 75% 100%

Comparisons by conditionor procedure

Quality comparisons ofphysicians

Cost comparison ofphysicians

Procedure-specific costs

Condition-specific costs


N=38


69%

69%

66%

58%

58%


26

Most employers offer some health management resources and rate them highly

58

66

68

0% 25% 50% 75% 100%

Health Risk Appraisals

Nurseline

Disease managementprograms

Excellent to Good Satisfactory to Poor

N=38


92%

87%

86%


27

Use of most tools is not tracked, even if offered

15

15

8

29

11

33

21

54

57

38

33

15

23

18

0% 25% 50% 75% 100%

Electronic personal health records

Worksite biometric screening

Online symptom checkers

Health Coach

Lifestyle behavior change programs

Hospital cost ratings

Hospital quality ratings

Percent Tracking Percent not tracking

N=38


31%

44%

59%

69%

72%

51%

44%


28

Agenda



29

CDHP implementation is a major change and requires extensive employee communication

80% of HR executives cited the importance of employee communication

“There’s no such thing as too much personal communication, especially face-to-face.”

“Assume no one has read anything. Dumb down the materials. Communicate it once and then do it again 4 or 5 more times in different ways.”

Need senior management to help promote the CDHP Allow plenty of time and effort to roll out the plan The first year is the hardest


30

How employers addressed communication challenges during initial rollout and enrollment

Repetitive and sustained communications through multiple channels

Tailor to structure of company– Face-to-face meetings when employees in a few locations– E-mail and intranet site when employees on-line– Mailings and newsletters when employees in many locations and

not on-line– Diverse company cultures

Train people to “do the math” – Example employees under each plan option – Modeling tools to calculate out-of-pocket costs

Force everyone to re-enroll each year so they pay attention


31

Lessons about plan design and operation

Stick with standard products that are proven Pick vendors carefully and make sure they can do

what they claim HSAs have advantages over HRAs

– Better incentives/engagement for consumer– Portability– But also require employees to open accounts

Two schools of thought regarding full replacement: – Much more payoff for the same amount of work– Many employers want to continue offering choice


32

HR executives see continued commitment to CDHPs

Other, 7.5%

Employees in a variety of plans, 7.5%

Full replacement CDHP, 27.5%

More employees in CDHP, 30.0%

Majority of employees in CDHP, 15.0%

Wait and see what develops, 12.5%


33

Questions & Answers

The CDHP Implementation Experience Briefing for 2 nd National Consumer Driven Healthcare Summit...

Documents

Transcript of The CDHP Implementation Experience Briefing for 2 nd National Consumer Driven Healthcare Summit...