Cooperative Health OverviewManaged by

Agenda

• NJPA Overview

• Benovate Overview

• What is happening? Why? (trend)

• The Cooperative Health Program

• Creating the Savings with Competitive

Bidding

• The Impact on our Clients

Who is NJPA?

• National Joint Powers Alliance

• Cooperative Purchasing

• Government Agency

• National Solutions under Contract

• NJPA Cooperative Health Program

Who is Benovate?

• NJPA Cooperative Health Program

Manager

• Develop Low Risk “Health” Pools

• Health Management

• Risk Management

• Cost Containment

Benovate solutions to control costs

• Utilize Predictive Modeling for Health Engagement

• Health Assessments & Screenings

• Focus on Sleep, Stress, Lifestyle, Disease Prevention

• Health Coaching & Advocacy

• Health Technology & Web Based Solutions

• Custom Wellness & Care Plans

• Health Rewards Platform

• Employer Outreach & Hospital Integration

6

201320122011201020092008200720062005200420032002200120001999

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000

$16,351*

$15,745*

$15,073*

$13,770*

$13,375*

$12,680*

$12,106*

$11,480*

$10,880*

$9,950*

$9,068*

$8,003*

$7,061*

$6,438*

$5,791*

$5,884*

$5,615*

$5,429*

$5,049*

$4,824*

$4,704*

$4,479*

$4,242*

$4,024*

$3,695*

$3,383*

$3,083*

$2,689*

$2,471*

$2,196*Single CoverageFamily Coverage

Average Annual Premiums for Single and Family Coverage, 1999-2013

Why? Healthcare Trends

7

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130%

50%

100%

150%

200%

250%

57%

119%

182%

56%

117%

196%

14%

34%

50%

11%29%

40%

Health Insurance PremiumsWorkers' Contribution to PremiumsWorkers' EarningsOverall Inflation

Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999-2013

Why? Healthcare Trends

NJPA Conclusions

• Traditional Consumer Driven Plans Weren't Working

• Network Model was antiquated.• Employers could benefit enough to want to

extend healthcare into the workplace. • Employees needed better more convenient

access to care and care coordination• Traditional care model assumes one size fits all• Traditional wellness was only a piece of the puzzle• The Problem is “Trend”, no end in sight without a

different model

Create Neutral Risk, Lower Future Exposure

Changing the Game: Gaining Control of Risk

• School Districts• Municipalities

• Non-Profits• Higher Education

Health Management Required

45%

Cooperative Health: Creating a Health Rewards Pool

50%

30%

20%

Current Fully Insured or Self Funded

2014

2015

Benovate Partially Self Funded Option

15%

15%

15%

15%

43%*

VS.

2014 2015

Avg: 12.8%

Avg: 5%(From Soft Quote)

Benovate Partially Self Funded Option

45%

15%

15%

15%

15%

43%*

Long TermPremium Control

Goal Loss Ratio: < 25%

Cooperative Health: Creating a Health Rewards Pool

* Leverage Improved Claims Experience for Lower Premium

Creating a Health Rewards PoolReturning your MoneyAchieving the Goal of 25% Less then Underwritten

Reinvesting in Health

• Max Premium: $400,000• Goal Loss Ratio: $300,000 • Available Incentive: $100,000

• Total 2014 Claims: $320,000

• Fund Incentives Programs

• Offset Health Management Expenses

• Allocate % to Captive

• Reduce Premiums Next Year

• Fund FSA/HSA/HRA• Health Rewards

• Health Bonus• Voluntary Benefits

Sample Group90 Lives (Bronze Plan: Employer 60% Payment)

Employer Use of Funds Sample

Employee Use of Funds Sample

Goal: Health Rewards Captive

Managed Risk

• Max Risk is Total Premium

• Aggregate Risk Policy for Claims Over Premium

• Specific Loss Policy Per Person

• ACA Compliant

Lower Costs

• Lower Cost Structures• Efficient

Administration• Transparency• Prevention Focus vs

Treatment• Lifestyle Change

Better Health

• Safer Work Environment

• More Productive Employees

• Increased Awareness

• Lower Presenteeism, Absenteeism

Health Rewards Program Benefits

Controlling Health Care Costs

The Health Care Cost Equation

Healthcare Services Costs (Costs)

Multiplied by (x)

Healthcare Services Utilization (Utilization)

(=‘s) Equals Total Healthcare Costs

Healthcare Cost Equation

4 Strategies To Control Costs

Gain Control of the Cost Structures

• Predict Disease

• Predict “Un-health”

• Create Transparent Cost Structures

• Review & Audit (before you pay)

#1 Control Costs: Create a Pre-disease ModelAvg Cost of Heart Attack; $67,000, Avg Cost to Prevent, $3,700

• Predictive Health Modeling

determines risk by condition

and lifestyle.

• Drives “appropriate”

Utilization.

Cos

t

• Health Risk Assessment• Stress Risk Assessment

• Behavior & Lifestyle Data• Biometric Data

#2: Determining Health Risk

#3: Transparent Cost Structures

• Transparent Pharmacy Benefit Management

• “Cost Plus” and “Reference Based Billing”

• Insurance Captive, Claims Data & Management

• True “3rd party” Third Party Administration

Transparent Pharmacy• 500 Employee Company: Re-priced

– Pharmacy Represented 22% of the total plan cost– Spread elimination: $119,426 of $741,000, 16%– Rebate Reduction Estimate: $8,000, 1%– Therapeutic Substitution: $14,076, 1.8%– Total Savings: $141,502; 19% Total Savings

• Typical Charge Master– Network Discount, 30-70% off of what?– Medicare plus 150%-400%– Cost Plus Medicare plus 54%– Reference Based Pricing, Medicare plus 100-150%

“Cost Plus” or “Referenced Based Billing”

Level Funded, Unbundled Self Funded, to Captive

Benefits• No Risk Contribution• Like Minded Employers• Control Costs Today• Manage Trend in the Future

Benefits• Lower Cost• Increased Transparency• Reporting and Cost Control

“3rd Party”, Third Party Administrator

Strategy #4: Medical Bill Review

Alabama Union Group• 100% of all OON claims reviewed had adjustment• $376,196 in savings adjustments• Average claim reviewed $22,935• $10,449 average savings per claim

Arkansas Company (small group)• 100% of all claims (17) had adjustments• $311,000 in savings adjustments• Average claim adjusted $37,423• $18,297 average savings per claim

4 Strategies to Control of Utilization

1. Align your “group

utilization”

2. Eliminate “One Size Fits All”

Health Management

3. Data Driven Plan Design,

Cost Focused Consumerism

4. Drive Appropriate

Utilization, Incent Care Plan

Execution, and True

Lifestyle Change

#1 Group Utilization Summarized

• The Kitchen Table

• Plan Cost

• Deductible

• Co-Pay

• Rx Costs

• “The Value”

o The Plan vs No Plano My Plan vs My Spouses Plano Employer A vs Employer B

Avoiding One Size Fits All

Marketing Message Across the Entire Population

#2 Customized Intervention

#3 Standardize Plan DesignRate Step Correlation to Employee Plan Selection

If I have healthcare needs, premium costs are

irrelative.

If I am healthy and young, I may look for alternatives.

If I am single and young, I may just waive and pay the

PPACA penalty.

#4 Driving Appropriate Utilization

Wisdom of the Medical Home

• Primary Care Physician Relationship works well

• Patients rate relationship and respect highly

• Biggest factor in deciding whether or not to

participate

• Higher rates of preventative care delivered

• National best practice control of targeted chronic

diseases

Stress, Sleep, & Lifestyle

Blood Chemistries: Body Analysis: Total Cholesterol VLDL ALT (SGPT) Weight

HDL LDL/HDL ratio AST(SGOT) Height

LDL Lactate Dehydrogenase (LDH) ALK PHOS Waist Circumference

TC/HDL Ratio Total Bilrubin Cotinine (Tobacco Use) Hip Circumference

Triglycerides Bun GGT(liver function) Wrist Circumference

Glucose Total Protein BMI

Uric Acid Creatinine PSA (for males 50 +) Body Fat Content

Globulin Calcium

Determining Risk

• Health Risk Assessment• Stress Risk Assessment• Behavior & Lifestyle Data• Biometric Data

Standard Biometric Panel

Mental and Nervous System, Metabolic, Cancers and Musculoskeletal

The “Big Four”

Control Costs: Stratify RiskAggregate Disease Risk Report

There must be an understanding where the costs really are…and where they are going

One Size Does Not Fit All

Conditions & Lifestyles Mapped

Cost of Care: Revenue & Expense Modeling by Condition, Network Alternative

• Physical, financial,

relationship

& personal development

health

• Individualized Coaching

• Employee and Family

• Stress Management

• Improved Health

• Assistance Navigating

DiseasePhysical Health Relationships Career/Growth Finance

Health & Lifestyle Coaching

Personal Health DesktopThe Personal Health Desktop (PHD) is a secure, online HIPAA-compliant web portal accessible from any Internet-connected device. This system provides participants secure access to features including:

• Medical history/lab results• Health Risk Assessments• Personal Health Assessment

reports• Risk Resolutions guidelines• Medical library• Health Counts rewards program

Access to Assessments & Data

• Earning Points, Rewards, or Dollars for Care Plan Engagement

• Improved Health• And… True Lifestyle Change

Provider & Community Engagement

Benovate’s “Your Data” Approach

• Give the consumer the data and tools

• Incent Participation

• Provide Coordination

Goal: Data Driven Consumerism

Hospital - ProviderRelationship Strategies

Wellness Strategies

Alternative Funding

Plans

Plan DesignOptions(HDHP)

FixedCosts, PlanFlexibility

& Reinsurance

Employee cost-shift to target

PlanUtilization

Population Health Management

& Improvement

Plan Design,Contribution& Population

Alignment

Risk PoolManagement

On-site Medical ClinicsNarrow Physician NetworksHospital Cost Plus Contracts

2% - 3% 5% - 6% 7% - 10%5% - 7% 4% - 8%

Employer Strategy & Savings Continuum

Summary: Tying it All Together

Phased Deployment of Solutions

Assessments &

Early

Interventio

n

Custom Wellness & Care

Plans

Incentives for Healthy Choices

Health & Lifestyle

Discounts

Lower

Cost

Health Management

Our process is built upon five very important steps to improving health and decreasing cost

Measureable Outcomes

Per Participant Risk Burden Trend

Connectivity

Considerations for Engagement

1. Request and analyze your data2. Target areas for improvement3. Phased Approach; Manage then Engage in Health4. Community Initiative: Affiliate

Thank you!