value-based benefit design an employer coalition approach william l. bruning president & ceo,...

Value-based Benefit Design

An Employer Coalition Approach

William L. BruningPresident & CEO, Mid-America

Coalition on Health Care

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KC2: A Truly Collaborative ModelKC2: A Truly Collaborative Model

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$400,000 $600,000

Loeppke, R., Taitel, M., Richling, D., Parry, T., Kessler, R.C., Hymel, Pl., and Konicki, D. Health and productivity as a business strategy J Occup Envrion Med. July 49(7):712-21, 2007

$200,000

Anxiety

Obesity

Hypertension

Arthritis

High Cholesterol

Sleeping Problems

Other Chronic Pain

Fatigue

Depression

Back/Neck Pain

MedicalDrugAbsencePresenteeism

Top 10 Medical, Drug & Productivity Costs -- per 1000/FTEs --Top 10 Medical, Drug & Productivity Costs -- per 1000/FTEs --

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Value-Based Benefit Design: Restructuring Health BenefitsValue-Based Benefit Design: Restructuring Health Benefits

VBBD is a strategy that minimizes or eliminates out-of-pocket costs for high-value services in defined patient populations

High-value services are identified through scientific evidence The more clinically beneficial and cost-effective the therapy is

for a patient group, the lower the out-of-pocket costs

Lowering out-of-pocket costs for high-value services has been found to improve access to and use of those services

More effective use of high-value services may positively impact the health of the targeted population

Preventable adverse health consequences reduced Related high-cost health care services avoided

Chernew ME et al. Health Aff (Millwood). 2008;27:103-112; Fendrick AM et al. Am J Manag Care. 2001;7:861-867;Fendrick AM, Chernew ME. Am J Manag Care. 2006;12 (special issue):SP5-SP10.

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Value-Based Benefits: Turning Theory into SolutionsValue-Based Benefits: Turning Theory into Solutions

Applicable in any company large enough to be focused on benefits and plan design Not just for large employers, with big HR budgets,

sophisticated HR staffs, and a C-Suite that understands the value of benefits

Expensive data integrators are not mandatory Employers can make better use of their existing data Employers can partner more effectively with vendors

Not just about “giving away benefits and drugs,” it’s about: Maximizing the value of your data to understand your

employees’ health risks and stratify your employee population

Measuring what you’re already doing Messaging to employees and C-Suite on the impact of health

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17 Employers, 64,000 KC Employees; 463,000 Lives Firm Wide17 Employers, 64,000 KC Employees; 463,000 Lives Firm Wide

Firm Wide Small to Mid-Size Mid-Size to Large Jumbo

# EEs 375 – 3,000 3,000 – 10,000 10,000+

H&R BLOCK

Trademarks on this page are the property of their respective owners

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VBB is not Just for Large EmployersVBB is not Just for Large Employers

Of the 17 participating employers, 4 have fewer than 1,000 employees in KC, and 8 have fewer than 2,000 employees

The median participating employer has 4,000 employees firm wide

The fundamental issue of understanding your data and workforce risks is key for all employers

The KC2 Tools are being tested for employers of all sizes

Trademarks on this page are the property of their respective owners

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Methods: Initial Survey and Employer InterviewMethods: Initial Survey and Employer Interview

Source: KC2 Project Team

What Kansas City employers told usExcerpt from Initial Survey:

•83% currently use data to assess employee health risks

•61% believe they face more challenges with internal data collection than from outside vendors

•Top perceived barriers to implementing VBB

•Employee Resistance•Cost of interventions/utilization

•Biggest influencers in benefit design•Cost / Trend•Corporate culture and leadership

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Best practices & case studies

What works to get through stages of the data cycle

Want to hear about absenteeism, productivity and retention from other employers

“Knowing how the private sector measures their bottom line”

Examples of how others are getting and using data to show outcomes

Working through issues of plan design

Collaboration and workgroups

to share ideas

“Toolkit or framework to evaluate a decision from a direct cost impact, short term impact and long term impact”

Idea generationIdea sharing

Idea validation

ROI template

Education

Better understanding of the local community

Benchmarking

“A plan design that will lead to the best result”

Peer-to-peer review of practical applications

“What would make participating in this VBB coalition meaningful and valuable to you?”

Employers Have Asked For:Employers Have Asked For:

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Process of Applying Value-Based BenefitsProcess of Applying Value-Based Benefits

Start Here:

Identify and collectdata

Identify and collectdata

Integratedata

Integratedata

Use data toclassify

riskseg. Chronic disease, lifestyle, high dollar

claims

Use data toclassify

riskseg. Chronic disease, lifestyle, high dollar

claims

Establish goals,design and conduct

worksite interventionsthat remove barriers to

healthy choices.

Establish goals,design and conduct

worksite interventionsthat remove barriers to

healthy choices.

Measure and evaluate outcomes

ROI

Measure and evaluate outcomes

ROI

SUSTAINABLE CHANGE

© 2007 Mid America Coalition on Health Care

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Methods: Data MapMethods: Data Map


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Methods: Employer Data Tracker (EDT)Methods: Employer Data Tracker (EDT)

Demographics Benefit Design Health Risk Appraisals Health Screenings Disease/Case Management Interventions On-Site Clinics Employee Satisfaction


Baseline Time PeriodFrom: 00/ 00/ 00

To: 00/ 00/ 00

Metric Value SD Comments/ NotesTotal Health Care Costs ($) $0.00 Total Number of Claimants (#) 0Total Health Care Cost Per Claimant ($) $0.00 Total Health Care Cost Per Member Per Month (PMPM) ($) $0.00 Actual Annual Administrative Cost ($) $0.00 Distribution of Covered Lives by Cost (%)

$0 - $999 0%$1,000-$9,999 0%

$10,000+ 0%Total Number of Non-Users or "Non-Claimants" (#) 0

Medical Claims

Claims– Medical/Pharmacy – Short- and Long-Term Disability – Workers’ Compensation– FML

Laboratory Tests Employee Assistance Program Productivity

– Absenteeism Excerpt from EDT:

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Baseline Data CompletenessBaseline Data Completeness

Minimum Data S et and A ll Data C ompletenes s (% R eporting )n=12

92%

88%

86%

80%

74%

64%

64%

60%

54%

42%

38%

25%

11%

88%

71%

65%

40%

55%

46%

49%

42%

45%

40%

47%

30%

12%

B enefit E nrollment

Medical C laims

D emographics

Health S creening

Health R is k Apprais al

S TD C laims

E mployee As s is tance P rogram

R x C laims

D is eas e Mgmt P artic ipation

WC C laims

LTD C laims

F ML C laims

Abs ence

Minimum D ata S et A ll Metrics

Data Gaps

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KC2 Intervention Model OverviewKC2 Intervention Model Overview

© 2009 Copyrighted Material. All rights reserved.

Return on Investment

Sp

ecific Interven

tion

sPopulation Health Goals

Evaluation

B

A

S

E

L

I

N

E

Business Goals

Objective A

Objective B

Objective A

Objective B

Intervention Type

Intervention Type

Intervention Type

Source: KC2 Project TeamSustainable Change Cycle

Value of Investment

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Identifying VBB InterventionsIdentifying VBB Interventions

Employer-specific

Measurable

Evidence-based

Optimizes outcomes

Definition:

Health Management Team

Actionable Data

Environment or Policy

Insurance Benefit Design

Employee Engagement

Vendor and Provider Value

Focus:


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Business Goals and ObjectivesBusiness Goals and Objectives

Make Health a Core Business Strategy

Align Data Definitions Across Internal and External Sources

Increase Access to Data

Integrate Sources to Create More Actionable Data

Further Develop Data Capabilities

Health Management Team (HMT)

Actionable Data

Incorporate Key Positions

Foster Health Champions

Create and Communicate Corporate Vision of Health

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Population Health Goals and ObjectivesPopulation Health Goals and Objectives

Environment and Policy

Insurance Benefit Design

Employee Engagement

Subsidize Healthy Food Options in Cafeteria and Vending Machines

Implement Smoke-Free Worksite Policy

Require Input of Biometric Data on HRA for Credit

Abbreviation: FSA: Flexible Spending Account

Vendor & Provider Value

Improve Health Status by Reducing Cardiometabolic Risks

Waived Co-Pay for Preventive Screenings or Target Drugs

Covered Benefits for Health Coaching for Target Conditions

Employer FSA Contribution as Incentive for Engagement

Increase Participation through Incentives

Increase Employee Satisfaction

Implement Weight Management Intervention

Work with Partners to Identify Employees/ Dependents with Targeted Risk Factors

Work with Partners to Develop Communication Plans

Work with Partners to Standardize Measures

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Frame Evaluation and Identify MeasuresFrame Evaluation and Identify Measures

InputsInputs

What We Invest

OutputsOutputs

What We Do, Who We Reach

OutcomesOutcomes

What Results

ProcessesProcesses

Enrollment

Participation

Frequency of contact

Service utilization

Financial

Human

Mental

Physical

Organizational

CapitalCapital

Business Presenteeism Productivity Overtime Absenteeism Replacement

Wages

Retention Recruitment Spend Trend ROI

Short-Term, Mid-Term, Long-TermShort-Term, Mid-Term, Long-Term

Employee Health Behavior Health Status Growth and Performance

Engagement Tenure


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Near-Term

OperationalResults

Mid-Term

Health Outcomes

Evaluation: Establishing the Business CaseEvaluation: Establishing the Business Case

What’s the cost of doing nothing?*What’s the cost of intervening?

Measuring OperationsIs intervention reaching target population?Is it being implemented in the ways specified?

Measuring Program EffectivenessIs intervention effective?

What’s the connection?Engagement health outcomesHealth outcomes productivity

Long-Term

Financial OutcomesMeasuring Costs

* Edington, D. Zero Trends: Health as a Serious Economic Strategy. Health Management Research Center, University of Michigan. Ann Arbor, MI. 2009.

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Near-Term

OperationalResults

Long-Term

Financial Outcomes

Mid-Term

Health Outcomes

Value of Investment (VOI)*Value of Investment (VOI)*

Corporate Viability

ProfitabilityGrowthOpportunitySustainability

Corporate Culture of HealthSupport for Future Initiatives

Success Builds Success

VOI

* Source: American Hospital Association

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What does “demonstrating value” mean in your organization?

What do you need to know about your interventions to determine if:

You reached the right people?

Programs were well-implemented?

Healthy stayed healthy, those at-risk lowered their risks?

Health outcomes improved?

Costs were better managed?

What’s important to your senior leadership to engage them in continuing to make health a core business strategy?

Key Questions Shape Evaluation PlanningKey Questions Shape Evaluation Planning

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Sharing a Successful Approach Sharing a Successful Approach

Under Construction

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Spreading The Word About Value-Based BenefitsSpreading The Word About Value-Based Benefits

Presentations and Public Relations Local and National Association Meetings Using the media to tell the story

Employer Guide, including: Tools and Modules used Employer case studies Lessons learned Resources available to employers

Replication National Business Coalition on Health (NBCH) Pfizer Inc. Online presence

value-based benefit design an employer coalition approach william l. bruning president & ceo,...

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