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May 13, 2010. Total Health Management: Best Practices to Drive Optimal Health and Business Outcomes. Total Health Management Effectively Addressing Key Business Issues. The Solution: A Total Health Management Approach. The Problem: Health risks and conditions are leading to

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total health management effectively addressing key business issues
Total Health ManagementEffectively Addressing Key Business Issues

The Solution:

A Total Health Management Approach

The Problem:

Health risks and conditions

are leading to

increased costs of doing business

and affecting companies’ ability

to effectively deploy talent

on a day-in and day-out basis

in the US and across the globe

Total Health Management

is all of the actions an employer can take to engage and support management and employees in making good choices to avoid the cost and consequences of poor health

+

+

=

Healthier

and Safer

Workforce

ReducedCost

Increased

Productivity

Competitive Advantage,

Positive Company Image

slide3

THM tackles the business challenge by addressing all the root causes of problems to achieve improvements in health, workforce productivity and cost management

Medical Drivers

Non-Medical Drivers

The Problem:

Health risks and conditions are leading

to increased costs of doing business

and affecting the ability

to effectively deploy talent

on a day-in and day-out basis

  • Policies
  • Work Practices
  • People Management
  • Financial (e.g., plan design, variable compensation, reimbursements, incentives, contracting)
  • Multi-Diagnoses/Risks
  • Psychosocial Issues
  • Major Diagnoses
  • Treatment Variability
  • Care Coordination
  • Case Management

Critical Business Metrics

Health Status

Health Care Costs

Safety

Total Cost

Total Lost Time

Workers’ Compensation Costs

total health management addressing the entire health care continuum

Well

Productive, low health care users

At Risk

Currently productive, potential high cost claimants

Illness / Injured

Limited to no productivity, high medical costs

Catastrophic

High cost users, poor prognosis

Occ and Non-Occ Absence and Disability Management

Health& Safety Promotion

Health and Safety Risk Management

Chronic Condition and Case Management

High Cost Case Management

Total Health ManagementAddressing the Entire Health Care Continuum

To achieve the following objectives

Optimized health, safety and productivity

Managed costs

Wise allocation and use of resources based on local needs and infrastructure

Alignment with broader total rewards and/or talent management strategies

Maximized ROI

the total health management opportunity

The Hidden Costs of Illness

Estimated indirect cost of absences = 2% of payroll

$49M Health & Absence Costs*

Direct non-occupational absence costs = 2.7% of payroll

+

Health care benefits costs = 16% of payroll

Equals more than 20% of payroll

  • * Assumptions:
    • For an employer with 5,000 employees and average salary of $47,060
  • * Survey results:
    • Average salary: $47,060
    • % electing employer coverage: 84%
    • % with dependent coverage: 56%
    • Average employee age: 41 years
    • % females/males: 53%/47%

$235M Payroll*

Payroll

Source: Mercer’s 2008 National Survey of Employer-Sponsored Health Plans and Mercer’s 2007 Survey of Health, Productivity and Absence Management Programs

Reducedcost

Healthier

workforce

Increased

productivity

Competitive advantage,

Positive company image

The Total Health Management Opportunity

Total Savings of 1 – 2% of payroll

(~ $1Million/1,000 employee)

  • Address the “hidden” costs associated with poor health with a comprehensive and integrated approach
  • Manage Total Health to Achieve Total Value

+

+

=

marketplace trends mercer health care survey
Marketplace TrendsMercer Health Care Survey
  • Established in 1986, national probability sample used since 1993
  • 2,914 employers participated in 2009
  • All employers with 10 or more employees are surveyed using a stratified random sample; large employers are oversampled to permit robust break-outs by size
  • In this presentation, we refer to:
    • Small employers – 10-499 employees
    • Large employers – 500+ employees
    • Jumbo employers – 20,000+ employees
slide8

Back in 2006:

Health management and consumerism emerge as large employers’ most important cost-management strategies for the next five years*

All large employers

Jumbo employers

* Employers indicating strategy will be significant in efforts to manage health benefit cost.

Source: Mercer’s National Survey of Employer-Sponsored Health Plans 2006

slide9
Sharp growth in use of health management programsPercent of large employers offering programs and offering incentives
return on investment in health management large employers
Return on investment in health managementLarge employers

All large Jumbo

employersemployers

Provide health management

programs through specialty vendor/

request optional services from health

plan vendor 37% 73%

Of those, % of employers that have

attempted to measure return on

investment (ROI)* 45% 69%

Of those, % of employers that are

satisfied with ROI 74% 75%

*Among employers that offer disease or health management programs

provide worksite or near site medical clinic
Provide worksite or near-site medical clinic

All large employers Jumbo employers

Large employers

that provide a

primary care clinic

a strong thm approach can transform the member experience through an integrated approach
A strong THM approach can transform the member experience through an integrated approach

Traditional Health Management Program Model

Integrated HealthManagement Program Model

Healthpromotion

Lifestylemgmt

Diseasemgmt

Casemgmt

Disabilitymgmt

Healthpromotion

Lifestylemgmt

Diseasemgmt

Casemgmt

Disabilitymgmt

Historical emphasis

Integrated approach

Healthy

At-risk

Chronically ill

Catastrophically ill

Limited participation, effectiveness

Greater engagement, better ROI

Source: Mercer Oliver Wyman

vendors have been evolving towards more integrated models
Vendors have been evolving towards more integrated models

The marketplace is evolving rapidly:

  • Expanded and re-tooled product suites
  • New entrants
  • More sophisticated offerings
  • Shift to more consumer centric, integrated models
future vision a blended model of care competing on cost quality and outcomes
Future Vision – A blended model of care, competing on cost, quality and outcomes

BLENDED MODEL Integrated Wellness/Illness/

Injury Management System

On- and Near Site Care Model

Web and Telephonic based Care Model

Value

Potential

Health Plan based Care Model

Physician based Care Model

Evolutionary Path

slide16

Total Health Management

Best Practices –

Management Practices

hero best practice scorecard version 3 sample questions and scorecard output
HERO Best Practice Scorecard -- Version 3Sample Questions and Scorecard Output

Sample Scorecard

Illustrative purpose only

total health management critical success factors
Total Health ManagementCritical Success Factors

Measurement and Evaluation

Strategic Planning

Leadership Engagement

Program Level Management

Programs

Engagement Methods

  • Integrated data warehouse with individual level data across programs and vendors
  • Data and process for on-going performance and program evaluation
  • Cross-functional alignment of THM objectives and planning
  • Health and wellness objectives linked to annual operating plan
  • Formal 3-year strategic plan
  • Dashboard with THM metrics is routinely reviewed by leadership
  • Adequate funding allocated
  • Local wellness champions
  • The link between health and business success is supported at the enterprise-wide, business unit and local levels
  • Accountability for health and wellness endorsed by senior leadership and cross functional managers
  • Process and metrics for proactive program and vendor management
  • Vendor performance guarantees for outcomes
  • Programs span the health population continuum
  • Multiple modes of identification (claims, HRAs, screenings, vendor cross-referral)
  • Multiple modes of delivery (web, paper, telephonic, on-site)
  • Accessible to Employees, Spouses/DPs, Retirees
  • Strong branding
  • Multi-media communication strategy
  • Simple, on-going messaging
  • Incentives to drive key behaviors
  • Overarching/integrated health benefits portal
  • Integration with other company initiatives
  • Competitions and other means of group / organizational engagement

The above are considered THM Best Practices and can be assessed through the Mercer/HERO Scorecard

total health management addresses the full health care continuum
Total Health Management addresses the full health care continuum…

Well

Productive, low health care users

At Risk

Currently productive, potential high cost claimants

Ill / Injured

Limited to no productivity, high medical costs

Catastrophic

High cost users, poor prognosis

…with tailored approaches…

  • Awareness
  • Prevention and Early Detection
  • Healthy Lifestyle Promotion
  • Linkage to Safety
  • Bio-psychosocial Approach to Risk Reduction
  • Targeted Behavior Modification and Condition Management
  • Evidence-Based Decisions
  • Intensive Upstream Cost Risk Reduction
  • Access to “Top” Docs and Facilities (COEs)
  • Focused Treatment Compliance
  • Integrated Medical/ Disability Case Management and Return to Work/Health
  • Intensive Upstream Cost Risk Reduction
  • Access to “Top” Docs and Facilities (COEs)
  • Focused Treatment Compliance

Reinforcement through Incentives, Plan Design and Communications

comprehensive branding and communication strategy key stakeholder involvement is crucial to success
Comprehensive Branding and Communication Strategy Key stakeholder involvement is crucial to success

Top Down

Wellness is experienced by employees as part of the total value of working at the company

New healthier behaviors at work and home

Improved performance and productivity

Goals and Outcomes

New conversations between “healthy” and “less healthy” employees

Control rising health care costs

Sustainable behavior change

Bottom Up

key metrics and measures demonstrating effectiveness of thm
Key Metrics and MeasuresDemonstrating effectiveness of THM

Short-Term Measures

(0-12 Months)

Intermediate-Term Measures

(12-24 Months)

Long-Term Measures

(2-5 Years)

  • Program Delivery
    • Process Flow
    • Vendor Cross-referrals
  • Participation
    • Baseline Utilization
    • Characteristics of Participants
  • Awareness
    • Program Awareness
    • Name/Brand Recognition
    • Program Perception
  • Program Satisfaction
  • Impacts
    • Knowledge, Attitudes, Beliefs
    • Self-Efficacy
    • Behaviors
  • Baseline Analyses
    • Health
      • Health Status
      • Health Risks
      • Prevalence of Chronic Conditions
    • Health x Costs Relationships
  • Program Delivery
    • Process Flow
    • Vendor Cross-referrals
  • Participation
    • Repeat Program Utilization
    • Characteristics of Repeat Participation
    • Completion Rates
  • Awareness
    • Program Perception
  • Program Satisfaction
  • Impacts
    • Change in Health
      • Health Status
      • Health Risks
      • Clinical Values
  • Outcomes
    • Health Care Utilization
    • Lost Work Time
    • Productivity
    • Employee Turnover
    • Employee Satisfaction/Culture
  • Program Delivery
    • See Intermediate-Term
  • Participation
    • See Intermediate-Term
  • Awareness
    • Program Perception
  • Program Satisfaction
  • Impacts
    • See Intermediate-Term
    • Impact on Organizational Culture
  • Outcomes
    • See Intermediate-Term
    • Medical Costs
      • Trend
      • ROI

Leading Indicators

Lagging Indicators

slide22

Total Health Management

Best Practices –

Case Studies

slide23
THM Capabilities and Expertise in ActionCase In Point: Large beverage manufacturer, seller and distributor

Situation

  • About 30,000 employees, primarily male and hourly workers
  • Leverage emphasis on safety to build a culture of health
  • Geographically dispersed with 300+ work locations with limited access to computers for online communication and health assessment
  • High prevalence of obesity, hypertension and stress

Action

  • Health and wellness brand and multimedia campaign
  • Developed targeted wellness program to deliver at specific worksites
  • Incentives to complete HA and lifestyle management program including national competition and volunteering
  • Implemented onsite clinics at about 25+ locations
  • Engaged on-site wellness champions, clinic nurses and safety resources to promote on-site screenings, health assessment and programs
  • Result
  • 70% + health assessment participation (60% was the goal)
  • 40% + high/moderate risk population participates in lifestyle management programs
  • Medical trend averaged 5.6% annually from 2004 to 2007
  • 2007: Received the prestigious C. Everett Koop National Health Award for their health and wellness program
thm capabilities and expertise in action case in point high tech manufacturer
THM Capabilities and Expertise in ActionCase In Point: High-tech manufacturer

Situation, Challenge

  • High-tech manufacturer: 10,000 employees
    • Low morale after 2001-2002 layoffs
    • Rising health and absence costs
    • Increasing pressures by overseas competition
  • HR saw value in the THM model as a benefit to employees and a necessary medical/absence cost management strategy
  • Capitalize on a new integrated data warehouse: health/medical, pharmacy, behavioral health, disability, workers’ compensation data
  • Facilitate collaboration among historically siloed internal and external stakeholders in order to ensure effective integration
thm capabilities and expertise in action case in point high tech manufacturer continued
THM Capabilities and Expertise in ActionCase In Point: High-tech manufacturer (continued)

Action

  • Data warehouse and THM modeling tools:
    • Business case for THM investment and five-year potential savings
    • Multi-year comprehensive strategies regarding medical, pharmacy, behavioral health, and occ- and non-occ disability management
    • Metrics dashboard to monitor program and results
  • Best-in-class THM programs across the continuum of care regularly monitored and audited to improve performance
  • Business rules and shared performance guarantees to enhance member experience and improve care management
  • Transitional and proactive return-to-work program for occupational and non-occupational disabilities
  • Incentives for positive behaviors
  • Local 24/7 Total Health teams at all locations to engage local leadership and employees
  • Result
  • Financial indicators signal that employer is on the right track: 2008 medical trend was 3% (compared to 19% at baseline year 2002) and pharmacy trend was 5.4% (compared to 5.7% at baseline)
  • Over same period Short-Term Disability PEPY costs dropped by 33% and STD incidence rates dropped by 28%; workers’ compensation PEPY dropped by 13% and WC incidence rates dropped by 29%.
key points to remember
Key Points to Remember
  • Consumer Centric Design and Delivery
    • Intuitive, Empowering and Easy to Navigate
  • Balanced Portfolio of Investments
    • Across the Entire Care Continuum
  • Continuous Improvement Approach
    • Rigorous Monitoring, Evaluation and Process Improvement
  • Shared Accountability
    • Alignment of Internal and External Stakeholders with Key Objectives
  • Engagement, Engagement, Engagement
    • Focus on W.I.I.F.M. to Drive Best Outcomes