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Wellness & Prevention: a key component of a functional and harmonious healthcare system

Wellness & Prevention: a key component of a functional and harmonious healthcare system François Millard FSA, FIA, MAAA September 24, 2010. 1. Wellness as an essential ingredient to curb trend in a transformed health system: Evidence from South Africa . 2. How Vitality works. 3.

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Wellness & Prevention: a key component of a functional and harmonious healthcare system

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  1. Wellness & Prevention: a key component of a functional and harmonious healthcare system François Millard FSA, FIA, MAAA September 24, 2010

  2. 1 Wellness as an essential ingredient to curb trend in a transformed health system: Evidence from South Africa 2 How Vitality works 3 Applying the principles in the US corporate environment 4 The integrated medical home/ wellness home

  3. 1 Wellness as an essential ingredient to curb trend in a transformed health system: Evidence from South Africa

  4. South African healthcare has been through a transformation similar to what the US faces South Africa US Guaranteed access and coverage a a No exclusions for pre-existing conditions a a Restrictions on premium rating a a Prescribed minimum benefits a a Penalties for not purchasing insurance X a 4

  5. Drivers and Remedies of Medical Costs Cost Risk Treatment Cost Member Member Risk Treatment Cost per Services Utilization of Services Frequency of Sickness x x = = x x Drivers Lifestyle Disease burden Technology Treatment protocols Supply and demand of medical products and services Provider and services contracting. Benefit Rules Cost sharing mechanisms Wellness & Prevention Remedies Utilization Management Benefit Rules Managed Care & Cost shifting

  6. Lack of information Hyperbolic discounting Over optimism Healthcare is riddled with market failure Benefits are hidden, price is immediate Benefits are immediate, price is hidden True efficacy of different health and wellness approaches is not well understood Under consumption of preventive care People tend to overestimate their abilities and health status Sickness Wellness Future rewards of a healthy lifestyle are significantly undervalued relative to cost today

  7. The Discovery Healthcare Model Triangle of healthcare utilization

  8. Impact of the combined model on long-term medical inflation trend Discovery medical trend vs. Industry (1993 = 100) 700 600 500 400 300 200 100 0 2003 1993 1994 1997 1998 1999 2000 1995 2004 1996 2001 2002 2007 2005 2006 Discovery Industry

  9. 2 How Vitality works

  10. Vitality provides a co-ordinated approach to lifestyle modification Knowledge Active Care Integrated network of partners in communities and additional coverage through local events and devices Integration of best available lifestyle resources and care networks (e.g. nutrition, biometrics, smoking, disease specific interventions and coaching)

  11. Publication of Vitality cross-sectional studies 11

  12. VIP Study 1: impact of Vitality engagement on hospital-related costs Risk-adjusted hospital admission costs: engaged vs. not engaged Vitality members Not engaged benchmark 15-20% 10-15% 30-40% * P < 0.001 for all categories (including overall result) except cancer where P < 0.01 *Categorisation based on diagnosis-related groupers using ICD-10, CPT-4 and local procedural codes 12 Source: “Participation in an Incentive-based Wellness Program and health care costs: Results of the Discovery Vitality Insured Persons Study”. Please do not quote without written permission from Discovery or PruHealth.

  13. VIP Study 2: Vitality engagement is correlated with lower cost of chronic disease Risk-adjusted hospital cost for chronic members: engaged vs. not engaged Vitality members Not engaged benchmark 8-10% 20-30% Beneficiaries with single conditions P = 0.001 for multiple metabolic conditions, all single conditions are not statistically significant

  14. Longitudinal Vitality study1 Evidence of significant changes in cohort fitness engagement over time Longitudinal Vitality study: relationship between increasing activity and the odds of hospitalization Odds ratio for hospitalization in Years 4 to 5 % of members using the gym benefit Number of additional gym visits per week from Year 1 to Year 3 (for initial inactive members) Year • 1A retrospective analysis of 304,000 adults over the period 2004 to 2008, covering 33,196,197 member months of data. The analysis was designed to test for: • Significant changes in engagement with fitness-related activities over time • Whether these changes were associated with changes in the probability and cost of hospitalization 14

  15. 3 Applying the principles in the US corporate environment

  16. Application to Client’s Population (7,000 employees): Medical Cost 1. Health Maintenance 2. Risk & Cost Management Methodology overview: Numbers shown represents a constant cohort of almost 5,000 employees present within the base period (2007) and 2008 Vitality year. Claims are Age & Gender adjusted. Costs increase as risk factors increase. Interventions are aimed at keeping the low risk low, and reducing or managing high risks

  17. Engagement Client 7,000 employees: Tracking of simple and complex behaviors Average Workouts per Month (Verified and qualified workouts Only) Breakdown by type of activity The large increase in physical activity is driven by the combination of total participants and average workouts. The overall results for the 3rd policy year are especially promising.

  18. Directional US Vitality experience:Client 7,000 employees. Risk factor prevalence (verified results): employees and spouses (2009 vs. 2008)

  19. 4 The integrated medical home/ wellness home

  20. The integrated Medical Home / Wellness Home:A model for a holistic, integrated healthcare system

  21. Fundamental principles of the Medical Home:Commonality to Vitality design

  22. Key Observations 1 Wellness reduces the cost of chronic illnesses and encourages changing lifestyle behavior 2 Engagement keeps people in the healthcare system and therefore encourages a longer-term investment in healthcare 3 Engaging consumers to change their behavior has driven down healthcare costs 4 This is a key component of a functional and harmonious healthcare system

  23. Wellness & Prevention: a key component of a functional and harmonious healthcare system François Millard FSA, FIA, MAAA September 24, 2010

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