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Population Health Management

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  1. Population Health Management Presented at: Investment in Human Capital Conference June 11-12 , 2003 Presented by: David Anderson, PhD - Vice President, Programs & Technology StayWell Health Management Saint Paul, MN

  2. Presentation Overview • Costs of Unhealthy Lifestyle • Investing in Health: What are Best Practices? • Population health management (PHM) • Program design: What works? • Implementation process & technology • Integration strategies • What’s the ROI? • Selected Case Studies • Implications for Employers

  3. Costs of Unhealthy Lifestyle

  4. Impact on Individual Health Care Costs: High-Risk vs. Lower-Risk Employees For example, individuals at high risk for depression have 70.2% higher costs than those at lower risk HERO Research: Study #1 Source: Goetzel et al. (1998)

  5. Impact of High-Risk Status on Organizational Health Care Costs • High-risk status costs $465 per employee annually (1996 dollars) • 27% of total annual expenditures • High-risk stress alone accounts for 7.9% of total health care costs HERO Research: Study #2 Source: Anderson et al. (2000)

  6. Costs Increase With Risk & Age Medical Costs by Health Risk Levels and Age 1997-1999 Average Annual Paid Amounts Source: StayWell data analyzed by U of Michigan (N = 43,687)

  7. Medical Costs Will Rise Even Faster! Annual Health Benefit Costs Per Active Employee Up 14.7% in 2002; 14% 2003 budget Source: 2002 Mercer US Health Care Survey

  8. Surviving “The Perfect Storm” • Supply-Side Strategies Have Failed to Control Costs • Controls on medical utilization and prices, managed care • Consumers insulated from consequences of health-related decisions -- both good and bad • Swamped by converging forces: aging, controllable health risks, expanding medical technology • Piecemeal Approaches Not Enough • Annual increases in medical costs $500-$1000/employee • Small savings helpful but not sufficient • Success Requires Bold Comprehensive Strategy • To substantially improvepopulation health • To fundamentally reduce need & demand for medical care

  9. Investing in Health: What are Best Practices?

  10. Wellness Management • Information • Motivation • Preventive Screening • Risk Management • Targeted Intervention • Targeted Screening • Demand Management • Self Care • Nurse Advice Line • Disease Management • Compliance • Risk Management • Disability Management • Case Management • Decision Support Health & Well-Being Low Risk, Optimal Health At Risk Inactivity, Obesity, Stress, High Blood Pressure Minor Illness/Injury Doctor Visits ER Visits Chronic Disease Diabetes Heart Disease Disability Traumatic Injury Cancer 85% of employees = 15% of costs 15% of employees = 85% of costs Population Health Management An Integrated Strategy Across the Health Continuum

  11. Comprehensive Strategy Ongoing Wide “menu” of options Targeted Intervention By risk level By readiness to change Tailored Programming 1-on-1 health coaching Focused media/materials Supportive Culture Leadership Policies/Norms Incentives Program Design: What Works?

  12. Comprehensive Programs Work Source: Jose, Anderson & Haight (1990)

  13. Erfurt, Foote et al. (1990) Targeting Increases Effectiveness Controlled Research • Erfurt, Foote, et al. (1990-1993) • Impact of targeting & individual follow-up • Participation up 500% • More risk reduction • Long-term contact key Scientific Review • Heaney & Goetzel (1997) • 48 studies of multi-component programs • Effective programs target those at-risk for individual counseling

  14. Personal Coaching Reduces Risk Impact of Telephonic Interventions on Health Risks: Two-Year Follow-Up Net Impact .85 Risks Per EE Source: Gold et al. (2000)

  15. Culture Drives Participation

  16. Incentives Drive Participation

  17. Chronic Disease • Disability Healthier Employees Lower Health Care Costs Reduced Absence Increased Productivity Improved Morale High Risk Stage of Change Risk Triage Moderate Risk Assessment Outcomes Analysis & Reporting Low Risk Awareness - Motivation - Cultural Support Population Health Management Program Implementation Process

  18. Core Technologies for PHM • Health Assessment • Health risk assessment (HRA) • Other health assessment -- health status, claims, predictive modeling • Program Management Database • Population demographics • Health assessment • Intervention targeting & tracking • Management reporting - population & targeted • Cost-Effective Interventions • Risk reduction: fitness, smoking, weight, stress, eating, etc. • Disease management: diabetes, heart disease, asthma, etc. • Traditional & Technology-Based Delivery • Online tools reduce delivery costs & increase access to information

  19. Integrating PHM Strategically • Health Care Plan Integration • Monthly contribution linked to participation - HRA & activities • Intervention participation linked to benefit plan coverage • Deductible & co-payment levels tied to participation • Consumer-focused accountability & support • Disability Plan Integration • Triage STD cases into health management support • Incentive linked to participation • Communications Strategy • Establish link between health care costs and daily individual decisions and behaviors • Position PHM as strategic investment

  20. What’s the ROI?

  21. $3-$6 2-5 Years $2-$3 1 Year $2-$10? 1 Year $?-$? 1 Year Return on Investment Impact of Population Health Management on Medical Costs Short-Term Long-Term Wellness/Risk Management Demand Management Disease Management Disability Management Sources: Aldana (2001); Goetzel et al. (1999); Industry reports

  22. “Total Cost” of Poor Health Medical (18%) Lost Productivity (76%) Disability (6%) Medical & disability costs account for only 24% of health and productivity costs Source: Integrated Benefits Institute (2001)

  23. StayWell’s Experience: Selected Case Studies

  24. Hawaii Medical Service Association (HMSA) • Demographics & History • Largest plan in Hawaii • Launched health management program in 1990 • 375,000 eligible adult members in PPO & POS plans • 213,590 participants through 2001 • HealthPass Program Design • 100% funded by health plan • Annual “happy birthday” invitation • Biometric screening, HRA, follow-up exams & referrals • Interventions: group at-risk education, disease management • Best Practice Program & Results • 98.6% consider HealthPass important part of HMSA benefits • 48% increase in low-risk prevalence; 29% high-risk decrease • $188 reduction in annual medical costs • ROI = $2.51 per dollar invested • C. Everett Koop Award in 2002

  25. Hawaii Medical Service Association (HMSA)

  26. Hawaii Medical Service Association (HMSA) Savings = $188 * Significant difference (p < .05) controlling for age, gender, member status, island, coverage type plan type, morbidity level, and baseline medical costs. All costs in paid dollars, adjusted to 2001.

  27. Marathon Ashland Petroleum & Marathon Oil Company • Demographics & History • 15,000 eligible employees and spouses • 15 large sites and 2000 employees at small sites • Wellness since 1990 • Program Design • Communication plan • Online & paper HRA • Lifestyle & disease management interventions • Reimbursement program • Onsite & mail-based programming • Program evaluation & research • Best Practice Program Results • 78% participation in HRA • High intervention participation -- 42% in lifestyle; 29% in DM • Upper management commitment & support

  28. DaimlerChrysler WELCOA Gold • Demographics & History • 75,000 employees • 21 manufacturing sites, 5 office sites, 81 remote delivery sites • Piloted 1985-1990; Rollout 1991-1995; Ongoing refinement • Program Design • Coordination staff on-site year round • Promotion, HRA & screening, interventions, workshops, quarterly campaigns, monthly newsletters, etc. • Best Practice Program & Results • Full commitment to long-term implementation • Benchmark program encompassing full range of services • Program institutionalized & part of culture • 98% participant satisfaction; 96% intend to improve a health habit • 25 WELCOA Gold Awards since 1998 • C. Everett Koop Award in 2000 • Optimas Award in 2001 • Medical cost savings = $212 annually per participant

  29. DaimlerChrysler 1997 Health Care Cost Savings versus Non-participants Source: University of Rochester & CORE Analytic (1999)

  30. Large Telecommunications Company Short-Term Disability Savings versus Non-participants * Significant difference Source: Serxner et al. (2001)

  31. CIGNA Corporation • Demographics & History • Employees on short-term disability • Nationwide program • Piloted in 1998; expanded in 1999 • Triumph Program Design • Triumph program is disability-linked intervention • Single component of comprehensive strategy • Program elements: • HRA with incentive • HelpLine support • NextSteps lifestyle phone-based interventions • Best Practice Program & Results • C. Everett Koop Award (2000) • Evaluation research in progress • Major improvement in health risks and health status (SF-12) • Estimated annual cost savings of $839 per participant

  32. CIGNA Corporation

  33. Managing Employee Health: Implications for Employers

  34. Why Not Invest in Health? • Long-term investment required to achieve ROI • Starting now minimizes the wait • Better short-term savings opportunities • Use these savings to cover investment • Lack of confidence in ROI numbers • As opposed to the solid ROI numbers on CABG? • Other priorities • Those things generating over 50% of medical costs? • No budget • Other than the $10k-$20k/year spent on poor health • High turnover • Well, that does narrow the focus...

  35. The Cost of Doing Nothing? Annual Medical Costs (10% trend - Start 2003 - Achieve 3:1 ROI 3rd year)

  36. Implications for Employers • Surviving the “Perfect Storm” • Serious commitment to investment in health • Comprehensive Population Health Management strategy • Vision to control health care costs and improve productivity • Best Options for Smooth Sailing • Large Employers • Substantial increase in employee health investment • Integrate PHM with health-related benefit programs • National program providers -- integrators -- health plans • Small Employers • Options limited but piecemeal approaches insufficient • Coalition contracting • Health plans -- current vs. future capabilities