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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 Presentation Overview Costs of Unhealthy Lifestyle

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slide1

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

presentation overview
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
hero research study 1

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)

slide5

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)

costs increase with risk age
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)

slide7

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

surviving the perfect storm
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
slide9

Investing in Health:

What are Best Practices?

slide10

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

program design what works
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?
comprehensive programs work
Comprehensive Programs Work

Source: Jose, Anderson & Haight (1990)

targeting increases effectiveness

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
personal coaching reduces risk
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)

slide17

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

core technologies for phm
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
integrating phm strategically
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
slide21

$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

slide22

“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)

slide23

StayWell’s Experience:

Selected Case Studies

slide24

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
slide26

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.

marathon ashland petroleum marathon oil company
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
slide28

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
slide29

DaimlerChrysler

1997 Health Care Cost Savings

versus Non-participants

Source: University of Rochester & CORE Analytic (1999)

slide30

Large Telecommunications Company

Short-Term Disability Savings

versus Non-participants

* Significant difference

Source: Serxner et al. (2001)

slide31

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
slide33

Managing Employee Health:

Implications for Employers

why not invest in health
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...
the cost of doing nothing
The Cost of Doing Nothing?

Annual Medical Costs

(10% trend - Start 2003 - Achieve 3:1 ROI 3rd year)

implications for employers
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