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2013 Performance-Based Health Plan Design May 22, 2012. Mission: Performance-based Health Plan Design. We will continue to engage our faculty and staff in personal health and wellness through our health plan benefits by incenting behavior change that leads to long-term health benefits.

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mission performance based health plan design
Mission: Performance-based Health Plan Design
  • We will continue to engage our faculty and staff in personal health and wellness through our health plan benefits by incenting behavior change that leads to long-term health benefits.
  • The performance-based health plan design is intended to improve the overall health of our population, accelerate our goal of becoming the healthiest university on the globe, and reduce our health care costs.
contributing factors
Contributing Factors
  • Even though we faired better than national averages, the annual cost for Ohio State’s health plan increased by 37% from 2006-2011.

Our demographics, behaviors, and conditions all contribute to a higher claims experience than comparison data*.

      • An older average age
      • A higher percentage of enrolled dependents than other universities
      • A 40% obesity rate
      • 38% of enrollees with chronic conditions drove 65.8% of the costs ($146M) in 2010
      • Individuals with heart disease represent 52% of all faculty and staff costs

* Data based on Aon Hewitt’s Health Value Initiative™ (HHVI), which is an annual study of over 350 employers (representing over 1,800 health plans in 140 U.S. market areas) to collect and summarize information to improve the understanding of health plan cost and value among employers.

ohio state s year over year trend compared to national trend
Ohio State’s Year-Over-Year Trend Compared to National Trend
  • Ohio State’s average Per Employee Per Year (PEPY) costs are below national average trends when analyzing the entire period from 2006 – 2010.
  • In recent years, our cost trend has been greatly influenced by dependent costs.
  • Both employee and dependent costs have seen a significant increase over the last two years, and we experienced a trend that was higher than the national average in 2010.

National Year-Over-Year Trend






call to action
Call to Action

In order to combat the negative impact of rising costs, we must act.

  • Continue to build a personal accountability mindset
  • Reduce the rising costs of caring for our population
proposed action
Proposed Action
  • PHA: Continued focus on the importance of completing a personal health assessment (PHA) as foundational awareness fundamental to long-term behavior change – Note: The 2011 PHA completion rate was 62% for faculty and staff and 31% for spouses/partners.
  • PCP: An incentive that waives member out-of-pocket costs for Primary Care Physician (PCP) office visits for all members to further the concept of patient-centered medical homes and contribute to longer-term potential cost containment
  • University subsidy: Greater for employees than for dependents
  • Health Reimbursement Account (HRA): Funded for completion of a Personal Health Action Plan – using dollars currently allocated to the Incentive Points Program ($150 per enrolled faculty or staff member)
  • Greater cost sharing:For faculty and staff who choose not to “participate”
2013 program framework promoting the value of a pcp relationship
2013 Program Framework—Promoting the Value of a PCP Relationship

*Mental Health/Substance Abuse

2013 program framework promoting individual accountability
2013 Program Framework—Promoting Individual Accountability

¹ PHA Completion rate-to-date: 42%

2 Action Plans

Currently, action plans are created and maintained by health coaches and care coordinators for individuals that have been identified as moderate or high risk

The rollout of the enhanced 2013 personalized action plans should allow all risk levels to create, maintain, and complete action plans

Action plans should be interactive and allow each individual to access, view, and update their plan

Roll out of Action Plans2 during 2013 (timing TBD)

Eligibility for 2013 plan options—Based on PHA completion from 10/01/2011–09/30/20121

Participating Medical Plan Option

  • Maintain similar and/orenhanced structure of medical benefit plan choices

1. Complete PHA(encourage completionof biometrics)



NonparticipatingMedical Plan Option

  • Less rich level of benefits

Employee Contributions Differ

  • ²Not eligible if enrolled in nonparticipating plan
2013 proposed performance based plan design subsidy
Participating (PHA) Plan Design

Maintain choice of 5 current plan options

Add plan design incentive – waive out-of-pocket costs for covered PCP office visits for all members1


Increase subsidy for faculty/staff from 85% to 86% (to offset elimination of the current $360 PHA premium credit)

Decrease subsidy for dependents from 84% to 82%

Nonparticipating (No PHA) Plan Design

One Default Plan

Plan Design

Increased medical plan deductibles and out-of-pocket maximums

Reduced medical coinsurance level

Higher cost-sharing and out-of-pocket maximums for prescription drugs

(Detailed plan design comparison included in the Appendix)


Faculty/staff subsidy reduced from 85% to 80%

Dependent subsidy reduced from 84% to 78%

2013 Proposed Performance-Based Plan Design& Subsidy
  • ¹The Mental Health Parity Act (MHPA), signed into law on September 26, 1996, requires that the benefit for mental health/substance abuse (MH/SA) office visits be at least as rich as the benefit for the majority of the charges in that category.  Current analysis is being performed to determine the benefit level requirement for MH/SA if a change in out-of-pocket charges is implemented for PCPs.
  • Annual Deductible

The amount a covered individual or family would have to pay for eligible services incurred during a single plan year before the plan begins to pay benefits (excludes copay services)

    • Copay

A flat dollar amount that a covered individual owes for a particular covered service

    • Coinsurance

The percentage of a provider’s allowed fee that a covered individual owes after the annual deductible amount has been met

    • Annual Out-of-Pocket Maximum

The total amount a covered individual or family would have to pay for eligible services incurred during a single plan year before the plan begins to pay eligible expenses at 100%

    • Subsidy

The portion of the total health plan cost that is paid by the university

our data reveals a need for action
Without Action:Our health-related costs will escalate as the health of our members deteriorates.

With Action:We can focus on improving health and slowing the increase of risk and cost trend over time.

Our Data Reveals a Need for Action

Health and Behavior Risks

Amongst the 56%of enrolled faculty & staff who completed the PHA in 2010, the following health concerns were exhibited:

  • 40% obesity & 29% overweight rates
  • 37% with a waist circumference > 40” for men & > 35” for women
  • 23% with elevated triglyceride levels of 150 or more
  • 5% with glucose (blood sugar) levels of 200 or higher
  • 13% with elevated blood pressure > 140 over 90
  • 26% with low HDL (good) cholesterol levels (men < 40 and women < 50)
  • 13% positive for metabolic syndrome with 58% already being treated for one or more chronic conditions


  • Chronic conditions—38.2% of the total population have chronic conditions & incurred 65.8% of the cost (≈ $146 million dollars in 2010)
    • Almost half of the F&S population have at least one chronic condition
  • Multiple chronic conditions—11.9% of the total population have multiple chronic conditions & incurred 31.7% of the cost ($11,237 PMPY)
  • Those suffering from multiple chronic conditions represented only 16.9% of the F&S population but drove 37.5% of the total cost
    • 88% of F&S with diabetes have at least one other chronic condition
  • Heart disease—represents 52% of faculty/staff costs


Based on F&S and dependents enrolled in medical coverage from 2006–2010:

  • Older average age and higher percentage of females
    • 57.6% female and average age of 48.2 for F&S
    • 50.9% female and average age of 49.6 for SSDP/spouses
  • Children accounted for 20.2% of the total paid dollars in 2010 compared to prior year averages of 17%
  • Greater number of dependents enrolled per employee compared to other universities
  • Higher dependent subsidy level may adversely impact OSU’s plan with a higher number of covered dependents

Cost Drivers