Coverage of Diabetes & CAD Through Value Based Health Plan Regina C. Reardon

1. Coverage of Diabetes & CAD Through Value Based Health Plan Regina C. Reardon PresidentHealthcare Strategies, Inc. September 30, 2013

2. About the Fund • UFCW Local 1776 & Participating Employers Health and Welfare Fund • Primarily in retail food industry • Self-insured medical, pharmacy & other benefits • Covering 40+ Employers • 20K lives • Average age – 47

3. Cause for Action • Encourage participants to take a more proactive role in managing and improving their health • Contain the Fund’s claim cost by identifying individuals at risk of incurring high cost claims • Develop action plan

4. Options Considered STICK APPROACH • Cost shifting to participants who are non-compliant with the programs • Lower level medical plan • Increase in employee contribution • Surcharge/Penalty for non-compliance

5. Options Considered CARROT APPROACH • Encourage participation in wellness programs • Raffle/Giveaways • Provide 50% reduction for prescription drugs and doctor visit co-pays related to chronic conditions • Preventive and Wellness Reimbursement of out-of-pocket costs (up to $100 per family member per year)

6. Course of Action & Why • Raffle and Surcharge/Penalty for non-compliance • Encourage participation in wellness programs • Provide 50% reduction for prescription drugs and doctor visit co-pays related to chronic conditions • Preventive and Wellness Reimbursement of out-of-pocket costs (up to $100 per family member per year) • Cost-savings to participants and Fund

7. Actions Taken • Required participants to complete a Health Risk Assessment (“HRA”) • Stratified participants and dependents into Chronic/At Risk/Well groups based on HRA results and medical/pharmacy utilization • Required participants to do certain things to obtain waivers of surcharges • i.e., call a Health Coach, have a mammogram, get a HeartCam scan • Verified participants’ compliance semi-annually • Self-reporting • Developed points system

8. Obstacles & Challenges • Tailoring program requirements to specific chronic conditions • i.e., COPD, CAD, CHF, Diabetes, and Asthma • Compliance verification process cumbersome for participants and Fund • i.e., too much paperwork for participants to self report and for Fund to monitor

9. Meeting the Challenges • Tailored program requirements to specific chronic conditions • i.e., Diabetics now required to report their HbA1C and other ADA-recommended test results • Developed a points-reward program to track participants’ compliance via on-line automated claims reporting system

10. Results to Date • We identified our participants in the following buckets: • Well – 68% • At Risk – 12% • Chronics – 20% • Diabetes – 37% • CAD – 26% • COPD – 17% • Asthma – 6% • CHF – 5% • Other/Unspecified – 9%

11. Results to Date (continued) Gaps in care decreased by getting the chronic members involved resulting in a lower pmpm medical cost for the disease states targeted PER MEMBER PER MONTH COSTS Fye 6/30/11 Fye 6/30/12 %decrease • Coronary Artery Disease $ 1,332.71 $ 1,002.53 -24.7% • Congestive Heart Failure $ 2,694.14 $ 1,795.67 -33.3% • COPD $ 1,497.32 $ 1,044.03 -30.2% • Diabetes $ 988.96 $ 897.20 - 9.2% • Asthma $ 603.01 $ 541.28 -10.2%

12. Results to Date (continued) Gaps in care decreased by getting members involved resulting in an overall HIGHER pmpm pharmacy cost for the disease states targeted PER MEMBER PER MONTH COSTS Fye 6/30/11 Fye 6/30/12 %decrease • Coronary Artery Disease $ 306.55 $ 325.54 +5.8% • Congestive Heart Failure $ 377.45 $ 347.51 -7.9% • COPD $ 251.77 $ 248.81 +1.2% • Diabetes $ 282.20 $ 313.98 +10.1% • Asthma $ 188.78 $ 198.57 +4.7%

13. Results to Date (continued) Gaps in care decreased by getting members involved resulting in an OVERALL LOWER pmpm cost for the disease states targeted PER MEMBER PER MONTH COSTS Fye 6/30/11 Fye 6/30/12 %decrease • Coronary Artery Disease $ 1,639.26 $ 1,328.07 -18.98% • Congestion Heart Failure $ 3,071.59 $ 2,143.18 -30.2% • COPD $ 1,749.09 $ 1,292.84 -26.08% • Diabetes $ 1,271.16 $ 1,211.18 -4.7% • Asthma $ 791.79 $ 739.85 -6.5%

14. Lessons Learned • Communication is key - know your audience! • Provide alternate ways for participants to report information and remain compliant with program requirements (self-reporting via paper and phone, automated reporting through claim system) • Get everyone on board (Fund Office, medical/pharmacy providers, Union Representatives)

15. Lessons Learned • Feedback from participants • Some positive: • “My coach was very polite, courteous and gave me very good info about my heart disease. She provided me with information that I didn’t know of my disease. She was very helpful in many ways.” • “I was actually hesitant to do this but after starting to speak to Bernice I felt comfortable enough to ask her a couple of questions she was very helpful by sending out some info to me.” • Some negative: • “Don’t see the purpose of this. My doctors would handle all questions.”

16. What’s Next • Continue to identify and encourage treatment for those who have, or are at risk for, chronic conditions (COPD, CAD, CHF, Asthma, Diabetes) • Mandatory diabetes screening for anyone under 45 and overweight, and everyone age 45 and older* *Source:www.uad-cvd.org

17. What’s Next • Patient Centered Medical Home (“PCMH”) • No deductibles or office visit co-pays for participants • Expanded access to Primary Care Physician (“PCP”) and other providers • More robust level of service and follow-up care provided • National Committee for Quality Assurance (NCQA) Credential for PCMH Requires: • Patient registry • Electronic medical records • Gap-in-care analysis • + + + + +

18. - Questions -