the empowered consumer - nhrma conference - g... · source: career 1 source ©2018 arthur j....

©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM

The Empowered Consumer: Out of the Box Thinking for

Controlling Healthcare CostGraham Thompson | Client Consultant

Charnique Walker, MBA | HR & Benefits Technology Leader, Western Region

2©2018 ARTHUR J. GALLAGHER & CO. | AJG.COM

Agenda

• Rising Cost of Healthcare

• Emerging Changes in the Healthcare Market

‒ Centers of Excellence

‒ Tiered Networks

‒ Value Added Plans

‒ Exclusionary Pharmacy

• Consumer Communication and Engagement


Unsustainable Healthcare Cost


Rising Healthcare Costs Factors

Unhealthy Lifestyles

Wasteful Spending

Medical Technology

Pharmacy CostAging Workforce


Effects of Rising Healthcare Cost

For the

Employer

• Rising cost force employers to repurpose

healthcare spend

• Cost management tactics may disrupt

“destination employer” reputation

For the

Employee

• Healthcare cost shifted to employees

‒ Higher deductibles

‒ Higher co pays

‒ Higher premiums

• Healthcare cost rising faster than inflation

and employee wages


Destination Employer

65% of employees are

more likely to recommend

their employer as a good

place to work because of

the benefits offeredLodestar

Benefits in the Workplace

Source: Career 1 Source

http://www.commonwealthfund.org/publications/in-the-literature/2017/may/tiered-provider-network-enrollment


Emerging Changes in Healthcare MarketStrategies and Tactics


Employer Strategies

56%56% of employers have an

effective strategy to

manage healthcare cost

74%

74% of employers say

managing the cost of health

benefits is a top priority for

their organization

Gallagher

2017 Benefits Strategy and Benchmarking Survey


Centers of Excellence

A facility recognized for providing the highest levels of leadership, quality, service

and best practices in certain fields

Centers

Evaluation

Criteria

Procedure Success and Survival

Rates

Quality of Medical Professionals

Involvement in Clinical Research

Patient Satisfaction

Number of Patients Treated

Treatment Planning &

Coordination

Program Depth and Breadth

Quality of Patient Services


Healthcare Savings

Hig

her

Qualit

y C

are

Low

er H

ealth

care

Cost O

vera

ll

Center of Excellence Facility's

Outcomes

• Fewer procedure

complications

• Avoid preventable patient

readmissions

• Shorter hospital length of stay

• Higher survival rates


$38,251

$33,544

$23,013 $24,308

$5,710

$21,664 $21,664

$15,729 $13,179

$3,459

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

HipReplacement

KneeReplacement

Lap Band Hysterectomy KneeArthoscopy

Cost Comparison

Non Centers of Excellence Centers of Excellence

Center of Excellence Case Study


Domestic Tourism

• Narrow Center of Excellence network out of

state for specialized surgeries

• Lower cost, better care

• Compensation package offered to utilize

programs

• Walmart & LowesINC, Magazine “Domestic Medical Tourism”


Value-Based Designs

quality of care, healthcare cost by,

Traditional Fee-for-service medicine

$ incentives to promote cost-efficient

care and consumer choices

Increased quality, decreased cost

TRANSTITING FROM

IMPLEMENTING


Program Fundamentals

Increase level of integration between health plans and healthcare providers

Value Outcomes Preventative care

Volume Outputs Emergency care

Promoting educated healthcare spend by

reducing barriers for improving health by

lowering consumer cost for “high value”

services and providers

Fee-For-

Service

Focus

Value

Based

Plans

Focus


Program Incentives

Empowering employees to take charge of personal health &

wellbeing requires program transparency and education

Incentives for “high value care”

• Deductible adjustment

• Reduced Copays

• Fund-based plan contributions

• Reduced out-of-pocket spend

Disincentives for “low value care”

• Higher cost sharing

• Increased cost for non-evidence

based treatments/services

• Increased cost for non-formulary/non-

preferred brand Rx


Health Management Case Study

Annual Physical Incentive: $50 Per Month

• Overall 17% reduction in ER utilization

• Large Claims:

o Participants large claimants per 1000 are half the

incidence rate on Nonparticipants

• Prescription Costs:

o Participants trending at 3%

o Nonparticipants trending at 35%

• Inpatient Admissions:

o Participants down 5%

o Nonparticipants up 50%


Health Management Case StudyPharmacy Cost Per Employee Per Year Medical Cost Per Employee Per Year

High Cost Claimants per

1000 participants

Arthur J. Gallagher and Kirby Corporation


• Narrow: Less provider choice, lower premium

• Tiered: Broad network of providers and more flexibility for

members

– Differing cost-sharing between tiers

– Incentivize preferred providers with low cost sharing

• Consumer directed healthcare

Narrow & Tiered Networks


How Tiered Networks Work

Incentivize members to utilize preferred providers

while not limiting their choice of providers

$ $$ $$$

Source: Premera Blue Cross



Healthcare Savings

Source: The Commonwealth Fund, 2017

On average, tiered

networks decrease

healthcare

spending by 5%



Pharmacy

20%

RX cost contributes to

nearly 20% of

healthcare cost

Percentage of Americans Using

Prescription Drugs by Age


Exclusionary Pharmacy


Wellness Programs

Education & activities organizations can do to promote healthy lifestyles

Source: Gallup “State of the American Workplace”, 2016.

Members with higher

overall well-being have

41% lower health

related cost than

members struggling

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0Suffering Struggling Thriving

$11,709

$7,388

$4,395

ANNUAL HEALTH-RELATED COSTS TO

EMPLYER, BY WELLBEING CATEGORY


Short-term vs. Long-term ROI

• Smoking

• Poor eating habits

• Lack of exercise

• Emotional health

• Cancer

• Pre-diabetes

• Obesity

• Depression

• Diabetes

• Heart Disease

• Emphysema

• Amputation

• Heart Attack

• Hospitalization

Intervention Can Avoid Intervention Can Avoid

Lifestyle Management Programs Disease Management Programs

Benefits are realized in longer term Benefits are realized in shorter term


Communication & Engagement


Consumer Centric Healthcare

Engaging the consumer as a partner in healthcare can be cost

effective and improve outcomes.

Doctor knows best Consumer Knows Best

Shifting to


Action and

Engagement

Rational Understanding

Emotional Connection

Employee Engagement

Employer communication is key

in employees Healthcare

engagement journey


Education is Essential

50% of employees do not

understand their employee

benefit materials

Source: International Foundation of Employee Benefit Plans

2016 Benefits Communication Survey Results

50%


Decision Support Tools

• Cost and quality transparency

tools

• Find providers that fits individual

needs

• Break decisions down in easy steps

• Make plan information easy to

evaluate

Help Me Use Tools

Help Me Choose Tools

Empowered Consumer


• Educate employees on the

“buying” process

• Help them make educated

decisions

• Right coverage for employee

and employee’s family

How to Choose


How to Choose: Case Study

New hire; paper enrollment with side-by-side comparison plan

Employee picks HDHP with HSA; learns nothing

about how plan works

Ski weekend disaster!

Bills start arriving

HDHP deductible kicks in; no contribution to HSA

Unhappy & frustrated employee

© 2018 GALLAGHER BENEFIT SERVICES, INC.


How to Choose: Case Study


How to Choose: Decision Support

Video-based platforms



• Existing platforms

• Standalone platforms


****

**

*****

Option C

*****

****

**

Option D

***

**

*****

Option A

*****

***

**

Option B


• Interactive questionnaire:

– Risk tolerance

– Current financial

situation

– Current health

– Current provider

relationships

35


How to Choose: Product Bundle

• Employee

demographic data

• Input from the

employee

• Recommended

bundled productsBUNDLEDPRODUCT

HSA

Critical

Illness

HDHP

Vision

Dental

Life


How to Choose: CDHPs

• Low cost-sharing / high

deductible

• Requires active engagement in

purchasing decisions

• Attractive to:

– Healthy individuals with

higher health literacy &

desire to control spending

• Employees will still need help!!


How to Use: Transparency Tools

• Cost

• Quality


How to Use: Transparency Tools

• Geolocation

– Personalized plan information

– Claims data


How to Use

• Real time cost & quality

• Real time comparison

history

• Carrot or stick strategy

• Personalization through

advocacy


How to Use: Location, Price, Cost & More

• Beyond location and

price

• Real-time experiences

– Treatment options

• EOB-like tools

– Total cost understanding


How to Use: Health Organizer

• Online EOBs

• Obeo tool– Itemized expenses

– Flags overcharges

– Decision support

• Education challenges still apply


How to Use: Financial Optimization

• Your FSA and HSA vendor

• Interactive tools

– Mine data

– Uncover insights

– Identify opportunities


How to Use: Improving Healthcare Outcomes

• Navigating health care

ecosystem

– Established, personalized

digital relationship

– Gaps in care


How to Use: Healthcare Outcomes

• Aggregators

‒ Programs

‒ Service providers


App-based

Uses all available data to provide personal, digital

outreach

Consistent, comprehensive messaging

Administrator ease of adding / removing programs

Holistic administrator view

How to Use: Healthcare Outcomes


User Interface

• Simplifies learning

process

• User experience based on

frequency


$$

BIG DATA

Big Data


The Future: Pulling it all Together!

• Big data

• Cognitive reasoning

• Artificial intelligence

• Personalized responses


Recruitment

Benefits Enrollment

Leveraging Big Data

HR & Benefits Technology

Administrative Strategic

Impact of Technology


In Review

• Understand emerging changes in the healthcare market

• How other employers, healthcare providers and insurance companies are

implementing consumer focused plan designs

• Tactics for integrating these approaches in your benefit program strategy.


Questions?

Graham Thompson | Client [email protected]

425.974.4427

Charnique Walker, MBA | HR & Benefits Technology Leader, Western Region

[email protected]

415.536.8606

the empowered consumer - nhrma conference - g... · source: career 1 source ©2018 arthur j....

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