National Healthcare Reform Magazine August 2011

1w w w. He a l t h c a r e R e f o r m Ma g a z i n e . c o m

National Healthcare Reform Magazine

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w w w. He a l t h c a r e R e f o r m Ma g a z i n e . c o m

C O N T E N T S04

HEALTHCARE CHEAPER, BETTER & FASTER IS THE “NEW” GAMEby Rajeev Mudumba

20 INNOVATIVE SMOKING CESSATION PROGRAMS DRIVE SOLID RESULTSby Beena Thomas

15 YOUR EMPLOYEES WILL BE GLOBAL HEALTHCARE CONSUMERS ARE YOUPREPARED TO COMMUNICATE WITHTHEMby Shawn Connors

30 USING REMOTE HEALTH MANAGEMENT SYSTEMS TO MANAGE CRITICAL ILLNESSESby Jason Goldberg

Copyright © 2011 Healthcare Reform. All rights reserved. Healthcare Reform Magazine is published monthly by. Material in this publication may not be reproduced in any way without express permission from Healthcare Reform Magazine. Requests for permission may be directed to [email protected]. Healthcare Reform Magazine is in no way responsible for the content of our advertisers or authors.

12 HEALTHCARE REFORM: THE GOOD , THE BAD AND THE UGLYby Christy Yaccarino

JULY 2011 EMPLOYER HEALTHCAREBENEFITS SURVEY RELEASED

INCREASING CHRONIC DISEASE COSTS LOWERED WITH DIGITAL HEALTH COACHINGby Steven M. Schwartz

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Jonathan Edelheit

LETTER FROM THE EDITOR TINY STEPS, THE RIPPLE EFFECTby Jonathan Edelheit

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Employer Funded Caregivingby Michael Guanci

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Good News In Alternative Supplemental Plansby Scott Krienke

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Jonathan Edelheit

think one of the problems we are facing with the declining health of Americans is that we are trying to tackle the problem on too large of a basis; a macro level, when we should be focusing on a micro level. I

think some insurance companies or employers think we can significantly change the way employees think, act and behave, and so we try to implement large programs to encourage these monumental changes. The truth of the reality is that we need to think small, at first. We need to get individuals to want to

change, and it doesn’t need to be a big step. Even a little step, can be like a ripple in a pond that has much larger implications, because once an individual takes that small step and wants to become healthy, a true transformation will happen. As an industry, we need to focus on where motivation lies at the core of the employees.

Our challenge is truly the fact of that matter that we are all busy in our daily work lives and caught up with family at home. In today’s culture, it can be overwhelming to fully engage in a healthy lifestyle. Between the constant distractions on TV, unhealthy food everywhere, and the fact walking has become an art form and we simply drive from place to place, it can be a true challenge to eat right and find time to exercise.

Here’s a thought- Let’s stop focusing on saying that we want employees to “engage” in healthy behavior, and instead, focus on motivating employees to want to engage in one simple, healthy behavior. If employees set an attainable goal, one that makes them feel better about themselves when they take action, they will strive to achieve even more. Once we can accomplish this, only then can we get employees to engage in an overall healthier lifestyle.

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Tiny Steps, The Ripple EffectEmployer Healthcare Congress2011Keynote Speaker



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evisiting an old management truism, a business must execute cheaper, better and faster to do well. But alas, the magic formula has its own limitations. If you want high quality at a low cost, then it will take a long time. If it’s high quality at

a fast pace, then cost will take a hit and if it’s low cost at a high speed, quality will go down.

Now, this does not hold true for healthcare. Speed in terms of healthcare translates into the urgency to respond as well as the reach of that response. In other words, it translates into how many more people have access to service and how quickly in case of need. Healthcare is a high accuracy science and hence, efficiency and effectiveness go hand in hand. The solution is not viable just with reach; it has to produce the promised results. That’s where quality comes in. As for costs, the lower they are kept, the simpler healthcare is to manage

RRajeev Mudumba



and the further its reach. Healthcare can be efficient while effective, accessible and still reasonably priced.

In today’s environment of healthcare reform and changing health dynamics, the success of future healthcare is hinged on doing better for less. And,

enterprises are awakening to this. In fact, some are already

headed in that direction.

According to a study conducted by Thompson Reuters, out of the $2 trillion spent

on healthcare, $700 billion is spent correcting preventable mistakes and errors [1]. There is

an estimated $250 billion spent on unnecessary procedures. In other words, about a trillion

dollars in savings are waiting to be discovered. With that much

money, we could more easily afford universal healthcare. And when I say universal, I am talking

about healthcare that is accessible to all.

The Centers for Medicare & Medicaid Services data shows that the agency spent $4.4 billion in 2009 on care for patients harmed in hospitals and another $26 billion on patients who were readmitted within 30 days [2].

According to the Kaiser Family Foundation, U.S. spends twice or more while leaving millions uninsured than other comparable countries such as France, Australia, Germany, Japan, etc., which spend less while covering everyone in their countries. Not only that, WHO studies have shown that we get less bang for our buck when compared to these countries.

Countries that are ahead of the U.S. in such studies have reflected valuable lessons we need to take note of.

Countries offering universal healthcare have shown that the care offered is the same to all citizens irrespective of their economic status. Canada, France and Israel have shown that investments in primary care are important [3]. Availability and accessibility of primary care to all ensures, that in the long run, there is a lower incidence of the need for urgent care which is both expensive and puts pressure on the available resources. Primary care advocates the wellness philosophy of prevention, thus helping control and minimize cases where a cure is needed.

Britain and France have advocated the optimization of non health personnel that are not doctors [4]. Nurses, midwives, physician assistants, etc.,

have their roles to play but can be optimized to service patients where a doctor’s expertise

is not necessarily required. These personnel can play an effective role is spreading the

reach of healthcare to remote areas and to non urgent clinical situations.

These countries have championed the cause of guaranteed treatment taking

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out the debate around what is insurable and what is not, who can get treatment and who cannot. As a result, doctors can do what they are trained for, which is, manage people’s health instead of managing the business of health.

Prescription drugs are also relatively cheaper in the East than in the West. Reason; governments ensure that there is fair trade practice associated with drugs. In France and Japan, any injuries as a result of medical errors are promptly covered removing the need for medical malpractice law suits [5].

This does not mean that healthcare is totally on the right track in these countries. They are wrestling with their own issues. They face the same healthcare inflation that we do in the U.S. This results in higher taxes to sustain the system they have in place. These countries are also seeking avenues to fight



the rising costs of healthcare. But, they have a better percentage of satisfied citizens than we do.

Governmental intervention in healthcare is a double edges sword. On the one end, it is a major cause of today’s high and rising healthcare costs. Medicare, Medicaid, and tax deductibility of employer provided health insurance created a system in which patients at the point of service pay only a fraction of their medical bills out of pocket. This subsidized system puts pressure on the available resources and those guaranteeing services. On the other hand, the expectation is that the Government intervenes further in guaranteeing healthcare access to all while also bringing costs down. Healthcare is a service business and should be treated as such. Today, healthcare is big business generating multimillion dollars in profits for the service providers, hospitals, insurance companies and drug companies among others. It would be a culture change to move from this model to one where it’s treated as primarily a service business administered at reasonable costs and profits.

U.S. investors say they are focused even more intently than before on companies with products that aim to lower the cost of healthcare. Entrepreneurs are now thinking in terms of making healthcare more efficient. Just based on what we already know, let us review some immediate steps that can be taken to see results in the right direction.

1. Focus on Primary Care - As we have discussed before, countries that are doing better than the U.S in healthcare have shown that they have focused on primary care. Primary care ensures that preventive steps are taken proactively to reduce the risk of chronic conditions later. We should focus more on extending quality primary care to all and ensure that citizens are educated about primary and preventive care. Another point to note is that in countries like France, medical education is either free or highly subsidized. As a result, doctors are not burdened with loans once they finish their education. They have similar opportunities whether they specialize or go into primary care. In the U.S., doctors end up with

huge loans by the time they complete their education. They look for more lucrative careers and hence, pursue specialties since a specialist earns far more than a primary care physician. Steps need to be taken to bring primary care on par with other specialties so that primary care attracts quality health practitioners as well. Medical education can be subsidized to alleviate the loan burden on those who pursue it. Also, instead of relying solely on doctors, nurse practitioners can be leveraged to provide primary care across the country. Any or all of these measures will reduce costs, increase the reach and quality of healthcare.

2. Streamline and Digitize Medicine - Universal application of information technology to digitize patient records, physician practices and the interactions between healthcare providers, insurance carriers, third party administrators and Federal/State bodies will ensure lower costs and increased efficiency. Electronic Healthcare Records (EHR) and Computer Physician Order Entry (CPOE) are a step in the right direction. eHealth, Teleradiology and other advancements in eMedicine help improve accuracy while simplifying procedures. These investments today are poised for great savings in the future.

3.Standardize Prevention & Maintenance - Chronic illnesses are on the rise in the U.S. and the world. Chronic diseases are the number one

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cause of death and disability in the United States. According to Centers for Disease Control and Prevention, more than 133 million Americans, 45% of the total population, have at least one chronic disease. Chronic diseases kill more than a million Americans each year, and are responsible for 7 of 10 deaths in the United States. Chronic diseases account for 75 percent% of the nation’s health care spending. Advocacy of health based prevention and regular health checkups are a precursor to tackling them. As a standard, if people have regular preventative health maintenance similar to the vaccine schedules and well baby checkups for children, most of the chronic illnesses can be prevented or caught at onset. When caught early, they are easier and cheaper to manage.

4.Manage Healthcare Accessibility - Healthcare costs vary within our own borders in the U.S. Based on the doctor-patient ratios in various locations, the number of patients seen by a practice also varies. As a result, there are rural locations where costs are less relative to urban locations and further, due to the lower doctor-patient ratio in such areas, the quality of care is also better. Such models should be propagated across the country. When the doctor-patient ratio is balanced in any area, it ensures better quality outcomes and can ensure balanced costs. To take healthcare to the most remote corners in the country, India is adopting telemedicine among its rural populace in a huge way. A foundation had been laid for a health superhighway to make the promise of universal healthcare a reality. The health superhighway will connect a chain of hospitals; both government and private through applications like telemedicine, mobile software and wireless networks so that doctors can connect with villages in India. Embracing technology and relying on resources other than just doctors to raise awareness levels helps lay the path to better health.

5. Tighten Control on Costs – In India, there is a growth in investments in a niche market for smaller

companies that want to make healthcare affordable, accessible, and ubiquitous. They offer high quality services similar to their larger counterparts, but costs are kept under a tight leash. The aim is to have hospitals that are accessible and efficient, run with a tight control on cost, and a firm grip on pricing. These companies are geared towards catering to the middle class and lower economic status clientele but without compromising on quality and service. Some of the innovative steps taken by them to cut costs include shared resources, mobile clinical units and scheduled procedures in various locations where healthcare is not accessible. Innovation is key to control costs. There is a lesson to be taken from this example that shows that a uniform quality of service at reasonable costs can



be provided to the farthest reaches of our society by leveraging innovative practices.

6. Advocate Checklists - Critical procedures can be monitored using simple checklists. These simple steps hugely contribute in minimizing medical errors as well as trauma and costs associated with such errors. ICUs in Michigan use a simple checklist famously chronicled in “The Checklist Manifesto” written by a cancer surgeon at Johns Hopkins, Atul Gawande. As we have seen before, a major chunk of healthcare costs are attributed to medical errors that are preventable. Adopting a checklist includes ensuring that simple things like hand washing and donning sterile gloves are done and it

proved very effective.In the first year, the Michigan hospitals reduced infections by two-thirds, saving 1,500 lives.Seton Family of Hospitals has shown successes in patient safety. They have adopted a nurse-led initiative that virtually eliminated bed sores, ranking Seton first internationally. Major reductions in infections were achieved. Seton has also dropped its birth injury rate to zero by putting best practices for obstericians around birthing processes. In 2003, when the safety initiative began, Seton billed Medicaid $500,000. In 2009, Medicaid was not billed at all [6].

This is just the beginning of a list. Further thought and discussion on this matter can provide several avenues for continuing the task of improving our healthcare infrastructure and services. Even without reinvention, restructuring our current healthcare system to make it cheaper, better and faster is a definite reality.

About the Author

Rajeev Mudumba works with a leading HRO/Healthcare organization. Rajeev has over 16 years of leadership experience in the HRO, Healthcare and

Technology consulting industries. His distinguished record of accomplishment and innovation includes high level strategy and ideation, precise execution and enhanced focus on efficiencies through the use of technology in business across various verticals. He can be contacted at [email protected].

References:1 Joe Flower, 15 Ways to Make Healthcare Cheaper by Making it Better3,4,5. Arthur Caplan, Ph.D, Spinning the globe offers lessons in health care. What does the rest of the world know that we don’t? - By Arthur Caplan, Ph.D – msnbc.com, Sept., 18th, 20092,6. Tony Inglis, Efficiency can make health care better and cheaper, May 10th, 2011

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ow that the Patient Care and Affordability Act, otherwise known as healthcare reform, has been circulating for a while, we are seeing different aspects come to

light – as the good, the bad and the ugly of health care reform begin to take shape. Some aspects of the bill are good, and do put a focus on prevention and protecting the regular employee/consumer. But other provisions of the bill are bad, and some are downright ugly.

The Good

The good parts of the health care reform law are the following:

Preventative Care Covered at 100 Percent: Though this part of reform will initially add costs to plans, I do think it is a good provision. The only way to truly lower costs over the long term is to keep people healthy. And the way to keep people

By Christy Yaccarino

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healthy is to ensure they get their screenings so problems can be detected early – while they can be treated with less cost.

Removal of Lifetime Maximums: Again, even though it will add costs to plans, I do think this is a good provision. If someone is going to hit a $1 million or $5 million maximum on a plan then they are seriously ill and should a plan then be allowed to just cut them off at that point when they truly need the coverage? The point to having insurance is for it to be there when you need it – and this provision allows just that.

Removal of Preexisting Conditions – First for Children, Then in 2014 for Everyone: Another one that may add costs to plans, but is a good provision. We should not deny coverage to a child for a pre-existing condition they have, and if we deny adults coverage for pre-existing conditions we will never get rid of the uninsured problem. However those with pre-existing conditions should be rated accordingly by the insurance carrier.

Nondiscrimination Requirements: Though this affects only non-grandfathered plans to start with, eventually it will affect all plans, and I do think it is a good provision. I don’t think it’s a bad thing to no longer allow key employees to have better benefits or costs than other employees.

The Bad

As for the bad parts of the health care reform law, they include:

Dependent Coverage Until Age 26: Extending coverage to age 26 with virtually no requirements is ridiculous. Under this law, a dependent can be married and still remain on their parent’s plan – and if the plan is not grandfathered they can even be employed with their own coverage and still remain

on their parent’s plan. There should have been more restrictions under this provision – such that you could not be married, could not have your own coverage available and had to be a full time student. It shouldn’t have been made the free-for all that it was.

Adding Cost of Medical Insurance on Employee’s W2 Beginning in 2012, for W2’s Issued in 2013: This is just an administrative nightmare for employers. There could have been a requirement made that once a year you have to notify employees of the cost of the medical insurance – but not on the w2. Employers are scrambling to ensure their systems are updated to allow this, and this is adding more cost to the employer.

Removal of over the counter drugs from Flexible Spending Accounts (FSA) reimbursement without a prescription: Removing over the counter drugs from allowable FSA reimbursements will drive employees to use higher cost medications that they can reimburse from their FSA. If they have to go to their doctor to get a prescription for an over the counter drug, they are most likely walking out instead with a prescription for a higher cost drug. This provision also increases medical plan costs by now forcing an office visit when not necessary in order to obtain the prescription.

The Ugly

And now for the ugly. These are parts of the bill that make you say what were they thinking?, and include:

Flexible Spending Account (FSA) cap of $2,500 in 2013: At a time when we are asking employees to pay more out of their paychecks for medical coverage, and more out of their pocket for deductibles, coinsurance and copays, limiting the FSA is not helping them. You’re now taking away

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the one pretax benefit so employees are not only being asked to pay more for their medical coverage but they are also being asked to pay more in taxes.

“Cadillac tax” in 2018: This provision levies a 40 percent nondeductible tax on the annual value of health care plan costs for employees that exceed 410,200 for single coverage and $27,500 for family coverage beginning in 2018. Given the cost of medical inflation, by the time 2018 comes around, most plans will hit this threshold – even if they are not truly “Cadillac” plans. The threshold needs to be raised significantly if this is truly a “Cadillac” plan tax. Otherwise it just looks like another way to hit employees with a new tax, or significantly higher out of pocket expenses as plans will be forced to slash benefits to be under the annual value requirement.

Health care exchanges: This is a BIG ugly provision. Since every state is being left on their own to develop these it will be interesting to see how they play out. Carriers are not being forced to join the exchanges – so I wonder how many will choose to? If they do make it up and running, the exchanges will add tons of notification requirements onto employers and give many an incentive to no longer offer employee’s coverage – they can just send them to the exchanges. And let’s be serious, has the government ever implemented any program well?

There is still hope that these bad and downright ugly provisions will get modified as the fight against this bill continues in Washington….but I don’t think we should count on it. It seems that most – if not all – of the health care reform bill’s provisions are here to stay – for now anyway.

About the Author

Christy Yaccarino has been in the Benefits industry for over 8 years. She currently serves as Benefit Manager for Ambrose Employer Group in New York City and is a Contributing Editor

to Employee Benefit News. Previously, Christy was employed on the Corporate Health and Welfare team of Campbell Soup Company, and as a Benefit Consultant for Gallagher Benefit Services, one of the nation’s largest insurance brokers. Christy holds the employee benefit designations of GBA (Group Benefit Associate), EHBA (Employee Healthcare Benefits Associate) and HIPAAA (HIPAA Associate) and is a licensed insurance producer. She also holds a Bachelor’s Degree from Marist College in Poughkeepsie, NY.



By Shawn Connors

FEATURE

“perfect storm” of trends occurred about 10 years ago in the music industry, and it changed the

landscape of that business forever. A fresh wave of consumers suddenly had a new host of Internet tools and a profound sense of empowerment. The conventional method of buying music would soon be history.

Get ready, because a similar storm is brewing in the healthcare industry, and an important disruption is about to occur to the conventional system of wellness communication.

Important Trends Are at WorkThese powerful fronts are colliding:

• Fast, self-help access to healthcare sources and data. Healthcare consumers arm themselves with information by simply using their fingertips. Credible Internet sources abound, and today’s patients can quickly scan reports, share links, ask questions and post comments.

• Rising healthcare costs, coupled with anxiety about money issues. Apprehension and hypertension persist. The recession might be over, but widespread worry about medical (and other) expenses remains. Many employees are largely covered under their current

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feel confident that they have funds in reserve, but now more than ever, they occupy a global buyer’s market. Healthcare consumers, like savvy retail shoppers, are price-conscious and determined to locate maximum overall value.

• Confusion about the future of the U.S. healthcare industry. Are your employees confident that they’ll qualify for a heart surgery or another major procedure in a few years? The more confusing the U.S. healthcare system gets — and the more bickering that persists over upcoming laws and regulations — the more consumers will seek alternative options for care. In general, we don’t like waiting around, especially in order to be told what to do.

Patients Are Realizing Their Power

The combination of these powerful trends will generate at least one important outcome: More of your employees are going to become global patients.

“Medical tourism,” the practice of traveling to receive medical, dental or surgical care, isn’t new, but it’s changing. U.S. residents have long been traveling to other countries for care, particularly for cosmetic surgery, dental work, procedures not covered by insurance and procedures not yet approved by the U.S. Food and Drug Administration (FDA). Today, however, many “medical tourists” are fully insured employees seeking all kinds of care—cardiology procedures, orthopedic surgery, spinal fusions, cancer treatments, bariatric surgery, fertility treatments, eye surgery and many more.The biggest attraction for medical tourists is no secret — cost savings that are often huge. A heart-valve replacement priced at $200,000 or more in an American hospital can cost $10,000 in India, according to the University of Delaware, and that price includes airfare and a post-operative vacation package. Medical tourists receiving care in Thailand save about 70 percent on average, and

ones traveling to Latin America typically save at least 50 percent, according to the Medical Tourism Association.

The simple truth: Individuals will choose to travel for care when the care is of higher quality, more affordable and/or or more easily available than what they can receive at home.

“Many people believe markets perform better than governments in allocating resources, and are much faster to respond to the demands of consumers,” says Fred Hansen, a physician and journalist. “Patients are realizing that the power of the consumer vote, exercised many times every day on choices in different markets. The Internet and cheap airfares have greatly increased consumers’ opportunities and choices by creating new consumer-driven markets.”

In hopes of securing a piece of that market, several countries — especially India, Singapore and Thailand — offer state-of-the-art facilities that specifically cater to medical tourists. These facilities have advanced technologies and equipment, and often employ physicians trained and board-certified in the United States.

Employers and Benefit Firms Are Responding

More employers and employees are giving medical tourism options serious consideration. A June 2010 survey conducted by the Medical Tourism Association at a Society for Human Resource Management (SHRM) conference found that 48 percent of the employers surveyed are “interested” in offering medical tourism to their employers on a voluntary basis, with 36 percent indicating they “might be interested.”

Experts say the medical tourism industry could turn a corner if enough U.S. employers and insurers



actively promote and underwrite it. Medical tourism is now being considered by industry giants like CIGNA, Aetna and BlueCross BlueShield, all of whom say they have either started or will soon start pilot programs that will offer partial travel medical insurance.

Other insurers have already launched pilot programs:

• Wellpoint began offering a pilot program with Serigraph Inc., a Wisconsin-based printing company. Under the program, members of Serigraph’s health plan can elect to travel to India to undergo certain procedures, including major joint replacement and upper and lower back fusion, and pay lower out-of-pocket costs.

• IDMI Systems Inc., a Georgia-based automation software developer, contracted with Companion Global Healthcare to provide medical tourism options for certain medical procedures to employees and dependents covered by the company’s self-funded health plan.

Disruptions Are Coming

We believe more companies will realize the credibility and viability of medical tourism, and will begin offering options for employees. Also, companies with self-funded plans will begin incentivizing employees to travel abroad for care.

The coming rise in medical tourism will be disruptive to the conventional healthcare system in profound ways:

• It will reduce the power of coalitions’ purchasing power when they approach healthcare providers.

• It will lead to new “centers of excellence” located across the world. Latin America is already becoming one for dental work, and India is becoming one for heart surgery.

• It will showcase the fact that employers aren’t going to give up their rights to affordable healthcare in an open, global economy.

Are You Preparing?

Are medical tourism options right for your employees? You need to take into consideration several different factors, including current health plan choices, employee demographics, risk associated with receiving care abroad and the medical tourism benefit options offered by insurers.No matter what you think of medical tourism, it’s wise to prepare your communication. If you choose to help employees seek overseas care, what messages and education materials can you offer so they can gain a clearer understanding of medical tourism’s advantages? Providing and promoting these materials will help them decide whether medical tourism is right for them.

If you choose to not help employees seek overseas care, how will you communicate that decision and defend your reasoning?

Here are the two most common questions employees have about medical tourism, and perspective you can share:

• Why don’t more insurers offer medical tourism options? Insurers want to take reasonable measures that providers overseas have the credentials to provide adequate care. They’re also concerned with continuity of care — for example, how much are they willing to cover for physical therapy back in the U.S.?

• Do treatments take place in low-quality facilities? Not usually. Medical tourists can find facilities abroad that are as good as ones in the U.S. About 220 overseas hospitals are certified by Joint Commission International, and most doctors who treat medical tourists have trained in the United

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States, Australia, Canada or Europe.

In addition to answering employees’ questions, here is news to keep in mind when considering (or implementing) a medical tourism benefit option:• New medical tourism guidelines have been created. U.S. organizations have begun to establish medical tourism guidelines and programs to assist people in choosing appropriate health care for their needs. Employers should ensure employees have a wide range of materials available to them to help them decide which route to care is appropriate. These resources include new medical tourism guidelines from the American Medical Association that the organizations says employers, insurance companies and other entities that facilitate or incentivize medical tourism should adhere to. The guidelines suggest that patients should be referred only to facilities that have been accredited by recognized international accrediting bodies, such as the Joint Commission International or the International Society for Quality in Health Care.

• The Medical Tourism Association recently launched its Quality of Care Project. The project

focuses on enhancing transparency of the quality of care worldwide so that employers, patients and insurers can better assess and compare facilities around the world. The project aims to create a single methodology for reporting certain statistics and quality indicators, so that individuals and companies can compare health care facilities’ quality, costs, patient volumes and patient safety records.

BioShawn M. Connors is president of Hope Health. He believes behavior change requires a mix of both art and science. He founded the International Health Awareness Center, Inc. (IHAC) in 1981, which focuses on the importance of communication in positively affecting workplace cultures. Recently, he worked with a talented team to develop a workable, realistic health communication system, empowering thousands of workplaces and community-based clients to communicate more effectively with new media. Shawn has earned the respect of marketing professionals and health educators alike.



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ver since the first Surgeon General’s report was released nearly 50 years ago, the medical

and financial consequences of tobacco use have become widely known. Yet, despite the fact that more than one-half of U.S. states now ban smoking in workplaces, restaurants and bars, one in five adults continue to smoke regularly. Indeed, more than 360 billion cigarettes are smoked in the U.S. every year.This persistence of tobacco use obliges employers to understand how smoking affects the well-being and productivity of their workforce, and to take action. With rising health care costs high on the CEO agenda, executives should firmly embrace innovative smoking cessation programs which can help their employees who smoke to quit the habit.

Grim Data The statistics are grim. According to the 2010 U.S. Surgeon General report, cigarettes are responsible for approximately 443,000 deaths – 1 in every 5 deaths – each year in the U.S. The economic toll is also high. More than $193 billion annually in health care costs and productivity losses is attributable to cigarette use. Smokers are

also far more likely to suffer from chronic diseases, such as atherosclerosis — the buildup of fatty substances in the arteries - than are nonsmokers. In short, tobacco use is the largest cause of preventable illness and death.

Smokers miss an average of 6.16 days of work each year due to sickness, compared with 3.86 days for non-smokers. Not surprisingly, smokers visit health care facilities far more often than non-smoking employees, have more hospital admissions, and stay in the hospital for longer periods on average. Of course, the harmful effects of smoking also impinge on others. Thousands of nonsmokers are adversely affected and may die from heart disease and lung diseases, including lung cancer every year because of exposure to secondhand smoke.

New Urgency The need for employers to address tobacco use has taken on new urgency recently. According to the Surgeon General’s report, the way that tobacco is grown, mixed and processed today has caused cigarettes to become more addictive than ever before – making it even tougher for smokers to quit.

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By Beena Thomas



Because chronic tobacco use in an intensely ingrained behavior, repeated interventions are often required for cessation efforts to be successful. But effective remedies exist. The Centers for Disease Control (CDC) declares tobacco cessation treatment as the “single most cost-effective health insurance benefit (for employees)”.

A study of 1,450 adults conducted in 2010 by OptumHealth and GfK Roper Public Affairs and Corporate Communications on smoking cessation found:

• Virtually all successful former smokers had previously tried to stop smoking an average of 5.4 times before succeeding

• 57 percent of successful former smokers had taken advantage of a smoking cessation program offered by their employer

• 60 percent of those who quit reported that the workplace program was very helpful

Key Motivators for ChangeThe good news for employers is that motivation is not lacking. Among current U.S. adult smokers, 70 percent report that they want to quit completely, according to the CDC.

The OptumHealth / GfK Roper study sought to understand the triggers that lead to successful behavioral change for smoking and weight loss, and how employers could design wellness programs that respond to those triggers. Seven out of ten respondents said that living a healthy lifestyle is important to them and believe that their health is mainly determined by their lifestyle choices, not solely by heredity. Clearly, they understand that health is related to behavior. Well over one-half of respondents cited the fear of future health problems as a key driver for changing their behavior.

Making a commitment to change was a key factor

cited by respondents who smoked. For this group, the secrets for successful quitting included:

• Persistence: Most tried several times to quit before succeeding

• Motivation: Nearly 70 percent said they wanted to improve their health, 65 percent wanted to feel better, and 62 percent wanted to live longer

Other strong motivators among the respondents included the desire to see their children grow up, and the determination to prove that they could quit smoking. Employers should not underestimate the power of these drivers. Their communications with smokers should address that competitive urge and leverage the emotional force of that challenge. Smoking cessation messaging must be inspirational, playing on employees’ desire to be healthy and active and to live a long life.

Personal Touch is KeyThrough its research and client experience, OptumHealth has found that robust tobacco cessation programs – those with frequent and intense contacts with wellness coaches - achieve higher quit rates than conventional approaches. These innovative programs are customized to each participant’s unique needs and readiness to change. They offer a high level of interaction with a wellness coach throughout the duration of the program, combined with nicotine replacement therapy (gum or patch) to optimize success rates.

The key to a successful cessation program is having a single coach who is dedicated to an employee and with whom close contact is maintained. That intimacy helps build trust and drive results. The coach identifies opportunities for reducing the number of cigarettes smoked and establishes short- and long-term goals against which the smoker is held accountable.

These programs are designed to change behavior

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and pay dividends on the back end. It starts with multi-method risk identification that uses five separate data streams: online health assessments, on-site biometric screenings, medical insurance claims analysis, employee self-identification and program referrals to identify counseling candidates. Another key component is to stimulate motivation through ongoing communications so that employees will join the program once they are ready. Additional features include detailed monitoring and reporting with specific behavior and lifestyle change metrics.

Paying Dividends

OptumHealth recently conducted an extensiveevaluation of 9,271 employees who enrolled in its most intensive smoking cessation program (which includes multiple methods of identifying candidates, personalized coaching, nicotine therapy and ongoing monitoring). The results were impressive: Nearly 39 percent reported not smoking as of their last call with their coach, and 65 percent of those who completed the program quit smoking. Additionally, the percentage of participants successfully quitting or reducing smoking increased as the number of coaching calls increased.

These programs can also be a smart investment. The combined savings in health care, productivity, workers compensation and disability costs from the program is projected to deliver a targeted return on investment of 1:1 in year one, 2.5:1 in year two, and 4.5:1 in the third year of the program.

While intensive programs like these are designed to work in any corporate culture, they may be best suited for organizations with a high number of smokers – many of whom are willing to make a change, but require more intensive coaching sessions than traditional tobacco cessation programs to help them kick the habit.

Without question, quitting smoking is difficult and relapses are frequent. But employers can address this challenge with a vigorous tobacco cessation program that is anchored by frequent, intensive coaching.

BioBeena Thomas, MPH, is Director, Health and

Wellness for OptumHealth, a division of United Health Group.Thomas is a seasoned healthcare professional with over 11 years of experience in innovative product development/implementation,

strategic planning and evangelism in total health solutions.



2011 Employer Healthcare CongressKeynote Speakers*

Bill Rancic Entrepreneur, Winner of The Apprentice

Bill Rancic is a New York Times best-selling author, inspiring & motivational speaker, and talented entrepreneur. American’s were first introduced to Bill Rancic as the winner of

Dr. Cecil WilsonPresident, American Medical Association

Cecil B. Wilson, MD, an internist from Winter Park, Fla.,became the 165th president of the American Medical Association in June 2010. Dr. Wilson has been a member

Donald Trump’s first season of The Apprentice. Bill is a New York Times best-selling author with two highly successful books on business. He currently stars in the reality show Giuliana and Bill with his wife Giuliana Rancic.

of the American Medical Association (AMA) Board of Trustees (BOT) since 2002 and served as chair of the AMA-BOT from 2006 to 2007. Dr. Wilson has also been a member of the AMA House of Delegates since 1992, and was previously elected to two terms as a member of the AMA Council on Constitution and Bylaws, of which he also served as vice chair.

Mitch JoelPresident, Twist Image & “Six Pixels of Separation”

Mitch Joel, When Google wanted to explain online marketing to the top brands in the world, they brought Mitch Joel to the Googleplex in Mountain View, California. Marketing Magazine dubbed him the “Rock Star of

Digital Marketing” and called him, “one of North America’s leading digital visionaries.” In 2006 he was named one of the most influential authorities on Blog Marketing in the world. Mitch Joel is President of Twist Image - an award-winning Digital Marketing and Communications agency.

John CaseyDirector of International Benefits, Google Inc.

John Casey, joined Google in 2010 and is the company’s Director of International Benefits. John’s key area of responsibility is the development and

execution of Google’s global benefits strategy that includes a focus on infrastructure, wellness and innovation.

Page 5

The Voluntary Benefits Magazine, Corporate Wellness Magazine, Self Funding Magazine, and Healthcare Reform Magazine, in partnership with the Employer Healthcare Congress, traveled in June to one of the largest employer conferences in the country and conducted a survey of hundreds of top HR professionals

nationwide. The Survey touched upon Voluntary Benefits, Corporate Wellness, Self Funding, and Healthcare Reform.

Of the employers participating in the survey 46% had up to 1,000 lives, 35% had between 1,000 to 10,000 lives, and 19% had over 10,000 lives. The Survey Results Found that:

Corporate Wellness

57% of respondents currently offer a Wellness Program, while 43% do not.

Voluntary Benefits

81% currently offer Voluntary Benefits to their employees, while 19% do not.

Self Funding

62% of respondents stated they self fund their medical plan, while 38% said they do not.

July 2011 Employer Healthcare Benefits Survey Released



July 2011 Employer Healthcare Benefits Survey Released

Healthcare Reform – Will it Increase Costs?

• An overall 76% felt healthcare costs would increase under healthcare reform; 57% of respondents felt that Healthcare Reform will significantly increase health insurance costs, while 11% felt it would lower healthcare costs. 19% felt it would just “increase” healthcare costs, but not significantly and 13% felt healthcare costs would remain the same.

Healthcare Reform – Will it be Positive or Negative for Business?

• 57% of respondents felt Healthcare Reform negatively affects their business while 43% believe it positively affects their business.

Healthcare Reform – Fine/Penalty for not buying insurance in 2014

65% of respondents felt that the $95 a year penalty for individuals who don’t buy health insurance in 2014 (increasing to $695 in 2016), is a large enough incentive to force people to buy health insurance. 35% of respondents felt it was not a large enough incentive to force people to buy health insurance.

Healthcare Reform – Destroying the Underwriting Process by Allowing Guarantee Issue and No Pre-ex in 2014

76% of respondents felt that starting in 2014, allowing any person to wait until they are sick to purchase health insurance and have immediate guaranteed coverage at the same price as a healthy person, would destroy the underwriting process, while 24% felt it would not.

Online Healthcare Information

78% of respondents felt that internet news, resource websites and social media are one of the most important sources for gathering information on healthcare issues, while 22% disagreed.

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iven the continual steep rise in health care costs in an already challenging economic environment, many

employers now recognize the strategic business advantage of having a physically and emotionally healthy, engaged and active workforce. For employers, employees with chronic diseases and conditions – such as heart disease, diabetes, arthritis, and depression – are of particular concern. Research shows that individuals with chronic diseases have higher medical costs and put greater demands on the health care system. For example, health care spending is:

• 2.5 times greater for a person living with one chronic condition than for an individual with no chronic conditions;

• 7 times greater for an individual living with three or four chronic conditions compared to someone without any chronic conditions; and,

• 15 times greater for a person with 5 or more chronic conditions than for an individual who does not suffer with chronic conditions.Additionally, with the overall aging of

the American population, the prevalence of chronic diseases and co-morbidity are growing steadily. From 1996 to 2006, the average number of physician office visits increased 43 percent for diabetes and 51 percent for hypertension, while physical visits for preventive care increased by only 19.2 percent.

Furthermore, the cost of chronic diseases reaches beyond direct health care expenditures. Chronic diseases also seriously impact employee productivity and performance. Asthma, diabetes and hypertension result in an estimated 164 million workdays missed by Americans each year, with an annual cost to employers of an estimated $30 billion.

To help mitigate the effects of rising health care costs and declining employee productivity, forward-thinking employers are strategically investing in comprehensive solutions – such as health and wellness programs – that can favorably affect the health of their employees. This growing trend is creating a demand for new approaches to deliver population health promotion programs that are efficacious, economical, scalable and sustainable. Digital

GBy Steven M. Schwartz



health coaching is one such approach.

Digital health coaching is an individualized, interactive, technology-based experience that provides individuals with the knowledge and tools that they need to take a more active role in managing their health. It is driven by intelligent technology that uses behavioral science models and theories, behavior change techniques, evidence-based guidelines and education and learning theory to create personalized interactions. The transformative potential of digital health coaching is its scalability to large populations at a relatively low cost, and therefore can reach all segments of the employee health spectrum, from individuals in good health to those with a chronic or severe disease.

Self-Management Approach

Self-management is an approach to chronic care that enhances self-efficacy and teaches problem-solving skills to achieve more effective condition management, role management, and emotional management. The self-management framework focuses on the following principles, whereby individuals:

• Accept responsibility for managing their care;

• Optimize daily functioning in ways that realistically consider the limitations imposed by their condition and its treatment;

• Effectively and appropriately adjust their affective responses to their conditions; and,

• More efficiently manage their care when multiple chronic diseases are addressed in a unified manner.

Research has demonstrated that health management programs that employ self-management concepts are successful in promoting favorable behavior change (e.g. cognitive symptom management, self-reported general health, and social/role activities) and for improving self-confidence in one’s ability to manage his or her chronic diseases.

Self-management can also be a cost-effective method, in that it can reduce preventable health events that drive health care utilization (e.g. inpatient and outpatient visits). For example, people living with five or more chronic diseases average 15 medical visits a year compared to 4 visits a year for other patients. Additionally, individuals that suffer with five or more chronic conditions fill almost 50 prescriptions in a single year.

Research data suggest that digital health coaching programs – health promotion interventions that are standardized, personalized, and based on proven behavior principles and techniques – can be an instrumental component of a chronic condition self-management strategy. Digital health coaching programs can be deployed at population level, are relatively low cost and convenient, and work both independently and as complementary resources that scale higher-touch interventions.

Online Chronic Condition Management Strategy Case Study

Highmark Inc. and HealthMedia, Inc., conducted a study that evaluated the economic effect of a scalable, convenient, online intervention designed to enhance the participant’s ability to manage his or her chronic conditions, with a particular focus on the development of self-management skills and the mitigation of

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costs (both direct and indirect). For the study, researchers reviewed the data of 413 members who participated in the HealthMedia® Care® for Your Health digital health coaching program, as part of the chronic condition management strategy offered by Highmark. This group was compared to a risk-matched cohort of 360 non-participants. The intervention included a baseline general health assessment, customized action plan, tailored email newsletter, and follow-up evaluations. The study found that online digital health coaching disease management programs favorably impact employer health care costs.

Highmark’s chronic condition management services include (but are not limited to):

• Interactive voice response (IVR) telephonic outreach to members with chronic conditions;

• Letter and phone call reminders for clinical preventive exams;

• Educational resources that include medical management consulting and educational outreach for members and providers;

• Self-management education; and,

• Complex case management.

Developed by a team of health care experts and clinical behavioral scientists, HealthMedia® Care® for Your Health is a tailored digital health coaching program that teaches people to become more independent and active, and to more successfully manage their chronic conditions. This intervention works in conjunction with Highmark health coaches to help members manage chronic conditions, such as diabetes, asthma, back pain, depression, and coronary artery disease.

The program begins with a baseline general health questionnaire, the results of which are used to customize an action plan, three e-mail

newsletters, and follow-up evaluations, which are administered at days 1, 30, 90, and 180 after program completion.

The following topics are assessed in the baseline and follow-up questionnaires and in the program content:

• Medication compliance

• Relationships with physicians and pharmacists

• Symptom management

• Lifestyle behaviors

• Emotional changes

• Work productivity

Study participants self-reported their medical history on the baseline questionnaire. On average, participants had 2.7 chronic conditions. The most common conditions reported were:

• Hyperlipidemia (39.5 percent)

• Hypertension (36.6 percent)

• Allergies (24.7 percent)

• Acid reflux/gastroesophageal reflux disease (23.7 percent)

• Back pain (23.5 percent)

In addition, researchers reviewed the data for specific heath care expenditure trends in five categories:

• Inpatient services

• Outpatient services

• Professional services

• Pharmacy services• Total health care costs

The Results

The study results indicated that online self-management interventions can be an important


National Healthcare Reform Magazineand cost-effective component of an employer’s population health management strategy. The data showed a reduction in health care costs of $757 per person per year than predicted for employees who participated in the condition self-management and HealthMedia® Care® for Your Health program, versus employees who did not participate in the program.

Furthermore, participants consistently had lower utilization increases relative to non-participants in all categories except outpatient services. Although the findings showed a higher increase in outpatient services utilization for program participants than for non-participants, the overall outpatient costs and total health care costs were lower for participants. The higher outpatient service utilization by participants may be a result of the encouragement that members receive through the digital health coaching program to seek regular outpatient care to manage their chronic condition(s). This reduces the need for more aggressive medication and hospitalization. The same result has been found in other studies. Also, members that participated in the online chronic condition self-management program had fewer annualized total hospital inpatient days and a shorter length of stay per person per year compared to non-participants.

Additionally, the estimated cost savings per person by category for study participants versus non-participants include:

• $313 for inpatient costs• $274 for outpatient costs

• $152 for professional services

• $71 for pharmacy costs

Note: because of the use of separate predictive models for each category, the sum of these categorical savings does not equal the $757

savings reported for total health care expenditures.

Conclusion

The prevalence of chronic conditions is growing rapidly, which puts further pressure on an already overwhelmed health care system and contributes to the steep increase in health care costs. As a result, there is a growing trend by employers to provide wellness and prevention programs to their employees with the intent to empower individuals to take greater responsibility for their health. Condition management programs that teach self-management skills and encourage preventative care are believed to yield a positive return on investment (ROI) and help people live healthier, more productive lives.This study illustrates that the application of general self-management principles can produce a measurable ROI for employers. Furthermore, the study demonstrates the potential benefits that efficient and effective population chronic illness management programs can provide to employees.Technologies, such as digital health coaching, must continue to be developed, tested, and – where effective – applied if we are to address the mounting health care challenges related to chronic disease management and cost containment.

Bio

Dr. Steven M. Schwartz is Research Director at HealthMedia, Inc., a Johnson & Johnson company and part of the Wellness & Prevention business. Dr. Schwartz received his B.A. in general psychology from Wayne State University, an M.A. in experimental psychology from the College of William and Mary, and a Ph.D. in clinical/health psychology from

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n estimated 133 million Americans are currently living with one or more chronic conditions – a figure that is only expected to grow as the baby boomer generation ages. Many experience frustration with monitoring and managing their own or their loved ones’ complex medical needs.

In addition, hospitals are especially challenged to find ways to improve management of all critical illnesses in the face of proposals to slash Medicare payments to facilities that readmit patients within a specific time period. According to the American Hospital Association, these new regulations would raise costs to hospitals an estimated $19 billion over 10 years.

The good news is that today health management providers are offering solutions that make it possible for these individuals to manage their health from anywhere, at any time, while also providing important informational updates to their caregivers or doctors. Remote health monitoring has the potential to not only drastically reduce health care costs, but also to improve patients’ quality of life by allowing them to continue living independently at home rather than being hospitalized or moved into an assisted living facility.

High blood pressure alone affects 73 million Americans. As of 2008, the estimated direct and indirect cost of high blood pressure was $69.4 billion, according to the American Heart Association. In an attempt to combat these high costs, the use of home blood pressure monitoring is recommended by several national and international guidelines for the management of hypertension, including The American Heart Association and The American Society of Hypertension. In one study’s analysis of 904 patients using real-time readings from a remote hypertension

ABy Jason Goldberg


National Healthcare Reform Magazinemanagement program for a period of six months, the average reduction of systolic blood pressure was 9 mmHg. These decreases in blood pressure are significant because controlled blood pressure has been associated with a 35-40 percent mean reduction in stroke incidence, 20-25 percent mean reduction in myocardial infarctions and more than 50 percent reduction in heart failure. A 12mmHg drop in average systolic blood pressure will save one life in every 11 treated patients over ten years. This means that in the 904 patient population, almost 40 lives would be saved.

Regarding congestive heart failure (CHF), there are approximately 5.3 million people suffering from CHF in the United States. The lifetime risk of developing heart failure at the age of 40 is 20 percent, and approximately 380,000 people above the age of 65 will be diagnosed with CHF annually. The estimated total of direct and indirect cost of heart failure in the United States for 2008 is $34.8 billion, with the greatest share being hospitalizations. The increasing number of patients being hospitalized with CHF has been great cause for concern. The number of patients with CHF discharged from the hospital rose from 400,000 in 1979 to over 1 million in 2005. Furthermore, within 4-6 months after discharge, 47 percent of the patients are likely to be readmitted. A recent study of 417 CHF patients using a remote health monitoring system proved that this was an effective method to reduce congestive heart failure hospital admissions by 57 percent, demonstrating that these systems can significantly reduce healthcare costs.

Our company has created a revolutionary remote health management platform that addresses many of today’s most challenging and costly healthcare issues. For people managing critical conditions such as congestive heart failure, hypertension, diabetes, asthma or obesity, our system provides relevant, real-time, reliable and actionable data. This can deliver interactive, personalized communication, allowing individuals to become more engaged and active participants in their own health. This

approach also makes proactive prevention more realistic than ever, as it is instrumental in gauging health issues before critical conditions manifest themselves into acute events. For example, daily blood pressure readings are more indicative of someone developing hypertension than having one reading taken every six months at the doctor’s office. Remote health monitoring devices and programs

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are designed to empower patients to take an active role in the management of their personal health. Patients with a critical illness need to be able to easily follow their care plans and make necessary lifestyle or medication modifications. This can minimize the chance that they will develop additional complications that could further jeopardize their health, thus requiring expensive treatment. Consistent and regular monitoring of blood glucose levels or body weight, for example, can help reinforce adherence to good health practices as well. As a bonus, because some remote health monitoring devices, like ours, are wireless, they can also make it possible to manage health while traveling or on the go.

Many remote health management systems not only offer solutions for patients, but for their caregivers as well. Often times caregivers look to technology for assistance in tracking a person’s status or progress, and now computers, smart phones and even tablets can enable health care providers to monitor patients in their homes and let adult children and other

family members keep an eye on aging parents. When a patient steps on the scale in the morning or checks their blood glucose level before a meal, for example, a designated caretaking team can be notified, even if they are hundreds or thousands of miles away.

The compact, affordable and easy-to-use devices monitor data and can automatically and wirelessly transmit this information to the individual’s healthcare team without the need for cumbersome wires or manual data entry.

One person who has experienced first-hand the benefits of remote health monitoring is 70-year-old Ira Roberts, who is living with diabetes. A church minister for 35 years, he also teaches at William Patterson University and travels over 300 miles a week as a gospel musician. With such a busy schedule, Ira can’t afford to let his diabetes slow him down. At home or on the road, he stays on a healthy track by providing his doctors with 24/7 access to all his latest health information.



Ira does this by using a remote glucose meter, which makes it easy to capture and transmit important blood sugar data, no matter where he happens to be. For Ira, being able to send his glucose readings wirelessly and automatically via our system is what has allowed him to remain active and fully independent.

The device “helps me manage my health by getting all my doctors on the same page,” said Ira. “The system acts as a watchdog of my diabetes.”

Ira once took injected medications to manage his Type II diabetes, which tended to cause significant fluctuations in his body weight. Now, in addition to his glucose meter, Ira uses a digital body weight scale, to monitor his weight on a daily basis. Such accurate, up-to-the- minute information has allowed his doctors to make timely and effective medication adjustments. Together, the two products have proved so successful that Ira has been able to stop taking three medications.

These easy, affordable, consumer-inspired devices are a perfect solution for busy people such as Ira.

When assessing remote health monitoring systems conducive to travel, it’s essential that they be compatible with various modes of communication – such as cell phones, telephone lines and the Internet – so no matter where you are, you can capture, store, and send health information to your healthcare team, including physicians, family and other designated caregivers. That team can then access this information to assist with timely and appropriate healthcare decisions. Health care is increasingly top of mind for Americans, as well as those around the world, from physicians and hospitals, to patients and caregivers. If patients with chronic conditions are able to manage them at home or remotely, healthcare costs would likely decrease, people would have better understanding of their own health and their caretaker will be able to have more peace of mind.

About Jason Goldberg:

Jason Goldberg, president of IDEAL LIFE, founded the company in 2002. As president, Goldberg oversees overall product development, management and corporate direction. Under his

guidance, IDEAL LIFE has grown from a simple idea into a leading global health technology company spanning multiple continents with the largest implementation of remote health management solutions. Goldberg’s passion for technology and extensive knowledge of software development, marketing, international business development and consumer products, has created a company uniquely attuned to the practical needs of today’s healthcare consumers.

Prior to founding IDEAL LIFE, Goldberg’s vast work experience included successful tenures with HomeProject, MGI Software and Maxverse International.

Goldberg earned his Bachelor of Anthropology degree with honors and currently resides in Toronto with his family.

About IDEAL LIFE:

IDEAL LIFE, the industry leader in remote health management solutions, has created an innovative platform that addresses many of today’s most challenging and costly healthcare issues. Guided by a medical advisory panel of experts, the IDEAL LIFE program makes proactive prevention more realistic than ever as it is instrumental in gauging health issues before chronic conditions manifest themselves into acute events. For people managing chronic conditions such as congestive heart failure, hypertension, diabetes, asthma or obesity, IDEAL LIFE provides relevant, real-time, reliable and actionable data from a person either at home or while on the go. It delivers interactive, personalized communication to incorporate feedback to the knowledge base, allowing individuals to become more engaged and active participants in their own health.

The easy-to-use IDEAL LIFE system utilizes digital, secure two-way communication, allowing for a more personalized and cost-effective wellness experience. The FDA-cleared and HIPAA-compliant products have, for example, been proven to reduce congestive heart failure hospital admissions by 57 percent, demonstrating they can significantly reduce healthcare costs. For more information, visit www.ideallifeonline.com.

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By Scott Krienke

NEWS & INSIGHT

early a year and a half after the passage of health care reform, rising medical costs continue to beleaguer individuals and small businesses looking to purchase health insurance for their families and employees. Those who can afford the

higher premiums associated with major medical plans often are faced with high deductibles or other out-of-pocket costs.

The good news is there are new alternatives on the market that can help consumers find the health care coverage they want at a price they can afford. For many individuals and small businesses, supplemental products are a good option to help bridge the gaps in traditional health plans and create more extensive protection.

When selecting a supplemental plan, it is important to understand the differences between fixed-benefit and reimbursement plans, the two main ways in which a plan can pay benefits.

Fixed-Benefit Plans

Fixed-benefit plans pay a set cash amount when a customer receives a service like a medical test or treatment. Customers can choose to receive payment directly, so they can determine how best to spend it. For example, with a fixed-benefit accident plan, benefits can be used:

• To help pay medical bills related to the accident;

• To help cover expenses indirectly related to care such as travel and lodging expenses;

• To supplement lost income and pay for daily living expenses.

Fixed-benefit plans are sometimes known as scheduled-benefit plans, since a schedule of benefits specifies in advance how much money will be paid for a given service—so the customer knows up front exactly what benefits to expect. As an added advantage, fixed-benefit plans are generally not subject to deductibles, coinsurance or coordination of benefits with any other insurance products.

Medical Expense Reimbursement Plans

Reimbursement plans, on the other hand, pay benefits according to the amount charged for the service. These plans, which typically are sold with a primary health plan, offer the advantage of limiting

N



the customer’s out of pocket exposure when a unique event happens like an accident. Generally, after a small deductible is met on the supplemental plan, it will reimburse for the entire amount charged for services, up to the per-event limit, which is usually set at the amount of the insured’s deductible or out-of-pocket maximum.

Agent Advantages

In addition to providing substantial benefits for the consumer, supplemental plans offer several advantages to agents selling the plans. There are a wide variety of supplemental plans on the market today, ranging from accident and critical illness, to more specialized types of plans including dental, cancer and hospital indemnity. With so many products to choose from, agents easily can find a plan to fit every client need and budget. Since many supplemental plans are designed to complement a primary health plan, insurance companies are making it easier than ever to attach a supplemental plan to the customer’s primary policy—often with just a few clicks and no additional underwriting.

Agents should also note that supplemental plans historically have offered higher commission rates when compared with traditional health plans. As many agents are seeing their commissions reduced on major medical products, supplemental plans offer a way to satisfy their clients’ need for affordable coverage while earning the compensation that will allow them to continue to succeed in this space. Access to Health Care

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As medical inflation and rising premiums are placing major medical insurance out of reach for many individuals, the industry is responding by offering broader and more customized benefits as fixed-benefit medical plans. These type of plans offer affordable monthly premiums and access to everyday health care services like doctor office visits, prescriptions and hospital stays. Like other fixed-benefit products, the plans pay a set cash amount when a customer receives a service, and there are no deductibles or copays, so benefits start right away.

Increasingly, carriers are offering a wider range of fixed-benefit medical plans with an array of benefits and features, so it pays to do a bit of research before selecting a plan. One thing to look for is how the plan provides wellness and preventive benefits. Some plans separate them out and pay lower benefits, whereas other plans treat them as part of the overall benefit package. Another important consideration is whether the plan provides meaningful benefits for inpatient hospitalization as well as inpatient and outpatient surgery. Finally, it’s good idea to find out what other features and services are available. For example, some plans offer access to valuable network discounts on medical services and prescriptions. A few plans even offer access to advocates who will help negotiate any outstanding medical bills, which helps give customers the peace of mind they need before purchasing a plan.

With so many health insurance options available, consumers are looking to their agents for expert advice in selecting a plan. The key to choosing the right plan is understanding customers’ unique needs, which benefits and features they value most, and then helping them to understand how they can use those features and other services to help them maximize value from their plan.

About the Author

Scott Krienke Senior Vice President, Product and Marketing. Mr. Krienke oversees Assurant Health’s product and marketing functions, guiding the development and growth of the company’s product lines. Mr. Krienke joined the company in 1984 and has previously served as Vice President—Human Resources as well as Vice President—Claims and Customer Service. Mr. Krienke holds a degree in business administration from Marquette University and holds the FLMI and ALHC designations.

Mr. Krienke is on the Board of Pathfinders.



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peak with a room of 10 or 15 people in their 40s and bring up the topic of caregiving. Chances are a few of the people currently serve as caregivers. Ask them about their

stress levels. You will probably receive a resonating chorus of complaints about how these caregivers feel exhausted, they can barely keep track of their schedules, and their hair is falling out. And if the caregivers have jobs, odds are they do not have access to a benefit that helps alleviate their stress.

As the population in America ages, more people are serving as unpaid, family caregivers to an elderly loved one, but they are receiving no help

from employers. “Why should they?” an employer might ask. At first glance, the answer seems obvious. A caregiver benefit would cost a lot of money and would only indirectly help an employee, right? Not necessarily. According to The Metlife Caregiving Cost Study done in 2006, each year the cost to employers for employed caregivers in the United States is $33.6 billion, while each employed caregiver costs an average of $2,110. Because of things like worker absenteeism, workday interruptions, needing to replace and train new employees and people moving from full- to part-time, employers are losing more because of their caregiving employees. Clearly, this epidemic is

S


National Healthcare Reform Magazinehitting employees directly, and as the population increases and more workers are thrust into a caregiver role, the financial problem posed by this population will continue to cause headaches for HR executives.

So, what can employers do? The same MetLife study found “Any funds spent by the employer in helping with caregiving have a payback to the employer of 3 to 13 times the cost.” This statistic looks quite surprising at first, but think about the room filled with people in their 40s. Who do you think the most stressed people in the room are? The caregivers, who are worrying about how to coordinate doctor visits, making sure their loved ones take the right medications, making sure their loved ones even get prescribed the right medications, and wondering why they have no free time, for unpaid caregivers spend an average of 21.9 hours per week proving care. More disconcerting are the mental and physical health issues that caregivers face. For example, between 40 to 70 percent of caregivers have clinically significant symptoms of depression, with approximately 25 to 50 percent of these caregivers meeting the diagnostic criteria for major depression. Clearly, employers should be interested in a benefit for caregivers. As any manager can attest, a happy employee makes a good employee, and an investment in a caregiver benefit is a good investment.

About the Author

Michael Guanci is a communication specialist at Long Term Solutions. Michael has contributed to the development of WeCare+, a product dedicated to providing resources and support to

caregivers while also alleviating stress. LTS does this by conducting a clinical assessment, developing a plan of care, making care referrals, and providing clinical coordination and consultation. Send inquiries to [email protected]. (November 2009). National Alliance for Caregiving in collaboration with AARP. Caregiving in the U.S.

2.Zarit, S. (2006). Assessment of Family Caregivers: A Research Perspec tive. In Family Caregiver Alliance (Eds.), Caregiver Assessment: Voices and Views from the Field. Report from a National Consensus Develop ment Conference (Vol. II) (pp. 12 – 37). San Francisco: Family Care giver Alliance.

Documents

National Healthcare Reform Magazine August 2011