Upload
doanbao
View
213
Download
0
Embed Size (px)
Citation preview
Value-Based Design:Reducing Cost, Improving OutcomesJennifer M. BoehmPrincipalHewitt Associates
To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Unprecedented UncertaintyEconomic Challenges
How is our business doing?
Will cutbacks be necessary?
What is the HR “contribution”?
What does this mean for benefits?
Political Questions
What are the priorities?
Will health care be addressed?
What path will reform take?
What does that mean for employers?
Action steps—Be proactive.Develop and implement a written strategic plan that
combines short term savings and longer term investmentsto maximize results.
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Employer ChallengesBenefits “Value” Still Critical
Maintaining a viable health and health care plan is a competitive necessity
Still need to attract and retain diverse workforce
Retained or regained health drives improvedproductivity but requires better return in investment(ROI)
Employee Attitudes Challenging
Employees split on the employers role (benefits versus health)
74% agree employer should educate them onhealth benefits1
Only 38% agree employer should educate them onimproving their health1
Health Plans Struggle
Can’t meet the needs of employers or members
Choices are limited (and performance is underwhelming)
Difficult to differentiate capabilities or commitment to truly change the game
“Value added” services are not integrated, unevenly delivered and hard to evaluate
“Bad” Health Behaviors Growing Cost Driver
Preventable and/or lifestyle related conditions causing high costs and lost productivity but engaging people to change their behavior is still a huge challenge
Obesity
Diabetes
Smoking
Managing an employer-sponsored health plan is more challenging than ever
1Hewitt 2008 The Road Ahead Employee Survey
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
To Make Matters WorseFinancial Pressures Mount
Balance between business survival and maintaining competitive position
HR being “asked” to contribute to and support cost-saving initiatives
Short-term cost savings versus long-term payoff of improved health
Financial Crisis Exacerbates Health Crisis
People forego or postponeessential care
Health behaviors erode asstress grows
Mental health issues emerge
Job losses increase number ofuninsureds
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Making the ChoiceTo survive, employers might
Cut costs first—“Ready, Fire, Aim!”
Worry about longer term implications later—“Law of Unintended Consequences”
To thrive, employers must
Cut the right costs
Invest in measurable health improvement
Design, measure, revise
Be disciplined about ROI
Hewitt Associates’ (Hewitt’s) View—Employers CAN thrive in uncertainty by demanding lower cost AND higher value
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
To Survive and Thrive, Manage Cost, AND Improve Health
If You Can’t Measure It, Your Credibility Is at Risk—KNOW YOUR DATA
Your approach MUST be rooted in your own data, not just “big ideas”
Tackle Specific Behaviors and Conditions—PICK YOUR SPOTS
Diabetes, Obesity, Smoking, Physical Activity, Food Management
Typical employer: diabetic costs—$13,000/year, non-diabetic—$2,600/year
Fix the Things that Impede Right Behaviors—DRIVE VALUE
Build on foundation of “value-based” design
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Current Employer Strategies
Purchasing Based—20%
By using all-in vendor solutions
More consolidation
Higher expectations for improved vendor performance
Assumes lack of true vendor differentiation
Modified Status Quo—40%
By adjusting current designs
More cost shifting
More “take-aways”
Minimal emphasis on behavior change
“Off the Shelf”—30%
By adopting ready-made solution
Lack of strategic plan
Lack of targeted solutions
Follow-the-leader and see where itgoes
Integrated & Targeted—10%
By changing the game
Drives changes that matter…create value in program
Increases accountability for all
Requires leadership support and personalized interventions
Embraces technology
More Progressive
Less Prevalent
Less Progressive
More Prevalent
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
“Value”= Getting to “Right”
The “right” outcome is about supporting all the health care that is needed, but only the health care that is needed
A Value-Based
Program
RightConnections
RightServices
RightProviders
RightIncentives
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
What is “Value” in a Health Care Program?Pay for services that work…STOP paying for inefficient, unsafe, and duplicative services
Employers need to support initiatives that call for
Reduction in medical errors
Elimination of wasteful and duplicative diagnostic testing
Evidence-based care guidelines
Reduction in post-op infections
Provider accountability
Appropriate care settings
Improving health care literacy
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
How Does Value Fit Into the Overall Health Care Program?
Consumer Focus Patient Focus
The design created is dynamic
and integrated
Offer coinsurance-based, cost-sharing, and/or an account-based plan
Cover generous preventive and wellness care
Promote healthy lifestyle programs and corporate environment support
Implement multi-channel decision support
Offer significant incentives for HRQ1/ biometric completion and
targeted risk management compliance
Require compliance with condition management protocols
Require evidence-based care guidelines
Assign personal health advocates for support/guidance
Offer high performance providers and centers of excellence
Provide higher coverage for high-valued services
1Health Risk Questionnaire
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Value-Based Design (VBD)Why?
Historically, we have created “agnostic” designs that treat all conditions and treatments equally
Many employers have reached their cost sharing threshold, which is causing affordability and compliance issues for high and low value services
Only 55% of employees receive the care they need, as indicated by medical evidence1
79,000 Americans die each year because they don’t receive evidence-based care for chronic conditions2
1Rand; 2NCQA
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Defining VBD
“Value” is derived from evidence-based care guidelines
Premise behind VBD
Lowering member cost-sharing may increase utilization of high value services, leading to better health outcome
Needs to work in concert with initiatives such as CDHPs, DM, HPNs, Coaching, and P4P to optimize
health care effectiveness and efficiency
Needs to work in concert with initiatives such as CDHPs, DM, HPNs, Coaching, and P4P to optimize
health care effectiveness and efficiency
Simply put…VBDs set cost-sharing on value, not price
Simply put…VBDs set cost-sharing on value, not price
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
VBD: Fiscally Responsible and Clinically Sensitive
Noncompliant Patient
Leads To
Increased Medical
Costs
Decreased
Productivity
VBD, when coupled with other health management programs
Reduces financial barriers to essential care
Improves compliance with necessary treatments
Reduces medical costs and improves productivity over time
Simply put…value-based designs set cost-sharing on value, not price
Simply put…value-based designs set cost-sharing on value, not price
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Thoughts from Leading Employers1
Which of the following types of VBD programs or enhanced benefitdesign coverages do you currently offer or plan to offer in the future?
12%
5%
47%
36%
0%4%
52%
43%
0%>1%0%5%
10%15%20%25%30%35%40%45%50%55%60%65%
Currently in Use Adopting in 2008 Considering for aFuture Date
Do Not Plan toOffer
Offered, thenEliminated
Prescription DrugMedical
1Data Source: Hewitt’s 2008 Road Ahead Survey
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Thoughts from Leading Employers1
36% 40%
17%
46%
61%67%
31%
89%
67%
81%
34%
87%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percent of CompaniesTargeting Conditon
Enhanced Benefit Used -Prescription Drug
Enhanced Benefit Used -Medical
AsthmaCardiovascular Diease DepressionDiabetes
Please indicate which conditions your organization is targeting for your employee population and what enhanced benefit is being used to target each condition?
1Data Source: Hewitt’s 2008 Road Ahead Survey
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Thoughts from Leading Employers1
Are there any prerequisites for a member to receive the enhancedbenefits (i.e., participating in a disease management program?
4%
27%
20%
0% 10% 20% 30%
Yes
No
Currently no, but will require prerequisites
Percent of Companies
1Data Source: Hewitt’s 2008 Road Ahead Survey
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
The Spectrum of VBDs
Level of ComplexityLow High
Rx only
Integrated Rx
and condition
management
Integrated Rx, medical
services, and condition
management
Improvement in Health OutcomesModerate High
Individual
patient-specific
design
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
VBD Continuum
Target Patients
Patient Identification
Administrative Complexity
Benefit Enhancement Cost
Return on Investment (ROI)Highest Lowest
Lowest Highest
Low Specificity High Specificity
Lowest Highest
Patient AccountabilityHigh High
Target Services
Enhance benefits for clinically valuable services across broad population
Target Services
Enhance benefits for clinically valuable services across broad population
Target Patients
Enhance benefits for specific clinically-defined categories based on patient-
specific characteristics
Target Patients
Enhance benefits for specific clinically-defined categories based on patient-
specific characteristics
Additional Design Components to Contemplate
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Employer ResponseHewitt has convened a roundtable of employers who have implemented or are considering implementing VBD programs
Learnings and Barriers identified by the Roundtable
“Understanding and implementing consistent outcomes—based on metrics across health plans and PBMs”
“Need better understanding of ROI possibilities and potential administrative roadblocks”
“Want to see demonstrated short and long term ROI; major barrier is finalizing design and ROI methodology”
“Administration and communication”
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Hewitt’s Approach to Value-Based DesignA Value-Based Benefit Program must Integrate with Other Programs
It’s not the “silver bullet”!
VBD ROI will depend heavily on other programs already in place
VBD-specific ROI may be difficult to quantify in a well-constructed, integrated health management program
Feasibility is the First Step
Quantify at a high level whether the approach makes sense, usingemployer’s own data
Integration with other programs is crucial
Implementation needs to be in partnership with PBM and medical plans
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Hewitt’s VBD Economic modelOur economic model was developed in an exclusive partnership with Dr. Mark Fendrick, MD (University of Michigan) and Dr. Michael Chernew (Harvard University)
Model is founded on economic principles of elasticity
Sits atop Hewitt’s proprietary actuarial pricing model
The model incorporates an employer’s actual prescription drug claims/utilization data to estimate impact of a VBD program
Output is the increase in cost to implement a value-based benefit design
Can incorporate the estimated offsets due to improved medical and productivity outcomes
Can also estimate the needed change in design for non-value-based prescription benefits
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Hewitt’s VBD Assessment Solution
Compliance TrackeRx
Assess current Rx compliance and gaps across 11 chronic conditions
Model incentive design alternatives to target improved Rx compliance for specific conditions
Calculate level of investment or amount of cost to spread to other benefit areas
Calculate prospective ROI for direct medical costs and improved productivity
VBD Modeler
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Hewitt’s VBD Modeler—Sample Screen Shots
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Employer Example—Hospitality CompanyApproach
Selected targeted therapeutic classes of drugs including
Beta Blockers
Statins
Glucose Control
Reduced Rx copays
Generic: $5 to $0
Preferred Brand: $25 to $12.50
Nonpreferred Brand: $45 to $22.50
Established measurement process
Results
Nonadherance rates fell by 7%–13%
Glucose Control: -13.2%
Beta Blockers: -9.5%
Statins: -7.1%
Next Steps
Expand into medical services for targeted conditions
Target patients using enhanced clinical data
Link to participation in condition and health management programs
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Employer Example—Large Power Company’s Current VBD
Enhanced benefit (half cost share) effective January 1, 2008
Targeting vascular diseases/treatments with most clinical value
Targeted Conditions – Vascular Cluster
Prescription DrugsDiabete
s CAD CAD w/ MI CHF/A-FibPAD/
AneurysmIschemic
Heart DiseaseHyper-tension
ACE Inhibitors
ARBs
Calcium channel blockers
Beta Blockers
Diuretics
Anti-arrhythmic
Statins and other antihyperlipidemics
Anti-platelets, anticoagulants and other blood thinners
Diabetic Control (oral, inhaled, injected)
Diabetic Supplies (needles, gauze, swabs, lancets strips, pumps, glucometers)
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
Taking VBD to the Next Level—An Integrated Solution
Value-Based Program
Wellness
Providers
Communication
Diversity Coaching
Disease Management
Health Plans/Networks
PBMs
Design
KNOW your data PICK your spots DRIVE value
2009 Total Rewards Conference & ExhibitionTo protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC.
InquiriesSend E-mail To:
For a copy of this presentation, please visit:• Hewitt.com
• LinkedIn.com
“Hewitt-WorldatWork09”