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Covenant Care – An Affordable Self-Funded AlternativeCovenant Care – An Affordable Self-Funded AlternativeFor Employer Groups of 25-250 EmployeesFor Employer Groups of 25-250 Employees
Offers a viable alternative to your clients who are fully insured
Helps you protect your fully insured business with an alternative Fully Funded product
Provides a clearly defined strategy for truly managing an employer’s real claim costs and those cost drivers, specifically employees who are at risk
The Covenant Care Program IntroductionThe Covenant Care Program Introduction
Lifestyle Disease Focus – 3 case studies The Covenant Care Program offers an Integrated Results Based Wellness
Program with Fixed Monthly Funding Caps. What do we mean by Integrated Results Based Wellness Programs?
Biometric Screenings to determine lifestyle related conditions Those results are tied to benefit plans and/or premium differentials
Case Studies and what we mean by lifestyle related costs What is driving the cost increases for most employers
Precept Ministries Benton County
Risk Management Strategies Bravo Integrated Results Based Wellness Programs Delphi (MAP) TelaDoc
Spaggregate – Special Aggregate Reinsurance Contract Summary
The Covenant Care Program OverviewThe Covenant Care Program Overview
Percent of Chronic Diseases That are Caused by Poor Lifestyle
71% 70%82%
91%
0%
20%
40%
60%
80%
100%
Cancers Stroke Heart Disease Diabetes
The Health Care DilemmaThe Health Care Dilemma
How Safeway is Cutting Healthcare Costs – Safeway’s plan capitalizes on two key insights gained in 2005. The first is that 70% of all health care costs are the direct result of behavior. “The second insight, which is well understood by the providers of healthcare, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity. Furthermore, 80% of the cardiovascular disease is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.” WSJ, 6-12-09
When All Else Fails: Forcing Workers Into Healthy Habits – AmeriGas Propane Inc. had tried a number of voluntary wellness programs to encourage healthy habits in its employees. But the company concluded that “optional programs just don’t work” says Bill Katz, Vice President of Human Resources. WSJ, 7-8-09
In 2008 PepsiCo introduced a $600 surcharge for smokers. It already offered a smoking-cessation program, but that year, it enhanced it by adding nicotine-replacement therapy such as patches and gum. "The combination of those two elements led to a tenfold increase in participation and increased the quit rate from 20% to 34% in 2008 over 2007," says Greg Heaslip, benefits vice president. USA Today 6-19-09
Marketplace Trends In WellnessMarketplace Trends In Wellness
Lifestyle 71 cents of the health care dollar is spent on treating conditions that are
lifestyle related and potentially reducible by behavioral changes. Prof. Roger Seehafer, Purdue University
Chronic diseases related to lifestyle account for 75% of the national medical costs. Eleven separate studies by the Centers of Disease Control (CDC) suggest that worksite wellness programs can produce significant improvements in employee health. CDC 2006
Average healthcare expenditures for people with diabetes run about $13,243 per person compared with $2,650 per person for people without diabetes. USDOHHS report, September 2003
Obesity More than one-third of US adults – over 72 million people – were obese in 2005-
2006. This includes 33.3 percent of men and 35.3 percent of women. CDC 2007
"In view of these alarmingly high rates of obesity in all population groups, CDC has made the prevention of obesity one of its top public health priorities," said Janet Collins, director of CDC’s National Center for Chronic Disease Prevention and Health Promotion. CDC 2007
35%
At Risk
50% Healthy
15%Acute
Chronic
59% of this years low cost population will be in next years high cost population.
Low Cost Population
The IssueThe Issue
15% of all plan participants have acute or chronic health conditions
This group drives 80% of the claims
59% of next years acute chronic high risk population will come from this years low cost population
The RealityThe Reality
Reinsurance Premium
Administrative Fees
Employers have implemented cost shifting strategies to reduce their portion of healthcare costs Plan Design Changes Plan Contribution Changes
The positive impact of these changes were/are short lived. Cost shifting will not provide a positive impact to the overall healthcare trend.
This strategy does not address the root cause of rising health care costs…lifestyle related conditions
Employer Healthcare Costs
2%
12%
86%
Administrative Costs Stoploss Premium Paid Medical Claims
The SolutionThe Solution We strive to discover the root cause of escalating health care costs
We help employers implement a strategy that will focus on risk shifting and not on cost shifting
This strategy will enable and motivate employees to take a more active role in managing their health care expenses
What is the root cause of escalating health care costs? The ClaimsThe Claims
Who is responsible for the increase in health care costs? EmployeesEmployees
Risk Shifting StrategyRisk Shifting Strategy
Precept MinistriesClaims Cost Per Member
$406.50 $375.18
$252.94
$406.50$463.41
$528.29
$0.00$100.00$200.00$300.00$400.00$500.00$600.00
2006 2007 2008
Covenant Risk Mgt. Strategy No Strategy
Claim Savings
Case Study 1 – Case Study 1 – Precept MinistriesPrecept Ministries
A faith based ministry needed to control their rising health care costs
Implemented our strategy in 2006 and have experienced a reduction in actual claims costs by as much as 62%
The ministry has saved $811,576 over past two years
Risk Shifting StrategyRisk Shifting Strategy
Case Study 2 – Case Study 2 – Benton County, ARBenton County, AR 2006 Health plan
$500K in the red 2006 implemented The
Covenant Risk Strategy 2008 Results
Paid back $500K Plan $2.3M in the
black Success brought to the
attention of the national media
Benton County Board of CommissionersClaims Cost Per Member
$395.37
$283.12$210.20
$395.37$450.72
$513.82
$0.00$100.00$200.00$300.00$400.00$500.00$600.00
2006 2007 2008
Covenant Risk Mgt. Strategy No Strategy
Claim Savings
Risk Management Strategy – Integrated Results Risk Management Strategy – Integrated Results Based WellnessBased Wellness
Bravo Wellness offers a HIPAA compliant, integrated results based wellness program designed to implement options that motivate employees to participate in your wellness program and achieve measurable results:
Increased Premium Contribution and/or Plan of benefit differentials
Bravo’s program includes biometric screenings that give employees financial rewards for achieving healthy outcomes based on the following measurements:
Body Mass Index (BMI) − Blood Pressure Cholesterol Level (LDL) − Tobacco/Nicotine
A “win-win” process that helps nurture a culture of wellness while holding employees accountable for their lifestyle choices
Risk Management Strategy – Delphi MAPRisk Management Strategy – Delphi MAP
DELPHI MAP (Medical Advocacy Program) Empowering employees to become informed purchasers of
healthcare Advocate Nurses guide and coach employees through their
episode of care to higher qualified physicians and the most cost effective facilities
Empowering employers to reduce/manage their medical cost through a “transparency” solution with an extensive data base that profiles the quality of every specialist and the cost of every medical facility in the USA
Encourage employers to change their Summary Plan Description to:
Develop a plan organized approach to benefit payments Empower employees through MAP to obtain better outcomes Encourage employees with incentives/penalties to change
their purchasing habits and Set goals and benchmarks for the benefit plan to monitor
results
Risk Management Strategy – TelaDocRisk Management Strategy – TelaDoc
TelaDoc Medical Services A network of board certified Primary Care Physicians providing
consultations 24 hours a day, 7 days a week, 365 days a year Physicians diagnose routine, non-emergency medical problems via
telephone, recommend treatment and prescribe medication when appropriate
TelaDoc Benefits The three key challenges facing healthcare today…
Access Affordability Convenience
Additional Benefits Significant cost savings No time off needed to “see the doctor” Access for rural residents, mobile employees or those traveling Normal access time is 30 minutes
The Spaggregate PlanAn Attractive Reinsurance Alternative for the Fully Insured Employer
For Employer Groups currently fully insured who… Want the advantage of Self-Funding, but are hesitant to leave the
safety of fixed premiums Want to test the waters of Self-Funding without a huge commitment Want reports and claim experience to aid in managing benefit
decisions Want to retain the profit margin of the plan rather than feed the profits
of the insurance company Want a capped risk based on expected claim factors and fixed costs Want to design your own health plan or use the variety of pre-set
designs
With the Spaggregate Plan, the only money the client is required to fund are the administration fees, aggregate premiums and aggregate factors (Fully Funded Equivalent)
Spaggregate AdvantagesSpaggregate Advantages
Fully Insured Spaggregate Self-Funded
Capped Funding Yes Yes No
Lasers No No Yes
Access to Claim Experience
No (under 100 EE’s)
Yes Yes
Premiums Fixed Fixed Variable
Cash Calls None None Weekly funding of claims up to specific per member
Administration Higher Cost, Less Service
Lower Cost, Great Service
Lower Cost, Great Service
Potential for year end savings
No Yes Yes
Spaggregate Plan Features
Immediate Advance Funding The plan allows for a fixed budget each month. If claims
exceed the cumulative monthly attachment point, then claims are immediately advanced by Pan American Life. The employer is only responsible for funding monthly factors and premiums on the first of each month
Terminal Liability Option - can be elected and paid for any time prior to the contract end date. Three months of paid run out costs 1.5 months of
premium and factors Six months of run out costs 2 months of premium and
factors Unlimited Aggregate Maximum
LTM - Lifetime Maximum per individuals apply, but unlimited for the group
Covenant Care Plan Design Comparison
Premier Plan Plus Plan Access Plan
Plan Maximum $5,000,000 $5,000,000 $250,000
Deductible $500 $1,500 $1,000
Coinsurance 80/20 to $12,500
100% after deductible
50/50 to $10,000
Office Visit $20 / $40 100% after deductible
$20 / $40
RX Benefit $10 / $25 / $50 100% after deductible
$10 (Generic Only)
Maximum OOP $3,000 $1,500 $6,000
Covenant Administrators
Insurance Protection
Medicor
Bravo
Delphi-MAP
Tela-Doc/ Care Here
CustomerHitting The Mark In Controlling Healthcare Costs
The Covenant Care Advantage
If you have a Fully Insured client who is: willing to take an aggressive strategic
approach to managing their health care program,
with the potential benefits of self-funding AND the protection of a fully-funded program, Covenant Care is the program for them.
For General Agency Opportunities or to Obtain a Quote, Contact:Robert M. GearhartStratum Group6133 Rockside RoadSuite 201Independence, Ohio 44131216-901-9133 phone216-524-5773 [email protected]