HealthCheck360 Selling Wellness to your CFO 041712

Presented By:Jim Wachtel

National Sales Director

[email protected]

1

Agenda

Introduction

The CFO’s Role

Wellness – Doing nothing is a losing strategy

Traditional Wellness

6 Key Features to Measure to Results

Conclusion

2Proprietary & Confidential

The CFO’s Role

…CFOs are uniquely situated to build and communicate an integrated risk view, optimize business decisions, and build a strong risk management culture. - McKinsey Quarterly

Financial Risks

Liability Risks

Health Risks


Doing Nothing is a Losing Strategy

Year 0

Low Risk (0-2 Health Risks)

27,951

Medium Risk (3-4 Health Risks)

10,670

High Risk (5+ Health Risks)

4,691

Migration study of 43,312 Individuals Over 3 Years

Source: University of Michigan Health Management Research Center

Year 3

Low Risk (0-2 Health Risks)

26,591

Medium Risk (3-4 Health Risks)

11,495

High Risk (5+ Health Risks)

5,226

Key Findings

Risk profile of a population gets worse over time

Number of high risk individuals increased 11.4%

Number of medium risk individuals increased 7.7%

Number of low risk individuals decreased 4.9%

Results are a function of American lifestyle habits and the realities of age


Excess Risk Equals Excess Cost

Source: University of Michigan Health Management Research Center

Inflation adjusted to 2009: http://www.halfhill.com/inflation.html

Cost Area Low Risk (N=671)

Medium Risk

(N=504)

High Risk (N=396)

Short-Term Disability

$160 $288 $444

Worker’s Compensation

$304 $325 $662

Absence $327 $455 $703

Medical & Pharmacy

$1,544 $1,983 $4,929

Total $2,335 $3,052 $6,738

High Risk Employees cost three times as

much as low risk

employees!


The Clear Path to Higher Costs

Lifestyle Decisions

Health Risks

Disease (Costs)

Six Key Features to Measure Performance

1. Outcome-based, objective biometrics to detect risk

2. Objective and clear scoring model

3. Portable and carrier independent

4. Meaningful incentives (Substantial, Understandable)

5. Support for positive behavior change (Health Coaching, Engagement Tools, Educational Resources)

6. Measured results and analysis


Key Feature #1 – Outcome Based

Objective measurement is key to success

Set baseline

Track trends

Real information, not a guess

Importance of on-site venipuncture biometric screening

Accuracy and flexibility of full panel results

Objective data points to measure over time

Participants don’t “know their numbers”

Biometrics determine follow up programming

Uncover hidden risks


Key Feature #2 – Clear, Objective Scoring

Easy to understand scoring drives engagement and participation

Objective scoring prevents errors with self reported information

Scored model translates risks into compliant measurement model

Long term measurement tool


Carrier Programs: Risk awareness– Carrier, not the client, owns the data

– Don’t share proactive risk data with risk bearer

– Customization/ Flexibility

“Being Carrier Independent allows your program to stay consistent

over time”

Key Feature #3 – Portable Information


Key Feature #4 – Meaningful Incentives


Incentives – Multiple Purposes

Participation Health Outcomes

Target: 80% to 100% participation

Rewards go to those who have less risks OR are making progress in

reducing risks

Engagement

As necessary to build momentum,

support change

12

Incentives

Proprietary & Confidential

Proprietary & Confidential

Cost Neutral Implementation

• Year 1: Increase contribution rates by $40 company wide

for singles and $80 for a family, then offer $40/$80

discount for participating

• Year 2: Upon retesting, offer discount for:

– maintaining high level of health

– improving health (5 points)

– doctor’s affidavit that states compliance with care

Properly Designed Program Pays for Itself

13

Incentive Value and Participation

• Results for completion of Health Risk Assessments show a direct correlation between incentive value and participation

• Incentives reward those who make healthy lifestyle choices


0%

20%

40%

60%

80%

100%

$0 $100 $200 $400 $600 $800 $1000

Incentive (Annual Cash Value)

Enro

llme

nt

Pe

rce

nta

ge

HIPAA Compliance

Wellness Program conditions and rewards MUST comply with HIPAA Wellness Program Regulations:

1. Limit on Reward

2. Reasonably Designed To Promote Good Health or Prevent Disease

3. Annual Opportunity to Qualify For Reward

4. Reasonable Alternative Standard

5. Disclosure Required


Key Feature #5 – Support Behavior Change

Personal Intervention Population/Social Programming

Communication campaign

• Marketing to drive participation

• Ensure understanding of available programs

• Effectively communicate incentives

Education Campaign

• Monthly Newsletter

• Twitter tip of the day

• Lunch n Learns

Activity Programming

• Weight loss challenges

• Pedometer programs

• Point based initiatives

Push/ Pull Targeted Communications

• Focus on personal risk factors

• Reward positive change

Coaching/ Medical Management

• Health Coaching

• Disease Management

• Case Management

Online Health Portal

• Health/Wellness content

• Activity/ Nutrition Tracking tools

• Program management


What Influenced You To Improve Your Health?

21%

48%

56%

63%

73%

91%

0% 20% 40% 60% 80% 100%

Co-worker inspired change

Illness of friend/family

Spouse was improving health

Taking online HRA

Want to pay lower insurance premiums

Receiving Biometric data

Somewhat agree, Agree and Strongly Agree

Biometrics and premium incentives are much more influential than online HRA or personal events in influencing decision to improve health.


N = 6,000

Attitudes towards Wellness Program

34%

67%

80%

89%

92%

92%

0% 20% 40% 60% 80% 100%

Alerted me to medical condition I wasn't aware of*

Articles I received motivated me to improve health

Premium Incentive motivated me to improve my health

Report helped me understand where to change

Provided valuable insight into my health

Program made it more likely for me to improve health

Somewhat agree, Agree and Strongly Agree

* Using Agree/Disagree scale only

There was very strong agreement that the wellness program not only provided good insight into health, but also help foster the desire to improve health. One-third of participants found out about a health issue that they were unaware of before the program.


N = 6,000

Key Feature #6 – Measured Results

Desired Reporting Capabilities

Individual Report

Executive & Aggregate Report

Claims analysis (if applicable)

Health Coaching Reporting

Risk Migration Analysis

Critical Value Reporting

Executive Review of Findings Presentation after assessments


Key Feature #6 – Measured Results

Know what you can measure

Easier to Measure:

Biometric migration

Claims data

Engagement

Harder to Measure

Productivity

Presenteeism


You Don’t Know What You Don’t Know

Biometric Screening Findings

• 111 with glucose in diabetic range

• 580 with glucose in pre-diabetic range

• 549 individuals with elevated systolic and diastolic blood pressure readings

• 815with elevated cholesterol

• 883 with BMI readings > 30, of which 396 (44.8%) are also pre-diabetic

Claims Information

• 50 have claims with a diagnosis suggesting diabetes or pre-diabetes

• 78 have claims with a diagnosis suggesting hypertension

• 98 individuals have claims with a diagnosis suggesting being at risk of a heart attack


N = 1,750 Mfg Firm

Employee Perception of Health

29%

59%

10% 1% 0%

Self reported Status of Health

Great

Good

Average

Below Average

Poor

33%

37%

18%

8%4%

Biometric Results

Ideal (85+)

Low (71-84)

Moderate (61-70)

High (51-60)

Very High (<=50)

88% of participants self-reported a good or great health status

70% of participants scored a 71 or higher (ideal or low level of risk)

1% of participants self reported a below average or poor health status

12% of participants scored a 60 or below (high or very high risk)


Claims Experience Correlated to Health Score

7/8/2012 Proprietary & Confidential 23

$4,229.58

$6,391.89

$7,826.56

$10,214.99

$-

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

Ideal (85+) Low Risk (71-84) Moderate Risk (61-70) High/ Very High Risk(<60)

Paid Claims

Overall Health Score – Repeat Participants

ABC Company

Participants who took HRA in 2010 AND 2011

General Statistics

2010 2011 Variance

Population 491 491 N/A

Average Score Increase/Decrease/No Change from Year 2 to Year 3

Average 81.1 83.1 2.0 2010 Range Increase Decrease No Change Total

St Dev 12.3 12.2 0.1 96+ 2.2 (4.8) NA (1.7)

95-90 3.9 (5.1) NA (0.3)

Overall Score Distribution 89-80 6.2 (6.6) NA 1.8

96+ 54 84 30 79-70 8.4 (6.8) NA 3.0

95-90 91 99 8 69-60 9.8 (4.3) NA 4.8

89-80 148 138 (10) 59-50 11.5 (5.4) NA 7.5

79-70 106 95 (11) <50 11.7 (3.0) NA 8.0

69-60 61 57 (4) Grand Total 7.0 (5.7) NA 2.0

59-50 27 14 (13)

<50 4 4 0

Total 491 491 0

Increase/Decrease/No Change from Year 1 to Year 2

2010 Range Increase Decrease No Change Total 2010 Range Increase Decrease No Change Total

96+ 18 27 9 54 96+ 33.3% 50.0% 16.7% 100.0%

95-90 42 38 11 91 95-90 46.2% 41.8% 12.1% 100.0%

89-80 93 48 7 148 89-80 62.8% 32.4% 4.7% 100.0%

79-70 64 32 10 106 79-70 60.4% 30.2% 9.4% 100.0%

69-60 37 16 8 61 69-60 60.7% 26.2% 13.1% 100.0%

59-50 20 5 2 27 59-50 74.1% 18.5% 7.4% 100.0%

<50 3 1 0 4 <50 75.0% 25.0% 0.0% 100.0%

Grand Total 277 167 47 491 Total 56.4% 34.0% 9.6% 100.0%

7/8/2012 Proprietary & Confidential 24

Case Study – Partial Union Environment

• Medical and drug costs have actually decreased on a per employee and per member basis over the last five years.

• If medical plan costs had increased at rate of 8% per year since 2007-08, ABC Company premiums would be $7.24 million dollars higher than today. Total Wellness investment less than $1m in same period.

Plan YearPlan Costs/Premiums per Covered

Employee

2007-2008 $8,852

2008-2009 $9,054

2009-2010 $8,365

2010-2011 $8,967

2011-2012 $8,823


Case Study – Partial Union Environment

Of the 612 repeat participants between 2010 and 2011, the overall average health score increased from 72.6 to 76.6. There was an improvement in health score in almost every risk category (with the exception of those scoring over 96).

Overall blood pressure for these same participants decreased, as did the overall cholesterol levels.

Of the 40 people who were at extremely high risk for blood pressure in 2010, 30 moved to be at moderate, low, or ideal categories.

Of the 173 people with high or very high cholesterol risk, nearly 45% moved to moderate, low, or ideal categories.

The number of people with very high glucose levels fell 35%.

Typical Profile of New v. Repeat Participant

Biometric Profile 2011 ScoreAvg. BMI

Avg. Weight

Avg. Systolic

Avg. Diastolic

Avg. Total Cholesterol

Avg. Glucose

Nicotine POS

Repeat Participants 76.6 29.0 192.8 120.4 76.3 192.6 97.8 26%

First Time Participants 67.9 29.9 203.2 124.4 78.3 195.7 101.7 22%


Repeat Participation = Reduced Claims Expense

$5,000.00 $5,500.00 $6,000.00 $6,500.00 $7,000.00 $7,500.00 $8,000.00 $8,500.00

Non-participant/ HRA Only

1 HRA w/ biometrics

2 HRA w/ biometrics

3 HRA w/ biometrics

$8,132.47

$6,202.27

$5,838.68

$5,493.29


Large Financial Services Firm

Medical Trend Claims Analysis

$7,000.00

$7,500.00

$8,000.00

$8,500.00

$9,000.00

$9,500.00

$10,000.00

$10,500.00

$11,000.00

$11,500.00

2006 2007 2008 2009 2010

Cost per employee on plan Average for Industry

Expected Claims

HealthCheck360°implemented in 2008.

2007: Client’s trends increase exponentially

2008: HC360° Implemented

2010 actual claims demonstrated:

– Trend reduced to low single digits for two straight years

– $959,051 saving from expected trend

– $1,470,386 savings from industry average trend


Correlation to Health Score in Population

Average claims per HRA participant:

Year 1 – $7,057.57

Year 2 – $6,023.68

$-

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

85+ 71-84 61-70 51-60 50 or less

Score Correlation

Linear (2009) Linear (2010)


N = 1589

Biometrics and Medical Expense

$2,316

$2,973

$4,253

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Ideal < 100 Moderate 100-125 High 126+

Glucose Level Correlation to Avg. Claims (medical claims only)

Avg. Claims Linear (Avg. Claims)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

< 18 18-25 25-29 30-34 35-39 40+In

curr

ed

Me

dic

al C

laim

s

BMI

BMI Level Correlation to Avg. Claims (medical claims only)


Actual Results from HC360° Client Pool

Impact of Nicotine Use on Claims

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

18-29 30-39 40-49 50-59 60+

Nicotine Use Correlation to Avg. Claims (medical claims only)

NEG POS


N = 18,000

Impact of Health on WC Costs

Total

Total Score Counts Avg WC

<50 150 $875.76

50-59 206 $1,007.89

60-75 561 $771.36

76-85 342 $703.24

86+ 330 $366.25

Total 1,589 $713.09

N = 1,589


Wellness Circle of Success

Engage

• Meaningful Incentives

• Effective Communication

Identify

• Biometric Screening - Full Blood Panel

• Health Risk Assessment

Support

• Coaching for all Participants

• Program Integration

• MyHealthCheck360.com

Educate

• Individual Reporting

• Monthly Newsletter

• Targeted Communications

Measure

• Measure and Evaluate Results

• Executive/ Aggregate Reports


HealthCheck360° Key Features

1. Outcome Based, using objective, biometrics to detect risk

2. Clear-cut scoring and measurement model

3. Carrier Independent

4. Meaningful Incentives (Substantial, Understandable)

5. Full spectrum support for positive behavior change (Health Coaching, Engagement Tools, Educational Resources)

6. Measured Results and Analysis


Presented By:Jim Wachtel

National Sales Director

[email protected]

563-289-7360

mailto:[email protected]

Health & Medicine

HealthCheck360 Selling Wellness to your CFO 041712