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ACA Hangover: Don't Overlook Wellness in 2014 February 25, 2014

HEALTHCHECK360.COM 866.511.0360

PRESENTED BY MICHAEL KELLY

AGENDA

• Why Wellness • Impact of Reform on Wellness Programs • Key Components of Effective Wellness Programs • Quantifiable Outcomes

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Why Wellness

THE EVOLUTION OF OUR EMPLOYEES

COSTS ARE CORRELATED TO HEALTH RISKS & AGE

Ideal (85+)

Low Risk (71-84)

Moderate Risk (61-70)

High Risk (51-60)

Very High Risk (<=50)

$-

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

<30 30-40

40-50 50-60

60+

Heal

th R

isk

Leve

l

Clai

ms C

ost

Age

HC360 Sample Population Study, N=10262, 2012

WHY WELLNESS – BARRIERS TO CONTROLLING COSTS

0% 10% 20% 30% 40% 50% 60% 70%

Changes in workforce demographics

Poor information on provider quality

Poor quality or misue of care because primary, specialy and facility care are not integrated

Overuse of care through providers recommending too many services

Higher costs due to new medical technologies

Poor information on provider costs

Overuse of care through employees seeking inappropriate care

Poor employee understanding of how to use the plan

High-cost catastropic cases and end-of-life care

Underuse of preventative services

Employees' poor Health Habits

11%

11%

13%

14%

19%

21%

24%

30%

41%

41%

67%

2010 Employer Survey on Purchasing Value in Health Care Report, Towers Watson & National Business Group on Health

Can be impacted by effective and integrated wellness programming

FLAWS IN WELLNESS MARKETPLACE

• Poor access and high costs in geographically dispersed populations

• No accountability or effective behavior change models

• Actionable data was not transparent or accessible

• Carrier programs dominated marketplace • Lack of integrated data-driven tools for

engagement

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Impact of Reform on Wellness

VERY SIMPLE…

• Costs will rise for most plans • Access to care is going to become restrictive • Employers will have more flexibility in design of wellness

initiatives • Outcome based wellness must become more flexible to

accommodate HIPAA

INTENT OF REGULATORS – THE CHALLENGE

• Stated in preamble – – …to ensure that the program is reasonably designed to improve health and is not

a subterfuge for underwriting or reducing benefits based on health status. – The intention of the Departments in these final regulations is that, regardless of the

type of wellness program, every individual participating in the program should be able to receive the full amount of any reward or incentive, regardless of any health factor.

• Clarify the 5 requirements of health contingent wellness programs

• However…

INTENT OF REGULATORS - THE GOOD NEWS

• These final regulations continue to permit plans and issuers flexibility in designing reasonable alternative standards (including using reasonable alternative standards that are health-contingent).

• No defined reasonable alternatives as it was viewed to stifle innovation in the wellness space.

PARTICIPATORY V. HEALTH-CONTINGENT WELLNESS

Participatory • Reward Not Based on

Health Factor • 5 HIPAA Wellness Rules

NA • But Other Laws May Apply

– ERISA, ADA, GINA, Tax, Privacy

Health-Contingent • Reward Based on Health

Factor • 5 HIPAA Wellness Rules Apply • Two New Subcategories:

– Activity-Only Wellness Programs

– Outcome-Based Wellness Programs

HIPAA COMPLIANCE UNDER REFORM

• Standard #1 – Frequency of Opportunity to Qualify • Standard #2 – Size of Reward (30%/50%) • Standard #3 – Uniform Availability and Reasonable

Alternative • Standard #4 – Reasonable Design • Standard #5 – Notice of Other Means of Qualifying

for the Reward

WELLNESS PROGRAM DEFINITIONS

Old Rules

Wellness Programs

Participation Only

Outcome Based

New Rules Wellness Programs

Participatory Health Contingent

Activity Only

Outcome Based

NEW RAS PROCESS

Wellness Programs

Participatory Health Contingent

Activity Only

Outcome Based Must provide reasonable

alternative standard… PERIOD!

Must provide RAS based on health status if: 1. Medically inadvisable, or 2. Unreasonably difficult

OTHER POSSIBILITIES

• Employer can waive standard or reasonable alternative at any time (just give the incentive to the employee).

• The employee’s primary care doctor can recommend reasonable alternative plan (and plan/vendor must accommodate).

ONUS OF RESPONSIBILITY

• Employer: Communication/ Payroll Admin • Employee: Action/ Request for reasonable alternative • Vendor: Administering reasonable process and reporting to

employer eligibility

HEALTHCHECK360 MODEL – YEAR ONE

• HealthCheck360 provides 0-100 score based on biometric results

• Activity Based Health Contingent Program – Participant receives preferred

cost sharing (typically through premium contribution) by participating in the program and establishing baseline score.

– If a health issue prevents employee from participating, HealthCheck360° will provide alternative participatory program (HRA only, health coaching, activity, etc).

Health Contingent

(Activity Only)

Participatory

Outcome based (HRA Score – 71+/5+)

Complete Activity Program (Track 2x week)

Participatory (Optional/ Not Recommended)

Primary Care Physician Recommendation

HEALTHCHECK360 MODEL – YEAR TWO

• Complete Biometric screen/ HRA/ ROF call

– If unable, we CAN require medical necessity • If outcome is not met, all failures are

entitled to reasonable alternative – Call HealthCheck360 – HC360 provides physician review form – Participant returns form to HC360 – Participant must complete activity or weight loss

program – If completed to satisfaction, company must

reimburse contributions – If not completed, participant continues on higher

contribution • If participant refuses or cannot

complete suggested program… – we CAN require medical necessity

Medical need for alternative

Call HealthCheck360 - Physician Review

Or

5 BEST PRACTICES

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You have to collect biometrics… and objectively measure health!

Biometric Screening

The Why • Participants do not “know their

numbers” • Participants are not honest • Objective data points for measuring

progress over time • Enables integration with disease and

case management teams

The What • Comprehensive assessment of major

risks – used to create a health score • Core Panels

– Body Composition – Blood Pressure – Lipid Panel – Cholesterol/Triglycerides – Glucose – Diabetes Risk – Nicotine/ Alcohol

• Additional panels to identify potential catastrophic issues – liver function, kidney function

• Optional preventative screenings based on age/gender – e.g., PSA screenings

ACCESS TO CARE UNDER REFORM

• Access to Care – Plans required to cover preventative services at no cost – Barriers to preventative care are removed and newly insured demand

service, access will become an issue – Primary Care Network already at a deficit

• Opportunity – Wellness programs will bridge the gap, providing new and expanded

options for basic care – Educates employees on appropriate level of care and responsible

utilization

OBJECTIVE SCORING SYSTEM

• Our scoring algorithm is directly correlated to present and future cost drivers

• Developed and reviewed by a panel of

physicians

• Balanced across all major cost drivers

• Transparent to participant

• Designed to reward positive change across health spectrum

• Designed to integrate with medical management

• Easily understood 0-100 scale

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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

25 Proprietary & Confidential

N = 1,750 Mfg Firm

Outcome Based Incentives!

B e s t P r a c t i c e # 3 :

OUTCOME BASED INCENTIVE MODELS

Proprietary & Confidential

EMPLOYER MARKET IS TRENDING…

0% 10% 20% 30% 40% 50% 60% 70% 80%

Reward (or penalize) based on biometric outcomes other than smoker, tobacco-use

status (e.g., achievement of weight control or target cholesterol levels)

Require employees to complete a health management program/activity (beyond simply

enrolling in a program) in order to receive reward (or avoid penalty)

12%

35%

10%

44%

33%

70%

Planned for 2013 2012 2011

Performance in an Era of Uncertainty | Towers Watson/National Business Group on Health 2012

INCENTIVE VALUE AND PARTICIPATION

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

• Incentives reward those who make healthy lifestyle choices

Proprietary & Confidential

0%

20%

40%

60%

80%

100%

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

Incentive (Annual Cash Value)

Enro

llmen

t Per

cent

age

RECOMMENDED INCENTIVE STRUCTURES

Premium Contribution Model

•Each participant receives score from 0-100 based on health risks

•Monthly contribution rates are dependent on maintaining good health, improving health, or compliance

Premium Refund (Safeway) Model

• Similar to premium contribution model except all contributions are the same and incentive is refunded participant in following year

• Can be integrated well with HSA/HRA plans

Biometric Tier Model

•Participant earns contribution or plan design rewards by meeting requirement in one or more biometric measurements

• For example: Anyone with a BMI<30 receives $10 off premium per month.

EXAMPLE MODEL

Preferred Rate • Health score of 71+ • Repeat participants with <71 AND 5+ pt improvement • All new participants

Participation Rate • Participants who fail to meet health goals

Standard Rate • Non-participants

Data Driven Interventions

DATA DRIVEN ENGAGEMENT

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• Biometrics • HRA responses • Demographics • Claims

Data

• Ideal, Low, Moderate, High, & Very High Risk

Stratification • Communications • Technology • Health Coaching • Medical Mgmt

Engagement

FOLLOW-UP EMPLOYEE COMMUNICATION

POST HRA COMMUNICATION CAMPAIGN

• Each participant will receive risk-specific quarterly communications.

• Monthly Wellness newsletter

• Monthly lunch and learns from HealthCheck360° health coaches – http://www.youtube.com/watch?v=Y5lgvnUplW4

• Regular updates on www.healthcheck360blog.com

• Daily wellness tips on www.twitter.com/healthcheck360

• Blog , twitter, and lunch and learns are all integrated with Facebook

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MYHEALTHCHECK360.COM

• Company branded

• Personalized content

• User specific tracking tools

– Weight

– Nutrition

– Activity

– Steps

– Water

– Nicotine Use

• Client specific challenge

management

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PROGRAM MANAGEMENT

• www.myHealthCheck360.com gives your wellness team the ability to plan, track, and manage programs and design:

• Weight loss contests • Activity programming • Pedometer programs • Sleep, nicotine, and other

options

• HealthCheck360° has developed employee communication plans to support these initiatives.

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MYHEALTHCHECK360° MOBILE APPLICATION

• iPhone and Android • Linked to personal weight

management goal • Tracking tool • Access to company challenges • Tips of the day • Personal Account management

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HEALTH COACHING MODELS

• Review of Findings Call (ROF) • Targeted • Comprehensive • Opt-in • Custom

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System promotes improved health

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 HC360° 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.

Proprietary & Confidential N = 6,000

Client Specific Reporting! Is it working?

B e s t P r a c t i c e # 5

Reporting: Is the program working?

THREE PRIMARY QUESTIONS

• Is the population getting healthier? – If so… program is succeeding

• What is the impact of the incentive structure on program costs? – Design can self fund program for 1:1

• How has reduction in risk correlated to claims experience (trend)?

– Specific correlation tests to health risks – Examine event rates: chronic care, ER visits, compliance, et.c

5. CLIENT SPECIFIC REPORTING

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* If applicable

• Individual Report • Executive & Aggregate Report • Claims analysis* • Health Coaching Reporting* • Risk Migration Analysis • Critical Value Reporting • Executive Review Presentation

– Provides synopsis of various reports – Identifies key issues – Compares company data to industry cohorts

IMPORTANCE OF PARTICIPATION

Proprietary & Confidential

$3,800.00

$4,000.00

$4,200.00

$4,400.00

$4,600.00

$4,800.00

$5,000.00

Biometric Participant Non-participant

$4,194.13

$4,967.48

Participation Correlation to Claims

HC360 Sample Population Study, N=10262, 2012

18% Increase in non-participant costs

WHAT HAPPENS IF YOU DO NOTHING?

72.00

73.00

74.00

75.00

76.00

77.00

78.00

79.00

80.00

81.00

82.00

30 31 32 33

75.67

77.57

79.55

81.01

77.19 76.52

76.11 75.54

HRA

Tot

al S

core

Age

4-Year Repeat Participants vs. Baseline in HealthCheck360° Population

4-Year Repeat Participants Baseline Average

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HealthCheck360° Sample Population Study

67.00

68.00

69.00

70.00

71.00

72.00

73.00

74.00

75.00

76.00

45 46 47 48

70.74

72.67

74.94

75.93

71.19 70.89 70.74 70.53

HRA

Tot

al S

core

Average Age

4-Year Repeat Participants vs. Baseline in HealthCheck360° Population

4-Year Repeat Participants Baseline Average

HEALTH METRICS IMPROVE WITH PARTICIPATION

R² = 0.9662

R² = 0.8815

66

68

70

72

74

76

78

80

82

84

30 35 40 45 50 55 60 65

HR

A T

otal

Sco

re

Age

HC360 Repeat Participants vs Baseline

Baseline HC360 Participants

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CONTINUED POSITIVE IMPACT

R² = 0.9663

R² = 0.9326

R² = 0.8504 R² = 0.6612

65

70

75

80

85

90

20 25 30 35 40 45 50 55 60 65

HR

A T

otal

Sco

re

Age

Age vs. Total Score

1-Year Participants

2-Year Participants

3-Year Participants

4-Year Participants

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BIOMETRIC CORRELATION TO CLAIMS COST

$3,445.88 $3,601.02

$4,183.42

$5,249.77

$6,356.69

y = 2748.2e0.1602x R² = 0.9554

$2,500.00

$3,000.00

$3,500.00

$4,000.00

$4,500.00

$5,000.00

$5,500.00

$6,000.00

$6,500.00

$7,000.00

Ideal (18.5-24.9)

Low Risk (25-29.9)

Moderate Risk (30.0-

34.9)

High Risk (35.0-39.9)

Very High Risk (40+)

Allo

wed

Cla

ims

(Ann

ual)

BMI Risk Level

BMI Correlation to Claims

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HC360 Sample Client Report, N=10262, 2012

$3,730.05

$5,265.33

$7,406.44

y = 2648.6e0.343x R² = 1

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

$7,000.00

$8,000.00

Ideal (<100) Moderate Risk (100-125)

Very High Risk (>=126)

Allo

wed

Cla

ims

(Ann

ual)

Glucose Risk Level

Glucose Correlation to Claims

WHY THIS IS IMPORTANT

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$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 Claims by Age

NEG POS HealthCheck360°/SISCO Population Study, 2011.

WORK COMP CORRELATION

$366.25

$703.24

$771.36

$952.22

y = 314.75e0.2959x R² = 0.8591

$250.00

$350.00

$450.00

$550.00

$650.00

$750.00

$850.00

$950.00

$1,050.00

$1,150.00

Ideal Risk Low Risk Moderate Risk High Risk

Average WC Cost by Health Level

Avg WC Expon. (Avg WC)

Figure 1 2000 EE manufacturing and distribution company – Significant correlation in high health risk levels and workers compensation expense.

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 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

34%

67%

80%

89%

92%

92%

Somewhat Agree, Agree and Strongly Agree * Using Agree/Disagree scale only

EMPLOYEES RECOGNIZE BENEFIT

50

N = 6,000

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Outcome based wellness drives health improvement!

YEAR 1 TO 3 HEALTH MIGRATION

0

1000

2000

3000

4000

5000

6000

7000

8000

Ideal Low Moderate High Very High

5320

7275

4409

2888

2145

6061

7538

4072

2587

1779

6518

7578

3977

2363

1601

3 Year Repeat Migration – Participants: 22,037

Year 1 Year 2 Year 3 22.5% Increase 25.5% Decrease

YEAR 1 TO 4 HEALTH MIGRATION

0

500

1000

1500

2000

2500

3000

3500

Ideal Low Moderate High Very High

1863

3205

2064

1389

1071

2205

3298

1929

1270

890

2545

3289

1891

1105

762

2749

3223

1788

1097

735

4 Year Repeat Migration – Participants: 9,592

Year 1 Year 2 Year 3 Year 4 47.6% Increase 31.4% Decrease

KEYS TO SUCCESS

• Delivering a consistent program to all employees at all locations • Ability to provide and evolve outcome-based incentive structure • HealthCheck360° integrated tools – communications, coaching, mobile, online,

and program management – enable all employees to be engaged throughout the year and at every location.

• Ability to integrate claims, disability, & other data with biometric tracking creates best in class reporting

• Motivation + Engagement + Data = Improved Health • Improved Health = Lower cost & happier employees

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QUESTIONS?

Michael P. Kelly Director, HealthCheck360° Ph: 563.587.5186 | 866.511.0360 Cell: 563.845.8085 Fax: 563.587.5836 Michael.Kelly@healthcheck360.com HealthCheck360° 800 Main Street | PO Box 28 Dubuque, IA 52004-0028 www.healthcheck360.com