OUTLOOK 2011 by The Institute for HealthCare Consumerism

From the publishers of

CDHC Solutions and EmployersWeb.com magazines

www.cdhcsolutionsmag.com

www.employersweb.com

Annual Solutions Outlook 2011 VOL 7 NO. 2 $7 USA

Former House Speaker Gingrich Addresses the PPACA, Amendments to law

Thought Leaders Share Insights into: Health Care, Benefits, Compensation Wellness and prevention: reforms on Which We All Agree Economic Wave in Employee Voluntary Spending

Spotlight on CDHC Solutions Forum East and West Conferences

T WORK

Enjoy a healthier HSA with Alliant Credit Union

Our Health Savings Account (HSA) protects your company’s bottom line and takes better care of your employees The Alliant HSA makes your health care benefit a win/win for your company and employees. We help companies realize significant savings in health care costs. Plus, we have a track record of providing HR professionals with best-in-class service and communication support.

AT WORK

With a high rate of return, easy access to funds and without the costly fees other providers charge, our HSA is designed to help employees earn more and save more money faster. Put your health care benefits on a wellness plan with an Alliant HSA.

AT WORK

AT WORK Learn more now at www.alliantatwork.com or contact Janet Meinheit at jmeinheit@alliantcreditunion.com

AT WORK

Want tips to implement or fine-tune your HSA program? Download a free copy of our “Is an HDHP/HSA the right prescription for your company?” white paper at www.alliantatwork.com

Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government Agency

Your savings federally insured to at least and backed by the full faith and credit United States Government

National Credit Union Administratio a U.S. Government Agency

Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government

National Credit Union Administration, a U.S. Government Agency

Your savings federally insured to at least $250,000 and backed by the full faith and credit of the United States Government

AT WORK

National Credit Union Administration, a U.S. Government Agency

I n side T his I ss u e 2011 Industry Experts’ Outlook 8 Health Care Outlook on Policy & Legislation Health Reform Law—Only Something Washington Could Dream Up The Patient Protection and Affordable Care Act (PPACA) inserts the federal government into every aspect of your health care, giving Washington bureaucrats such powers as to determine how your teeth shall be examined

40 Incentives in Wellness Big Fat Truth About use of Incentives for Wellness Programs According to studies from Johns Hopkins and Duke universities, 75 percent of Americans will be overweight by 2015. With health care costs continuing to skyrocket, it is imperative for companies to use incentives to create a successful wellness program By George B. Delta, Executive Director, Incentive Federation

By Newt Gingrich, Founder, Center for Health Transformation

48 Voluntary & Supplemental Health Benefits

16 Health Plans Health Plans Must Drive Through 2011 Without an Up-to-date Road Map Survey respondents see consumers benefiting at other stakeholders’ expense By Clive Riddle, President, MCOL

22 Health Care Consumerism The Future of Employment-based Health Insurance Post PPACA The future of employment-based health insurance is much more than government provided health care or employers adding high-deductible consumer-driven health care plans with attached saving accounts. The future is about empowering individuals with information and financial responsibility

The Economic Wave in Employee Voluntary Spending Although the recession is over and the economy is on the rise, employers remain conservative about benefit spending By Gil Lowerre and Bonnie Brazzell, Eastbridge Consulting Group

55 Health Care Consumerism Decision Support Tools Helping Consumers Drive Change in Health Care Historically assigned to the passenger seat, consumers take the steering wheel with a new generation of strategies and tools from their employers By Dr. Wendy Lynch, Health as Human Capital Foundation

By Ronald E. Bachman, President, CEO Healthcare Visions

32 Pharmacy Benefits Management Promote Greater use of Proven Pharmacy Benefit Management Tools for Greater Consumer, Payer Savings

$250,000 of the

Over the past decade, America’s pharmacy benefit managers have led the effort to put the brakes on runaway prescription drug costs for consumers, Fortune 500 employers, and government programs By Mark Merritt, President, CEO Pharmaceutical Care Management Association

60 Employee Communication, Education & Engagement Economy and Health Reform Creates even Greater need for Educated Health Care Consumers To manage rising expenses while maintaining compliance under the PPACA, it has become necessary for employers to implement a variety of changes to their health care benefits program By Andrew Webber, President, National Business Coalition on Health

on,

36 Population Health & Wellness

64 Medical Tourism & Health Care Access

Wellness and Prevention: Reforms on Which We All Agree Although the new Congress and a persistent divide in public opinion raise questions about the course of health care reform, the outlook remains strongly positive for wellness, prevention and care management initiatives under the law

Planes, Trains and Automobiles: Access to Care Defines Medical Travel Amid tight budgets and diminishing choices, medical travel option promises to open new avenues for better, more affordable health care By Laura Carabello, Chief Creative Officer, CPR Strategic Marketing Communications

By Tracey Moorhead, President, CEO The Care Continuum Alliance

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

InSIDE THIS ISSuE Industry ExpErts 66 Behavioral Health Care

Preserving Mental Health Leads to Corporate ‘Wellth’

depression

thOuGht lEAdErshIps ConnectYourCare

Five Things you Didn’t know About CDHC

By Jamie Sprigg

It is evident one cannot successfully or cost effectively treat illness such as hypertension, diabetes and other conditions without dealing with related stress and

By John Reynolds

By Ronald E. Bachman, President, CEO Healthcare Visions

retirement Planning & Financial Education (online only)

18 26

401(k) Continues to Evolve and that Includes Plan Communication Strategies Retirement planning is evolving, and to effectively communicate at 401(k) plan, one should consider three factors: demographics, psychographics and synchrographics By David Wray, President, Profit Sharing/401(k) Council of America

FIS Global Healthcare

Putting the Consumer Truly in the Driver’s Seat

Lighthouse1

CDHC: A Diﬀerent kind of Health Care Reform

unitedHealthcare

Consumers in Control of Their Health With CDHPs

TSYS

Building Consumer-Directed Health Care Adoption

By Trey Jinks

Benefits & Compensation

Best Buy

Incentives and Encouragement key to Wellness Program Success

Bravo Wellness

Don’t Touch That, It’s Hot: Employers Begin Linking Health Living Results to Health Care Contributions By Jim Pshock

(online only) Retirement Policy in 2012: Future Perfect Tension As Congress gets involved in refining the defined contribution plan system, employers have to answer what role do they, and the federal government, play in providing financial security for the workforce By Jason Hammersla, Director of Communications, American Benefits Council

Intelispend

Choosing the Right Wellness Program Means Healthy Employees, Healthy Business

By Deanna Baker

52 58

Transitions Optical, Inc.

An Eye-level Take on Vision Health in 2011

By Pat Huot

Liazon

Unleashing the Power of the Benefits Consumer

By Alan Cohen

Motivation/recognition & rewards

dEpArtMEnts

(online) What’s in Store for Recognition and Rewards Programs As the economy shows signs of improvement, employers are waking to the realization their employees need to feel engaged and valued By Kevin J. Cronin, President, Recognition Professionals International

Editor and Publisher’s Letter

With Clouds Departing, Forecast Calls for Optimistic Outlook

20 Stats & Data

Aetna Study Shows Consistent Growth for CDHP, Increased Engagement for CDHP Members

29 CDHC Solutions Forum 70 Who’s Who Profiles 74 resource Guide/Ad Index

PrInT AnD OnLInE KEY Connect with CdhC experts and community members online at www.CdhCsolutionsMag.com by looking for the following symbols at the end of each article: blog

MEMBER

BLOG

WHO’S WHO PROFILE

BROKER/ADVISOR/ CONSULTANT

EMPLOYEE COMMUNICATION & EDUCATION

HEALTH PLANS

HSA/HRA/FSA ADMIN & FINANCE

S TOTAL POPULATION HEALTH & WELLNESS

PHARMACY BENEFITS MGMT

POLICY & LEGIS PERSPECTIVE

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

SUPPLEMENTAL BENEFITS MGMT

TOOLS AND TECHNOLOGY

MEDICAL TOURISM

Care for your employees as much as they care about others. Give Target GiftCards.

They’re a great way to encourage participation in weight loss or smoking cessation programs, increase patient referrals, or just reward employees for doing a great job. Whatever the reason, Target, the store everyone loves, is here to make everything better. Take two — or five — and visit Target.com/corporategiftcards or call 1-800-5GIFTS5 as directed.

L ette r

Editor & Publisher

With Clouds Departing, Forecast Calls for Optimistic Outlook As the clouds of the Great Recession that have hovered over the nation for the past two years show signs of lifting, a feeling of optimism abounds. The economy appears to be recovering at the beginning of 2011. While the road to recovery is long and winding, employers appear in a better place today than where they were at this time last year, which explains the positive vibe oozing from the pages and the screen of this year’s Solutions Outlook 2011. We are proud to present our fifth edition of Solutions Outlook. This year’s edition is the biggest and arguably the most insightful Outlook produced, with an all-star cast of the leading industry thought leaders providing their insights into what is on the horizon for health care, benefits and compensation. With the skyrocketing cost of health care and the passage and ongoing debate about amending the Patient Protection and Affordable Care Act (PPACA), health care has gone from the back pages of newspapers to the front page and the lead story in newscasts. We are pleased to have former Speaker of the House and Georgia Congressman Newt Gingrich providing our overall health care outlook on policy and legislation in regard to the health care law. A polarizing figure, who as of press time had not officially announced his candidacy to run for President, Gingrich blends a combination of political savviness with first-hand knowledge of the health care industry and gives his opinion on what the future holds for the PPACA and the health care consumer (page 8). Gingrich’s piece sets the tone for industry experts such as: Clive Riddle, president of Managed Care Online, providing his outlook on health plans (Page 16); health care consumerism guru, Ronald E. Bachman providing his expert opinion on the ever-expanding consumer-directed health care movement (Page 22); Mark Merritt, president, CEO of Pharmaceutical Care Management Association, offering his opinion on the state of pharmacy benefit management (Page 32); and Tracey Moorhead, president, CEO of The Care Continuum Alliance, providing insight to the wellness and prevention aspects of the health care law (Page 36), and what is ahead for 2011. In addition to the magazine, David Wray, president of Profit Sharing/401(k) Council of America, provides an exclusive online piece about the outlook for retirement planning and financial education. Other exclusive online outlook pieces, appearing on both www.cdhcsolutionsmag.com and www.employersweb.com, are Jason Hammersla of American Benefits Council providing an outlook on benefits and compensation, and Kevin J. Cronin, president of Recognition Professionals International, offering his opinion on what is on the horizon for motivation, recognition and rewards in 2011. As always, the articles submitted are the beliefs and opinions of the author and do not necessarily reflect those of FieldMedia. We welcome all opinions and contributions regardless of political party affiliation. We hope Solutions Outlook 2011 provides you enjoyment and insight to what lies ahead in the months to come.

www.cdhcsolutionsmag.com VOLUME 7 NO. 2 Solutions Outlook 2011

Published by FieldMedia LLC 292 South Main Street, Suite 400 Alpharetta, GA 30009 Tel: 404.671.9551 Fax: 770.663.4409 ceo/ Publisher/Editor-In-Chief

Doug Field 404.671.9551 ext. 101 · dfield@ fieldmedia.com Associate Publisher

Brent Macy 404.671.9551 ext. 103 · bmacy@fieldmedia.com Managing Editor

Todd Callahan 404.671.9551 ext. 105 · tcallahan@fieldmedia.com Associate Editor

Jonathan Field jfield@fieldmedia.com Sales Associates National Account Manager

Brent Macy 404.671.9551 ext. 103 · bmacy@fieldmedia.com Vice President of Business Development

Susan Yakots 404.671.9551 ext. 102 · subscriberservice@fieldmedia.com Business development Associates

David Cerri 404.671.9551 ext. 106 · dcerri@fieldmedia.com Rogers Beasley 404.671.9551 ext. 109 · rbeasley@fieldmedia.com art director

Kellie Frissell 404.671.9551 ext. 107 · kfrissell@fieldmedia.com Marketing Coordinator

Erica LaSalle 404.671.9551 ext. 110 · elasalle@fieldmedia.com Chairman of CDHC Solutions Editorial Advisory Board

Ronald E. Bachman, CEO, Healthcare Visions Editorial Advisory Board

Ronald E. Bachman, Healthcare Visions G.J. Domis, Procter & Gamble Tracy Grunsfeld, Medco Health Solutions Karen Kirkpatrick, Infinisource Mike McCue, former editor-in-chief, Managed Health Care Executive Joseph Paduda, Health Strategy Associates David Randall, CDHCI Janet Trautwein, National Association of Health Underwriters Neil Trautwein, National Retail Federation Andrew Webber, National Business Coalition on Health Online Content Manager

Todd Callahan 404.671.9551 · tcallahan@fieldmedia.com Social Media Manager & Reprints

Drew Collins 404.671.9551 ext. 104 · dcollins@fieldmedia.com Business Manager

Karen Raudabaugh 404.671.9551 ext. 108 · kraudabaugh@fieldmedia.com Webmaster

Sincerely,

CDHC Solutions ™ is a trademark of FieldMedia LLC. CDHC Solutions ™ is published eight times yearly by FieldMedia, Inc., 292 South Main Street, Suite 400, Alpharetta, GA 30009. Periodical postage paid at Alpharetta, GA and additional mailing offices.

Doug Field CEO/Publisher dfield@fieldmedia.com

Todd Callahan Managing Editor tcallahan@fieldmedia.com

Solutions Outlook 2011 I CDHC Solutions I www.cdhcsolutionsmag.com I EmployersWeb.com ™

™

TO SUBSCRIBE: Make checks and money orders payable to CDHC Solutions ™ magazine 292 S. Main Street, Suite 400, Alpharetta, GA 30009 or visit www. cdhcsolutionsmag.com. Non-qualified persons may subscribe at the following rates: single copy $7.50; $75.00/yr in the US, $105/yr in Canada and $170/yr international. Please contact FieldMedia at 404.671.9551 or subscriberservice@ fieldmedia.com for name/address changes. PRINTED IN THE U.S.A. CDHC Solutions ™ is designed to provide both accurate and authoritative information with regard to the understanding that the publisher is not engaged in rendering legal, financial or other professional service. If legal advice is required, the services of a professional adviser should be sought. The magazine is not responsible for unsolicited manuscripts or photographs. Send letters to the editor and editorial inquiries to the above address or to mbolch@fieldmedia.com. Requests for Permissions to reuse content contact Copyright Clearance Center at info@copyright.com.

Smarter is healthy.

Smarter is saving more than $400 per member per year.*

Aetna’s proven CDHP. Aetna is not only leading the industry in Consumer-Directed Health Plans, our Aetna HealthFund® Study* proves short-term and sustainable cost savings and increased employee involvement without compromise to care. And we continue to lead the way with the next generation of smarter health plans that, coupled with efficient provider networks, can help maximize savings. Get a smarter health plan , Aetna.com/Smarterishealthy SM

medical dental vision life disability pharmacy

*Aetna HealthFund® Seventh Annual Study Results, released December 2010. Savings are based on the results of the study for full replacement cases only. Results do not represent a savings guarantee. Savings will vary for each customer, depending on plan design, engagement strategies, claim experience and other factors. © 2011 Aetna Inc. Plans offered by Aetna Life Insurance Company and its affiliates. Health insurance plans contain exclusions and limitations. Providers are independent contractors and are not agents of Aetna. 2011053

Health Care Outlook on Policy & Legislation

Founder The Center for Health Transformation

Health Reform Law—Only Someth

t is 2,409 pages. It extends 1,968 new powers to the Secretary of Health and Human Services and other unelected bureaucrats. It also creates 159 new boards, commissions, offices and agencies in the federal government. This is the Patient Protection and Affordable Care Act (PPACA) by the numbers. But perhaps nothing communicates the degree to which this law inserts the federal government into every aspect of your health care than the fact that it gives Washington bureaucrats the power to determine how your teeth shall be examined. Washington is now, literally, conducting “tooth level surveillance” of every aspect of your health care. The new federal health reform law has expanded the reach of federal and state governments so far that government is now actually in our mouths and in our teeth. And it is likely to get worse. That’s because despite all the alarming, invasive powers and new bureaucracies created by this law, it still fails to adequately address what must be the ultimate goal of health reform, making sure that health care is available, affordable, and appropriate. In a free society, the only reforms of our health system that will accomplish these goals are those empowering patients and doctors with more choices, more information and more responsibility. Unfortunately, the new law moves in the opposite direction by centralizing more power in Washington and attacking recent innovations like health savings accounts (HSA), flexible spending accounts (FSA) and consumer-directed health plans that empower individuals to take charge of their own health.

PPACA Changes to HSAs and FSAs Unacceptable At the Center for Health Transformation, we believe personal responsibility is at the very heart of successful reform. Consumerdirected health plans reinforce the concept of personal responsibility and empower individuals to consult with their families and health care providers. These plans also help create and support a competitive health care marketplace. Consumer-directed health plans allow individuals— not federal or state bureaucrats or insurance executives—to decide which health care providers to use and encourage decisions based on price and quality of service. About 25 percent of workers in businesses of 10 employees or more were offered tax-deferred FSAs in 2005, according to Mercer Human Resources, and 35 percent of those were utilizing such accounts. Unfortunately, the PPACA weakens consumer-directed health care plans by limiting the utility of HSAs, FSAs and HRAs to customers. Whereas funds from these accounts used to be eligible for purchasing all over-the-counter (OTC) medications, now certain OTC medications require a physician’s prescription. By their very nature, OTC items are available to consumers so they can try to manage their 8

By Newt Gingrich

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

health care issue without going to the doctor. So, the new health reform law added another stumbling block to cost-effective care. Furthermore, there seems to be no logic behind which OTC medications require a prescription. Denture cream, Band-Aids, and contact lens solution do not require a prescription but antacids, laxatives, wart remover, aspirin, and diaper cream do. The list is long and difficult to remember and creates more paperwork for doctors who are already fed up with a medical system that is making it more cumbersome for them to practice medicine. Other changes under the new law include a limit on how much workers can deposit into their FSAs. There is currently no annual limit to how much an employee may put in these tax-deferred accounts, which can help offset high-deductible insurance plans. Some workers deposit large amounts of money into their FSAs to pay for special education services for disabled children or to help cover the deductible for several family members. However, in 2014, workers will only be allowed to deposit $2,500 a year. The new $2,500 limit will discourage many workers from participating in consumer-directed health care. After all, if most of an FSA is utilized for a deductible and none is left for other health care purchases, workers will see little benefit in participating in such plans. Both of these changes to market-oriented FSAs need to be repealed. Consumers get more involved with their health care and health care costs with FSAs and HSAs. Congress and the Obama Administration should make this a priority until the PPACA can be repealed or replaced in its entirety.

Health Reform’s Current Status Will this destructive new law survive? Can it be repealed? Is there a chance for replacement? Before addressing these questions, it is worth reviewing where things stand at the end of the first quarter of 2011. n Congressional Efforts to Repeal - The House overwhelmingly voted to repeal the PPACA in January. The Senate rejected the repeal vote, mostly along party lines. However, the Senate has adopted legislation to remove the 1099 reporting requirement for any purchase by any business or organization for items of $600 or more. That 1099 repeal is now before the U.S. House. President Obama has suggested he would be open to changes in the law but not outright appeal. n Legal Challenges - In February, U.S. District Court Judge Roger Vinson in Florida ruled the PPACA unconstitutional. He set aside the entire law based on the mandate that those who are uninsured must purchase health insurance. However, two other federal judges found only parts of the law unconstitutional and refused to strike the law in its entirety. Meanwhile, attorneys general from several states are asking the federal government to either expedite the U.S. Supreme Court’s review of this matter or set aside most of the implementation of the law to take effect in 2014. With so much confusion, state governments and the National Federation of Independent Business, plaintiffs in these cases, are seeking

ing washington Could Dream up clarity. However, the federal government is proceeding with 2010 physician survey released by Gallup and Jackson Healthcare of implementation as if there were no legal case. Alpharetta, Ga., found that one-in-four health care dollars could be n Unequal Treatment Under the Law - Hundreds of associations, attributed to “defensive medicine”—unnecessary tests and treatments corporations and trade groups (including unions that supported that doctors order to keep themselves from being sued. That’s a President Obama’s candidacy) have sought and won waivers potential savings of $650 billion. Furthermore, reducing unnecessary from implementing early requirements in the law, including those tests and procedures would allow doctors to see more patients. concerning the limited coverage offered in mini-med plans. HHS In his State of the Union address, President Obama signaled he Secretary Kathleen Sebelius has granted more than 700 waivers to was open to signing a civil justice reform bill. Congress should take date. him up on his offer. n State Budget Realities - State governments, many on the brink The second reform is to weed out waste, fraud and abuse in of insolvency, are struggling with the issue of having to provide Medicare and Medicaid. A Center for Health Transformation analysis coverage for 15 to 20 million more new patients on Medicaid. of health care fraud revealed the U.S. government pays crooks $80 States simply cannot afford it. And federal Medicaid guidelines to $120 billion annually due to poor auditing and accounting. This is are so restrictive they cannot use creative techniques to insure almost 10 percent of total Medicare and Medicaid spending. In some these working poor with programs such as HSAs or consumer- cases, vendors are mere storefronts, post office boxes for organized driven health plans. crime units, billing the taxpayers for millions of dollars annually for n More Complications Than medical procedures never performed. Solutions - Chaos about the legal south Florida, one crook told a There is little in this new law focused In future of the new law is making reporter it was more lucrative than it difficult for governors and drug dealing. on saving money and saving lives. legislatures to decide whether to Comparing the fraud rate of 10 set up their own health exchanges percent in Medicare and Medicaid to or markets where the uninsured can purchase health insurance. that of major credit card companies, which is around .3 percent; it is no If they set up their own, they can make them more consumer- wonder health care spending is out of control. The government should oriented and write their own rules. The larger question is how benchmark this private sector standard and incorporate the real-time, many people will wind up on this exchange if they lose their digital, intelligent systems used in credit card processing for Medicare employer’s health insurance due to the new law. Like the poor, and Medicaid billing. The cost savings would pay for the initial IT they too may need taxpayer subsidies to afford coverage. investment almost immediately. Third, we must remove Washington-imposed limitations on These significant obstacles for implementation of the new law innovation within Medicaid by block-granting it to the states. Let make the likelihood of repeal, or at least significant modification, state governments develop a customized system to best serve their great enough that it’s worth outlining what immediate reforms should unique needs. Rhode Island is an example of a state that provides replace the PPACA. innovative programs to the poor by managing its own Medicaid program through a block grant in which there are few strings attached first Three repeal and replace steps on how money is spent. Medicaid shouldn’t be the same program from As we see now, the PPACA is something that has so many illogical Maine to Nevada. Some states may just want to provide routine health provisions only Washington and its bureaucrats could dream it up. coverage while others may want to include oral health and wellness Health care is supposed to be something that encourages a healthy care. But it should be up to locally-elected officials to decide, including relationship between doctor and patient. But there is little in this new whether they want the individuals, who qualify, to self-select their law focused on saving money and saving lives—making the very name, own type of plans or even utilize high-deductible type programs or Patient Protection and Affordable Care Act, a misnomer. other consumer-directed type of plans under Medicaid. In 1996, the The PPACA must be repealed and replaced with common sense Republican Congress created a similar block grant reform to welfare, reform. At the Center for Health Transformation, we suggest three and a Democratic President signed it. immediate reforms for improving health that could garner bipartisan These three reforms would not fix our health system entirely, but support. they are a significant start in the right direction. Along with expanded The first is civil justice reform. America faces a chronic physician use of consumer-directed health plans that promote better health at shortage that will only get worse as the baby boomers retire. Doctors lower cost, these steps would do more to save lives and save money and hospitals need protection against frivolous lawsuits to encourage than all 2,409 pages, 1,968 new powers, and 159 new bureaucracies more people to enter the field to meet this growing demand. created by the new health care law. You can count on it. ; Lawsuit abuse also contributes to the high cost of health care. A EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

HealtH Care COnsumerism By Jamie sPriggs Founder & CHieF MArKetinG oFFiCer COnneCtyOurCare

Five Things You Didn’t Know About CDHC

onsumer-directed health care (CDHC) as we know it today has been around for a decade: however, many benefits executives feel that every time they catch up to the best practices for CDHC, the rules are changed by either legislation, product improvements or market forces. Here is an industry executive’s insight into the ever-changing world of CDHC.

1 > CDHC requires a firm Handshake

Recognizing and supporting this intense need, ConnectYourCare delivers industry-leading claims processing with 99 percent of claims processed within two days; oﬀers participants a call center that is open 24 hours a day, seven days a week, 365 days a year; and has implemented account management teams that include both an account executive to provide strategic consultation and account manager to oversee day-to-day operations. The rich service model ensures we execute on our guiding principle to deliver stewardship to clients and provide excellent service to every level of our clients’ organization.

With CDHC administrators numbering in the thousands, how can benefits executives be sure to choose the administrator offering additional value? It’s especially important to make a good first impression when delivering not only a new benefit, but also a new benefit design. The best 4 > Homegrown is Better benefits executives choose administrators offering a firm handshake, making As the industry consolidates, we are seeing again and again an excellent first impression on administrators outsourcing “Administrators that cannot meet strict Service Level employees. Your employees all or portions of their CDHC demand a comprehensive Agreements or offer advanced services like a round-the-clock solutions to other vendors who product and services approach are not positioned well to react to and their impression of the call center will not be able to meet employers’ and participants’ market changes and client needs. account-based component critical needs, thus driving down customer satisfaction, reducing Additionally, these solutions often of CDHC will influence their enrollment and damaging an otherwise adequate program.” cannot be customized to meet a opinion of the health plan. client’s unique needs. For example, ConnectYourCare uses science to help clients drive ConnectYourCare delivers a proprietary technology platform built the adoption of account-based health plans and increase employee and managed in-house by ConnectYourCare with no reliance on thirdsatisfaction of CDHC. Consumerology® is the advanced application of the party software. This homegrown approach allows us to modify our product behavioral sciences to health care. It drives better understanding of human to meet unique client needs. For example, we can support employers’ behavior, incorporates messaging that motivates employees to act, leads to incentive plans, wellness plans, accommodate complicated account stacking higher enrollment in tax-advantaged health care accounts and increases tax rules and much more. savings for participants and their employers. Additionally, our solution’s health care payment card (debit card) is not outsourced to a third-party card vendor. By providing our own payment card, we are able to respond to market changes faster and 2 > 2011 will Put the “Consumer” Back in Consumermeet individual clients unique requests. ConnectYourCare’s homegrown Directed Health Care solution enables us to meet our pledge to execute flawlessly. This year will be the year of the consumer in terms of CDHC technology. Consumers have more features at their fingertips than ever before, with mobile browsing, mobile applications and other technology advances 5 > CDHC is more than Just a funding account designed to make accounts easier than ever to use debuting widely across Consumer-directed health care is so much more than just a funding the industry. Early predictions point to customer satisfaction increasing account; it’s an entire approach that puts the consumer in the driver’s considerably as these new technology features become available. seat. However, the consumer needs the proper tools in order to drive In alignment with our laser focus on the consumer experience, successfully. Plans that lack consumer education and tools are like driving ConnectYourCare is the leader in CDHC mobile technology and is at night without headlights. developing a number of technology enhancements in 2011 that will bring ConnectYourCare’s solution offers calculators that allow consumers account information to the consumer in new ways. to estimate potential spending and tax savings, treatment cost guidelines, prescription and hospital comparison tools, medical encyclopedia, symptom checker and more. These tools not only help the consumer understand 3 > Customer service Can make or Break a CDHC Program the financial impact of health care, they also educate consumers about New benefits require extra handholding. Just as technology the health care conditions impacting themselves and their loved ones. enhancements are essential to the evolving consumer experience, excellence ConnectYourCare’s Stewardship philosophy includes providing the tools in customer service is just as critical to the core customer experience. necessary to simplify complex health benefit decisions. ; Consumers are more empowered than ever and want an administrator who can deliver the elevated service levels they deserve. 10

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Flawless account administration allows employees to focus on more important things. Our Stewardship Model simplifies account administration, drives account enrollment and delivers greater employee satisfaction. Account Administration Excellence

Service Excellence

•

HSA, HRA, FSA, VEBA, Retirement and Commuter benefit accounts

•

Industry leading customer service performance metrics

•

Multi-account healthcare payment card

•

24x7 customer service center

•

Online participant portal and employer dashboard

•

Tiered account management structure for optimal account service

•

Participant communications designed to drive enrollment using proven Consumerology® principles

•

Fast and accurate claims processing

•

Award-winning technology

www.connectyourcare.com

HealtH Care COnsumerism By JOHn reynOlDs President, HeALtHCAre, GoVernMent & BiLLer soLutions fis

Putting the Consumer Truly in the Driver’s Seat

ori is 48, and, like a growing number of other consumers today—more than 52 million—she finds herself in the puzzling world of consumer-directed healthcare (CDH). During this year’s open enrollment period, she selected a highdeductible health plan (HDHP) and a health savings account (HSA). However, like so many others, Lori doesn’t fully understand her new plan/benefit account. All she knows is, with more of the cost of her healthcare coming out of her pocket, she must take more responsibility for decisions involving her healthcare spending and saving, as well as her personal health and wellness. After a lifetime of HMO and PPO plans, and minimal out-ofpocket healthcare expenses, this is uncharted territory for her.

benefit-account contributions and balances, to handling insurance/benefit claims, to receiving and paying medical bills and beyond—consumers, like Lori, will be doing these things from their mobile devices, if they aren’t already. However, balances and claims and payments are only part of the story. With more personal responsibility from a cost perspective, Lori must take a more active role in managing her own personal health—to avoid chronic conditions, better manage existing conditions, and improve her overall health and wellness—in order to lower the overall cost of her care. To do that, Lori needs diagnostic and wellness tools, incentive programs and personal health management tools, such as personal health records—all easily accessible, through the channel of her choosing (including mobile), and ideally accessed in the same place as her healthcare accounts/ financial information.

Employers are increasingly turning to CDH plans and accounts to help limit tax liability, health care premiums and payroll costs.

Employers, too, have a vested interest in educating employees like Lori about consumer-directed health plans (CDHP) and tax advantaged benefit accounts. With rapidly escalating healthcare costs—and the ongoing challenge of retaining employees while controlling costs—employers are increasingly turning to CDH plans and accounts to help limit tax liability, healthcare premiums and payroll costs. Incenting employees like Lori to enroll in and contribute to her HSA (and regard that account as a longterm savings vehicle), oﬀers significant cost savings for her employer.

In a perfect world, Lori should be able to easily find answers to her questions—from “What’s my HSA balance?” or “Have my claims been paid?” to “What are my immediate health risks?” and “What preventative procedures and checkups should I be scheduling?” Lori also should be able to easily find answers to those questions through any channel she chooses to use (whether online, by e-mail, phone, social media, or by using her mobile phone). Mobile, in particular, should be an important component of any consumer engagement strategy. The opportunity to employ mobile solutions to further empower a CDH experience is limitless. From verifying insurance coverage, to managing

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

FIS Healthcare Solutions is already helping employers, insurance plans, third party administrators, financial institutions, and healthcare providers realign their products and services to better support consumers like Lori. A leader in consumer-directed healthcare space, FIS provides a variety of tools and resources to help empower consumers to take a more proactive role in their healthcare— including healthcare benefit account administration and payment cards, an online consumer health/wealth portal, and mobile health and wellness applications. Still, there are challenges ahead, as consumer preferences continue to evolve, new channels, like social media, gain prominence, plan/account/program complexity continues to escalate, and new legislation continues to reshape the industry. As industry players attempt to position their own solutions to these challenges, we must all remain focused on two essential objectives: How do you best get consumers like Lori to think diﬀerently about their role in managing their own healthcare, and how do you empower consumers to make better, more informed choices about their healthcare? Stay tuned.

;

ﬁsglobal.com

We’re forging new connections between patients, payers, providers and financial institutions. The increasingly consumer-directed U.S. healthcare system is marked by rising costs, regulatory changes and chronic inefficiencies that plague all parties involved. FIS Healthcare Solutions is helping to transform the healthcare industry by facilitating the flow of information and funds between patients, payers, providers and financial institutions. Thanks to deep industry expertise, proven technology and extensive relationships across the financial and healthcare payments spectrum, FIS can deliver a complete healthcare solution suite that seamlessly connects thousands of individuals and organizations. As a result, healthcare providers get a single interface for streamlining HIPAA and financial transactions. Payers gain a consumer-directed healthcare (CDH) administration platform to improve relationships with members and employee groups. Patients have a more seamless healthcare experience – from saving and paying for care, to making treatment decisions. And financial institutions are well positioned to strengthen and grow their healthcare customer relationships. To learn more about our complete healthcare solution suite, visit www.fisglobal.com/healthcare.

FREE WEBINAR SERIES Learn about the future of healthcare payments www.ﬁsglobal.com/transformation Never Compromise.

FI N ANCIAL S OLUT IONS

•

PAYMENT SOL UTION S HEALTHCARE

•

B U SI N E SS C O N SU LTI N G

•

TE C H N O LO G Y SE RVI CES

HealtH Care COnsumerism

ligHtHOuse1 WWW.LiGHtHouse1.CoM

CDHC: A Different Kind of Health Care Reform H

ealth care reform continues to unfold through various legislative bodies of the U.S. government; we read and hear about it every day. And yet there’s another type of health care reform happening, a different kind. It’s not the type you can vote “yes” or “no” on; it’s not the kind requiring sweeping mandates or laws. This type of health care reform has grown rapidly over the past several years, framed by fundamental consumer behavior principles and structured by employment and tax laws. This health care reform is powered by a segment of the population that realizes health and wealth are permanently and critically connected. This reform reduces cost as a means to expand coverage, instead of believing the opposite approach will somehow work. So what is this different kind of health care reform? It’s consumer-directed health care (CDHC), and it’s the fastestgrowing—and most fiscally effective—health plan design available today.

How CDHC reduces Costs While health care reform may be a mandate for the government, it is an incredible struggle for both families and companies alike trying to find ways to stretch their health care dollars. There are four primary factors that help make CDHC an extremely attractive solution for lowering the cost of health care. These factors are: reduced insurance premiums, reduced utilization, the eﬀect of competition in the provider market, and automation that makes the plans cost-eﬀective and easier to administer.

reduced insurance Premiums To the employee, or more accurately the consumer, (after all, health insurance is a form of compensation) pays less for a higher-deductible, lower premium plan. By using high-deductible plans, premiums can drop substantially. If an employee has low health care expenses, this amount is immediately realized as savings by both the employer and the employee.

reduced utilization By coupling a high-deductible health plan with a health reimbursement account such as an HSA, HRA, FSA or other account, employees have several incentives to make not only

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

healthy lifestyle choices, but also better consumer choices. Healthy consumers spend less on health care. Smart consumers shop with care to get a better price on treatment and prescriptions, ultimately spending less.

effect of Competition in the Provider market As the trend of employers pushing responsibility for health care to employees continues with CDHC solutions, consumers are more engaged and motivated to shop for and manage their individual spending. In turn, this has forced price transparency and fueled demand and innovation for lower cost, consumer-centric delivery options. Simply put, healthy competition reduces price.

automation that makes the Plans Cost-effective and easier to administer Significant advancements in the technology and processing of CDHC plans include: administration platforms, consumer websites and support tools, mobile applications, and payment solutions such as health care debit cards. These tools simplify and streamline the overhead and cost associated with servicing CDHC plans.

The future As health care reform and debate continues to unfold, one thing is for certain: Current trends and innovative technologies will continue to play a strong role in creating an effective and powerful pool of consumers. As always, these consumers will bear pressure to lower costs and create much more efficient, affordable and available health care solutions. With more than 2.7 million consumers using Lighthouse1 ondemand™ to manage their HsAs, HrAs, FsAs, and transit Plans, Lighthouse1 is the nation’s largest cloud computing health care solution. More than 100 of the nation’s largest health plan providers, third party administrators and financial institutions use the innovative, web-based Lighthouse1 platform to administer their consumer-driven health care accounts. Lighthouse1 ondemand is the only solution available today that meets more than 1,100 unique benefit plan designs, simplifies the user experience, and satisfies workflow management needs of administration partners, employers, and consumers. Visit www. lighthouse1.com for more information. ;

This year, top Lighthouse1 Partners will grow an average of 98%.

Now is the time to join them.

Lighthouse1 and its partners serve more than 2.7 million consumers, making Lighthouse1 the nation’s largest web-based healthcare solution that manages HSAs, HRAs, FSAs, and Transit Plans. It is the only solution available today that meets more than 1,100 unique benefit plan designs, simplifies the user experience, and satisfies workflow management needs of administration partners, employers, and consumers. It does all this on one technology platform comprised of Lighthouse1 OnDemand, the Lighthouse1 OneCard, and fully integrated web-based portals available 24/7/365. Lighthouse1 and its partners are dedicated to reducing costs and simplifying the business of healthcare. For more information visit www.lighthouse1.com or e-mail sales@lighthouse1.com

Minneapolis • Fargo • Phone: 952.908.9056 • www.lighthouse1.com

Health Plans

By Clive Riddle President, MCOL

Health Plans Must Drive Through 2011

Survey Respondents see Consumers Ben

s health plans progress through 2011, they must address a myriad of health reform requirements and marketplace challenges, as well as the specter of uncertainties from still forthcoming regulatory guidance and court challenges to the Affordable Care Act and a Republican House determined to de-fund and otherwise roll back provisions from the Act. So where to begin in examining this landmine-filled landscape? Consider what industry-insider managed care and other health professionals think 2011 and beyond hold in store. Managed Care Online (MCOL) conducted our ninth annual Future Care survey during January. Respondents were asked which of the following health care business trends they thought would have the greatest overall impact. One can certainly see the ebb and flow of certain trends over time: The peaking of consumer-driven plans and consumer cost sharing after the introduction of health savings accounts (HSA); the realignment of all factors taking a back seat to the Great Recession in 2009; and the recent passage of health reform. Here’s this year’s and historical responses. Trend

2011

2010

2009

2008

2007

2006

2005

Significant

Moderate

Little

Unsure

None/Won't Happen

2006

2005

2004

ACO

31%

32%

23%

17%

14%

12%

MLR

28%

39%

20%

21%

23%

14%

Exchange

34%

37%

20%

Depend

22%

30%

44%

2004

EHR

36%

33%

23%

28%

14%

Guarantee

38%

34%

20%

26%

38%

36%

Medicaid

40%

42%

13%

24%

Mandate

40%

35%

13%

Advances in health care technology

12%

17%

14%

12%

Consumer-driven health plans

13%

18.5.%

21%

23%

14%

Compliance issues

Effects of the Recession

14%

26%

57%

Health Care Reform Initiatives

49%

37%

21%

24%

11%

28%

14%

Increased consumer cost sharing

11%

34%

40%

26%

38%

36%

Population Health initiatives

13%

24%

Other Grand Total

This year, we asked respondents to rate the ultimate anticipated impact in the marketplace of these selected health reform provisions: n Accountable Care Organization Development (ACO) n Health Plan Medical Loss Ratio Regulation (MLR) n State Health Insurance Exchanges (Exchange) n Extension of Dependent Care Coverage (Depend) n EHR Development—Meaningful Use (EHR) n Health Insurance Guaranteed Issue/ Elimination of Pre-Existing Conditions (Guarantee) n Expansion of Medicaid Coverage (Medicaid) n Mandated Coverage Provisions for Business and Individuals (Mandate)

12%

100%

Provision

Here’s how these provisions stacked up against each other: The Mandate, under attack in federal appeal courts, drew the highest level of response of any provision in both the Significant and the None/Won’t Happen categories. Lastly, we asked respondents to rank these stakeholders as winners or losers for the coming year. It would appear consumers and pharmaceutical organizations are viewed as the biggest winners, and employers and physicians are viewed as the biggest losers. Stakeholder

While respondents were generally consistent this year regarding these responses by their organization type, there were a few notable exceptions: n Twenty-five percent of vendors viewed population health initiatives as the top trend, compared to one percent of all other respondents. n Twelve and one-half percent of providers viewed advances in health care technology as the top trend compared to 4.2 percent of all other respondents. n Eighteen and seven-tenths percent of providers viewed the effects of the recession as the top trend compared to 9.7 percent of all other respondents.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Better Off

Same

Worse Off

2008

2007

2006

2005

2004

Consumers

37%

27%

36%

12%

17%

14%

12%

Employers

15%

30%

55%

13%

18.5.%

21%

23%

14%

Health Plans

32%

31%

37%

Hospitals

25%

34%

41%

Physicians

21%

29%

50%

24%

11%

28%

14%

Pharmaceutical

35%

43%

23%

34%

40%

26%

38%

36%

Being that respondents tend to rank most stakeholders as “worse off” each year, we’ll examine “worse off” responses from a historical perspective for consumers and health plans. The historical perspective illustrates how dramatically respondents feel consumers’ change of fortune has occurred with health reform compared to everyone else. Also interesting are the mood swings regarding health plan fortunes. Our own analysis of what 2011 and beyond hold in store for 2011 health plans addresses a confluence of factors including: reform,

11 without an up-to-date road map

nefiting at Other Stakeholders’ Expense Medicaid, ACOs and provider Worse Off Consumers Health Plans payment restructuring, physician 2011 36% 37% integration, EHR, wellness 2010 66% 55% incentives, and consumer-driven 2009 69% 54% plans, and more uncertainty. 2008 75% 13% The Republican House, 2007 72% 11% negative public opinions 2006 70% 46% and Federal judge rulings on 2005 63% 35% mandating coverage will continue 2004 78% 33% to have an influence on health 2003 75% 36% care reform implementation in 2011. Health plans will go forward with dual track objectives—tackling compliance with the array of Affordable Care Act and applicable state provisions, while attempting to best position themselves and influence outcomes as health reform endures an extended political and legal confrontation. As employment-based health coverage shrank during the past decade, Medicaid grew, particularly once the recession kicked in. The Affordable Care Act accelerated projected Medicaid enrollment for the coming years. Given that health care policy can most often be effectively dictated through the role as purchaser, Medicaid has increasing clout to impact policy in 2011 and beyond. Furthermore, the increased enrollment has made Medicaid the awakening giant for health plans and provider systems to deal with. Major health plans will increasingly look for Medicaid contracting, market expansions and plan acquisition opportunities. No one is waiting to see how Medicare ACO pilots set forth under the Affordable Care Act will turn out. This year will witness continued rapid deployment of ACO development and operational initiatives in the commercial and Medicaid sectors. Health Plan provider network departments across the nation have already reached out to developing ACOs and have forged initiatives to assist in their development. At the same time, there is a groundswell of warnings throughout the industry about getting involved with ACOs. Never has there been swooning in the marketplace over a hot new trend without the accompanying follow-up of naysayers, attributing all the attention to hype, smoke and mirrors. Quite often, it can be for good reason. But by the end of 2011, health plans won’t know if that’s the case or not for ACOs. The health plan provider-contracting environment will be subject to much greater change and upheaval in 2011. Whether driven by new delivery system initiatives such as ACOs, medical homes, and integration initiatives; general payment restructuring, such as by episode of care; or network restructuring initiatives, such as narrow networks, 2011 will witness significantly heightened activity. Health plans will need to be positioning for the implications of increased physician integration. It isn’t just all about potential

ACO development. Whether due to EHR/Meaningful Use pressures, economic pressures, perceptions of the future outlook for health care, and a host of other factors, physicians in private practice will continue to integrate into larger medical groups or with health care systems at an increasing rate in 2011. Find some major employers in 2011 that aren’t deploying health risk assessments and financial incentives for employees to engage wellness and lifestyle health care issues, and they most likely are developing plans to do so. Those already involved will continue to roll out additional programs, particularly seeking how to reach into dependent engagement. Health plans will strive to offer such programs as an integrated feature for employers, versus having the component carved-out through third-party vendors. Health plans also will grapple with how to build or enhance such programs in their individual and government program products. Broadband Internet connectivity existed for sometime before it reached enough critical mass for consumers nationwide to routinely watch YouTube videos of 2-year-olds biting their older brothers’ fingers. In 2011, there will be enough medical groups, hospitals, health plans and consumer portals to engage and transact a material segment of the consumer population with their health care, and the impact of this ongoing transformation over time will be immense. Health plans will need to continue enhancing investments in such initiatives. HSAs and consumer-driven plans were written off by pundits as health care reform coalesced during the past two years. But the plans are survivors, and reports keep coming out documenting moderate, steady growth, that over time, makes them an important factor in the health benefits equation. Health plans will continue to dedicate material resources toward their consumer-driven initiatives, particularly for ASO clients. There’s so much unknown country to drive through: n How much will health care reform backlash affect reform implementation? n What will be the specifics of various implementing regulations? n Will the economy pick up steam or not? n How are other stakeholders going to behave in this environment? Often, with major uncertainties afoot, organizations can tend to hunker down for the time being. But with so much at stake, 2011 will require that health plans figure out how to drive forward without an up-to-date road map. ; Clive Riddle is president of MCOL (http://www.mcol.com), a leading publisher of health care business information. A 30-plus-year health care veteran, Clive served 12 years as CEO of a regional hospital-owned managed care organization. Clive is often quoted in industry media on related issues, has been a frequent speaker at national conferences, and recently authored his first novel: Dorris Bridge. He can be reached at cliver@mcol.com or 209-577-4888. EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

HealtH Plans

Consumers in Control of Their Health With CDHPs

hile we all know that genetic factors figure prominently in our overall health, everyday factors like behavior and lifestyle choices account for a large percentage of an individual’s overall health: between 50 to 80 percent of a person’s health status*.

This means that reaching out to an individual prior to decision-making is an excellent way to make a positive, measurable diﬀerence. Done throughout a large population— like the workforce of a mid-sized company—these changes can have a significant positive influence on health care costs. With these principles in mind, UnitedHealthcare has created an entire portfolio of consumer-driven health plans, or CDHP. The premise behind these plans is simple: An employer sets up either a health savings account (HSA) or a health reimbursement account (HrA) to allow members to pay for their health care expenses. Both accounts also provide members and employers certain tax advantages; both may allow funds to roll to the next year, but when an employee leaves the company, HRA funds revert to the employer, while HSA funds stay with the employee, to be used for future health care expenses. CDHPs put members in control of their health, and their own health budgets, by giving them freedom to use these funds as they see fit. These plans help members learn about their own health care needs and understand all of their options. By helping members get the right information about their health and their options, CDHPs encourage them to make informed decisions, which can ultimately lead to better outcomes for everyone.

access Helps members make Better Decisions about Their Health. Access is a critical component to making CDHPs work: access to information, and access to the right medical care, at the right time. Most of UnitedHealthcare’s CDHPs oﬀer members their pick from a nationwide physician network that includes: n More than 645,000 physicians and health care professionals n More than 5,100 hospitals n Pharmacy locations that number greater than 60,000 With numbers like these, care is accessible. UnitedHealthcare provides online tools to help members evaluate their options and make more informed decisions. These tools include:

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

The UnitedHealth Premium® designation program, which lets members review standardized reports ranking doctors and specialists on their ability to provide quality, cost-efficient care that promotes better outcomes. The Treatment Cost Estimator, which provides condition-specific cost estimates based on where care is received, so members can investigate their options and make more informed decisions about spending their health care dollars. Quicken Health Expense TrackerSM, which lets them review their claims and payments, and manage their spending Personal reminders for health screenings and routine care, a simple but potent tool produces real results

wellness tools That put Better Health in reach UnitedHealthcare’s CDHPs also include wellness programs and services that emphasize self-management and underscore the relationship between everyday decisions and overall health status. These programs address common concerns, ailments and health goals, including: n Diabetes n Smoking cessation n Weight loss and nutrition n Activity and physical fitness

superior service and solutions for employers The high quality, innovative plans are only part of the reason UnitedHealthcare is the industry leader in CDHPs. n Plans were designed to be easy to administer n All UnitedHealthcare CDHPs come with fully integrated banking services and turnkey implementation tools for both employers and employees. To learn more about the impact UnitedHealthcare’s CDHPs can have on your business, contact your broker, call 1.866. 438.5651, or read more online at uhctogether.com/CDH. ; *Source:

Adapted from Department of Health and Human Services, Centers for Disease Control and Prevention. . For a complete description of the UnitedHealth Premium® Designation program, including details on the methodology used, geographic availability, program limitations and medical specialties participating, please see myuhc.com®. ©2011 United HealthCare Services, Inc. Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Administrative services provided by or through UnitedHealthcare Insurance Company, United HealthCare Services, Inc. or their affiliates. Health plan coverage provided by or through a UnitedHealthcare company.

changes in behavior couLd Lead to better heaLth.*

UnitedHealthcare’s industry-leading consumerdriven health (CDH) plans were designed to get employees on the path to good health with improved lifestyle habits and use of the health care system. That’s why our plans offer: • 100% coverage for preventive care • Access to the right information at the right time, including the quality and costefficiency of network physicians through the UnitedHealth Premium® designation program • Personalized treatment reminders and a Treatment Cost EstimatorSM Tools like these are designed to change employees’ behavior by getting them actively involved in their health care choices.

For more information on UnitedHealthcare’s CDH plans, visit uhctogether.com/CDH or call 1.866.438.5651.

* Source: Adapted from Department of Health and Human Services, Centers for Disease Control and Prevention. ©2011 United HealthCare Services, Inc. Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Administrative services provided by or through UnitedHealthcare Insurance Company, United HealthCare Services, Inc. or their affiliates. Health plan coverage provided by or through a UnitedHealthcare company. UHCEW506202-001

stats & Data: HealtH Plans

Aetna Study Shows Consistent Growth for CDHP, Increased Engagement for CDHP Members In a study by Aetna, consumer-directed health plans have not only demonstrated significant savings for employers but also continued correlation with far more engaged health care consumers. Employers that have transitioned from a Preferred Provider Organization (PPO) or other traditional health benefits plans to an Aetna HealthFund consumer-directed plan (CDHP) saved $21.5 million over a five-year period for every 10,000 members, and members of CDHP accessed preventative care and screenings more frequently than PPO members. 50

Percent

40 30 20 10 0

Highlights From the National Health Care Quality and Disparities Reports

Each year since 2003, the Agency for Healthcare Research and Quality (AHRQ) has reported on progress and opportunities for improving health care quality and reducing health care disparities. One problem the report uncovered was limited access to health care. Access to care is far from optimal. On average, Americans report barriers to care one-fifth of the time, ranging from 3 percent of people saying they were unable to get or had to delay getting prescription medications to 60 percent of people saying their usual provider did not have oﬃce hours on weekends or nights. The key is access to health insurance. Health insurance facilitates entry into the health care system. Uninsured people are less likely to receive medical care and more likely to have poor health status. The costs of early death and poor health among uninsured people total $65 billion to $130 billion annually. The financial burden of uninsurance also is high for uninsured individuals; almost 50 percent of personal bankruptcy filings are due to medical expenses. Uninsured individuals report more problems getting care, are diagnosed at later disease stages, and get less therapeutic care. They are sicker when hospitalized and more likely to die during their stay.

financial Burden of Health Care Costs According to the study, which is the longest-running consumerdirected health plan review, health savings account (HSA) members are much more likely to be engaged, pro-active health care consumers. HSA members utilized online tools three times as often as PPO members and took a health assessment twice as often. They spent 12 percent more on preventative care and generally accessed high levels of screening for breast and cervical cancer compared with PPO members. The results of the study, which extended from Jan. 1, 2002 to Dec. 31, 2009, also showed HSAs continued to offer more savings than health reimbursement accounts (HRA). Compared with HRA members, HSA members had 15 percent lower primary care physician utilization for non-routine visits, 11 percent lower specialist utilization and 9 percent lower overall medical cost in 2009. Companies offering Aetna HealthFund HRA and HSA plans as an option saved $9 million over a five-year period for every 10,000 members enrolled in all health plan options. The study found that generally employers who offered plans that encourage employee engagement in their health plans demonstrated the best 2009 total costs trends.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Health insurance is supposed to protect individuals from the burden of high health care costs. However, even with health insurance, the financial burden for health care can still be high and is increasing. High premiums and out-of-pocket payments can be a significant barrier to accessing needed medical treatment and preventive care. One way to assess the extent of financial burden is to determine the percentage of family income spent on a family’s health insurance premium and out-of-pocket medical expenses. Overall, in 2007 about 16.3 percent of people under age 65 had health insurance premium and out-of-pocket medical expenses that were more than 10 percent of total family income. The percentage of people under 65, whose family’s health insurance premium and out-of-pocket medical expenses were more than 1 percent of total family income, was nearly three times as high for individuals with private non-group insurance as for individuals with private employer-sponsored insurance (46.7 percent compared with 15.8 percent.) There was no significant diﬀerence between publicly insured individuals and individuals with employer-sponsored insurance. The percentage of people under age 65 whose family’s health insurance premium and out-of-pocket medical expenses were more than 10 percent of total family income was higher for individuals living in non-metropolitan areas than for those in metropolitan areas overall (21.1 percent compared with 15.4 percent). Individuals living in non-core areas were more likely than individuals living in large central metropolitan areas to have health insurance premium and out-of-pocket medical expenses of more than 10 percent of family income (19.7 percent compared with 14.0 percent). ;

Promotions 401k matching Anniversary gifts Annual retreat Free coffee Free parking Profit sharing Company cars Expense accounts Vacations

Most employee incentives cost you money. Here are two that donâ&#x20AC;&#x2122;t.

Prescription Savings Card

Incentive #1: Prescription Savings Card

Incentive #2: My HSA Rewards

The My HSA Rewards program offers a complimentary prescription savings card that will allow users to reduce the costs of commonly used prescription drugs by up to 75%, including many typically excluded drugs. The card is a supplement to pharmacy benefits and does not replace insurance.

If your company provides employees with the opportunity for an HSA, you will want to explore the complimentary HSA rewards program. My HSA Rewards is designed to help your employees contribute more money to their HSAs simply by shoppingâ&#x20AC;&#x201D;with additional cash back rewards when they use their prescription savings card.

To get this complimentary prescription savings card for you and your staff, or for more information, please visit www.myhsarewards.com/home/CDHC.

For more information about My HSA Rewards, review our advertorial on the opposite page and visit us at www.myhsarewards.com/employers.

Health Care Consumerism

By Ronald E. Bachman President & CEO Healthcare Visions

Health Care Consumerism: The Health Insuran

he Patient Protection and Affordability Act (PPACA) allows for continued use of health personal care accounts and expands the rewards and incentives based on health status (outcomes) to 30 percent of the insurance value for individuals and families. While these insurance options may not be the focus of the PPACA, they are allowed with some limitations and a few new restrictions. The type of account(s) to use and how to structure them will depend upon final regulatory guidance and legislative interpretations. The future of employment-based health insurance is much more than the potential of government-provided health care or employers implementing high-deductible consumer-driven health care (CDHC) plans with attached saving accounts. The future is about empowering individuals with information and financial responsibility to support a position of ownership. It’s about supporting and rewarding healthy behaviors regardless of plan design. It’s about engaging employees, employers, providers, carriers, and other stakeholders in a new relationship, dealing with health rather than sickness and disease. For employers, health care is similar to a maintenance contract for supporting optimal physical and mental functioning of their employees—their human capital. No business would want to turn their equipment maintenance over to the federal government. Employers are not interested in turning the maintenance of their human capital over to government insurance. A Towers Watson survey found that beginning in 2014, when large employers must offer at least the government defined “essential benefits” to full-time employees or pay a penalty, 88 percent of surveyed employers are either definitely, or likely, to continue providing health benefits. Of course, human capital and equipment capital are very different. Human capital brings intelligence, problem solving, creativity, teaming, and “entrepreneurial” values to a business. Employees bring understanding, compassion, mentoring, and flexibility. That is why human capital is the most important asset of any business. Studies from the Health as Human Capital Foundation (HHCF) indicate identical companies, with equalized populations, and the same benefits can have an 84 percent difference in health care costs. Lowering costs is not about more government or private vendor management of care, limiting formularies, or cost shifting. Changes are required across the corporate environment with consistent messages and an emphasis on personal responsibility. It is not just health care. It is about employees’ active engagement in all aspects of the employment relationship. A June 2010 survey, supported by the Institute for Health and Productivity Management, found that 62 percent of American businesses and nearly 85 percent of employees say the workplace must play a leadership role in creating a healthier workforce and

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

helping to curb rising health care costs. In their own self interest, employees want employers to take an active role in creating a healthy workplace. As individuals, personal human capital is the economic value workers bring to a company. The Health as Human Capital Foundation (HHCF) defines human capital as three personal assets: 1. Skill – education and experiences, 2. Motivation – attitudes and values, and 3. Health – physical and mental capacity. The development of personal human capital creates income opportunities and long-term financial growth for individuals. Without health, all the other aspects of personal human capital are quickly diminished. Individual health and a healthy workplace is the link between personal career interests and corporate productivity interests. There are several confusing accounts with different legislated and regulatory requirements. Health savings accounts (HSA)s and health reimbursement accounts (HRA)s are the newest forms of personal care accounts. These new accounts add to the previous use of flexible spending accounts (FSA)s. The current use of these accounts by high deductible consumer-driven health care plans (CDHP)s is just the first generation of change leading to the ultimate form of CDHP—health care consumerism. The existing health care system has a fundamental structural problem. Third-party reimbursements and the absence of individual financial responsibility foster an environment of entitlement and unlimited demand for health care services. The current system is based on a supply-control model. Because demand is assumed to be unlimited, to contain costs plans currently limit access to providers and control the supply of care (e.g. it’s not medically necessary, it’s not available, it’s not covered, you’re not sick enough, you’ll have to wait for that service). The future of health care is based on a demand-control model with economic forces similar to those affecting all other purchasing behaviors. Clearly, health and health care are not the same as purchasing other goods and services; however, certain megatrends have been impacting our economy and service industries that parallel health care, such as: 1. Personal Responsibility 2. Self-Reliance, self-help, self-care 3. Individual Ownership 4. Portability 5. Transparency (the right to know) 6. Consumerism (empowerment)

future of employment-Based ce Post PPaCa Health care consumerism is about transforming an employer’s health benefit plan into one putting economic purchasing power—and decision-making—in the hands of participants. It’s about supplying the information and decision support tools they need, along with financial incentives, rewards, and other benefits encouraging personal involvement in altering health and health care purchasing behaviors. Health care consumerism is independent of plan design. Health care consumerism includes opportunities to accumulate funds through “shared-savings.” That is, plan members can be financially rewarded for doing the right activities that improve their health and save money. Rewards can include activities such as participation in a wellness assessment, compliance with a condition management program (e.g. taking medications, diet, exercise, office visits), and maintenance of good health characteristics (e.g. blood pressure, cholesterol, nicotine use, body mass index).

Health Care Consumerism Building Blocks The five key building blocks of health care consumerism are: 1. Personal Accounts (FSAs, HRAs, HSAs) 2. Wellness/Prevention and Early Intervention Programs 3. Disease Management and Case Management Programs 4. Information and Decision Support Programs 5. Incentive and Compliance Reward Programs Numerous studies indicate early adopters of the first generation consumerism plans are seeing positive results from greater use of preventive care services and lower year-over-year health care cost trends. The consumerism movement, now focusing on behavioral change, is in its second generation of designs. Future third and fourth generations and the ultimate forms of health care consumerism have yet to fully develop, as products and services are only now evolving to meet the challenges ahead. The 2009 American Academy of Actuaries multi-year study of health care consumerism

concluded that first year claims could be lowered by 12 to 20 percent with future cost trends decreased by 3 to 5 percent. Employers and insurers would be wise to consider health care consumerism as allowed under the PPACA. Under the legislation, financial rewards, based on health status, are increased from 20 to 30 percent. The Secretary of Health and Human Services has the authority to increase that limit to 50 percent. In addition, the PPACA allows unlimited rewards and incentives for participation and engagement. It is the creative development, efficient delivery, efficacy, and interaction of these elements that will prove the success or failure of health care consumerism. There are two basic requirements for a successful health care consumerism strategy. A plan based on health care consumerism must: 1. Encourage and attract enrollment from the sickest members, as well as the healthy, and 2. Work for those members not wanting to get involved in decisionmaking as well as those that do. Many criticize first generation consumerism CDHPs as only benefiting the young, healthy, and wealthy. Those concerns were mitigated as CDHPs evolved beyond the first generation CDHP plans to more sustainable and effective second generation health care consumerism focusing on rewards and incentives to support employee engagement and behavioral change.

The Promises of Consumerism Major Building blocks of Consumerism Personal Care Accounts Wellness/Prevention Early Prevention

The Promise of Demand Control & Savings

The Promise of Wellness

Disease and Case Management

The Promise of Health

Information Decision Support

The Promise of Transparency

Incentives & Rewards

The Promise of Shared Savings

It is the creative development, efficient delivery, efficacy, and successful integration of these elements that will prove the success or failure of consumerism.

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Health Care Consumerism cont’d

The Evolution of Health Care

Future Generations of Health Care Consumerism Traditional Plans

Low Impact

Traditional Plans with Consumer Information

1st Generation Consumerism

2nd Generation Consumerism

3rd Generation Consumerism

4th Generation Consumerism

Focus on Discretionary Spending

Focus on Behavior Changes

Integrated Health & Performance

Personalized Health & Health Care

BEHAVIORAL CHANGE AND COST MANAGMENT POTENTIAL

High Impact

Four Generations of Health Care Consumerism

Second Generation Consumerism – Focus on behavior Experience from the early adopters of CDHPs formed the basis changes and the use of all plan designs with individual and group for improved versions, creative new ideas, and exciting product incentives/rewards to effectively change health and health care designs. First generation health care consumerism focused on plan purchasing behaviors. Impact: Chronic & Persistent Conditions, design and discretionary expenses (prescription drugs, office visits, Pre-Natal, Wellness & Preventive care. and emergency room use). First generation plans mainly impacted the Third Generation Consumerism – Focus on health 80 percent of members who generate only 20 percent of total health and organizational performance and the integration with how care costs. Second generation products are now available focusing consumerism and behavior change affects work performance and on behavior changes, including chronic and persistent diagnoses the corporate bottom line. Impact: Organizational health, turnover, (e.g. diabetes, asthma, congestive heart failure, depression). More absenteeism, productivity, disability, presenteeism, unscheduled sick improvements are rapidly on the way to effectively deal with the 20 days, creativity, and teaming. percent of the population who generate 80 percent of total costs. Fourth Generation Consumerism – Focus on lifestyle, Greater awareness by employers, insurers, and a growing lifecycles, personal health needs, and the impact of how behavior number of vendors are building a reservoir of thoughtful and creative change affects personal health and health care. Impact: Lifecycle new solutions. National and regional insurers have invested millions needs, personal health, genetic predispositions, predictive modeling, in new systems and product development. Second, third and even healthy habits, and wellness. fourth generation products are being developed and envisioned as It is important to recognize each generation builds on and the transformation to health care consumerism is now well under includes the previous generations. One generation of health care way. consumerism does not necessarily replace the prior generation. Also, First Generation Consumerism – Focus on high-deductible no one stakeholder (e.g. employee, employer, insurer, provider) plan designs, implementation of personal care accounts 1st Generation 2nd Generation 3rd Generation 4th Generation The Health Care Consumerism Consumerism Consumerism Consumerism (HRAs, HSAs, FSAs), and Consumerism Focus on Focus on Integrated Personalized basic decision support Discretionary Behavior Health & Health & Grid tools. Impact: Discretionary Spending Changes Performance Health Care Expenses. Initial Account Only

Activity & Compliance Rewards

Indiv & Group Corporate Metric Rewards

Specialized Accts, Matching HRAs, Expanded QME

100% Basic Preventive Care

Web-based behavior change support programs

Worksite wellness, safety, stress & error reduction

Genomics, predictive modeling push technology

Disease and Case Management

Information Health Coach

Compliance Awards, disease specific allowances

Population Mgmt, Integrated Health Mgmt, Integrated Back-to-Back Work

Wireless cyber-support, cultural DM, Holistic care

Information Decision Support

Passive Info Discretionary Expenses

Personal health mgmt, info with incentives to access

Health & performance info, integrated health work data

Arrive in time info and services, information therapy

Incentives & Rewards

Cash, Tickets, Trinkets

Health Incentive Accts, activity based incentives

Non-health corporate metric driven incentives

Personal dev plan incentives, health status related

Personal Care Accounts

Wellness/Prevention Early Prevention

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

can advance too far into the future without the involvement and participation of the others. As such, we can expect a slow but methodical advancement over the next few years as the iterative process of demand for products and services are met and new demands are made and needs surface to challenge the entrepreneurial spirit of the market.

The Health Care Consumerism grid

Potential Applications for Personal Care Accounts Untapped Potential for Health Care Consumerism

Personal Care Accounts Wellness/Prevention Early Prevention Disease and Case Management Information Decision Support Incentives & Rewards

Most Consumer-Centric Plan Designs Typical CDHC

Traditional Plan Designs

HMO

EPO

POS

PPO

Must Meet HSA Legal Definition

HDP PPO

Co-Payment Designs

Deductible & Co-Insurance Designs

Medical FSAs – Ordering Important if used with HRAs

Ltd and Non-plan FSA

Health Incentive Accounts (Incentive Based HRAs)

Initial $500 - 1000 HRA Incentive HRAs

HSA

HSA & HRA Match & Incentive HRAs

A visual framework for Incentive viewing the future of health care HSAs consumerism is the combination HDHP = High Deductible Health Plan as defined in HSA legislation of the four generations and the five building blocks. The overall goal of health care consumerism is to assist individuals window for spending. This limitation is typically referred to as “use-itin making more informed health and health care decisions, which will or-lose-it.” PPACA also lowers the annual limit of FSAs from $5,000 favorably impact clinical outcomes and lower the cost of health care. to $2,500. Personal Care Accounts (HRAs, HSAs, and FSAs) can still be Creative combinations of HRAs, HSAs, and FSAs are possible utilized under the PPACA. HRAs may get a boost under the PPACA under the PPACA, but are limited due to certain legislative and once the Secretary of HHS. outlines the standards and mandates for regulatory prohibitions. Below is a visual representation of how “essential benefits” as required under the PPACA. Introduced under personal care accounts can be used with different plan designs. new Treasury regulations in 2002, the flexibility and accumulation Regardless of the type of plan (HMO, EPO, POS, or PPO), feature of HRAs allows them to be creatively used with any plan health care consumerism can be implemented to achieve the desired design. effect of consumer involvement, changed health and health care Introduced in 2003 legislation, the triple tax advantaged HSAs behavior, added member financial security, and improved employee may be limited by additional PPACA plan design restrictions. satisfaction. The PPACA limits the potential of substituting HSA savings for As employers continue to wrestle with the complexities of the premiums by requiring the maximum plan deductible to be no more PPACA, health care consumerism seems to be the silver lining in than $2,000 for small group plans. Introduced in 1978, FSAs are of the new legislation. Employers would be wise to take advantage limited accumulation value because unused funds cannot be carried of the savings and improved health of their workforce that is over from year to year. Unused funds, even if contributed by the encouraged by the PPACA by implementing some form of health employee, revert to the employer if not used within the 12-15 month care consumerism. ;

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

HealtH Care COnsumerism By trey Jinks President tsys HealtHCare

Building Consumer-Directed Health Care Adoption tax advantages of Consumer-Directed Health Care (CDHC) The health care industry has entered a new paradigm. In the past, health benefits were frequently just part of the compensation package and employees spent little effort earning those benefits. As health and wealth become more intertwined, our industry shares a community obligation and opportunity to create the comprehensive solutions engaging employers and employees to adapt and to adopt the responsibilities of consumer-directed health care (CDHC). For many employers, flexible spending accounts (FSA)s are often the most under-utilized benefit offered to employees. According to the 2009 Mercer national survey of employersponsored Health Plans, 85 percent of U.S. Employers offer an FSA with an average participation of 18-20 percent. The under-utilization of FSAs is surprising because it is one of the few benefits that has a payback for both the employee and the employer. Both enjoy pre-tax savings and employers may be able to negotiate better health plan premiums using higher deductibles, and potentially fewer claims. Tax-advantaged accounts will save employees 30 to 40 percent in taxes on their contributions. What a great way to save money for health care.

U.S. employees were invited to complete a survey regarding their use of FSAs. Those who participated were entered into a drawing to win an iPad. Nearly half of our 5,613 U.S. employees participated, providing insight for structuring a comprehensive communication plan based on what motivates our employees. Not surprising, the most common reasons for participating were tax-savings and the ease of use with payment card access. The most common reasons for not participating were fear of use-it-or-lose-it and expenses were too low to need an FSA. The communication plan included postcards, flyers, and e-mail blasts. A Web page with Q & As and FSA information sources was provided prior to and during open enrollment, and will be updated all year. We’re even considering employee testimonials about using their FSA funds.

The net result of these efforts was a record 52 percent enrollment for 2011. Up from 48 percent in 2010, that’s nearly triple the national average.

Many of the CDHC adoption diﬃculties facing the industry are, by nature, consumer-centered. In the flurry of launching new ideas, products, and programs aimed at the consumer to drive down the cost of health care, the common denominator is consumer engagement. The engagement tools in use today are components of the complete CDHC solution, and tying them together can be challenging. Employee engagement initiatives must answer employee uncertainty. It starts with a well designed plan that includes tax-advantaged accounts-health reimbursement arrangements (HRA)s, health savings accounts (HSA)s and flexible spending accounts (FSA)s as well as clear communication about how they work.

fsa adoption—a success story In August 2010 we formed a TSYS team to examine and increase FSA usage among employees for 2011. We already had a high participation rate, but we wanted to see if we could move it even higher.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

The net result of these eﬀorts was a record 52 percent enrollment for 2011. Up from 48 percent in 2010, that’s nearly triple the national average. In a year when the cap on FSAs was heavily debated—causing concern for every user—average contributions at TSYS rose 9 percent, to $1,500, with average tax savings of $456 per participant. Our communications highlight the benefits of tax-advantaged savings with everyday life examples of usage and help to diﬀuse employee confusion or concern. Our goal is to deflate uncertainty and inflate acceptance and maybe even add a little excitement about cost saving options for improving health and wealth. Communication takes many forms and every employer has its own unique approach to sharing information with employees. The key to making communication sticky is to first identify what information employees need to fully understand their options. Only then can you deliver the messages that help them arrive at a comfortable level of acceptance and engagement. Clear communication is the key, and when it comes to tax-advantaged accounts in consumer-directed health plans, you can never say too much about a good thing. ;

Do Your Beneﬁt Plans Need an Affordable Payment Card Solution?

It’s never been easier!

It’s never too soon to upgrade your technology. Now you can get all the functionality you need to launch your health beneﬁts card payment solution. The best part? You don’t have to be one of the big guys to do it affordably.

Ready to launch when you are. TSYS Healthcare® and Superadmin.com have powered a payment solution to move a small to midsize portfolio onto a card program at a low cost for each member per month. It’s fast, efﬁcient and affordable. We’ve removed the barriers of complex pricing and minimums so you can add the efﬁciency of a payment card in all your plans. ALWAYS INCLUDED:

NOT REQUIRED:

• Superadmin TPA software*

• Setup Fees

• TSYS My Care Card® FSA/HRA payment card with advanced HRA functionality

• Minimum number of accounts

• Administrative and Cardholder Portals

• Minimum fee commitment

*The Superadmin.com beneﬁt administration system is a real time online solution, designed by TPAs for TPAs to build complex design plans for employers.

We’ve got the powerful tools you need to upgrade your payment solution. Fast • Easy • Efficient • Affordable

TSYS Healthcare www.tsyshealthcare.com healthcare@tsys.com +1.612.338.3871

Plan Designs

as Unique as

Your Clients

DataPath understands that benefit consultants need plan designs as unique as the employers and families they serve, and a system to process those comprehensive plans. Since 1995, DataPath has led the industry by providing the ability to offer plan designs with embedded deductibles, including multiple HRA and MERP plan designs using an HDHP as overhead coverage.

DataPath 105 includes:

Comprehensive plan design, simplified administration.

II C E

SAS

R T IF I C A TI

800.633.3841 • www.dpath.com • sales@dpath.com

II CERTIFICAT I

• Multiple embedded deductibles • Flexible plan design and benefit setup • Stack MERPs, HRAs and FSAs alongside HSAs • Claim adjustments for processed or unprocessed claims • Fully integrated debit card and FSA benefits • Multiple funding methods, including annual, prorated or payroll frequencies • Ability to credit participant accounts at varying frequencies with different amounts • Import employer contributions

SUccEEd in A tiME oF UncErtAinty Understand the health care laws. Manage better health & benefit choices. Empower your employees.

Featured Speakers Ron Bachman

FSA, MAAA, Sr. Fellow, Center for Health Transformation; President, Healthcare Visions; Chairman of CDHC Solutions Editorial Advisory Board

Roy Ramthun

Tom Torre

Jon Comola

SVP General Manager, FIS Consumer Driven Healthcare Solutions, FIS Global

President, HSA Consulting Services, LLC; Former Senior Health Policy Advisor to President George W. Bush

CEO and Chairman, Wye River Group; Founder of Foundation for American Healthcare Leadership

John Hickman

John Young

Vice President â&#x20AC;&#x201C; Consumerism CIGNA HealthCare

Partner, Alston+Bird LLP

www.cdhcsolutionsforum.com Who Should Attend?

CEOs/Presidents/CFOs HR and benefits executives Health plan administrators Corporate wellness and medical directors Benefit brokers Third party administrators Benefit consultants Bankers

www.cdhcsolutionsforum Benefits of Attending The 2nd Annual CDHC Solutions Forum conference series, produced by CDHC Solutions magazine, is designed for employers, TPAs, benefit brokers, consultants and regional health plan providers seeking strategies to enhance their current health and benefit offerings, and the tools to implement them. The conferences are focused on consumer-directed health care, including: • Pharmacy benefit management • Population health and wellness strategies • Employee incentives and communications • HSA/HRA/FSA administration • New health care law Featured speakers and top industry leaders will share valuable information and experiences that you cannot afford to miss.

You will walk away knowledgeable, inspired and prepared to implement new health care strategies to save your company time and money. It is our pleasure to host this conference series. We thank you for your participation and we continue to pledge unmatched dedication to integrity and knowledge in the industry through our forums, publications and online communities.

Doug Field President, Publisher, CEO FieldMedia LLC

Ron Bachman, FSA, MAAA Chairman CDHC Solutions Editorial Advisory Board

ForUM EASt 2011

Atlanta

2011 Conference Locations Forum East 2011, May 11-May 12 Atlanta, GA Cobb Galleria Centre New for 2011, the East Forum has expanded to a day and a half with six featured speakers, eighteen workshops and two pre-conference workshops. Plan to attend one of the pre-conference workshops (additional fees apply) for hands-on, exclusive health and benefit solutions.

Forum West 2011, September 15 Denver, CO Marriott Tech Center

Pre-Conference Workshops: • Health Care Reform: What Happened? What is to Come and What is Still Needed? Includes a complimentary one year, full subscription to the Health Reform Navigator (a $99 value) •

CDHC Certification Course, brought to you by NAHU (National Association of Health Underwriters) Approved for insurance continuing education credits

Visit www.cdhcsolutionsforum.com to preview the agenda and register for the conference.

New for 2011, the Forum West conference will be held in Denver, CO. The West Forum will include six featured speakers, eight workshops and an interactive employer panel. Visit our website to view the latest agenda.

Take advantage of our Early Bird rates by registering before 7/29. Go to www.cdhcsolutionsforum.com.

ForUM WESt 2011

m.com

SUccEEd in A tiME oF UncErtAinty

Plan Ahead and Save

Significant savings for advance registration

Forum East: Early Bird deadline, March 31, 2011 Attendee conference registration includes: • Three innovative workshops of your choice • Four general sessions with top industry leaders • Continental breakfast, all-day breaks and boxed lunch • Opening night reception • Conference workbook with all presentations • Free parking

Forum West: Super Saver deadline: March 31, 2011 Early Bird deadline: July 29, 2011 Attendee conference registration includes: • Two innovative workshops of your choice • Three general sessions with top industry leaders • Continental breakfast, all-day breaks and boxed lunch • Conference workbook with all presentations • Free parking

Group rates are available for both events. Register at www.cdhcsolutionsforum.com. Dress for the conference is business casual.

Gold Sponsors

Silver Sponsors & Exhibitors

Partnered with

Produced by CDHC Solutions™, a FieldMedia Property

Pharmacy Benefits Management

By Mark Merritt President & CEO Pharmaceutical Care Management Association

Promote Greater Use of Proven Tools for Greater C

ver the past decade, America’s pharmacy benefit managers (PBMs) have led the effort to put the brakes on runaway prescription drug costs for consumers, Fortune 500 employers, and government programs. PBMs are hired by unions, large employers, and Medicare to help design and manage quality drug benefits that are affordable and accessible to the masses. This partnership resulted in drug spending during the 2007-2009 period to grow at the slowest annual rate in more than 40 years. The increased use of generic drugs also aided in dampening the impact of increasing prices on brands. Since the key to access is affordability, promoting the use of proven PBM tools and technologies—including pharmacy networks, mail-service pharmacies, utilization management, and electronic prescribing—will generate increased competition and reduce prescription drug costs for consumers and payers. In addressing health care spending in 2011, key stakeholders will be more open to leveraging greater use of these tools while rejecting policies that will only increase costs for consumers and payers. Moving forward, these options include:

Expand Pharmacy Delivery Options. Today, chronic care accounts for roughly 75 percent of the nation’s health spending. More

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

than 90 percent of prescriptions are filled by the chronically ill for whom prescription drugs provide the first line of defense. In light of this, consumers—and the employers, unions, and government agencies that provide benefits—are increasingly turning to mailservice pharmacies to save money and improve pharmacy care. While numerous independent studies have documented that mail-service pharmacies reduce drug costs and provide greater safety and convenience, Medicare beneficiaries are not given the same incentives to use this proven delivery system as the under-65 population. This is costly and unfortunate since home delivery reduces costs and increases convenience for seniors and the disabled.

Encourage Greater Competition Among Drug Manufacturers. The private market encourages manufacturer competition by covering some drugs more favorably than others, and generic drugs most favorably of all. Regrettably, Medicare Part D insulates drug makers from competition. It requires drug plans to cover “all or substantially all” drugs in at least six different drug classes, despite no evidence that patients had difficulty accessing these drugs. In doing so, this provision merely allows brand name drug makers to charge more

Pharmacy Benefits management onsumer, Payer savings because they know plans are required to include their drugs on formularies, whether they offer discounts or not.

and ingredient costs (the reimbursement for the cost of the actual drug). Unlike Medicaid fee-for-service (FFS) programs, most health plans use third parties to improve generic utilization and to negotiate encourage greater generic utilization. pharmacy payments directly with chain drugstores and the drug A recent survey showed 85 percent of Americans believe wholesalers that represent independent pharmacies. patients should use generic medications unless directed otherwise by The result is that Medicaid FFS pharmacy programs use fewer their respective physicians. Working generic drugs and pay pharmacies in coordination with PBMs, private higher dispensing fees and ingredient Modernizing Medicaid pharmacy sector plans have experimented with costs than other programs. high-performance incentive programs Modernizing Medicaid pharmacy can can reduce costs without cutting to encourage greater generic usage, reduce costs without cutting benefits, including “generics first” formularies. limiting eligibility, demanding deeper benefits, limiting eligibility, Recognizing the success of these manufacturer rebates, or paying demanding deeper manufacturer programs in lowering costs, Medicare drugstores’ ever-higher dispensing Part D plans are now allowed to fees in hopes that it will increase rebates, or paying drugstores’ ever- generic dispensing. implement similar programs to encourage beneficiaries to utilize Recent polling found that voters higher dispensing fees in hopes that lower-cost generic drugs through free want to reduce Medicaid spending by it will increase generic dispensing. generic first-fill programs. more efficient pharmacy management rather than cutting benefits for manage medicaid Pharmacy patients or payments to doctors and more like medicare and Commercial sector Programs. hospitals. Voters also want Medicaid to stop paying higher pharmacy Newly elected governors across the country are under enormous costs than other programs while also using fewer generics. ; pressure to reduce Medicaid spending. Instead of painful elimination of benefits and draconian cuts to hospitals and doctors, states should Mark Merritt is President and CEO of the Pharmaceutical Care Management Association (PCMA), start by ending Medicaid’s habit of paying more than other programs the national association representing America’s pharmacy benefit managers (PBMs). PBMs drive prescription drug costs lower for more than 210 million Americans and manage about 70 percent for pharmacy benefits. of the more than three billion prescriptions dispensed in the United States each year. Mr. Merritt A new study from The Lewin Group found that Medicaid took the helm of PCMA in March 2003 and quickly raised the industry’s profile in Washington. pharmacy could save more than $30 billion over the next decade by National Journal noted that a “new player has appeared on the field among the associations in transitioning to more efficient approaches used by Medicare Part Washington’s health care lobbying game” and named Mr. Merritt one of the most influential players D plans, Medicaid managed care organizations (MCOs), and the in the Medicare prescription drug debate. Mr. Merritt also is repeatedly ranked as one of the most commercial sector. For example, this would save New York $2.2 effective trade association CEOs in America by The Hill newspaper in Washington, D.C. Mr. Merritt is credited with designing and implementing innovative, campaign-focused strategies that billion, California $2.1 billion, Texas $1.2 billion, and Illinois $559 go beyond traditional Washington-style lobbying campaigns. Mr. Merritt has pioneered strategies million over the next decade. that reach beyond the boundaries of Washington politics to communicate more effectively with Modernizing Medicaid pharmacy is more of a possibility now diverse constituencies from Wall Street to Main Street and even Hollywood. Mr. Merritt has served that health reform has eliminated incentives for states to carve as a senior strategist with America’s Health Insurance Plans and the Pharmaceutical Research and pharmacy benefits out of managed Medicaid programs in order to Manufacturers of America (PhRMA) as well as with the presidential campaigns of current U.S. Senator Lamar Alexander and former Senator Robert Dole. Mr. Merritt also has served as a Fellow collect rebates from drug manufacturers. The problem is that most at Harvard University’s John F. Kennedy School of Government, where he lectured on the intersection Medicaid programs have state government officials determine how of public policy and the news media. He holds both an MA and BA from Georgetown University. He much to pay drugstores for each prescription filled (dispensing fees) and his wife Jayne have four children.

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

think solutions. We’re a PBM with the services you want and the results you expect.

Improving Care. Maximizing Value.

We’re about innovation. And choices. And flexibility. And collaboration. And savings. In short, we’re what you’ve been looking for – an industry leader who offers custom prescription benefit plans that control costs without limiting benefits. We build lasting partnerships because we have the expertise to deliver exactly what our clients want. We think solutions.

Want to improve your prescription plan? Try our Benefit Maximizer: www.benefit-maximizer.com 1.866.268.0089 pbmsales@PrescriptionSolutions.com www.PrescriptionSolutions.com

Population Health & Wellness

By Tracey Moorhead President & CEO Care Continuum Alliance

Wellness and Prevention Ref

lthough the new Congress and a persistent divide in public 3. The importance of widespread adoption of health information opinion raise questions about the course of health care technologies to collect, share, and analyze health-related data. reform in the new year, the outlook remains strongly positive Together, these principles present dramatic opportunities for wellness, prevention, and care management initiatives under the for population health management organizations, as the federal law and in the broader health care marketplace. government leads a shift in health care delivery from a fragmented The 2010 Patient Protection and Affordable Care Act (PPACA), system to one that values and rewards prevention, health promotion the reform law, affirmed and care coordination. policymakers’ recognition of The reform law builds The law’s prevention and wellness provisions on momentum created by the value wellness, prevention, and chronic care management the American Recovery and also ranked among the few aspects of the add to health care. In doing Reinvestment Act of 2009 so, the law established law for which congressional proponents and and, within it, the Health unprecedented federal support Information Technology for critics found common ground during the for these strategies. While Economic and Clinical Health individual mandates and other (HITECH) Act. Together, lead up to its enactment in March 2010. aspects of the reform law might ARRA and HITECH direct face intense scrutiny in the $1 billion toward incentives Republican-controlled House to promote widespread this year, there appears to be a much smaller chance the law’s provider adoption and expansion of electronic medical records to wellness and prevention provisions will draw fire. improve care coordination. The ARRA also includes $650 million Public opinion seems to support that conclusion. A January for evidence-based clinical and community-based prevention and survey by the Kaiser Family Foundation and Harvard School of wellness strategies and programs to lower chronic disease rates. n This “down payment” on reform, as the president called it, Public Health found the law’s elimination of cost sharing for Medicare reflected the administration’s vision of chronic disease preventive services enjoyed strong public support, despite the split in prevention as a pillar of health care reform; a vision shared opinion about the overall reform bill. That opinion has changed little across the political spectrum and driven by the troubling state throughout the reform debate. of chronic disease in the United States: For example, a November 2009 public opinion survey by Trust n $277 billion annually in direct health care costs and $1 trillion for America’s Health and the Robert Wood Johnson Foundation in lost productivity from the seven most common chronic found 71 percent of Americans favor an increased investment in conditions. disease prevention and that disease prevention is one of the most n At least 133 million Americans, or 45 percent of the population, popular components of health care reform. The law’s prevention and with at least one chronic disease. wellness provisions also ranked among the few aspects of the law for n Seven out of every 10 deaths attributable to chronic conditions. which congressional proponents and critics found common ground n An expected dramatic rise in the incidence of chronic disease by during the lead up to its enactment in March 2010. 2023. All this is welcome news for population health management, which will see significant new opportunities this year and beyond The impact of chronic disease is particularly burdensome in under the PPACA to improve health care quality and value. These opportunities will come through direct federal spending for wellness, Medicare and Medicaid, where a growing number of beneficiaries, prevention and care management programs, as well as through new with multiple chronic conditions, drive the greatest percentage of delivery and reimbursement models likely to rely on the enhanced health care spending—96 percent in Medicare and 83 percent in Medicaid. efficiencies, care coordination, and health management create. The PPACA responds with a landmark shift at the federal level Further driving optimism in the industry is agreement among the Obama administration and congressional leaders of both political away from acute, reactive health care and toward a system that makes parties on three core principles that align squarely with population prevention and wellness a priority. Title IV of the PPACA advances the prevention theme through a diverse set of initiatives that will health management’s demonstrated expertise: touch communities and workplaces and rewrite national priorities, 1. The importance of prevention and wellness activities with much of that work getting under way in 2011. 2. The importance of care coordination

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

orms on which we all agree For many public- and private-sector programs, the impact is in a wellness program and meeting certain health-related standards clear and direct. In Medicare, the law eliminates cost-sharing for (previously, incentives were capped at 20 percent). The new law covered preventive services rated “A” or “B” by the U.S. Preventive also gives HHS the authority to increase the reward to as much as 50 Services Task Force (USPSTF) and waives deductibles for colorectal percent of the cost of coverage. cancer screening tests. New private health plans are required to waive cost sharing for these services as well. The USPSTF-rated In addition, the PPACA establishes a 10-state pilot program services include a broad variety of health screenings and counseling by July 1, 2014, to allow participating states to apply the higher services. Of particular interest to incentives level to wellness the industry are alcohol-misuse programs in the individual market. The PPACA provision requires eligible counseling, depression screening, Employers likely will seize on and smoking cessation programs. the higher rewards level to spur programs to include support for health The PPACA requires greater participation in wellness awareness and health promotion Medicare coverage of an annual and health promotion programs wellness visit that includes a and, in doing so, broaden the activities, operate in supportive health risk assessment (HRA) and market for these services. customized prevention plan. The The PPACA empowers small environments and include employee Department of Health and Human employers to expand wellness engagement strategies. Services (HHS) has established and health promotion offerings. physician payment codes for the It authorizes $200 million in wellness visit and has directed the grants over five years to help small Centers for Disease Control and Prevention to develop guidance businesses provide comprehensive workplace wellness programs. on the health risk assessment tool for Medicare populations. HHS The law defines an eligible employer as one that employs fewer must publish that HRA guidance no later than March 23, 2011, and than 100 employees who work 25 hours or more per week and an HRA model by no later than Sept. 29, 2011. Health assessment that did not have a workplace wellness program in place before the is a critical tool in population health management, and the industry law’s enactment. The PPACA provision requires eligible programs has produced a variety of sophisticated tools and questionnaires to include support for health awareness and health promotion to gather self-reported information about health behaviors, status activities, operate in supportive environments and include employee regarding recommended screening and preventive services, safety engagement strategies. As of this writing, Congress had not approved precautions, and potential health risks. This collective expertise appropriations for this program and the industry strongly encourages creates a key opportunity for population health management to action to advance that funding. positively influence federal policymaking with respect to development medical loss ratio of a Medicare HRA tool, as well as its use in the Medicare program. While the PPACA provides considerable direct support for In Medicaid, the PPACA encourages states to remove costsharing for preventive services by offering a 1 percentage point wellness, prevention and care management, the law’s insurance increase in the federal medical assistance percentage (FMAP) for market reforms indirectly achieve a similar end. The PPACA requires these services beginning in 2013. Further, this year the PPACA health plans to spend 80 to 85 percent of premium income on authorizes three-year grants to states to develop programs to provide patient care, either through direct medical spending or for services Medicaid enrollees with incentives to participate in comprehensive in a newly created “activities that improve health care quality” health lifestyle programs and to meet certain health behavior category. Creation of the quality improvement category represented targets. These initiatives likely will result in expanded preventive a milestone for population health management stakeholders, who had services business for wellness and population health management worked for several years to revise a National Association of Insurance Commissioners (NAIC) accounting guideline that defined wellness organizations contracting with state Medicaid programs. Opportunities in the private market, particularly with respect to and care management as “administrative costs” in the MLR formula. With the advent of the quality improvement category, health workplace health promotion and employer-sponsored health plans, are abundant. The PPACA permits employers to offer employees plans can now properly count wellness and health management premium discounts, waivers of cost-sharing requirements, or other activities toward patient care, rather than as administrative costs rewards of up to 30 percent of the cost of coverage for participating to trim for compliance with minimum MLR thresholds – a critical

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Population Health & Wellness cont’d

distinction for population health management. Working under the Somewhat less obvious—but of potentially greater value to aegis of the reform law, the NAIC last year developed model guidance population health management—are the opportunities the PPACA on MLR reporting that formally moves wellness, prevention, and creates by advancing new payment and delivery models requiring care management to the quality improvement category, and CMS increased care coordination and health management support for adopted the definition in an interim final rule at year’s end. physicians and other providers. Population health management How the new MLR requirements progress in the new year organizations are well positioned to collaborate with the physician bears watching. Both the NAIC groups and hospitals that establish and HHS have cautioned they will accountable care organizations For its part, HHS said in the interim final (ACO)s and patient-centered closely monitor MLR reporting for the quality category. The medical homes under reform. This rule that it will require health plans to NAIC has said it will establish stems, in part, from population a means to test reported quality health management’s increasing show “measurable results” from quality improvement measures to ensure deployment of collaborative, improvement activities to continue the measures do, in fact, improve innovative care models to fully health standards. integrate services with physiciancounting them in that category. For its part, HHS said in led practice models and to better the interim final rule that it will support patient adherence to require health plans to show physician-developed care plans. “measurable results” from quality improvement activities to continue It also reflects the industry’s evolution to multiple intervention counting them in that category. The department said that while modalities that build upon and complement the traditional call health plans do not have to prospectively provide evidence of the center model, allowing it to better meet consumer needs and fill quality improvement activity’s effectiveness, a health plan will have resource gaps for providers. to show measurable results stemming from the activity. Additional Supporting development of new delivery and payment models guidance on a variety of MLR issues can be expected as the provision is the newly minted Center for Medicare and Medicaid Innovation is carried out and enforced. Medicare Advantage Plans will become (CMMI), which will pilot broad payment and primary practice subject to MLR thresholds in 2014. reforms to expand innovative payment and delivery arrangements that improve quality and outcomes. Population health management will A New National Strategy follow the center’s work closely: Models the CMMI deems successful Reform’s public- and private-market support for wellness and will be eligible for nationwide expansion. Pilots are expected to prevention comes against the backdrop of a new national strategy for include ACOs, patient-centered medical homes, community care an “expanded and sustained national investment” in prevention and teams and others. Congress appropriated $10 billion for 2011 wellness. The law accomplishes this through creation of a National through 2019 to fund CMMI initiatives. Prevention, Health Promotion and Public Health Council, which In total, these provisions and others in the ACA and ARRA laws will coordinate the work of more than a dozen federal agencies to will move the nation closer to the ideal of a well care, rather than develop a national strategy on prevention, wellness and public health sick care system and generate valuable opportunities throughout the activities. The law also makes a significant financial commitment to market for wellness, prevention and care management services. ; the national strategy: It authorizes $7 billion annually through 2015 and $2 billion in each year after for a Prevention and Public Health Tracey Moorhead is President and CEO of the Care Continuum Alliance. She directs policy formulation and strategic advocacy efforts and represents the population health Fund. The fund will support prevention research, health screenings, improvement industry before the media, allied organizations and constituents and obesity prevention, tobacco control, immunization programs, and all levels of government for the Care Continuum Alliance, a non-profit association representing more than 200 organizations and individuals. For more information, call other initiatives. (202) 737-5980 or visit www.carecontinuum.org.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Seeking Direction About

Health Care Reform? Health Reform Navigator—Your complete Health Reform Information Center. It provides an aggregation and “point & click” navigation to information regarding the Patient Protection and Affordable Care Act (PPACA).

Health Reform Navigator includes: PPACA – Direct point and click access to Insurance- and Taxes and Penalties-specific sections of the law. Locate immediately the actual language of PPACA for each topic you are interested in (e.g. grandfather clause, small group subsidy, child coverage).

Timelines – Multiple timelines including a unique Navigator Legislative Timeline with links to all insurance and taxes/penalties in PPACA.

Regulations – Direct point and click access to DOL, HHS, and IRS health reform regulations and related information (FAQ, model notices, videos, and more).

Surveys – Direct point and click access to national surveys on what employers are doing in response to PPACA. HOT Topics – As regulations are announced, special attention is provided for easy viewing of What’s New (including FAQ, Fact Sheets, and Videos).

Updates – For a $99 charge you will buy the current updated Navigator for PPACA and the access code to any updates provided at this same website.

FREE BONUS – The Preventive Care Navigator is offered for a limited time as a free bonus. The Preventive Care Navigator uses the same easy “point & click” technology to answer specific questions about the January 1, 2011 mandate for benefit plans to include significant preventive care services at 100% coverage. It includes detailed explanations, exclusions, sample SDP language, and CPT codes applicable to each benefit.

For $99 you gain Instant Access to Health Reform Navigator AND Preventive Care Navigator (A $198 Combined Value).

Start navigating today. Download your Health Reform Navigator www.cdhcsolutionsmag.com

Incentives in Wellness

By George B. Delta General Counsel The Incentive Foundation Inc.

Big Fat Truth About use of Inc

ccording to various studies, including one from the School Although the benefits of a wellness program should be fairly of Public Health at Johns Hopkins and another from Duke obvious, we do not always do what is best for ourselves without some University, approximately three in four Americans will be nudging. Thus, the key to getting employees to participate may be to overweight by 2015 and that number will increase steadily over time. provide them with incentives. The medical costs of these individuals can be up to 10 times higher There are multiple approaches to providing such incentives. and their worker’s compensation claims twice the rate of those who The approach Congress and the president have taken in the Patient are not overweight. Currently, approximately 72 million Americans Protection and Affordable Care Act of 2010 (PPACA) is to permit are classified as obese. As a result, health care costs are expected to employers to offer cash incentives to employees for participating in increase dramatically over the next decade. wellness programs and reaching certain targets. Current law limits As bad as the current situation appears to be, the health of American the value of wellness incentives to 20 percent of the total health care workers is declining and is expected to be worse. Approximately one premium spent per worker. When the new rules of the PPACA go in three suffers from some symptoms of depression, one in four into effect in 2014, limits will go up to 30 percent and may rise to as smokes, one in five experiences difficulty sleeping, one in five is treated high as 50 percent. for high blood pressure, one in seven has high levels of cholesterol, Safeway has been at the forefront of such cash incentives to and nearly half have not exercised in more than a month. All of these improve health. Safeway’s chief executive officer, Steven A. Burd, health risks make employees less productive and have helped cause has been an outspoken proponent of company health care plans that health insurance premiums to double since 1999. Quite clearly, it is reward healthy behaviors. Like most workers, Safeway employees in everyone’s interest for employees pay a portion of their health care to change their lives and live healthier. costs through premiums, copays, A properly designed wellness One possible means of achieving a and deductibles. program can lead to multiple healthier and more productive life is Safeway has instituted a program to participate in wellness programs. that has substantial differences in benefits, such as reduced accidents, premiums, depending on levels of A well-designed wellness program should have many components to healthiness. The company’s health fewer absences due to sickness, it. The program could cover: disease care plan also has differing premiums, higher productivity, lower health management, fitness programs, diets, based on various factors such as screenings and preventive care, weight smoking, weight, blood pressure, and care costs, and overall better health. cholesterol levels. It has employees loss, cessation of smoking, helping employees change their health profiles, screened for those four items, and and so on. The program should start with a baseline analysis of each they receive a discount off a base level premium for each test they employee’s health profile, so it can measure improvement over time. pass or standard they meet. A properly designed wellness program can lead to multiple In order to encourage employees to provide such information, benefits, such as reduced accidents, fewer absences due to sickness, Safeway uses outside parties to collect the data, and those parties higher productivity, lower health care costs, and overall better health. are not permitted to share the collected information with company All of these benefits, when added together, inevitably lead to improved management. The confidentiality of such data is very important. employee morale and ultimately better company performance. On the surface, the attractiveness of Safeway’s approach is However, even with these proven benefits, employers still find it obvious. If one requires workers to pay higher premiums if they difficult to convince employees to participate in wellness programs. flunk tests for measures such as smoking, weight, blood pressure and There may be several reasons for this fact. cholesterol, they will want to become healthier to reduce their costs. a) Employees may be hesitant to provide sensitive health information When they do so, the employer gets a fitter and healthier workforce to their employers for fear of reprisal and discrimination. and reduces medical expenses. Employees benefit in the form of b) They may not feel comfortable participating in group wellness lower deductibles and premiums. activities, such as exercising in a group setting. However, Safeway type insurance plans are not without critics. c) The wellness program may be boring and its benefits not According to an article by David Hilzenrath in The Washington Post communicated well enough. on Jan. 17, 2010, in practice, the cost savings for Safeway employees Indeed, management participation in and proselytizing for a have been somewhat elusive. The critical question is how large must wellness program can be very helpful in getting employees to take the financial incentives be to change behavior, and if behavior is not part. Finally, employees may see wellness programs as just another changed significantly enough, do such incentives simply shift costs employer event, and an intrusive one at that. from employer to employee? In other words, if an employee fails one 40

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

entives for Wellness Programs or two of Safeway’s benchmark tests, his premiums and deductibles wellness awards for eligible employees who participate in a qualified would increase considerably. The employee would then have an wellness program. Under such a law, the awards would be nontaxable opportunity to reduce the inflated premiums by losing weight or to the employee and deductible by the employer, as long as they do quitting smoking, for example, but the punitive nature of Safeway’s not exceed $400 per recipient. program can be troubling. Ultimately, more data are necessary before Qualified wellness awards would thus motivate employees to anyone can make a determination with respect to the efficacy of participate in an employer’s qualified wellness program by giving premium reduction incentives. them an incentive for doing so. As the Johnson & Johnson study Another, better tested, and more efficacious type of incentive showed, such awards and incentives have a long and proven track employers can use to drive employee behavior, with respect to record of influencing good employee behavior and would be a health and wellness, is awards of tangible personal property, for powerful tool in ensuring the success of the wellness programs example, merchandise. In order to motivate employees to participate championed by the PPACA. To ensure qualified wellness awards in a wellness program, employers would be best served by offering are not disguised compensation, the awards would be in the form of incentives to join the program and recognition and awards when tangible personal property and not cash or cash equivalents. employees reach significant plateaus and meet goals or targets. In addition to reducing the likelihood of disguised compensation, A properly designed wellness program requires an assessment awards in the form of tangible property have the added benefit of of the general health and well-being of employees to provide baseline having “trophy” value by serving as a continuous reminder of an information before starting a program employee’s achievement in the area in order to be able to measure its of health and wellness. Appropriately Voluntary participation by relative success. designed qualified wellness awards employees increased from 26 to 90 would serve as a valuable tool to Because employees are reluctant to provide personal information and ensure the success of an employer’s percent when non-cash incentives need to see an immediate tangible qualified wellness program. benefit for their efforts, incentives, As this article indicates, the were offered. This stands to reason, awards, and recognition would PPACA currently encourages the as premium reduction discounts provide them a compelling reason to Safeway approach of premium participate in the wellness programs reduction, based on the use of can be viewed as just another that the PPACA envisions. It is logical wellness plans and the attainment to assume employees may need to see of certain measurable health goals small bonus, while merchandise an immediate and tangible benefit for and results. While this approach is has trophy value and is more their efforts. Employers can offer nonlaudable in certain respects, its track cash incentives to entice employees record is currently unproven, and it is meaningful to the recipient. to enroll in a wellness program and unclear whether the cost savings will to reward them when they reach materialize for employees. significant plateaus and meet significant goals. The incentives can In contrast, non-cash incentives have a proven track record of range from health-related merchandise to gift cards redeemable for success in a variety of areas. Accordingly, a qualified wellness award, only merchandise. that is nontaxable to the employee and deductible by the employer, According to a white paper by Barb Hendrickson and Stacie could be used separately or in conjunction with premium reduction Pinnavaia, a long-term study by Johnson & Johnson, conducted by programs to motivate employees to participate in wellness plans, to MED-STAT (a health information company in Ann Arbor, Mich.), improve their health and lifestyles, and improved productivity and showed that health care costs were $225 less for each employee who morale. participated in a wellness program during a period spanning four Using non-cash incentives to encourage participation in wellness years. The study also confirmed the value of awards and incentives. programs and to drive healthier behavior once employees begin to Voluntary participation by employees increased from 26 to participate is an essential means for employers to make wellness 90 percent when non-cash incentives were offered. This stands programs more effective and American workers safer, happier, more to reason, as premium reduction discounts can be viewed as just engaged, and more productive. ; another small bonus, while merchandise has trophy value and is more George B. Delta is counsel to the Incentive Federation Inc., Incentive Legislative Campaign Trust, meaningful to the recipient. Recognition Professionals International, IMA Educational Fund, Inc., and various other clients in Incentives and recognition would be most beneficial if they also the incentive, premium, rewards and recognition marketplace. conferred a tax benefit. Namely, Congress should enact qualified EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

IncenTIves In Wellness

Incentives and Encouragement Key to Wellness Program Success

he design of wellness programs often reflects our own business operations: strategic, clear, and most importantly, results-focused. However, one essential component of a successful wellness program is sometimes overlooked—personal support and encouragement. A supportive approach, fueled by an inspiring incentive, can motivate, engage and encourage action; accomplishing whatever objective your organization sets out to achieve.

long-term program and simultaneously ease soreness from tightened braces. Gift cards also can motivate employees and members to continue participating in a wellness program. Many companies choose gift cards as an added benefit of joining a smoking cessation or drug rehabilitation program. An additional reason to participate, such as a gift card, has the ability to tip the scale toward healthier living.

Ultimately, the incentive you choose should be as rewarding for you as it is for the recipient.

The variety of companies offering Best Buy® Gift Cards shows the importance of good incentives. The needs and goals of these organizations may differ, but the tangible encouragement gift cards provide is the same for any kind of wellness program.

Incentives for Any objective Best Buy Gift Cards amplify the appreciation of healthy living by adding to the value of wellness. An incentive is one more reason, beyond an improvement in health, for participants to actively continue a program. Whether facing a case of especially high goals or a low budget, incentives can help increase interest and enthusiasm. We’ll highlight a few organizations below that offer Best Buy Gift Cards as a wellness incentive. Currently, several health clubs drive membership with gift cards. The same incentive also can motivate members to sign up for or continue a weight loss program. These health clubs motivate their members with Best Buy Gift Cards because they accentuate the joy of living and align with the purpose of their wellness programs. Dentists and orthodontists reward patients who keep monthly and annual appointments with gift cards. Because orthodontic programs aim to gradually improve oral health, a tangible incentive can reinforce the commitment to a

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Hospitals and private practices recognize and retain their top employees with gift cards. They are a way for these organizations to say, “thanks,” “we appreciate you” or, “keep up the outstanding work.” Incentives also can help retain valuable employees because they show your company values the people who contribute to its success.

easy to use, easy to enjoy Ultimately, the incentive you choose should be as rewarding for you as it is for the recipient. Best Buy Gift Card Incentives are easy to give and easy to use. Best Buy fulfills orders quickly and offers multiple shipping options. Visit corporateGiftcards.BestBuy.com for more information about how to qualify for free shipping and discounts. Best Buy Gift Cards have no expiration date, no dormancy fees and the cards retain their full balance until used. Whether your organization’s goal is to increase employee engagement or lower their cholesterol, gift cards as incentives provide one more reason to be healthy. They are a way to further exemplify your support and encouragement. ;

the “very own shopping spree” reward no fees. no expiration dates. Just happiness.™ Recognize and motivate employees with Best Buy® Gift Cards. They’ll get the excitement of choosing incentives that enhance their lives and connect them with family and friends. Learn more by contacting us at: 877-370-1234 | GiftCards@BestBuy.com | corporategiftcards.bestbuy.com/cdHc BEST BUY, the BEST BUY logo and the tag design are trademarks of BBY Solutions, Inc. © 2011 BBY Solutions, Inc. All Rights Reserved. BBY1103015

IncenTIves In Wellness By JIm Pshock Founder & PresidenT BrAvo Wellness llc

“Don’t Touch That, It’s Hot”

Employers Begin Linking Healthy Living Results to Health Care Contributions

s one of eight siblings, now having four children of my own, I’ve been surrounded by little ones my entire life. It’s funny to see that we have an inborn desire to do the things we are told not to do, even if we never cared about that choice until it was taken away from us. Take the boiling teapot on the stove for instance. No child was thinking about touching it anyway, yet when mother says don’t touch the teapot or you will burn yourself, touching the teapot is all some children can think about. Of course I’m one of the kids that had to touch it to make sure mom was right! Guess what? As mom was putting burn cream on my hand and wiping away the tears, I never blamed her for my poor choice. Even as a small child, I knew it was my own fault.

share of health plan costs. While the idea of an aggressive results-based program is hard for some to fathom, a phased-in strategy resonates with nearly all employers who take the time to analyze the true source of escalating costs and recognize that tough love is in fact still a way to care for and nurture their employees.

While the idea of an aggressive resultsbased program is hard for some to fathom, a phased-in strategy resonates with nearly all employers who take the time to analyze the true source of escalating costs and recognize that tough love is in fact still a way to care for and nurture their employees.

Into adulthood, as we make decisions with important items like insurance, we also see the direct impact of our choices. When we smoke, there is a different rate table for our life insurance. When we have traﬃc violations, due to our poor judgment, we pay more for our car insurance. When we live in a high-crime neighborhood, auto insurance rates are higher because the likelihood of your car being stolen or damaged is dramatically higher. The basic premise behind all insurance ratings is that reduced risk equals reduced rates. The Final Wellness Rules for Group Health Plans that were originally published by the Department of Labor in 2007, have made their way into the Patient Protection and Affordable Care Act (PPACA) and they will be expanded in the coming years. Finally, employers can financially motivate real behavior change and reward those who take personal accountability for their actions. A recent Towers Watson study reported that 56 percent of employers plan to hold employees accountable for a larger

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Although the trend toward results-based wellness initiatives is clear, employer’s reasons and timelines for engaging the strategy vary. Some employers, with a strong desire to implement a wellness strategy but with no budget to do so, have found that surcharges to those who fail to exhibit healthy lifestyle results in categories like blood pressure, cholesterol, tobacco use and body mass, can generate adequate funds to provide a corporate-wide wellness strategy for all employees. We also see employers who have invested significant money and resources into wellness, but perceive that the enrolled employees have reached a plateau, or that those employees who need help the most are not engaging in meaningful change. They are often giving discounts and gift cards to individuals who attend an annual health fair, even though they are 20 pounds heavier than last year! Like all money invested into employee development, leaders expect to see measurable results that justify the investment. Expect more programs to require measurable results before points and rewards are issued, or in some cases, to avoid surcharges. When employees see that their choices directly impact their paycheck, the tough love message employers are willing to make is not just good for the bottom line, it’s helping their treasured employees not get burned by a serious disease. ;

Save up to 8% on employer health care costs - the very first year.

877-66-BRAVO l www.bravowell.com “75% of every dollar spent on healthcare is spent treating conditions that are lifestyle related and largely preventable.” Centers for Disease Control, 2006

Bravo Wellness’ unique expertise in wellness incentives allows us to develop a compliant plan with little disruption, measurable results and meaningful impact for your business. With our support, you can implement a results-oriented solution that: • Promotes healthy living and prevention • Identifies high-risk issues early • Immediately reduces your health plan costs • Creates a corporate culture of wellness • Provides employees with access to tools to improve their health – and a financial reason to want to Contact us today at 877-66-BRAVO to arrange a presentation and begin your journey to lower healthcare costs, greater productivity and a better bottom line.

Live Well, Pay Less. Healthcare the Way It Should Be.

IncenTIves In Wellness By DeAnnA BAker VP oF eMPloYee deVeloPMenT and HuMan resourCes InTelIsPenD

Choosing the Right Wellness Program Means Healthy Employees, Healthy Business

ou’ve heard the statistics: about two-thirds of American adults are overweight or obese. More than half (55 percent) do not get enough physical activity, while 26 percent are completely inactive. If diet and physical activity patterns continue worsening at the current rate, they will soon surpass tobacco use as prime contributors to mortality. The good news is that doing something like implementing a company-wide wellness program can have a significant positive impact on these issues and improve the overall well-being of your workforce.

needs. Look for an administrator with a proactive and interactive communication strategy that includes more than just an e-mail or newsletter component. Successful wellness programs get participants excited and keep them engaged with ongoing activities like health assessments and biometric screenings.

The Warm-up: Getting your Wellness Program Going

Last, but certainly not least, plan to offer an effective reward for program participation. Almost any reward, from simple recognition to sweepstakes prizes, will generate some program participation. But to inspire the greatest number of people, consider offering a financial incentive such as a reduction or discount in insurance premiums or cash. (According to a recent survey, the most appealing monetary rewards included direct deposits into a bank account or receiving a branded prepaid card; 91 percent and 89 percent, respectively.)

But how does a company go about implementing a wellness program? What are the challenges? What are the most important components? These are important questions, and ones that as employers, we have to get right, because the numbers on poorly designed or implemented wellness programs are just as compelling. Forty-four percent of employees with access to a wellness program have never participated. That percentage only increases when you include employees who participated one year, but not the next. Through my own efforts to implement a wellness program for my company, I’ve found three key areas an employer must consider in order to have an effective wellness program.

Get ready, Get set: Addressing the key components Obviously, it is important to get buy-in from internal stakeholders, such as finance. A wellness program is an expense for which you should be prepared to make a case and show a positive ROI. You can start by pointing out medical costs are reduced by more than $3 for every dollar spent on wellness. Also, companies offering robust wellness programs are more productive (a healthy workforce means fewer sick days) and ultimately compete better for young new talent, who tend to be more health-conscious and expect their employer to support their healthier lifestyles. To ensure you see the positive results you are expecting from your program, consider getting help from a third party administrator. These companies will be HIPPA-compliant (a timeconsuming but required effort for companies planning to run their own wellness program) and support you according to your 46

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

In addition to the engagement factor, regular assessments can not only identify potential health problems early (when they are typically less costly to address), but also provide direction for health improvement goal setting.

However, one caution regarding the cash option: A paycheck deposit may seem like an obvious solution, but there are significant benefits that come with prepaid reward cards. Rather than getting lost in the shuﬄe of everyday purchases (like a cash reward), prepaid reward cards are more motivating because recipients think about and plan what they will do with their reward—maybe while they’re walking the treadmill or preparing that healthy meal.

Go! Remember those daunting health statistics? The result is that the cost of insuring employees has increased 54 percent since 1991. Implementing an effective wellness program will not only result in a healthier employee base, but a healthier bottom line for your company. ; Sources Health Aﬀairs, February 2010, “Workplace Wellness Programs Can Generate Savings,” Kathleen Baicker, David Cutler, Zirui Song. Kaiser/HRET survey of employee-sponsored health benefits cited in “Employee Health Promotion Programs: Supporting Scientific Research and Wellness Statistics,” American Chronicle (September 17, 2008). 2009 employee survey conducted by MasterCard and Harris Interactive. ©2011 InteliSpend Prepaid SolutionsTM

Flexible Rewards For your employee wellness program

WELLNESS INCENTIVES

EMPLOYEE REWARD & RECOGNITION

SALES INCENTIVES

buSINESS GIfTS

InteliSpend is the smart choice for the flexible, customizable prepaid products and services you want for today’s evolving business. for wellness needs from simple to complex, we offer the easily implemented MasterCard® Wellness Prepaid Card. It keeps everyone healthy. Especially your bottom line. Your business is evolving, so the currency of doing good business must as well. And now it has.

InteliSpend.com

This card is issued by MetaBankTM pursuant to license by MasterCard International Incorporated. MasterCard is a registered trademark of MasterCard International Incorporated. Reward cards are issued in connection with loyalty, award or promotion program. © 2011 InteliSpend Prepaid Solutions, LLC

1.888.234.7725

Voluntary & Supplemental Benefits

By Bonnie Brazzell and Gil Lowerre Eastbridge Consulting Group, Inc.

The Economic Wave in Emp

he recession is over and the economy is on the mend. The equities markets are improving and lending is starting to show signs of life, but workers are still hurting. Unemployment remains high, job growth is spotty, and incomes are lagging. Not surprisingly, this scenario has had an impact on voluntary coverages, buyer behavior, and the benefits business in general. The retrenching is leading to a reorienting of employee priorities and is setting the stage for rebound growth over the coming several years. Employers remain conservative about benefit spending. Even as profits improve and cash reserves recover, employers remain wary about spending. When asked about their plans for spending, employers disclosed significant plans to either reduce outlays or dampen the impact of cost increases.

Ownership through Employer Medical insurance Prescription drug coverage Dental insurance Vision coverage Short-term disability insurance Long-term disability insurance AD&D or travel insurance Life insurance Cancer or critical illness Hosp indemnity/ supplemental... Long-term care insurance 0%

40%

60%

2010

2006

80%

100%

While overall voluntary sales have increased every year through 2009 (2010 data are not yet available), increases have been tied more to additional purchases by previous owners and to takeover activity than they have been to new purchasers. As a result, voluntary product ownership has actually decreased over the last few years. Consumers are holding back. This short-term trend is not based on finding replacement products for voluntary coverages. Most Americans still get their financial security products through their employer. In one recent

At the same time that pressure is placed on them to contribute more, employees have been reacting to the overall economic uncertainty by increasing savings, cutting debt, and reducing payrollbased discretionary spending. This latter trend directly impacts cafeteria and voluntary offerings and is already showing up in ownership numbers. In one recent study, Medical, AD&D, Life Insurance, Critical Illness, Supplemental Medical and Long-Term Care coverages all showed ownership Employer Moves decreases. Planned in the Next 12 to 24 Months

20%

Percent

2010

2009

2008

2007

2006

2005

2004

Increase the employee contribution towards benefits

37%

12%

17%

14%

12%

Increase deductibles, copay, or other

29%

13%

18.5.%

21%

23%

14%

Cap total costs by going to a “definedcontribution” approach

14%

Move certain benefits to voluntary

26%

57%

Cap total costs some other way

37%

21%

24%

11%

28%

14%

Drop some benefits completely

34%

40%

26%

38%

36%

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

loyee voluntary spending Importance of Different Types of Insurance

Employee needs and exposures aren’t going away; the priorities have just been shifting in response to uncertainty.

9.86

Medical insurance 9.19

Prescription drug insurance

8.89

Dental insurance

8.44

Vision insurance

8.35

Life insurance 7.43

Disability insurance 6.32

AD&D insurance Long-term care insurance

4.98

Cancer or critical illness

4.94

Supplemental medical insurance

4.67

4 2010

6 2006

survey, only 23 percent of employees said they owned insurance (other than auto and homeowners’) outside the workplace. So what is happening? First, they are reorienting their protection priorities and, secondly, they are delaying purchase until the economic climate becomes more stable (and predictable). The priority shift is reflected in employees’ descriptions of how important various coverages are to them right now. The following chart uses a 10-point scale where 10 is the greatest importance and one is not at all important. We consider any coverage receiving an

8.0 or higher rating as “indispensable” or “extremely important” while those with a 7.0 or higher rating are “very important.” Those with a 6.0 or higher rating are “important” and those below a 6.0 are “not so important.” As you can see, overall, most coverages continue to be important, even in this 7 8 9 10 economy. However, there is clearly a shift in priorities. The big four, Medical, Drug, Dental and Vision, are seen as more important today, while the others have taken a step back in importance. Employees have become more conservative, focusing on what they perceive as the core coverages. Importance overall hasn’t changed much, but the priority coverages have shifted. This shift is reflected in buying interest. When asked which not-owned coverage they would be interested in buying today, if it were offered on a voluntary basis, the same pattern emerged. Keep in mind these employees had not seen a sales presentation or any materials about these products and yet they are interested in buying.

Voluntary Confidence 105 100

100

101.2

102.3

Recession

101 97.3

99.9

96.2

95.9

92.9 88.8

90 85 80

Dec ’05

July ‘06

Dec ‘06

July ‘07

Dec ‘07

July ‘08

Dec ‘08

July ‘09

Dec ‘09

July ‘10

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Voluntary & Supplemental Benefits cont’d Top Five Voluntary Products of Interest to Employees Employees are focusing on perceived core needs and are delaying purchases of coverages that are deemed less essential. With increasing economic stability over the next few years, the historic patterns of buyer behavior should reassert themselves. On the front lines of the voluntary business, brokers and voluntary executives have been living with these trends and forces every day. As they have watched preferences change and sales shift, they have become excellent predictors of voluntary activity at an industry level. The Eastbridge 2010 Voluntary Confidence Index Vision 30% tracks their attitudes toward Dental 28% sales, employee behavior, and Prescription Drug 19% industry performance. Left is the Short-Term Disability 17% aggregate index score, which can Long-Term Disability 15% be seen as a measure of their Drop some benefits overall confidence in the future of 5% completely the voluntary business.

Voluntary Confidence Index During the recession, many brokers focused more on core coverages and the key voluntary products employees were demanding. But as the job markets recover, the wider array of voluntary offerings again takes its place in the portfolio. Employee needs and exposures aren’t going away; the priorities have just been shifting in response to uncertainty. As that uncertainty diminishes those additional needs will become more compelling, and

in a climate where employers continue to look for ways to control benefit costs, the future for voluntary insurance can only become brighter. ; Gilbert W. Lowerre, CEBS, CLU, ChFC, President, Eastbridge Consulting Group Following his field experience as a producer and field sales manager for a major insurance company in New York State, Lowerre spent 10 years with the Life Insurance Marketing and Research Association (LIMRA) in Hartford, Conn. In 1989, Lowerre left his position as an officer at LIMRA to start Eastbridge Consulting Group, Inc. After 21 years, Eastbridge has become the leading U.S. consultancy with a specialty in voluntary product and worksite marketing and is known internationally for its research and consulting skills. His specialties include business strategy design, distribution development, marketing planning, worksite marketing, voluntary insurance, and employee benefits. Lowerre helps design new business models, enhance the performance of existing businesses, and helps companies enter new markets. He was inducted into the International Worksite Marketing Hall of Fame in 2006, and was named to Benefit Selling Magazine’s top 10 power list of influential people in the employee benefits industry in 2008. He has an undergraduate degree in psychology and a master’s degree in management. He has three grown children and lives with his wife in Avon, Conn.

Bonnie Brazzell, Vice President, Eastbridge Consulting Group Brazzell is a leading expert on worksite marketing of financial services products. Prior to Eastbridge, she had 25 years of experience with a major worksite/voluntary carrier. During her carrier career, Brazzell worked in various positions, including underwriting, product development, market development, and customer marketing. She joined Eastbridge in 1999. She manages consulting projects for both worksite/voluntary and group clients. Brazzell focuses on strategic, business, and marketing planning; competitor, product, and market analyses; and business line assessments. She also oversees a variety of research projects—both consortia and client specific—designed to improve the marketing of group and voluntary products. She has helped clients of all types develop and improve their marketing strategies. Brazzell is a frequent speaker at industry events and has had articles published in numerous publications. She has a degree in mathematics and lives in Columbia, S.C. Contact Bonnie at bbrazzell@eastbridge.com or 803-738-1236

Stats & Data: Voluntary & Supplemental Health Benefits Unum Named Most Frequently Used Voluntary Carrier in Broker Survey The number of brokers offering Unum’s voluntary benefits insurance coverage available through employers and usually paid for by employees - has more than quadrupled over the past decade. The increase is evident in a recent survey by the Eastbridge Consulting Group in which Unum was named most frequently by brokers as one of their top three voluntary carriers. Colonial Life, Unum’s sister company, was the second most frequently named voluntary carrier, according to Eastbridge’s research that focused on brokers whose primary business is selling traditional employersponsored benefits. As Eastbridge indicates, the increasing interest in voluntary benefits reflects the clear shift in how employee benefits are delivered in the workplace today. “Benefit brokers are moving along the learning curve from only occasionally selling voluntary to using it as a cross-selling tool to actively and pro-actively selling voluntary,” Eastbridge reported in “Employee Benefit Brokers and Voluntary: The Evolution Continues.” The study also discovered 46 percent of benefit brokers are at the cross-selling stage and 30 percent are in the active or pro-active stage.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Voluntary benefits can play a key role in an employee financial protection plan. Unum points to several reasons behind the growth in adoption of these products. “There’s a much richer array of financial protection products available today - like supplemental medical, accident, critical illness and long term care - so brokers can help clients create options that really meet the needs of a diverse workforce,” said Neiciee Durrence, vice president of voluntary benefits for Unum. “We also work closely with the broker and employer on an education and enrollment process that is easy, flexible and highly effective, backed by excellent ongoing customer service.”

Give them Something to Talk About Employees who participate in one-to-one benefits counseling sessions during enrollment say they have a greater understanding of the benefits their employers offer. Ongoing post-enrollment surveys by Colonial Life & Accident Insurance Company show that 97 percent of employees who take part in individual benefits counseling sessions say they better understand their benefits. Forty-four percent of employees say the sessions significantly improve their understanding. The same survey showed that 98 percent of employees believe one-to-one benefits counseling is important, with 61 percent saying it is very important.

Aflac lets you offer your employees a better benefits package that includes dental coverage — with no network restrictions, no deductibles, and no routine premium reviews. And since it’s a

Aflac Dental gives you a reason

to smile.

voluntary purchase by your employees, it’s all at no cost to your company. That should leave everybody smiling. Find your company a reason to smile at aflac.com/dental or call 877-236-2352

Individual coverage underwritten and offered by American Family Life Assurance Company of Columbus. In New York, coverage underwritten and offered by American Family Life Assurance Company of New York. Some policies may be available as group policies. Group coverage underwritten and offered by Continental American Insurance Company. Policies may not be available in all states. Aflac pays cash benefits direct to the insured, unless assigned. There may be indirect administrative or other costs. NAD1118

volunTAry & suPPlemenTAl BeneFITs By PAT huoT direCTor, ManaGed Vision Care TrAnsITIons oPTIcAl, Inc.

An Eye-Level Take on Vision Health in 2011

2011

promises to become another exciting year for vision benefits, as more managed care professionals champion eye health as a key component to employee wellness. We’ve certainly had insight into some of that momentum recently. Case in point: During our 2011 Transitions Academy education event, we unveiled our firstever Transitions vision Benefits Broker of the year, Patsy Akridge of Akridge Financial Services. This award recognizes benefits brokers who encourage healthy sight through superior vision benefit offerings and employee education. Both are more critical than ever, seeing how nearly half of employees aren’t taking advantage of their vision plan. As part of the event, Patsy joined finalists Rick Walker of J. Smith Lanier and Joe Part of Alltrust Insurance to offer best practices during a panel discussion. Let’s go eye-to-eye with these brokers, focusing on five vision benefit promotion tips they shared during the panel. Consider some of these concepts when evaluating vision plan potential in 2011. 1. early disease detection. All finalists recommended promoting vision benefits as an integral part of overall health care for employees, keeping an eye on the potential for early disease detection. Regular, comprehensive eye exams allow eye doctors to detect early signs of debilitating eye disease—as well as conditions like diabetes, hypertension and heart disease—that can quickly drain employee health and seriously strain corporate health care premiums. This basic medical service can identify and address these

Congratulations to winner and finalists! Winner: Patsy Akridge, President, Akridge Financial Services Finalists: Rick Walker, Vice President, J. Smith Lanier; Joe Part, Managing Partner, Alltrust Insurance A full recap of the Transitions Academy panel discussion will be published later this year as a white paper on our website, HealthySightWorkingforYou.org.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

issues before they can rob employees of their most precious sense, or keep them from enjoying a healthy, productive profession and lifestyle. 2. eyewear for comfort and protection. Too often, brokers and employers only focus on the exam portion of a vision benefit, yet eyewear options, included in the plan, are equally important. Properly corrected vision can seriously boost employee productivity. Plus, the right eyewear options can help protect against environmental hazards such as trauma, damaging UV radiation and eyestrain-inducing glare. 3. kids appeal. It’s essential for employees to realize that vision benefits are equally important for their kids—maybe more so, since 80 percent of learning comes through the eyes. Plus, kids’ eyes are three times more susceptible to UV damage. An eye exam—not just a vision screening – can keep tabs on vision correction and eye health, while certain lens options can protect kids’ eyes from sun and trauma. For instance, some vision plans even include full coverage of photochromic Transitions lenses for kids, which adapt to changing light to block UV rays and glare. 4. return on investment. Who says you can’t show ROI on a vision plan? Consider using the Healthy Sight Calculator (HealthySightWorkingForYou.org/calculator) to determine the potential impact of eye-related chronic diseases, eye diseases and vision issues on health care costs and productivity for a specific workforce. Examine all the ways eye-related issues tie back to health care cost claims, and then tabulate your annual savings possible with a quality vision benefit. 5. variety in vision plan structure. A voluntary vision plan can be a great option for employers who can’t avoid cutting back. As our finalists shared, some employers see up to an 85 percent enrollment. The caveat: Employees with voluntary vision plans report less satisfaction with their employers’ education efforts—making proper education even more critical. Additionally, in cases where a vision plan is embedded in a medical plan, explore and promote a vision buy-up, to give employees better access to sight-protecting eyewear options. The panelists agree, changing the way we talk about vision to employees is the catalyst for vision plan success in the workplace. The sooner we start promoting eye health as an essential part of employees’ medical routine, the greater impact we can make. Need ideas to get started? Visit HealthySightWorkingForYou. org. ; Pat Huot, Director, Managed Vision Care, Transitions Optical, Inc.

Transitions optical, Inc. 9251 Belcher Rd. Pinellas Park, Florida 33782 800.533.2081 ext. 2262 HealthySightWorkingForYou.org, Twitter.com/TransitionsMVC

Congratulations

to the 2010 Transitions Vision Benefits

Broker of the Year! Regular eye exams and quality eyewear help protect employees' eyes and overall health â&#x20AC;&#x201C; and ensure they're seeing their best â&#x20AC;&#x201C; so they can perform their best. Transitions Optical is proud to recognize brokers who go above and beyond to promote vision benefits. Learn more about the importance of vision benefits and the Transitions Vision Benefits Broker of the Year award at www.HealthySightWorkingForYou.org

Patsy Akridge President, Akridge Financial Services

THE ULTIMATE VOLUNTARY EMPLOYEE BENEFIT PROGRAM

Bright ideas in Employee Benefits... ...from LutherSales, where innovation brings new ideas to light. Welcome to the most comprehensive employee benefit program available anywhere! Give your employees access and opportunity to purchase premium products in furniture, bedding, computers, appliances and more through convenient voluntary direct deposit or sponsored payroll deduction. It’s Luxury Made Easy®, from LutherSales. Provide the good life to ALL your employees... Now that’s a benefit! Contact: Ryann Smith, National Account Manager-Broker Division ryann@luthersales.com 856-982-9170 http://producers.luthersales.com/

n Fine Furniture, Mattresses, Computers, Appliances and more n Improve Employee Morale in Your Workplace n No Cost or Liability for the Employer n Convenient payments made through Sponsored Payroll Deduction or Voluntary Direct Deposit n Substantial Discounts for Cash Purchases n Brokers Welcome!

Health Care Consumerism Decision Support Tools

By Dr. Wendy Lynch Founder, Lynch Consulting Senior Scientist Health as human Capital Foundation

Helping Consumers Drive Change in Health Care Historically Assigned to the Passenger Seat, Consumers Take the Steering Wheel With a new Generation of Strategies and Tools From Their Employers

ealth care is experiencing a quiet revolution. Like students sneaking behind the teacher’s back to read banned books, consumers are asking for answers. Their questions are simple: What do we get and how much will it cost? In any other market such questions are normal, but in health care, where price has been invisible, undecipherable, or someone else’s problem for so long, one must gather the nerve to even ask. Getting an actual answer? That’s revolutionary.

Below are some of the many ways employers and other insurance sponsors are expanding, enabling, and empowering the reach of consumers. This review will cover four different categories of support reinforcing active consumerism: n Offering/sponsoring alternative sources of care, n Aligning incentives beyond health accounts, n Providing access to useable, timely information, n Facilitating ownership of health decisions.

New Drivers Need Driver’s Education

All four areas have evolved significantly in recent years, fueled mostly by self-insured employers who realize growth in health care expenditures is unsustainable, yet find little in new legislation that will reduce that trend.

Simple economic incentives have fueled this new demand for otherwise typical information. More specifically, the motive to shop and compare stems from the natural tendency to care about one’s own money more than someone else’s. Consumer-directed health plans (CDHP)s have shifted decades of attention from insisting that health plans must cover more expensive procedures, to wondering why those procedures are so expensive in the first place. When moral hazard (the incentive to consume more because someone else pays) withers, consumerism takes root in its place. With our own money at stake, more of us ask for the keys, take the wheel, and start the ignition. Trouble is, it has been hard to find good information to help us get to where we want to go. Those who do ask often find themselves in uncharted or unfriendly territory, where the natives seem to prefer that we remain lost and disoriented. Thankfully, navigation tools and information are becoming easier to find.

An Evolution of Support for Consumer Navigation *

Private industry understands millions of consumers, empowered with their own money and armed with good information, can exert more power than any legislated mandate to control price. Creative entrepreneurs have stepped in to fill the void in consumer tools. At the same time, the U.S. Department of Health and Human Services successfully launched its own effort for transparency (HHS.gov/open) in 2009. The site provides open access to hundreds of previously hidden databases and funding application development to bring useable information to the masses. As these movements converge—more data, innovators transforming data into useable information, consumers with growing incentives and confidence to make active choices—we are seeing increasing grassroots pressure for transparency. We also are witnessing success in managing cost and improving safety.

Offering/sponsoring Alternative Sources of Care (Mostly Primary Care) It is not a secret there is tremendous waste and redundancy in health care. Further, it is widely accepted that the lack of coordination among providers can lead to excess testing, as well as avoidable procedures and costs. These realities have led to popular efforts to create “medical homes” that better manage and coordinate care in primary care settings. However, despite some large demonstrations of this approach, employers realize that most health systems have made limited progress toward making such “homes” the norm. Consequently, leading employers are creating alternative sources of care to fill existing gaps. 1. Primary Care Clinics Outside of Insurance Perhaps the most significant action employers and other payers are taking is the creation or sponsorship of care through new arrangements or mechanisms. The most overt example is large employers building clinics and hiring providers for primary care (often salaried) to serve their population outside of an insured system (example: WeCareTLC.com). This allows far more flexibility and influence about how care is delivered and how it is priced. There are some efforts for groups of smaller employers to contract directly for primary care separate from insurance premiums. Such primary-care-only arrangements are a pushback against perceptions that too many patients get referred unnecessarily toward specialist or hospital care.

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Health Care Consumerism Decision Support Tools cont’d

2. Situation-specific Care Alternatives Both health plans and employers also are offering primary care alternatives in situations where high-costs or uncoordinated care are likely. The first circumstance is avoiding use of emergency rooms for non-emergencies. A new breed of telephonic primary care has emerged to provide low-cost, virtual appointments when a member’s usual source of care is unavailable or closed. Organizations, such as Teladoc, provide members contact with a doctor within 20-30 minutes for a fraction of the cost of an ER or urgent care visit. The second circumstance is during complex medical cases where high probabilities of excess testing, treatment and costs occur, combined with safety and quality risks from lack of coordination among providers. Employers are sponsoring in-depth, longer-term access to pharmacists and advanced-level nurses to act as translators to help patients take control of their own care. Access to an “insider,” who understands, or can investigate the benefits and risks of multiple treatments, is rarely available within the usual system. Yet, 50 percent of all medical costs are incurred by the top 5 percent most expensive, complex cases, many of which can be redundant, poorly coordinated, and even dangerous. Programs, such as Knova Solutions, focus on care for this 5 percent, filling the need for what may be hours of support.

Aligning Incentives Beyond Health Accounts While high deductibles and health accounts create a solid platform to create consumer interest in cost and value, incentive alignment doesn’t end there. Employers have found more ways to share savings from lower cost, better quality, and even accurate billing. 1. Strong Incentives for Preferred Products, Providers, or Behaviors. Examples include deep discounts (or sometimes no cost) for choosing less expensive but effective medications, or for seeing an in-network provider. As described above, in the past two years there also has been a significant trend toward offering primary care at onsite or local clinics at low or no cost to the patient. There are case examples where patients, getting consistent care from high-quality (and often salaried) primary care providers avoid expensive specialty care and hospitalizations, and save money overall. Some employers and health plans now offer financial incentives to patients who get medical procedures from facilities and providers, that offer a safe alternative of sufficient quality at a lower price than usual or nearby sources. Incentives vary from small differences in co-insurance to cash payments for a portion of the cost difference. When less expensive alternatives require “medical travel,” employers reimburse all travel for the patient and a companion. Some payers distribute some of the collective

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

savings from lower-cost services across all plan members. These strategies help to extend consumer interest in price beyond one’s out-of-pocket maximum. 3. Incentives for Finding Mistakes. Some employers are even paying patients a portion of any money recouped from incorrect charges they find in a medical bill. 4. Incentives for Better Health or Health Improvement. For payers hoping to also reduce cost through improved health, there are many examples of premium differences for achieving healthy outcomes (weight, smoking, or others), incentives for participating in programs such as coaching in diet, fitness or condition management, and adding additional funds to health accounts for practicing prevention or remaining adherent to a treatment.

Providing Access to Useable, Timely Information Employers and consumers alike are becoming more aware of variation in price and quality. One look at the 2010 Healthcare Transparency Index (on price) or LeapFrog’s site (on safety and quality) revealed shocking differences in price and safety both between and within the same chain of pharmacies or hospitals. Any medication or procedure is an opportunity to save money or get better quality. The challenge has been getting information in the hands of consumers, at a time when it matters. While not as advanced as some other consumer industries, there has nonetheless been a significant expansion recently in the types, timeliness, customization, and integration of health care information. The first three types of information have been around for multiple years. 1. Comprehensive Health Information Sites. These include reputable sources such as Mayo Clinic, WebMD, Medline Plus, or other mega-sites. These provide excellent, expert-quality reference information about various conditions and treatment comparisons as patients try to understand a health issue. 2. Search-based Quality and Price Comparisons. The best known are LeapFrog (for hospitals) and Healthgrades (for a wider list of provider types). Here, consumers can find information comparing safety, quality, and in some cases price for procedures. All of these sources derive their information from large historical databases and provide tables generated on critieria selected by the user. 3. Decision Support Tools. Some sites, such as Consumer Reports on Health, provide structured comparisons of evidence about the benefits and risks of different treatment options to facilitate informed decisions for treatment alternatives to common problems. New breeds of information go beyond providing definitions and search tools and leap ahead to applied utility. These bring

consumers to the intersection of price and quality, in real-time, and 4. Paying attention to quality can minimize safety risks associated in some cases using push technology at the time of service. with hospitalization. 1. Bringing Information to the Consumer. Sources such as 5. End-of-life planning will help insure that individuals can control change:healthcare and HealtheReports are changing the game, the level of medical intervention and care that fits their own combining quality, price, and patients’ satisfaction data in values. the format and timeframe consumers need it. In the case of change:healthcare, pharmacy prices are available by location, Employers can reinforce active participation in decision making using mobile technology, pushed to the consumer when the through their investment in care alternatives (above), such as time of a refill approaches. telephonic nurse support or dedicated primary care. By choosing An explosion of new applications will certainly change this providers whose philosophical approach encourages patient landscape in the very near future, with a 78 percent increase participation and structuring reimbursements to allow adequate in mobile health applications in the past year and 500M time with patients, consumers gain experience as active participants users of mobile apps expected by 2015. Examples include in ways that reinforce economic incentives and messaging. continuous uploading of health information to a centralized summary virtual medical record and tracking As CDHPs continue their steady systems for health accounts. Which By choosing providers whose expansion, employers will find more ways of these will catch the attention of to leverage consumers’ price awareness employers remains to be seen. philosophical approach and entrepreneurs will fill consumers’ Price and quality information do encourages patient participation information needs. The newest trends demonstrate employers’ willingness to influence consumer choice; they also and structuring reimbursements promote smart consumerism, directly change the market. Readers will learn influence the supply of health care, as much about how consumerism can to allow adequate time with well as equip workers with the tools and influence a local health system from motivation to get involved. With their companies like Serigraph, whose CEO patients, consumers gain employer’s help, a new generation of described its power in a recent book: experience as active participants consumers will not only drive their own “The Company that Solved Healthcare.” but demand a system allowing By sharing cost and quality information in ways that reinforce economic care, easy navigation to the best value at the with their employees and demanding lowest price. ; a one-price, bundled fee for common incentives and messaging. procedures, this small company changed *Note: we have not attempted to provide a full directory or the health care landscape in its small exhaustive listing of all existing and new tools, only some market in Wisconsin. It started with aligning incentives, then examples of which we are aware at this time. We have tried to cover the various categories of support delivering price and quality information to let consumers make and resources and encourage readers to explore these areas further to uncover more of the many informed choices. innovative and useful services.

Facilitating ownership of health Decisions The last category of actions being taken by employers is consistent messaging about one’s individual ownership of health and health care choices. These may come in the form of newsletters, e-mails, websites or employment agreements. Their communication emphasizes some of these points: 1. Spending more on health care means less money for wages, bonuses, and training. Helping the organization spend wisely will benefit the company and its workers. 2. There are huge savings opportunities when consumers compare prices for the same procedure or medication. 3. Staying healthy means a more active life, better performance at work, and personal savings for retirement.

About the Author: For 25 years, Dr. Wendy Lynch has studied human and business performance. Her career includes faculty positions at the University of Colorado and Principal at Mercer Consulting. Now Dr. Lynch runs her own consulting firm and serves as Senior Scientist at HHCF. She also holds an adjunct position of Assistant Professor at IUPUI. She holds a Doctorate in Research Methodology, and has produced pivotal studies in productivity assessment and human capital management. A regular speaker and blogger, Dr. Lynch is also an author of the books “Aligning Incentives, Information and Choice” and “Who Survives? How Benefits Costs are Killing Your Business.”

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

consumer DecIsIon suPPorT Tools By AlAn cohen CHieF sTraTeGY oFFiCer & Co-Founder lIAzon

Unleashing the Power of the Benefits Consumer

enefits consumerism is about transforming benefits by putting economic purchasing power and decisionmaking in the hands of participants. It’s about supplying the information and decision support tools needed, along with financial incentives, rewards, and other benefits encouraging personal involvement in altering health and health care purchasing behaviors. It’s time to strip away the confusion created by the old approach to employee benefits and provide straight answers and real data about how this new approach—retail employee benefits—unleashes the power of the consumer to drive costs out of the employee benefits system.

Fix your Benefits costs Retail employee benefits starts by providing benefits consumers with the money needed to buy their own benefits. In a recent study, Towers Watson Consulting concluded “…employers need to take a step back to consider more systematic ways of managing their health benefit programs, essentially building an operating model for benefits that mirrors disciplines the company applies to other key areas of the business.”

employees toward the purchase of benefits. In effect, you’re making a compensation decision that is independent of the insurance each employee actually buys. “Benefits” is a budget line item you determine based on what you can afford to give your employees to buy insurance. In a long-range budget, you might build in an annual increase, say 3 to 5 percent a year, that you can live with; in contrast to the variable and volatile double-digit increases you currently have to absorb.

let your People Buy Their Benefits and costs Go Down You would be very surprised if all your employees drove the same car, lived in the same neighborhood, or chose the same mutual funds. So why do we assume they all want the same type of insurance protection? As we all know, the restricted offering in the current benefits practices costs too much and those limited choices create consumer dissatisfaction.

In addition to the high costs of benefits themselves, one of the main problems with today’s system is the cost usually is unknown to the employee.

Arguably, you have no more volatile component in your company’s budget than employee benefits. Most of your other outlays are pretty much fixed costs that you might adjust only slightly year over year. But some employers have seen benefits costs leap up as much as 70 percent from one year to the next, and almost no one escapes the double-digit inflation that has become the norm every year. Exacerbating the situation is the reality that benefits consume a larger percentage of your revenue, and it may be diﬃcult to raise prices accordingly in the current sluggish economy. What you need to do is get hold of these costs and set a fixed budget for your employees’ benefits. To do this, you have to uncouple benefits costs from the plans themselves and the administration of those plans. You recognize that in a consumer economy it is not up to you to pick the plans, you are merely contributing money to your

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

In addition to the high costs of benefits themselves, one of the main problems with today’s system is the cost usually is unknown to the employee. In every survey of employees about their benefits, they estimate benefits costs at 35 to 50 percent below the actual costs. Even more significant in this equation is that the value of the benefits is virtually unknown to you, the employer.

That value can be measured by the amount people are willing to spend on benefits. The fact is when consumers are paying, they buy less costly plans. When you give people choice and the technology to provide each with a personalized, transparent recommendation, employees pick lower cost plans than the ones you picked for them. It’s pretty simple to balance this equation—bring the cost and the benefit together in the hands of the consumer. This is the power that the consumer has to drive costs out of the system. It is a power that no employer, no broker, and no insurance carrier can wield. ;

Employee Communication & Education

President & CEO National Business Coalition on Health

Economy and Heal Even Greater Need for Educa

e are at a tipping point in employer-sponsored health benefits. Rising costs and the deteriorating health of Americans are impeding the ability of U.S. businesses to compete in a global economy - impacting productivity, operating costs, and shareholder earnings. To manage this expense while also meeting the requirements under the Patient Protection and Affordable Care Act, it has become necessary for many employers to implement a variety of changes to their health benefits programs. While these changes present a challenging environment for the well-versed benefits professional, it can easily overwhelm employees, leaving them with many questions and concerns. This is a critical time for employers to take a strategic approach to benefits management that incorporates effective employee education and communications efforts as well as collaboration with other employers in their communities.

The Need to Take Action is Hard to Ignore When it comes to health care, as a nation we spend so much; yet get so little in return. Even though the growth rate of U.S. spending on health care has moderated in recent years, at present rates, total spending is forecasted to reach more than 20 percent of the country’s gross domestic product (GDP) by 2018. Employers and their covered employees share a very large portion of that bill, together picking up 56 percent of the nation’s health care tab. Despite this level of spending — in 2006, the United States ranked No. 1 among industrialized nations in terms of per-capital health spending — we aren’t even a healthy nation. According to the World Health Organization (WHO), the United States ranks 37th in the world in population health status, 39th for infant mortality, 43rd for adult female mortality, 42nd for adult male mortality and 36th for life expectancy. While employers continue to pay the larger share of premium dollars, employee cost-sharing has increased significantly over the past few years, and there are signs they may not be able to continue to absorb additional out-of-pocket health care costs. Employees are being asked to contribute more to their health care costs at a time when the average worker is receiving some of the smallest salary increases in decades. Recent studies warn that higher cost sharing may prompt patients to avoid essential doctor appointments or recommended preventive screenings and skip refills of prescribed medications, undermining the benefit of good medical care. So how does an employer encourage its employees to take ownership and play a larger role in improving their own health status?

By Andrew WebBer

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Practical Approaches to Positive Changes Beleaguered employers need to understand the “total cost of care” should be their strategic focus in managing employee health benefits, not only the employer’s share of these costs. This understanding has fueled the growth of value-based benefit design, as well as the adoption of a growing array of employee health interventions designed to improve workforce health and make every dollar spent on health care count. Not surprisingly, large employers have been pioneers in implementing value-based benefits design. But the core elements of such programs work just as well for small and mid-sized businesses that also want to effect positive changes among their employees and on their bottom line. “Sometimes the smaller the company is, the more success it has in engaging employees in health care initiatives,” said Dianne Kiehl, the executive director of the Business Health Care Group of Southeast Wisconsin, an NBCH member coalition. “They already understand that when they help their employer control overall budget costs, it helps the business grow and become more successful.” Steps to Improve Employee Health and Total Benefit Costs For positive changes to occur, it takes knowledge, commitment, and practical interventions that have the power to improve both employee health as well as reduce an employer’s total health benefit costs. Gather the Information you Need to Make Smart Decisions Determine your company’s total spending on health care: what you pay in premiums, in medical and pharmacy claims, in disability costs due to both occupational and non-occupational illness or injury, and in lost productivity due to absence or “presenteeism.” Gather the Information That Tells you About Your own Covered Members’ Health Issues and Health Risks Use claims data analyses provided by vendors, public health information profiling your region or state, or employee Health Risk Assessment (HRA) data. An HRA has proven to be a valuable tool in encouraging employees to make positive lifestyle changes affecting total health benefit costs. More than half of all firms, with 200 or more employees, reported using HRAs in 2008, and their use by smaller companies also has grown over the past two years.

th reform creates ted health care consumerim Build commitment to the Process Among Both management and non-management employees Companies that decide to become proactive about controlling health-related costs must realize success takes time. It also takes buy-in from the top of the organization to generate acceptance and participation from all covered employees. Think broad and think long-term: n Begin with a three-year plan and assess your goals annually. It is important to have a consistent message when promoting healthy lifestyles to employees. n According to the American Heart and Lung Institute, fewer than one out of five employees (18 percent) feel his or her employer encouraged participation in fitness or smoking cessation programs. But when employees did feel their company’s encouragement, participation rates in those programs were much higher. select Interventions That Fit your needs and your resources It is possible for smaller employers to achieve the same level of benefits that larger firms have realized after committing to specific employee health improvement interventions. With smaller workforces, both the monetary resources applied and the consequent return on investment should fit the size of the company. The process is sequential: investigation, planning, intervention rollout, and evaluation. As you weigh the value of interventions that are most likely to show positive results, consider: n Strategies that fit your own goals n Resources that fit your budget n Interventions that can be implemented within your workplace n Rollouts that motivate employees n Ways to evaluate your success

resources for employers Once an employer has set a dual goal of achieving better health for plan participants and interrupting the spiral of rising costs, the initial approach is to target those health-related costs it can influence most effectively. Identifying specific health risk factors among employees and addressing them with effective wellness and disease management programs don’t need to be expensive. Employers can usually manage most aspects of such programs themselves, using free or low-cost, pre-packaged resources that are becoming more readily available. For instance, “The Blueprint for Health” from the American College of Occupational and Environmental Medicine (ACOEM)

estimates medical costs, absences, and work impairment for employers that do not have access to the data or resources necessary to conduct their own analyses. Another resource available to help companies just getting started or with limited budgets is three research-based measurement and modeling tools from the non-profit Integrated Benefits Institute. For example, the IBI Health & Productivity Snapshot Tool was developed in partnership with Dr. Ron Kessler of Harvard Medical School and creates estimates of the true cost of 27 workforce chronic health conditions. The tool estimates the typical prevalence, treatment status, lost time from absence and health-related performance at work and lost productivity costs associated with chronic health conditions typical for a similar workforce. It’s modeled from a large, credible database of employee survey results.

employee education Programs Once an employer identifies its employees’ risk factors, education is often the first line of defense. Any employer, no matter how large or small, can provide widely available information from reliable sources to employees about how to better manage their health. For example, employers could conduct brown-bag lunch seminars on specific health care topics or publish lists of local resources, such as community support groups.

Average Joe – health Benefits education One such educational program developed to help employees become savvy users of their health benefits and better managers of their own health care costs is the Business Health Care Group of Southeast Wisconsin’s “Average Joe” program. A membership organization of large and small employers, the coalition designed an educational series of eight video modules featuring “Joe,” an average health care consumer, who provides basic information about health care benefits and offers practical steps employees can take to become more actively engaged as “wise” health care consumers. Each module covers such topics as “getting the most from your health care visit,” “how insurance works,” “prescription drugs,” and “the importance of prevention and lifestyle.” “Average Joe” also provides a tool to assist human resources personnel in explaining to employees key aspects of health benefits, such as how to use an explanation of benefits (EOB). The program is available to all coalition members and has been used by the majority of those companies in ways that fit their individual needs and organizational cultures.

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Employee Communication & Education cont’d

Helping Employees Manage Their Conditions

For conditions such as heart disease or diabetes, free data are FrontPath Health Coalition, the largest health care purchasing available from a variety of national health associations such as the coalition in northwest Ohio, implemented a Medication Therapy Centers for Disease Control and Prevention (CDC), which offers Management (MTM) program for employees and dependents of the a rich source of information about America’s health through its city of Toledo and Toledo firefighters. The purpose of the Medication National Center for Health Statistics’ website. Tools and information Therapy Management program is to establish a comprehensive, to help employers address obesity prevention, tobacco-free campuses multi-level, multi-professional approach to managing a patient’s and wellness programs also are available from the CDC on its Healthy chronic disease. Worksite Initiatives website. Pharmacists, acting as the bridge between patients and The American Diabetes Association also has designed a physicians, agreed to provide education to patients about three workplace intervention program, DiabetesAtWork.org, which disease states—diabetes, hypertension and hyperlipidemia — in a companies can easily adopt to keep employees healthy, improve series of five counseling sessions conducted over a one-year period. productivity, and reduce health care costs. The goal was to improve both clinical outcomes (i.e. hemoglobin A1c [HbA1c] levels and blood pressure) and humanistic outcomes (i.e. Communication and Collaboration Employers can harness the power of the increasingly popular satisfaction with care and quality of life). The program also sought to social media, such as Facebook, YouTube and Twitter, to disseminate reduce emergency room visits, hospitalizations, and absenteeism. A total of 97 employees and dependents enrolled in the health information and educate their employees on becoming better health care consumers. Many of program. As a result of the MTM program, these Internet sites already are being participants decreased both HbA1c Since the overall health used by employees and their families to and blood pressure levels. Pharmacists communicate other types of information. also observed significant improvement of the community has E-mail, company Intranets, newsletters, in patient knowledge about all disease home mailings and in-person or videotaped states assessed, and the number of office, a significant impact on employee meetings also are useful tools to emergency room visits and hospitalizations employees’ behavior, it is help employers spread the word about also decreased. improving health status and lowering essential employers reach Providing Complex Information health care costs. Because everyone prefers in Consumer Friendly Ways beyond their own employee getting information differently, employers It does no good to provide employees should exploit a variety of media to populations and worksites. with quality and customer satisfaction communicate health messages. information if they can’t understand it. Since the overall health of the The Colorado Business Group on Health, community has a significant impact on a non-profit coalition representing large purchasers of health care employees’ behavior, it is essential employers reach beyond their services and more than 300,000 covered lives, produces an annual own employee populations and worksites. report presenting complex information in a consumer-friendly format. Everything an employer does to keep its employees healthy will With all of the health plan offerings in Colorado, it can be difficult to fail if it is sending them home after work to unhealthy communities. decide which plan would benefit an employer and their employees By the same token, a single employer does not have the purchasing the most. So each year CBGH develops and disseminates a Health leverage to transform the health care delivery system by itself. As Matters Quality Report presenting quality and consumer satisfaction more employers recognize the importance of collaboration and rankings of the state’s health plans to consumers. It also includes communication, they can have a significant impact on the local health suggestions for improving patient safety, disease management and care delivery system, as well as on the health of their employees and health tips. the community that surrounds them. ;

Health Care Agencies and Associations Offer Resources For employers that discover a significant portion of their current health benefit costs are driven by a few specific chronic conditions, a variety of free workforce intervention programs are available at no or low cost.

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Andrew Webber is president and CEO of the National Business Coalition on Health. NBCH is a national, non-profit, membership organization of 52 purchaser-led business and health coalition representing over 7,000 employers and 25 million employees and their dependents across the United States. NBCH and its members are dedicated to value-based purchasing of health care services through the collective action of public and private purchasers. For additional information visit: www.nbch.org.

We’d Love to Explain How Great Our BenAdmin Software as a Service Performs (But Our Clients Tell The Story Much Better) Our clients will tell you how we’ve gone even further in uncovering and solving their employee and HR management needs. Listen to what they’re saying, then ask yourself the tough question: Am I getting what my company needs? Here are five specific questions you should be asking about your current BenAdmin system:

Does your current BenAdmin vendor charge you additional fees for reporting, software upgrades or true customization?

Can your BenAdmin system provide imputed income calculations, premium deductions, wellness discounts based on your rules, and data feeds to all of your vendors?

Can your BenAdmin system enroll your associates in ANY available benefits product based on your rules?

Does your BenAdmin system support single sign-on, life event and status change management, coverage summaries, paystubs, and benefits and compensation statements?

Do your employees recognize your BenAdmin solution as a reliable, consistent communications conduit with your company?

Streamline your administrative process and save time and money with the Empowered Benefits BenAdmin solution. Call or go online to schedule a demonstration.

Medical Tourism / Health Care Access

By Laura Carabello, CCO CPR STrategic Marketing Communications

Planes, Trains and Automobiles: Ac

t’s likely the issues related to access to affordable, quality health care affecting so many Americans will persist—despite considerable noise from various sectors calling for repeal of health care reform legislation. Former U.S. Secretary of Health and Human Services (HHS) Tommy Thompson recently predicted that despite the shifting political landscape, health care reform will not be repealed. What does this mean to employers, health plans and individuals? Amid tight budgets and diminishing choice, the medical travel option promises to open new avenues for better, more affordable care for 2011—and for decades to come. This dramatic shift stems primarily because medical travel is no longer about patients traveling abroad for care, but about finding the best medical option for their needs no matter where it takes them. Whether this translates into taking a long car ride, hopping on a bus or train, or boarding an airplane, individuals can look forward to accessing the care that best suits their medical needs and their pocketbooks. Medical travel is drawing interest from individuals and companies alike for its positive health improvement and return-oninvestment. Medical travel also provides cost-effective options with transparent pricing, and wide access to the best surgical options available, especially with procedures that are unavailable, restricted, or too costly in the United States.

Compromised Care at Home—A Closer Look

(COE), where patients can choose from superior clinical results in elective and specialized surgeries priced at 30 to 50 percent less than the average. As with travel abroad and in the case of domestic travel for care, medical travel facilitators coordinate pre-travel communications for the client to the hospital and physician; arrange after-care needs; and track satisfaction and medical outcomes. In general, they offer plan prices that include surgery/procedure costs, airfare, lodging, transfers, 24/7 concierge service, savings potential, and accredited hospitals. The most proficient medical travel intermediaries offer surgery education, turnkey member care, marketing, communications, and full data reporting (outcomes, savings, claims) to assist in adoption and implementation. Additionally, they demonstrate genuine health care experience and leadership, proven, HIPAA-compliant operating systems, an emerging suite of vendors, and in-depth understanding of the health care continuum. U.S. COE patients have access to domestic facilities that compete at a global level, performing a high quantity of a given procedure while producing measurably superior clinical results at reasonable rates. Better outcomes mitigate liability claims, which in turn stem the tendency toward defensive medicine. Take for example Barry Yontz, a 58-year-old sales manager from Rockton, Ill. He required surgery to repair the torn meniscus in his left knee. With the assistance of BridgeHealth Medical, a national provider of medical travel services to COEs, he was able to connect to the Orthopedic Surgery Center of Orange County (OSCOC), a private clinic in Newport Beach, Orange County, Calif., with an excellent reputation. They offered a reasonable rate for outpatient arthroscopic surgery. Every step of the way the BridgeHealth care coordinator made the process run smoothly for Yontz, coordinating travel, accommodations, amenities, food—and every detail in between all the way through

Under health care reform, the number of covered (insured) individuals has increased and will continue to do so. Those with a medical condition that had left them uninsurable now have the ability to enroll in a new federally subsidized insurance program. Unfortunately, with more people having health coverage, the demand for physicians will increase at a time when a shortage of health care professionals—particularly primary care physicians—has already reached a critical point. In fact, even those who currently have insurance are challenged to find doctors. With so many new Procedure entrants having insurance, the pressure will lead to longer wait times for care. This has proven to be the case in Massachusetts where similar reforms have been in place and health insurance CABG w/o cath is mandated. A survey in USA Today demonstrated that CABG w/cath w/comp long wait times in Boston, especially for elective surgeries or Hip Arthroplasty diagnostic procedures, stem from the Massachusetts 2006 Knee Arthroplasty health reform initiative requiring nearly every resident have Bilateral Knee health insurance. The word is that it often takes 60 days or Arthroplasty more to get an appointment with a physician. Shoulder Arthroplasty Delayed health care, for any reason, does not sit well with the average American, and many of them will gladly turn ACL Repair to medical travel as a viable, quality alternative with little or Laminectomy no wait times. Gastric sleeve or

The Rise of Domestic Medical Travel

Typical Int’l Medical Travel Contracted Rates

U.S.

Costa Rica

India

$60,000 - $100,000

$32,000 - $36,000

$25,000

$8,500

$70,000 - $110,000

$47,000 - $53,000

$25,000

$8,500

$45,000 - $50,000

$20,000 - $25,000

$13,400

$8,000

$43,000 - $50,000

$19,000 - $23,000

$12,400

$7,000

$65,000 - $80,000

$32,000 - $35,000

$21,200

$14,000

$40,000 - $50,000

$20,000 - $24,000

$10,100

$8,500

$20,000 - $25,000

$10,000 - $14,000

$4,800

$6,500

$20,000 - $25,000

$10,000 - $14,000

$7,000

Gastric bypass

$35,000 - $50,000

$20,000 - $25,000

$9,800 - $12,900

$9,800 (sleeve)

Gastric banding

$25,000 - $40,000

$13,000 - $18,000

$9,800 - $10,300

$7,500

In recent years, medical travel has made an interesting shift to encompass a growing number of U.S. Centers of Excellence 64

Typical Case*

Typical Domestic Medical Travel Contracted Rates

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

*What a sponsor pays after preferred provider organization (PPO) discount. Source: BridgeHealth Medical; 2009.

ccess to care Defines medical Travel aftercare and follow-up. Even after paying for all travel and hotel costs for Yontz and his wife, his insurance company saved almost $3,000 compared with a similar surgery he had near his home the previous year.

Access to specialized care overseas Besides a wider field of choice for excellent care at home, medical travel also offers greater choice on a global scale in the form of unrestricted access to specialized care. The appeal of this for many Americans rises from a need for care associated with technology that is not available or a procedure that is prohibited or illegal in the United States. Other countries may offer cutting-edge reproductive technologies. Additionally, there may be procedures that are not yet FDA-approved but are available outside U.S. borders. Stem cell procedures and HIFU (ultrasound treatment for prostate cancer) come to mind as examples in this category. PlanetHospital.com is a California concierge service that searches the globe to find the components for reproductive technology and international adoption. Prospective parents often use an egg donor from one country, a sperm donor from another, and a surrogate who will deliver in a third country, thus bypassing the laws controlling such methods. For Europeans and Americans looking for low-cost, high quality infertility treatment, Spain, in particular, offers a feasible alternative for these reasons: n There are no age restrictions for in vitro fertilization (IVF) n Every woman is allowed to receive IVF, independently of their legal status or sexual orientation n Egg and semen donors are available. (The donor, if it is not conjugal, remains anonymous.) n Same-sex marriages are legally accepted n Partners can serve as donors, which is important for women, in particular, who are facing chemotherapy or postponing childbirth. According to a representative at Sphera, a multi-national company that works with medical travel facilitators in the United States and abroad through a network of health care facilities in Brazil and Spain, the prices in Spain tend to be lower due to high physician competency, especially in Barcelona and Madrid. Sphera provides access to various fertility treatments, including: n High quality IVF treatment for women, single women, and couples with rates of about 70 percent of success per cycle n Andrology – analysis of individual male fertility n State-of-the-art technology like IMSI, which increases fertility success rates n Fertility Preservation – to preserve female and male sperm and egg donation for a variety of reasons, including health problems, vasectomy, and postponement of birth. n Lesbian couples – One partner donates eggs to the other woman. An anonymous semen donor fertilizes the eggs, which are implanted so that genetically and physically both female partners feel more integrated and linked to the baby. n Artificial insemination from a conjugal or anonymous donor.

Because of its fertility laws, fertility clinics in Spain also are able to facilitate fertility for homosexual men. This requires an egg donor and a semen donation from one of the male partners. From there, the fertilized egg must be relocated to a country where a surrogate mother is allowed to have the egg implanted in her womb—a process that is not currently permitted in Spain. Sphera’s health care facilities have relationships with fertility clinics in India and the Ukraine, where surrogacy is legal.

medical Travel: The road Ahead As a result of health care reform initiatives, uninsured and underinsured individuals, as well as employers looking to offer more options for their workforce, will turn to medical travel for lower-priced, higher-quality care. This pressure point will incense U.S. facilities to do business differently—i.e. put the patient first— in order to stay competitive. Medical travel facilitators will continue to play an important role in terms of vetting health care facilities, matching patient needs with destination COEs, and arranging every aspect of the patient experience. As the widespread quest for better health care continues, medical travel will remain a steady force in years to come, meeting a growing demand. As word spreads about lower out-of-pocket expense, improved ROI, access to specialized care, and greater freedom of choice from a network of domestic COEs, the popularity of medical travel will become the norm. Eventually, the idea of going to a hospital for care simply because it is close to home, and regardless of quality, will become obsolete. ; Laura Carabello has been an entrepreneur and a strategy consultant in both domestic and international businesses related to health care and technology since 1985. Her fields of experience span from health care and health care information technology to health care technology disciplines and related infrastructure. She has a particular interest in medical travel, health care/health care information technology, managed care and employee benefits, pharmaceuticals and other business-to-business and direct-to-consumer health care and technology companies. She has been instrumental in the growth and development of companies worldwide and has orchestrated their transition to a Web-centric world. She served as a member of the advisory board of the International Medical Tourism Association (IMTA) and is the publisher/managing editor of Medical Travel Today, the authoritative, online business-to-business international newsletter of the medical tourism industry (www.medicaltraveltoday.com) as well as Your Medical Travel, the consumer newsletter (www.yourmedicaltravel). Carabello conducts marketing presentations at high profile meetings and conferences, including the European Medical Travel Conference (EMTC) in Venice, Italy, May 2010, where she addressed the impact of U.S. health care on the medical travel industry. She chaired the first collaborative meeting for the Drug Information Association (DIA) and Health Information Management Systems Society (HIMSS); has presented to the American Association of Preferred Provider Organizations (www.aappo.org); Health Care Administrators Association (www.HCAA.org); and a targeted presentation on medical tourism for the Self Insurance Institute of America (www.SIIA.org). She has been invited by multi-national governments, hospital systems, and private sector companies to present at international meetings on medical travel and health care issues. Founder and principal owner of CPR Strategic Marketing and Communications, (www.cpronline.com), Carabello has more than 25 years’ experience in business development, marketing, and corporate positioning. As strategy consultant, she has worked with more than 1,000 companies, including public and private organizations. She also serves as a strategic advisor to public, private and not-for-profit entities, and has been invited by the U.S. Federal Trade Commission to testify on health care advertising and marketing ethics. Carabello holds a Bachelor of Science degree in Journalism from the Newhouse School of Communications at Syracuse University, and she is a candidate for a Master’s Degree. In 2009, she was honored by the American Chiropractic Association as “Humanitarian of the Year.” Carabello was invited for membership status in the Healthcare Women’s Leadership Trust, was awarded the annual citation from the NJ Association of Women Business Owners and was elected as a “Pioneer Woman of the 90s.” In 2007, she was named as a “Woman of Influence” by the YWCA of Bergen County and currently serves on the “YW” Board of Directors. She can be reached at . lcarabello@cpronline.com; 201.641.1911 x12 EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Behavioral Health Care

By Ronald E. Bachman President & CEO Healthcare Visions

Preserving Mental Health L

he high cost of general health care has encouraged greater analyses of chronic and persistent conditions. It is now evident that one cannot successfully, or cost effectively, treat illnesses like hypertension, diabetes, asthma, congestive heart failure, and other conditions without dealing with related (or co-morbid) stress and depression. Return on investment (ROI) analyses show CEOs that improving corporate mental health is in their own best interest, the interest of their employees, and the interest of their company. It’s time this problem is addressed by those who can see the broad picture and understand that mental health translates into corporate “wellth.”

Mental Health Reform – A Bipartisan Agreement Mental health reform started with the passage of the 1996 Mental Health Parity Act. During the subsequent 12 years, more than 40 states separately equalized benefits between mental health and other coverages. As a result, states disproved the cost of coverage concerns and demonstrated the value of care, integrating mind and body. In 2008, the federal Domenici-Wellstone Act expanded upon and standardized state laws. In 2010 the Patient Protection & Affordable Care Act (PPACA) included mental health as an essential benefit and continued the 2008 parity requirements. Mental health reform is the result of bipartisan support. Senators Pete Domenici (R-N.M.) and Paul Wellstone (D-Minn) were legislative sponsors. Ted Kennedy (D-Mass) was an advocate for parity to eliminate discrimination. Former Speaker of the House Newt Gingrich (R-Ga) favored parity as an outcome of scientific brain research. Mental illness does not recognize party or political philosophy, and support for mental health crosses all economic and social segments.

Stress and depression are treatable chemical imbalances in the brain, not a character weakness. However, mental illness is different from other illnesses. With mental illnesses, people tend to push away family, avoid providers, and exhibit high levels of non-compliance with getting the appropriate care. It is for these reasons that business support is critical in areas of early intervention, coverage of medications, and respect for privacy. Career, job security, and work assignments should not suffer because one seeks treatment.

No Health Without Mental Health The good news is that there is a growing recognition that there is no individual or corporate health without mental health. There is corporate discomfort, ignorance, and uncertainty when dealing with the issues and the impacts of mental illness. For those suffering, there is still a stigma, discrimination, and fear of disclosure. There also is individual responsibility for health and mental health. Individual “human capital” is the value each person brings to an employer to do the work required for personal and career success. What each person brings to the table is skills, contacts, knowledge, creativity, and health (mental and physical). Without health the other skills are compromised. It is up to the individual to seek care and comply with treatment if they are to maximize their work potential.

Return on Investment Employers offer health coverage to their employees and families because they expect a financial return on their investment. They offer the security of health care coverage because they want their employees on the job, productive, and undistracted by health concerns for The Corporate Costs of Mental Illness

Workplace Awareness Corporate “human capital” is a term used to reflect the value of employees in an organization. It may be a cold analytical term equating humans to machines, but business needs to make decisions on productivity and effectiveness of its assets—be they human or equipment. If a company’s computers crashed and production ground to a halt, the CEO would demand immediate action to re-establish the “corporate brains.” In developing a knowledge-based workforce, it is just as important for CEOs to take care of the “central computer” within each employee. As health care costs continue to rise, studies have focused on chronic and persistent conditions. Three outcomes have emphasized the value of improving workplace mental health: 1. Scientific evidence proves depression is not a character weakness. It is a chemical imbalance in the brain and is treatable, 2. Medical studies demonstrate that mental and physical diseases and conditions are inter-related, and 3. Analytical (ROI) studies show the bottom-line financial and productivity benefits of maintaining and improving a company’s mental health. 66

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Medical Intensity Low

Medium

High

Type of Mental & Emotional Condition Frustration Anxiety Low Stress Minor Depression

Moderate Stress Depression Anger Attention Deficit Posttraumatic Stress High Stress Major Depression Schizophrenia Bipolar Disorder Obsessive Compulsive Panic Disorder Anorexia-Bulimia

Direct Health Plan Costs

Co-Morbid Conditions (Related Conditions)

Low

Tobacco Use Sleeplessness Colds/Flu Blood Pressure

Increased Errors Presenteeism Loss of Teaming

MEDIUM

Hypertension Musculoskeletal Digestive Gastrointestinal

Moderate-HIGH Unscheduled Absences Poor Morale Relation Conflicts Lost Productivity

High

Cardiovascuar Cancer Diabetes Asthma Back Pain Alcoholism

HIGH-Very High Low Productivity Divorce Turnover Early Retirement Worker’s Comp Disability

Very High

Accidents Burns

Very High Death Work Violence Disaster Recovery

Catastrophic Violence Suicide

Indirect Corporate Costs

eads to corporate ‘Wellth’ themselves or their family members. They offer benefits to attract and retain good employees, thus keeping down “turnover” costs of hiring, training, and replacing staff. Cutting costs and shifting risks to employees is easy to do. What’s hard is to perform a real ROI analysis that includes direct and indirect costs. If health care was viewed as an investment with a desired ROI, the CEO might find that cuts in their health care budget and restrictions on mental health coverage are actually a drain on corporate productivity and profits. A study by Cornell University and the University of Pennsylvania developed an approach that modeled the financial impact of investing in a worker’s health status. The study used traditional business ROI modeling to measure the direct and indirect costs of nine major medical conditions. Direct costs are the medical plan costs incurred as a consequence of an illness. The indirect costs are the costs of absences and impaired presenteeism (coming to work with an illness that impairs the usual level of productivity). The results were astounding and unexpected. It is likely direct health care costs represent the company’s second or third highest expense (after salary costs). But costs to the corporate bottom line are more than just direct health care expenditures. Indirect or related operational costs from untreated health care conditions are just as important. Mental health costs were not the highest insurance plan costs, but were the highest total corporate costs per worker (direct and indirect costs). On average, 4.3 percent of workers suffer from depression, with a total work cost of more than $25,000 per worker. Depression related corporate costs were more than double the $12,000 per worker corporate cost of diabetes. The results were clear. The number one overlooked health condition impacting the corporate bottom line was untreated depression.

Total corporate costs of mental Illness Even emotional disorders not rising to the level of clinical depression can affect corporate efficiency. If untreated with no prevention or early intervention, these conditions can progress to higher direct costs and more serious impacts on indirect corporate costs. The following chart shows the spectrum of corporate cost impacts from minor to more major mental and emotional conditions. The spectrum from low cost to catastrophic conditions may increase the health plan costs, but due to indirect costs, the overall corporate impact can be many multiples of the plan medical payments. Staff conflicts, turnover, and workplace violence can be devastating to the corporate mission. Without treating underlying depression, patients tend to be non-compliant with taking medications, making and keeping office appointments, and are frequently unable to deal rationally with other medical symptoms. Untreated depression is the underlying cause behind many payments made for treatment of digestive disorders, musculoskeletal, and cardiovascular diagnoses.

stress, Depression & mental health – c-suite Issue A focus on individual and corporate mental health is clearly a C-suite issue. Human resource executives and benefit managers can elevate their roles with programs to improve corporate mental health. Constructive tension may be helpful in an organization, but stress and depression are destructive. Anxiety is the result of a person being in a state of uncertainty and in an environment where they lack control. How many experience that daily? Mental health is the result of dealing proactively with mental illness. The following is a check list for proactive C-Suite action. 1. Do not treat mental illness as a single diagnosis. Surveys show employers do not understand the interrelationship between many diseases and depression—generally referred to as co-morbid conditions. Many employees cannot effectively recover from or stabilize chronic and persistent conditions such as diabetes, asthma, heart conditions, hypertension, or cancer because of a coexisting level of depression. 2. Protect and respect medical privacy. Do more than provide insurance coverage. A recent survey showed that benefit managers believed they were providing high quality accessible behavioral health programs to the corporate staff, but 50 percent of their employees feared using the benefits because of stigma and the potential loss of their job or a promotion. The high voluntary response rate to the survey from those suffering from depression indicated a cry for help and a need to voice concerns that could not be stated directly to corporate management. 3. Treat underlying clinical depression. Patients tend to be noncompliant with taking medications, making office appointments, and are not able to deal rationally with other medical symptoms. Untreated depression also is the underlying cause behind many payments made for treatment of digestive disorders, musculoskeletal, and cardiovascular diagnoses. 4. Educate staff and management that depression is a treatable condition. It’s a chemical imbalance in the brain, not a character weakness. According to the Institute of Medicine, 30,000 people die each year from suicide. Ninety percent have diagnosed treatable depression. 5. Know the costs and ROI numbers. CEOs should be provided with cross-silo, multi-year ROIs for health conditions affecting corporate human capital. In doing so CEOs may find the number one overlooked health condition impacting the corporate bottom line is untreated depression. View this article in its entirety. Please see www.cdhcsolutionsmag.com ;

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Health, Wellness and Risk Measurement

Put DSS resources to work for you

Health Risk Assessment

Proprietary DSS Health Risk Assessment (HRA) measurement instruments, benchmarking, analysis and reporting tools.

Health Care Engagement Index

The DSS Health Care Engagement Index速 (HCEI) tells you where your members or employees stand and provides direction for increasing engagement and improving health and wellness.

Risk-Based Risk-Sensitive Segmentation Product Design Our advanced risk-based segmentation approach stratifies your population, profiles the risk segments, and provides clear guidance for targeting high risk segments with the appropriate programs, messages and incentives.

DSS Risk-Sensitive Product Design uses choice modeling to align consumer preferences and health risks with suitable benefit designs.

Let us find the solution right for you.

800.989.5150 | DSSResearch.com

www.CDHCSolutionsMag.com

Who’s Who Profiles

Access these profiles online at www.CDHCSolutionsMag.com and www.EmployersWeb.com HSA/HRA/FSA Technology: Administration & Management

HSA/HRA/FSA Technology: Administration & Management

AmeriFlex

TSYS Healthcare®, provides end-toTSYS Healthcare end strategic payment solutions for 612.338.3871 consumer directed healthcare. We www.tsys.com/solutions/healthcare partner with benefits administrators, healthcare@tsys.com financial institutions and health plans and software providers to navigate all aspects of HSAs, HRAs, FSAs, cash reimbursements and lines of credit. TSYS Healthcare cards offer participants the security they expect along with the ability to conveniently access funds from multiple accounts and manage their benefits payments with simplified single-card access. Clients and partners benefit from simplified processes, reduced paperwork and cost savings that contribute to improved return on investment.

“We built the TSYS Healthcare platform to meet the market demand for reliable, configurable and intelligent solutions. Understanding the dynamic U.S. Healthcare market, our customers rely on our option-driven system to prepare them for the future. “ — Trey Jinks, Group Executive, TSYS Healthcare HSA/HRA/FSA Technology: Administration & Management

DataPath, Inc., is one of nation’s largest providers of CDH solutions specializing in account-based administration systems.

DataPath, Inc.

1601 WestPark Drive, Suite 9 Little Rock, AR 72204 501.296.9990 www.dpath.com

Since 1984, service providers using DataPath systems have provided administrative solutions for over 1 million participants of FSA, HRA, HSA, and COBRA. DataPath is the only solutions provider to design and deliver a full Suite of systems for handling 125, 105, 132, COBRA, HSAs, Credit and Debit Cards all delivered to account holders through a single Internet portal, myRSC.com.

“With the significant changes in healthcare today, our software solutions allow users to create custom plans for clients that benefit both the employer and employee. Not only have we created a single platform for all systems with myRSC.com, with the integration of our mySourceCard Debit Card at Wal-Mart and other retailers, our clients are able to offer a hassle-free solution with 100% compliance.” ®

302 Fellowship Road, Suite 100 Mount Laurel, NJ 08054 Internal Sales Support: 888.868.3539 (FLEX), option 4 Proposals and Marketing Inquiries: info@flex125.com www.flex125.com   Established in 1998, AmeriFlex is an independent benefits administrator providing technology-based, consumer-driven benefits and compliance solutions. n AmeriFlex

Convenience Card® Consolidated FSA/HRA/HSA/CRA Debit Card Platform n AmeriFlex Convenience Sleeve Consolidated FSA/HRA/HSA Healthcare Payment Solution n AmeriFlex Convenience Portal WebBased System for Streamlined Administration of CDHC Plans

n Mongoose®

Enterprise Class, Web-Based Solution for COBRA Administration n ePOP Instant POP Plan Online Document Ordering n Invoice Manager Paperless, Automated System for Group Claim Activity and Funding Administration

“At AmeriFlex, we are constantly looking for new ways to bring innovative and cost-effective payment solutions to the market in order to improve efficiency and simplify the delivery of healthcare products and services to all stakeholders.” — William Short, President & CEO, AmeriFlex HSA/HRA/FSA Technology: Administration & Management

No other solution available today has been so Lighthouse 1 deliberately designed to meet the benefit plan design, user experience and unique workflow 9800 Bren Road East, Suite 250 management needs of administrators, employers, Minneapolis, MN 55343 and consumers. As a web-based, real-time www.lighthouse1.com platform, Lighthouse1 OnDemand™ saves 952-908-9056 employers and consumers more than $1.2 billion a year in tax savings and administrative costs. Lighthouse1 OnDemand is the engine that combines technology, healthcare and banking to provide automation in the healthcare industry. Lighthouse1 and its partners serve more than 2.5 million consumers, making Lighthouse1 the nation’s largest web-based healthcare solution that manages HSAs, HRAs, FSAs, and Transit Plans.

“Rising healthcare costs, increased employer expectations and a challenging economy create tremendous opportunities in the CDH industry. Lighthouse1 is uniquely positioned to combine superior services and innovative technologies to administrators, employers and consumers. With the recent launch of Lighthouse1 Mobile, consumers now have even more access to their healthcare benefits and more control over their healthcare spending. Together with our strong network of partners, we are poised to keep reducing costs and simplifying the business of healthcare.” — Jeff Young, Chief Executive Officer for Lighthouse1 EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Who’s Who Profiles

www.cdhcsolutionsmag.com

Solutions to help your innovative health and benefit programs. Tools and Technology

As the premier provider of proven CDH technology solutions for benefits administrators, we know that your needs are many and varied.

T o ta l P o pu l at i o n H e a l th Car e Ma n a g e m e n t

314.439.5300

www.bemassoftware.com PayDirect CDH gives you all the functionality sales@bemassoftware.com that you need to administer your consumer driven healthcare benefits programs with ease and efficiency. PayDirect CDH... Is fully integrated with the industry’s leading benefits card that achieves the highest auto-substantiation rates n Administers complex HRAs with multiple tiered payouts and a variety of deductible arrangements n Handles specialized financial management and billing requirements n Provides access to an extensive range of reports with advanced functionality n

Automates repetitive processes. Imports and exports data to eliminate manual entry and allow integration with other business systems n Fulfills critical compliance requirements such as discrimination testing and CMS reporting n Includes an easy-to-use, customizable online portal n

Call today! Don’t wait to increase your efficiency.

P r e s c r i pt i o n B e n e f i ts Ma n a g e m e n t

We’re facing a healthcare crisis in our country. The cost of providing benefits—including prescription benefits—has become extremely painful for employers. The problem is that until now, solutions haven’t come to market that really address the root problems of the issue—cost and use. However, thanks to Align, Restat’s new pharmacy benefit model, self-funded employers will have a PBM whose interests are aligned with theirs. This partnership will enable employers to save millions of dollars in prescription drug costs annually. To learn more about Align and to read what internationally recognized consulting firm Milliman has to say about our process visit www.align.restat.com. David Kwasny, R.Ph., President

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

www.CDHCSolutionsmag.com

Who’s Who Profiles

Access these profiles online at www.CDHCSolutionsMag.com and www.EmployersWeb.com tools and Technology

Liazon was founded in 2007 to tackle the myriad problems inherent in employee benefits for small and mid-sized employers. Liazon’s retail employee benefits solutions give employers a cost-saving defined contribution strategy for all benefits. Liazon’s Benefits Exchange™ is the online store where employees find, learn about and purchase health care and other insurance products.

Liazon 737 Main Street, Suite 200 Buffalo, NY 716.803.6190 708 Third Avenue New York, NY 212.209.3836 www.liazon.com

“Liazon’s Bright Choices Benefits Exchange is the online store where employees shop for their benefits. It brings an exciting new retail model to employee benefits that empowers benefits consumers and saves employers money. Think of it as the ‘amazon.com’ for employee benefits.” — Ashok Subramanian, Co-founder and CEO, Liazon P R O F E S S ION A L

DE V ELO P MEN T

V o l u n tar y B e n e f i ts

Tired of offering the same LutherSales Appliance & old voluntary benefits to your Furniture Sales, Inc. employees? Think outside the box with the “Most 60 Plant Avenue,Suite 2 Comprehensive Employee Hauppauge, NY 11788 Purchase Program” from LutherSales.com. Your employees 631.236.4343 1.800.358.6466 will appreciate Luxury Made Easy®; furniture, mattresses, info@luthersales.com computers and appliances through convenient voluntary direct deposit or payroll deduction. Provide the good life to ALL your employees... Now that‘s a Benefit!

“Times are tough, traditional credit has never been more challenging.... HR Executives are recognizing that they have a special opportunity to impact the lives & lifestyles of their employees through the benefit of LutherSales. com. Our value proposition is compelling and a great story to go with it! Let’s face it why wouldn’t you offer a program like ours? It’s FREE and there is absolutely no employer liability.” —Scott Glickstein, President LutherSales Appliance & Furniture Sales, Inc. A S S OCI A T ION S

America’s Health Insurance Plans (AHIP) 601 Pennsylvania Ave., NW South Building, Suite 500 Washington, D.C. 20004

The AHIP Center for Insurance Education and Professional Development has offered educational programs for more than 50 years to professionals like you.

AHIP Center for Insurance Education and professional development 601 Pennsylvania Ave., NW South Building, Suite 500 Washington, D.C. 20004 800.509.4422 www.AHIPInsuranceEducation.org

With more content online, including overall health insurance, reform implementation, LTC, DI, and more, the

877.291.2247 www.ahip.org

America’s Health Insurance Plans (AHIP) is a national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans. Our member companies offer medical insurance, long-term care insurance, disability income insurance, dental insurance, supplemental insurance, stop-loss insurance and reinsurance to consumers, employers and public purchasers.

Center will help you learn, achieve, and succeed.

EmployersWeb.com™ I www.cdhcsolutionsmag.com I CDHC Solutions™ I Solutions Outlook 2011

Who’s Who Profiles

www.cdhcsolutionsmag.com

Solutions to help your innovative health and benefit programs. P har m a c e ut i c a l B e n e f i ts Ma n a g e m e n t

D e c i s i o n S upp o rt & C o st - S av i n g s T o o l s

Envision Pharmeceutical Envision Pharmaceutical Services, Inc is a full service pharmacy benefits Services, Inc. management company that delivers! John Ewell, EVP Marketing We deliver because our business 925.487.3266 model is based on transparency www.envisionrx.com and full disclosure, guaranteeing jewell@envisionrx.com 100% pass through pricing of all pharmaceutical manufacturer rebates and administrative fees at the point-of-sale. Additionally, our affiliate, Envision Insurance Company, is a national Prescription Drug Plan which enables us to offer a variety of solutions for your retirees. Envision is truly a “different” PBM! “Envision is pleased to be recognized by its clients surveyed by the Pharmacy Benefits Management Institute for three consecutive years as the top performer in virtually every category evaluated. This solidifies our leadership position in providing transparency and full disclosure to the PBM marketplace while continuing to find innovative solutions.” — Kevin M. Nagle, President & CEO, Envision Pharmaceutical Services/Rx Options

Seeking Direction About

Health Care Reform?

Health Reform Navigator includes:

Timelines – Multiple timelines including a unique Navigator Legislative Timeline with links to all insurance and taxes/ penalties in PPACA.

Regulations – Direct point and click access to DOL, HHS, and IRS health reform regulations and related information (FAQ, model notices, videos, and more). Surveys – Direct point and click access to national surveys on what employers are doing in response to PPACA.

HOT Topics – As regulations are announced, special attention is provided for easy viewing of What’s New (including FAQ, Fact Sheets, and Videos).

Updates – For a $99 charge you will buy the current updated Navigator for PPACA and the access code to any updates provided at this same website.

“If you want to grow your Health Savings Account faster and with ease, My HSA Rewards is a smart and simple way to put real cash into your HSA from the purchases you make every day.” — Sanders McConnell, President, My HSA Rewards

Health Reform Navigator—Your complete Health Reform Information Center. It provides an aggregation and “point & click” navigation to information regarding the Patient Protection and Affordable Care Act (PPACA).

PPACA – Direct point and click access to Insurance- and Taxes and Penalties-specific sections of the law. Locate immediately the actual language of PPACA for each topic you are interested in (e.g. grandfather clause, small group subsidy, child coverage).

My HSA Rewards allows individuals My Hsa Rewards to earn cash rewards for purchases 12460 Crabapple Road made through merchants Suite 202-254 participating in the program. Alpharetta, GA 30009 At launch, the merchant network consists of hundreds of major online 404.551.5543 retailers representing thousands of www.myhsarewards.com brands. The program works like an sanders@myhsarewards.com airline mileage program, but, instead of earning miles, participants earn cash rewards that are directed to a health savings account (HSA). There is no cost to the employer or the employee to join.

For $99 you gain Instant Access to Health Reform Navigator AND Preventive Care Navigator (A $198 Combined Value).

Start navigating today. Download your Health Reform Navigator www.cdhcsolutionsmag.com

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

Center for InsuranCe eduCatIon and ProfessIonal develoPment

Learn. Achieve. Succeed.

Health Care Reform Implementation Courses CE Credits and a Special Price The AHIP Center for Insurance Education and Professional Development’s online courses, Health Insurance Advanced Studies, Parts A and B, focus on the impact of reform initiatives and specific health insurance products and policy options. Courses that fulfill Ce requirements In select states, students qualify for up to 14 CE credits by taking the Health Insurance Advanced Studies, Part A course and up to 7 CE credits for the Health Insurance Advanced Studies, Part B course.

Take 10% off your enrollment with coupon code CdHC10 until December 31, 2011. www.aHIPInsurance education.org

Visit www.aHIPInsuranceeducation.org for more information.

CIE_111_197_HealthCare_Reform_CDHC_Ad_2F.indd 1

1/31/11 10:48:36 AM

Who’s Who Profiles

www.cdhcsolutionsmag.com

Solutions to help your innovative health and benefit programs. Effective print and online opportunity to put your company, its solutions, and your chief sales executive in front of 60,000 print and online prospects. How do you make your company and its solutions accessible to more than 60,000 health care benefits decision-makers, generate leads, and do so cost effectively? By participating in the industry’s only online, member-based networking community!

le Online Examp

New Customer Online Market Impact Program

FieldMedia has developed a special online-only offer to help you create a leadership presence on our member-based Web communities—CDHC Solutions Online and EmployersWeb.com Online—and help you generate sales leads, gain leadership presence, and connect you to our buyers and members.

Take advantage of our innovative online Who’s Who in Consumer-Directed Health Care profiles and receive the complete bonus package including lead-generating eblasts. Call your FM account rep 404.671.9551 or email at sales@fieldmedia.com. Check out the active online Who’s Who Profiles at www.cdhcsolutionsmag.com.

R e s o u r c e

If you use the services of our solutions providers, please tell them you saw their ad in CDHC Solutions™ or EmployersWeb.com™ magazine.

advertising index Aetna.............................................................................. 7

FIS Healthcare Solutions.......................12-13, 75

AHIP...................................................................... 71, 73

Health Reform Navigator........................... 39, 72

Alliant Credit Union..............Inside Front Cover

InteliSpend Prepaid Solutions.................. 46-47

AmeriFlex....................................................................69

Liazon.............................................................58-59, 70

BEMAS Software Inc..............................................70

Lighthouse1.................................................14-15, 69

CEO/Publisher Doug Field 404.671.9551 ext. 101 · dfield@fieldmedia.com

Best Buy................................................................ 42-43

LutherSales..................................................54-55, 71

Bravo Wellness................................................. 44-45

My HSA Rewards............................................ 21, 72

Associate Publisher 404.671.9551 ext. 103 Brent Macy bmacy@fieldmedia.com

CDHC Solutions Forum................................. 29-31

Prescription Solutions................................... 34-35

AHIP..............................................................................42

Restat............................................................................70

ConnectYourCare............................................ 10-11

Target............................................................................. 5

DataPath............................................................. 28, 69

Transitions Optical......................................... 52-53

DSS Research.................................................... 68, 70

TSYS Healthcare.......................................26-27, 69

Empowered Benefits.............................................63

UnitedHealthCare...................18-19, Back Cover

Requests for Permissions to reuse content contact Copyright Clearance Center at info@copyright.com.

advertising contacts

Business Development Associates 404.671.9551 Rogers Beasley rbeasley@fieldmedia.com, ext. 109 David Cerri dcerri@fieldmedia.com, ext. 106 Susan Yakots syakots@fieldmedia.com, ext. 102 Reprints Drew Collins dcollins@fieldmedia.com, ext. 104

Gu i d e

Envision Pharmaceutical Services...................52

Solutions Outlook 2011 I CDHC Solutions™ I www.cdhcsolutionsmag.com I EmployersWeb.com™

ﬁsglobal.com

FREE WEBINAR SERIES Learn about the future of healthcare payments www.ﬁsglobal.com/transformation Never Compromise.

FI N ANCIAL S OLUT IONS

•

PAYMENT SOL UTIO N S HEALTHCARE

•

BU SI N E SS C O N SU LTI N G

•

TE C H N O LO G Y SE RVI CES

changes in behavior couLd Lead to better heaLth.*

For more information on UnitedHealthcare’s CDH plans, visit uhctogether.com/CDH or call 1.866.438.5651.