Healthy, Wealthy and WiseSuccessful strategies leading to improved retention, engagement and productivity of employees

2

JAX Per Capita Health Claims Cost 2006-2013

3

2013 vs. 2007 Per Capita

Measure 2013 2007 % Change

Annual Per Member Cost $3,743 $3,826 -2.2%

In Patient $1,208 $1,053 +13.0%

Ambulatory $2,536 $2,772 -9.3%

Admissions/1000 60 86 -43%

Days of Care /1,000 239 294 -23%

In Patient Surgery 37 49 -33.4%

Claimants > $50,000 28 29 -3.6%

4

Medical Risk Factors 2009-2012

BP Glucose Cholesterol BMI Triglycerides Tobacco0%

10%

20%

30%

40%

50%

60%

2009

2010

2011

2012

5

Population Risk

Low Risk Moderate Risk High Risk Very High Risk0%

10%

20%

30%

40%

50%

60%

70%

2010 2011

2012

6

HMRC Wellness Score 2012 & 13

2012

2013

7

Workers Compensation & Safety

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.29

1.211.15

1.05

0.89

0.790.82

0.740.8

0.94

0.81

0.66 0.660.66 0.61

0.56

0.7

0.77 0.760.74

0.86 0.89

0.79

0.68

0.6

The Jackson LaboratoryExperience Mod

8

How Did We Do It?

Where did we go wrong?

What did we know for sure?

What are the manageable and unmanagible risks?

What are the costs and consequences of those risks?

Where Did We Go Wrong?Ignorance and avoidance

Unclear/undefined strategy

Lack of strong leaders

Lack of Plan and Business Model

Lack of visionaries/dreamers

Unclear/undefined accountability

Time

Funds and resources

Lack of fortitude

What Did We Know For Sure?

4%

31%

61%

38%

27%26%

12%

1%0%

25%

50%

75%

Healthy Acute Chronic Catastropic

Medical Costs

Members

Source: Aetna

The Lower the Risks…..The Lower the Costs

% Of

Population

11

What Do We Know For Sure• Risks exist and result in losses

• Many risks can be eliminated

• All losses can be managed and reduced

• Best practices strategies are effective

• Waiting prolongs losses and delays results

• Employees are our most important assets. Invest in their care, at least as much as we invest in caring for our other assets

What are the Risks?

Lifestyle Driven Chronic Disease

Age Driven Impairments – Aging Workforce

Sickness & Degenerative Disease

Genetic Disorders

Environmental Risks

Unsafe Behaviors

Accidents & Injuries

Health Care Utilization

What are the Consequences of Risk

Death

Disability

Accidents

Need for Medical Care

Absenteeism

Reduced Productivity

A massive deterioration of our most important assets

All costs associated with these

Productivity Losses

Productivity assumes a present, healthy and committed workforce

“Absenteeism” and “Presenteeism” are behaviors

Incidental absences account for 80% of absence events and 33% of lost work days

Employers spend 15% of payroll on absences.

Productivity Losses

Every day 3-6% of workforce absent

Companies commonly overstaff by 10% - 20% to cover absences

Typical companies set aside 4.4% of total budget for absenteeism. Poor morale companies set aside 5.5%

Presenteeism

Presenteeism is the degree to which a worker is unimpaired and working up to potential

60% of the total cost of illnesses results from employees who continue to work despite their illnesses and impairments

Eliminating Risks

Controllable

Behavior

Resources

Process

Limited Control

Provider Quality

Macro Economics

Macro Health Care Industry

External Cultures

Population Risk Management

A. By Severity of Risk (Predictive Modeling)

B. By Disease State

C. By Medical Provider

D. By Cost

E. By Location

F. By Employee or Dependent

Risks need to be organized into categories that facilitate development of targeted strategies. Risks can be organized and stratified:

Severity Based StrategiesEngaging Employees Where They Are At

Well

No Disease

At Risk

Obesity

High Cholesterol

Acute Illness/ Discretionary Care

Doctor Visits

Emergency Visits

Chronic Illness/

Diabetes

Coronary Heart Disease

Catastrophic

Head Injury

Cancer

Prevention

Early Detection

Nurse/EAP Line

Self Care Training

Screenings

Screenings

Disease Management

Targeted Programs

Nurse/EAP Line

Nurse/EAP Line

Consumer Support

Self Care Training

Disease Management

Consumer Support

Incentives

Benefit Design

Decision Support

Case Management

Nurse/EAP Line

Consumer Support

15% Members = 85% Cost

85% Members = 15% Cost

Risk Management Strategy

A written Health and Fitness Policy is established and signed by leadership

Goals that address health risks and costs are established annually

A written action plan is in place. Timelines and accountability are established

Leadership and local management actively participate in programs and initiatives

Risk Management Strategy

Increase management capability and accountability

Develop organization culture

Engage employees and assign accountability

Acquire and manage resources

Manage, measure, improve

Health Risk Management Operations

Leadership and Management

Health and fitness issues are regularly included on operational meeting agendas

Local site management knows their facilities’ health, disability and absence costs and loss trends. They are held accountable for improvement in each of these areas.

Health and Fitness program success is an element of managers’ and supervisors’ performance evaluation

Maine’s Health Care Challenges

Cost

QualityAccess

Why is Health Care So Costly in ME?

Rural older population

Low per capita Income

Poor health status with high rates of chronic disease

Significant cost shifting:

Uncompensated care for the uninsured.

Inadequate government reimbursement.

Highest % of population on Medicare and Medicaid

High incidence of Cancer

Rising demand for services

Inconsistent quality

Poor information

Inefficient costly care for the uninsured

Inefficient: Costly Care for Those Who are Uninsured

Individuals who are uninsured still receive medical care, but pay for their care out of pocket, or receive uncompensated (“charity”) care from facilities.

Because health care costs are borne out of pocket, the uninsured are less likely to receive preventive services, and delay seeking care until advanced stages of illness.

This “inefficient” way of addressing health needs and increases the cost of care.

Cost shifting: Inadequate Government Reimbursement

The Maine Hospital Association estimates that for every dollar spent rendering care to Medicare beneficiaries, hospitals receive $0.85 in reimbursement.

The Maine Hospital Association estimates that for every dollar spent rendering care to Medicaid beneficiaries, hospitals receive $0.76 in reimbursement.

These shortfalls contribute to higher insurance costs for other recipients through cost-shifting i.e. employers etc.

27

The Maine Lifestyle (what we perceive)

28

Mainer’s health behaviors and lifestyles drive the high cost of care.

Maine incidence of smoking, poor nutrition, and inactivity above national average.

o 55% of adults are overweight

o 38% of teens and 76% of adults do not exercise

o Tobacco addiction is above national average

o High school substance abuse rate is higher than national average

The Maine Lifestyle (reality)

29

Pre 2007 Strategy

Increase cost sharing with employees

Incent and cover prevention

Telephonic Chronic Disease Management

Complex Case Management

EAP

Aetna Networks

“Wellness”

Post 2007: What Has JAX Done To Combat These Challenges?

Joined Maine Health Management Coalition (MHMC) and became part of the solution

Reengineered Wellness Plan to JAXfit

Innovative benefit design

Tiered networks

Providers of Distinction (POD)

Value based purchasing

Partner with regional health providers

St. Joseph occupational and non occupational care on site

Enlightened Consumerism

31

Maine Health Management Coalition

The Maine Health Management Coalition (MHMC) is a non-profit organization whose over 60 members include public and private employers, hospitals, and health plans.

MHMC employers represent 93,000 Maine employees and 110,000 family members of those employees.

Participation helped us compare our health care results with coalition members.

In 2008 we found our costs were 25% higher per capita compared to MHMC average. First time we had a good Maine based comparison.

We found high costs were being driven by the high cost of the three hospitals we used (MDIH,MCMH,EMHS). JAX Per capita hospital costs were 50% higher than coalition average.

Became fully engaged with MHMC and worked to be a part of a multi stakeholder solution to state wide problem.

32

2007 Prevalence and Cost Comparison to MHMC

33

Maine Health Management Coalition

Multi Stakeholder Membership

Quality, Cost, Access

Transparency & Public Reporting

Plan Sponsor Engagement

Consumer Engagement

Payment Reforms

Value-Based Purchasing

34

Providers of Distinction

Tiered networks and benefits

35

Providers of Distinction

St. Joseph Hospital (SJH)

St. Mary’s Hospital - knee and hip replacements

Cost for replacements paid at 100%

100% of travel, food and lodging reimbursed

36

Providers of Distinction cont.

Center for Connected Health Partners Online Specialty Consultations

Harvard Medical School Faculty and Senior Attending Physicians

Expertise from Mass General, Brigham and Women’s, Dana Farber Hospitals

Web based interaction between 2nd opinion specialist, treating physician and patient

90% of interactions recommend changes in treatments and 5% new diagnosis

100% covered

Quest Diagnostics

Draw sites at JAX, Ellsworth, Bangor, CT and CA

Lab tests paid at 100%

WellMatch is an online health transparency tool accessed via computer, smartphone, or tablet

WellMatch, A Healthagen Business | Confidential and Proprietary 37

• Find a provider, by location, quality, or cost

• View prices for different providers, side by side

• Read reviews of providers from co-workers, and write new reviews

• View benefits information and total spending-to-date

38

Transparency-Empowered Health Care Consumers

Hospital A: Hernia repair (Inguinal Herniorrhaphy)

Hospital B:Hernia repair (Inguinal Herniorrhaphy)

Cost Of Service $37,511.94     Your Aetna member rate You Save $24744.95 $12,766.99 $10,266.99   Not paid      $0.00 Amount paid toward meeting your deductible      $500.00 Amount paid toward your remaining coinsurance      $2,000.00 Your copay amount      $0.00   Your Total Estimated Payment: $2,000.00

Cost Of Service $22,096.61     Your Aetna member rate You Save $12232.14 $9,864.47 $8,731.73   Not paid      $0.00 Amount paid toward meeting your deductible      $500.00 Amount paid toward your remaining coinsurance      $632.74 Your copay amount      $0.00   Your Total Estimated Payment: $632.74

39

JAXfit

Engages and empowers employees to:

Improve fitness and health

Prevent problems before they occur

Better handle problems when they occur

Detect and act upon problems as early as possible

Reduce the severity of problems that may occur

Improve health care and medical outcomes

Make the best use of available resources

Improve the quality of their lives

40

JAXfit cont.

Doug Coleman Fitness Center

Partnership with UMO

Onsite fitness classes

Passport to Better Health/Health Incentive Credits

Spouses invited to participate

Incentives and Rewards

Biometrics/Health Risk Assessments

Prevention

On Site Chronic Disease Management Nurses

On Site Lifestyle Coaching

41

JAXfit cont.

Health Incentive Credit program

Can be used to eliminate health plan deductible

Unused credits roll over from year to year

The following opportunities to earn credits are offered to employees and spouses: (“each” equals employee and spouse)

HRA completion $300/each

Biometric screening $500/each

Lifestyle coaching $400/Each

Person health record Interaction` $100/each

Use of preventative services $200/each

Dental exams $100/each

Retirement contribution $100/each

RN disease management program$600/each

42

2014 R&D Initiatives

TeleDoc or local 24/7 care

E-visits with PCP

Newtopia

Well Match

Accountable Care Organizations

Controlling Health Risks

Conclusion

Health risk management broadens health cost control beyond managing health benefit costs to managing the total cost of risk

44

Questions