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How Healthcare Consumerism Can Help Change the Game

Employee Health Benefit Trends:

Frank HoneSustainable Engagement Leader

HealthwaysAugust 18, 2009

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Presentation Overview

1. Key Issues and Challenges

2. The Employer Role in Healthcare

3. Why Healthcare Matters

4. How Healthcare Consumerism Fits

5. Driving Health Behavior Change

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Introduction and Background

Recently joined Healthways as Sustainable Engagement Leader28 year career in consumer advertising and marketing with NY advertising agencies and consultancies16 years focused on healthcare communications, particularly DTC

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Why Healthcare Matters

• Encourages business leaders to proactively address employee health issues and strategies• Focus is on free-market solutions and demand-driven strategies:

• Healthcare Consumerism • Personal Responsibility

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1. Key Issues and Challenges

Quality, Access, Cost – The “Holy Grail”

Complex provider networks and insurance schemes– Outgrowth of “managed care” era

Third-party Payments– Limits consumer knowledge of price/value

Rising Chronic Disease Incidence– Cardiac, Metabolic, Respiratory, Cancer, etc.

Lifestyle/Behavioral Issues– Sedentary ways, excess, limits on personal responsibility

Employer role– Hands-off or Hands-on?

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2. The Employer Role in HealthcareHands-off or Hands-on?

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Two-thirds of insured Americans have employer-provided health insurance

65% 68% 68% 66% 65% 63%59% 60% 59% 62%

99% 99% 99% 98% 98% 99% 98% 98% 99% 99%

56% 57% 58% 58% 55% 52%47% 48% 45%

49%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

All Small Firms (3-199 Workers)All Large Firms (200 or More Workers)3-9 Workers

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.

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Higher health premiums cut into corporate profits

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Healthcare is the #1 CEO issue

Source: Mercer

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Employee Benefits: Top Challenges

Five leading factors representing the top challenges in maintaining affordable employee health benefit coverage:

– Employee’s poor health habits 67%– Underuse of preventative services 42– Catastrophic/end-of-life care 36– Poor information on provider costs 24– Overuse through inappropriate care 21

– Source: Watson Wyatt, January 2009 survey of 489 employers

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Big Companies Are Investing In Employee Health

Onsite flu shots 97%Weight loss programs 85%Health Risk Appraisals 80%Tobacco cessation programs 74%On-site workout facilities 73%Online wellness programs 72%Organized walking/exercise programs 66%

– 2007 Business Roundtable Survey

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3. Why Healthcare Matters

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Overweight = Unhealthy

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Lifestyle-related chronic disease on the rise

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I exercise 30 minutes or more on most days of the weekI eat a healthy diet with 5 fruits/vegetables on most days

I am within 5 pounds of my ideal body weight

I don’t use tobacco products

I have 2 or fewer alcoholic drinks per day

What percentage of Americans can agree to all five of these statements?

Individual health behaviors are lacking

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50%

20%20%

10%

0

10

20

30

40

50

60

Care Access Genetics Environment BehaviorSource: Inst for the Future, CDC

Behavior is #1 Driver of Health Status

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4. How Healthcare Consumerism FitsConcepts and Best Practice

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Healthcare Consumerism Can Help

– “Healthcare Consumerism is about transforming an employer’s health benefit plan into one that puts economic purchasing power — and decision-making— in the hands of participants.

– “It must focus on health behavior change. Employers can supply information and decision support tools, along with financial incentives, rewards, and other benefits that encourage greater personal responsibility for their health.”

Ron BachmanSenior Fellow Center for Health Transformation

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Healthcare Building Blocks….

Financing Medical Behavior+ +

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Healthcare Building Blocks….

Financing Medical Behavior+ +

Health InsuranceCo-PaysOut of PocketGovernment Funding

Medical Marketing ModelDoctorHospitalPharmacyDrugs and Procedures

ConsumerStay healthyPreventionEngagementAdherence

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Employers can’t really change the healthcare system, but they can influence positive outcomes through financing and behavior change

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Financing and Behavior Change:A few examples

1. CDHPs

2. Obesity

3. Smoking Cessation

4. Health Risk Assessments

5. Incentives

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1. CDHP growth continues…a way to encourage personal responsibility

Source: Mercer

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CDHP Example: Blue Ridge Paper

Problem – Blue collar mill - with 2,100 primarily male, older union

employees, with “entitlement” mindset and little health benefit knowledge or investment - couldn’t afford premium increase projections

Solution– Focus on creating “culture of health”; engage employee

reps in decision-making; educate workforce and family –shift to CDHP + 17 specific population health management programs + coaching + fitness program + onsite clinic

Results – Absenteeism dropped by 50%, Disability claims dropped

by 20%, chronic claims dropped by 16%. – Five year cost savings = more than $17 million

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2. Obesity… a major health challenge

Obesity accounted for 27% of the rise in medical costs from 1987 to 2001

Ken Thorpe - Emory University

Obesity costs Companies $45 billion annuallyConference Board

Obesity is a more powerful trigger for chronic health problems than either smoking or heavy drinking

RAND

But many employers see it as sensitive issue to address head on…

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Weight Loss Example: Quest Diagnostics

• ProblemWorkforce obesity was on the rise, increasing each year from 2005-2008

• SolutionManagement initiates company-wide weight loss challenge

• Results Broad Participation – spurred Bill Germanakos to drop 164 pounds on “The Biggest Loser” TV program. He’s now “Wellness Ambassador”

Positive ROI - Winner of the Healthy Lifestyles Gold Award for its Healthy Quest employee wellness program

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3. Tobacco Use.. leading cause of death in the US

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Smoking Cessation Example: Weyco

Problem: Lifestyles risk drive costs– Illegal drugs and tobacco– Excess use of alcohol– Unhealthy eating– Physical inactivity

Strategy– Stop hiring or retaining tobacco users - adopt a no-

smoking policy that required employees to quit smoking during their private time and/or submit to a smoking test. Smoking cessation program options were offered.

Results– Policy took effect in January 2005, a year after

announcement– Four employees refused to take smoking test– Smoking was effectively eradicated at Weyco

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4. Health Data…a way to manage risk

Claims dataPast behavior

Health Risk AppraisalCurrent status

BiometricsFuture Risk

Then, the data can help drive the design…

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HRA Example: Johns Hopkins

Problem– Workforce was becoming older, sicker and more costly due

to asthma, hypertension, diabetes, depression, anxiety, COPD, cancer, back pain

Solution– Redesign health benefits and health initiatives, tied to

Health Risk Assessment (HRA) – Add health coaching, education, incentives

Results– HRAs provided more data on employee health than claims– Identified areas where interventions would help– Chronic care management has led to savings of $300 PMPM

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5. Incentives…a path to motivation

More companies are offering a financial incentive to participate in health initiatives:

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Incentives Example: Pitney Bowes

Problem– As medication co-pays increased with newer health plans,

many employees cut or eliminated drug usage. Complications caused increased medical bills

Solution– Provide lower cost or free drugs for certain chronic conditions:

asthma, diabetes, hypertension

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75 76

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81 82

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20

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50

60

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Asthma Diabetes Hypertension

2001 2006

Results– Adherence on drug increased

substantially and medical costs declined for three areas

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Incentives: Penalties would increase adherence to chronic treatment regimens

How Likely Would You Be To Comply With the Treatment Regimen Recommended by Your Doctor If You Would Be Required to Pay Higher Insurance Costs Otherwise?

9%3% 3% 4% 6% 5% 8%

14%18%

31%

1 2 3 4 5 6 7 8 9 10Not at all likely Extremely likely

63%

Deloitte's 2009 Survey of Health Care Consumers n = 2,192 respondents with one or more chronic conditions

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What does all this mean for employers?

Behavior change comes from encouraging personal responsibility about health, lifestyle and treatments– Engage employees as partners in managing healthcare costs

and quality

Corporations can adapt by treating employees as if they were customers of the company– Motivate them to accept their role and understand your

support and financial commitment

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Does having health and wellness programs equate to better outcomes?

Between…

Wellness, Care Management, Health Interventions, Fitness Programs

Actual Employee Health Behavior Change

Consumer Engagement

Influence+

Incentives+

Motivation..and

Enrollment and Interventions

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5. Driving Health Behavior ChangeUsing Communications Effectively

Needs to be multi-stageAccommodates consumer decision pathway

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Employee health engagement is a lot like consumer advertising…

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Awareness Interest Action

Of a brand, category, service, etc.

In knowing more

Buying it

Desire

Wanting it

“AIDA”

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Comparing the two…

Consumer advertising:

Focuses on getting consumers to buy your brandEffective use of media, messages, and metricsFollows “AIDA”

Employee health engagement:Focuses on getting employees to change behaviorEffective use of media, messages, and metricsAddresses the decision pathway

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Undiagnosed sufferer

Compliant patient

Recognition of symptomsRelevance to disease

Desire to treatInformation gathering

Physician appointment Rx written/filled

BARRIERS

Consumers have a decision pathway to follow with healthcare…

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…that also has many emotional barriers….

ConfusionFear

DenialCost

SolutionsTrust

Support

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…that need to be addressed in different ways

Emotional vs. rational messages Storytelling vs. factsConsider timing and sequencing– Media consumption and penetration– Different motivation and incentives– Recognize varying behavior change dynamics

Communicate two-way with reinforcement

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Some DTC TV ads as examples…

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Synvisc Advertising and Fulfillment

Fulfillment materials provide deeper education/ information and a list of providers

Advertising shows target adults in situations that OA knee sufferers cannot do or enjoy

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SpecialistSpecialist

Specialist Specialist

Synvisc

Specialist

Tell-A-Friend Program

Follow-up surveys

Ad easelPatient brochuresExercise flyer

Consumer-friendly call scriptsFulfillment materialsReminder mailings

6,000 Physician Provider NetworkPhysician and rep letters/e-mailsCommunity-based outreach materials

PrintPrint w/BRCDocumercialBranded and unbranded TV Branded and unbranded web sitesOA educational events

Doctor mention statisticsPPN reprint carrierDoctor mention flash card

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Lessons Learned from DTC

1. Relevant segmentation leads to smarter strategies

2. The decision pathway begins with a health issue and involves psychological and attitudinal barriers

3. Information overload is counterproductive. Bite-sized pieces of information work better

4. Most healthcare products and services are purchased because of need, not desire

5. Interactive communicationopportunities can be more productive than “push” marketing

Identify key segments of your employer populationConsider the challenges and barriers that your employees are facing in dealing with an array of conditionsDeliver messages in a format and form that will best lead to behavior change in measurable ways Find ways to stress the importance of dealing effectively with health issuesSupplement your health portalswith ways to interact directly with employees

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Strategic Development Framework for Employee Communications

communication objectives target audiences

communication strategy and tactical approach

media choices

key messages, and creative work

Measure results, encourage and share feedback

Revisit everything with an eye to continual improvement

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Health Behavior Change Requires:

Customized solutions, tailored to their:– Readiness to change– Lifestyle preferences and capabilities– Media consumption, message responsiveness

Convenience elements that reduce as many barriers as possibleIncentives that help make the abstract benefits of good health more near-term and concrete

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Thank You!

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Questions and Discussion…

frank.hone@healthways.com

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Why Healthcare Matters – on sale now!

• Encourages business leaders to proactively address employee health issues and strategies• Focus is on free-market solutions and demand-driven strategies:

• Healthcare Consumerism • Personal Responsibility

$20 check or cash