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Transcript of The CDHP Implementation Experience Briefing for 2 nd National Consumer Driven Healthcare Summit...
The CDHP Implementation Experience
Briefing for 2nd National Consumer Driven Healthcare Summit
September 26, 2007
Melinda Beeuwkes Buntin, Ph.D. The RAND Corporation
(Roland McDevitt, Ryan Lore, and Hayoung Park also contributed to this presentation).
Copyright © Watson Wyatt Worldwide. All rights reserved
2
Agenda
Overview of study and participating employers Employers' goals and challenges Employee communication Information tools and resources Lessons learned and future role of CDHPs
Copyright © Watson Wyatt Worldwide. All rights reserved
3
Overview of study
Study of CDHPs – Adopted by 42 employers– 2003 through 2007
CDHP defined as – Deductible of at least $500 for single coverage– With or without an HRA or HSA – Emphasize consumer engagement
Reports will focus on – Cost and quality outcomes– Implementation experience
RAND Corporation/Watson Wyatt with funding from– California HealthCare Foundation – Robert Wood Johnson Foundation
Copyright © Watson Wyatt Worldwide. All rights reserved
4
The 42 participating employers offered 58 high-deductible plans
0 2 4 6 8 10 12 14 16 18 20
2006
2005
2003-04
2002 orbefore
No account
HRA
HSA
Number of plans adopted in each time period
HD
HP
imp
lem
ent
atio
n ye
ar
NOTE: Some employers offered multiple plan designs with the same account type (i.e. three HRA options with different deductibles). These plans are counted only once for each employer.
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5
Member cost sharing varies in HRA, HSA and no account plans (ranked by average deductible)
Deductible No account HRA HSA
Lowest third $500 $869 $1,088
Middle third $500 $1,393 $1,230
Highest third $1,000 $1,738 $1,925
Employer account contribution
Lowest third $0 $456 $125
Middle third $0 $694 $240
Highest third $0 $800 $313
Bridge (deductible –employer contribution)
Lowest third $500 $413 $963
Middle third $500 $699 $990
Highest third $1,000 $938 $1,613
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6
2006 CDHP penetration rates ranged widely (8 employers went to full replacement)
0%10%20%30%40%50%60%70%80%90%100%
0 5 10 15 20 25 30 35 40 45
Penetration ranking of employer (lowest to highest)
200
6 C
DH
P p
enet
ratio
n ra
te
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7
Key ways employers can influence penetration level of CDHPs
0% 20% 40% 60% 80% 100%
Average penetration level for CDHPs (excluding full-replacement firms)
DeductibleLess than $1,000$1,000 - 1,499$1,500 or more
Eliminate popular plan
YesNo
6+ months0-5 months
Advance communication
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8
Only one CDHP in the study does not pay for preventive services before the deductible is satisfied
89
3
3
5
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Preventive servicescovered same as other
medical services
$20 copay perpreventive service visit
Preventive services paidat 100% with an annual
dollar limit
Preventive services paidat 100%
Percent of Employers
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9
Financial incentives are often offered to engage employees
13
24
53
16
18
13
13
13
0% 20% 40% 60% 80% 100%
Health coaching
Lifestyle behaviorchange programs
Health riskappraisals
Diseasemanagement
Employee only Employee and spouse No financial incentive
92%
84%
66%
58%
Percent of Employers
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10
Agenda
Overview of study and participating employers Employers' goals and challenges Employee communication Information tools and resources Lessons learned and future role of CDHPs
Copyright © Watson Wyatt Worldwide. All rights reserved
11
Cost control, consumer engagement top goals identified in open-ended interviews with HR executives
5
20
17
59
12
10
27
61
7
0% 20% 40% 60% 80% 100%
Quality
Other
Plan choice
Consumerengagement
Cost control
Principal goal Secondary goal
Percent of HR Executives
85%
78%
27%
15%
12%
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12
Communication biggest challenge cited by HR executives during initial rollout and open enrollment
10
90
0% 20% 40% 60% 80% 100%
Administration
Communication
Percent of HR Executives
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13
Agenda
Overview of study and participating employers Employers' goals and challenges Employee communication Information tools and resources Lessons learned and future role of CDHPs
Copyright © Watson Wyatt Worldwide. All rights reserved
14
Multiple communication modes used -- rollout through enrollment
33
26
13
67
64
39 51
21
8
62
26
5
0% 25% 50% 75% 100%
Office Mailings
Webcasts
Mail Home
Face-to-Face Mtgs
Website
Employees Only Employees & Spouses
Percent of Employers
90%
85%
75%
75%
52%
38%
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15
Multiple communication modes used -- 1st year of CDHP operation
28
59
10
49
18
28
54
10
56
8
21
10
0% 25% 50% 75% 100%
Office Mail
Webcasts
Face-to-Face Mtgs
Mail Home
Emails
Website
Employees Only Employees & Spouses
Percent of Employers
82%
69%
36%
39%
59%
66%
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16
Over half of employers involved employees in creating communication materials
23
23
31
38
0% 20% 40% 60% 80% 100%
Task force/Advisoryboard
Focus groups afterimplementation
Pre-launch survey
Early focus groups
Percent of Employers
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17
Nearly 80% of employers used external help for communication and rollout
26
31
33
64
59
0% 20% 40% 60% 80% 100%
Webcasts/Webinars
DVDs or Videos
Face-to-Face Mtgs
CommunicationStrategy
Written Material
Percent of Employers
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18
Implementation costs were substantial for external help, staffing, and advance communication
Mean Range (25th-75th percentile)
Estimated external cost of consulting and other labor, per employee
$10.95 $1.55-$13.89
Estimated external cost of producing materials, per employee
$7.48 $1.38-$11.11
Annual full time equivalents (FTEs) devoted to implementation
3.4 FTEs 1-3 FTEs
Number of months of communication of CDHP in advance of enrollment
4.3 months 2-6 months
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19
Agenda
Overview of study and participating employers Employers' goals and challenges Employee communication Information tools and resources Lessons learned and future role of CDHPs
Copyright © Watson Wyatt Worldwide. All rights reserved
20
Information is key to consumer engagement
HR Executives emphasized consumer engagement:
– “How do people get the information they need to make good choices?”
– “How many people are seeing highly-efficient providers, and how can that behavior be rewarded?”
– “[We need to] get people to take health risk assessments, push people towards healthy behaviors, then see if these people reduce their medical costs.”
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21
HR Executives’ overall ratings of information tools is low
N=41
10
5
0% 25% 50% 75% 100%
Quality of care fromspecific providers
Cost of care fromspecific providers
Good Excellent
Percent of HR Executives
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22
Only five tools used to introduce the CDHP rated highly
90
58
65
66
54
0% 25% 50% 75% 100%
Health risk appraisaltool
Calls to corporatebenefit dept
Plan cost calculators
Website
Online providerdirectory
Excellent or Good Satisfactory to Poor
Percent of Employers Offering
100%
92%
89%
79%
78%
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23
Many respondents rated prescription drug information as excellent or good
52
68
71
0% 25% 50% 75% 100%
Online therapeuticalternatives
Online formulary
Online drug costs
Excellent or Good Satisfactory to Poor
N=38
Percent of Employers Offering
92%
81%
78%
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24
Fewer respondents rated information about hospital cost and quality as excellent or good
19
24
37
34
13
0% 25% 50% 75% 100%
Comparisons bycondition or procedure
Condition-specificcosts
Cost comparison ofhospitals
Quality comparisons ofhospitals
Procedure-specificcosts
Excellent or Good Satisfactory to Poor
N=38
Percent of Employers Offering
76%
73%
77%
71%
65%
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25
Very few respondents rated information about physician cost and quality as excellent or good
11
11
14
14
16
0% 25% 50% 75% 100%
Comparisons by conditionor procedure
Quality comparisons ofphysicians
Cost comparison ofphysicians
Procedure-specific costs
Condition-specific costs
Excellent or Good Satisfactory to Poor
N=38
Percent of Employers Offering
69%
69%
66%
58%
58%
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26
Most employers offer some health management resources and rate them highly
58
66
68
0% 25% 50% 75% 100%
Health Risk Appraisals
Nurseline
Disease managementprograms
Excellent to Good Satisfactory to Poor
N=38
Percent of Employers Offering
92%
87%
86%
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27
Use of most tools is not tracked, even if offered
15
15
8
29
11
33
21
54
57
38
33
15
23
18
0% 25% 50% 75% 100%
Electronic personal health records
Worksite biometric screening
Online symptom checkers
Health Coach
Lifestyle behavior change programs
Hospital cost ratings
Hospital quality ratings
Percent Tracking Percent not tracking
N=38
Percent of Employers Offering
31%
44%
59%
69%
72%
51%
44%
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28
Agenda
Overview of study and participating employers Employers' goals and challenges Employee communication Information tools and resources Lessons learned and future role of CDHPs
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29
CDHP implementation is a major change and requires extensive employee communication
80% of HR executives cited the importance of employee communication
“There’s no such thing as too much personal communication, especially face-to-face.”
“Assume no one has read anything. Dumb down the materials. Communicate it once and then do it again 4 or 5 more times in different ways.”
Need senior management to help promote the CDHP Allow plenty of time and effort to roll out the plan The first year is the hardest
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30
How employers addressed communication challenges during initial rollout and enrollment
Repetitive and sustained communications through multiple channels
Tailor to structure of company– Face-to-face meetings when employees in a few locations– E-mail and intranet site when employees on-line– Mailings and newsletters when employees in many locations and
not on-line– Diverse company cultures
Train people to “do the math” – Example employees under each plan option – Modeling tools to calculate out-of-pocket costs
Force everyone to re-enroll each year so they pay attention
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31
Lessons about plan design and operation
Stick with standard products that are proven Pick vendors carefully and make sure they can do
what they claim HSAs have advantages over HRAs
– Better incentives/engagement for consumer– Portability– But also require employees to open accounts
Two schools of thought regarding full replacement: – Much more payoff for the same amount of work– Many employers want to continue offering choice
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32
HR executives see continued commitment to CDHPs
Other, 7.5%
Employees in a variety of plans, 7.5%
Full replacement CDHP, 27.5%
More employees in CDHP, 30.0%
Majority of employees in CDHP, 15.0%
Wait and see what develops, 12.5%
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33
Questions & Answers