TOTAL POPULATION MANAGEMENT

MASI WINTER CONFERENCEFEBRUARY 21,2013

• Bo Hartsfield– Vice President, Employee Benefits Consultant

Cobbs, Allen & Hall, Inc

• Dave Douglas– National Vice President of Sales Healthstat, Inc

• David Greene– Director of Marketing and Training Cobbs, Allen &

Hall, Inc.

Total Population Management

• The Issues– Rising Healthcare Costs

• We are unhealthier but we’re living longer• PPACA

– Groups wanting to be self funded– Managing Worker’s Compensation Costs

• Current Trends• Co-morbidity

• The Solutions– Consumerism

• Plan Design• Transparency• Onsite Clinic

– Worker’s Comp Management• Best Practices from a former underwriter

Total Population Management

THE PRESENT STATE OF HEALTH CARE

The Cost of Health Insurance

$5,791

$10,880

$15,069

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Average Cost of Family Health Insurance in the U.S.

Health Care Cost – A Look at Wellness

The Obesity IssueTrends by State 1985-2010

35.7% of the U.S. Adult population qualify as obese

Approximately 17% of children & adolescents are obese (ages 2-19)

No state has an obesity rate less than 15% (the national goal)

“Children will be entering adulthood heavier than they’ve ever been at any time in human history.” – Dr. David Ludwig, director of the childhood obesity program at Children’s Hospital in Boston

Percent of Obese (BMI ≥ 30) in U.S. Adults

U.S. Obesity Trends. CDC.com. Feb. 2012. Apr. 2012 <http://www.cdc.gov/obesity/data/trends.html>Parker-Pope, Tara. “Obesity Rates Stall, But No Decline.” The New York Times. 17 January 2012. 6 April 2012. <http://well.blogs.nytimes.com/2012/01/17/obesity-rates-stall-but-no-decline/>.

Arthritis, heart disease, cancer and diabetes are the leading causes of death and disability in the U.S.

70% of all deaths and 75% of the $2.6 trillion the nation

spends on health care servicesAsthma is the most common chronic disease in

children7 million children currently have asthma

Health-related work productivity losses are estimated to cost the U.S. $260 billion each year

In a study with over 1.3 million employed OptumHealth HRA participants:

56% reported having at least one health problem. 31% reported

being a high risk for health problemsAn average of 1.99 days per month of work missed

due to health9.04 days at work per month but with limited

performance

“

Pappas, S. “Obesity’s Hidden Job Costs: $73 billion”. msnbc.com 8 Oct. 10, 2 Feb 11. <http://www.msnbc.msn.com/>World Health Organization. “Asthma”. May 2011. Apr. 2012 <http://www.who.int/mediacentre/factsheets/fs307/en/index.html>Mitchell, Rebecca. “Measuring Health-Related Productivity Loss”. 14 April 2011. 11 April 2012. National Center for Biotechnology Information. <http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3128441/>

Chronic Diseases

WHAT ARE YOUR OPTIONS?

High Deductible Health Plans Employees need to have some “Skin in the Game”

Co-pay driven health plans disguise the cost of healthcare from the consumer

Consumers must become aware of their medical spend

Develop a plan design that drives consumer behaviors High Deductible: Deductibles of $1,000 or higher for an

individual Pair plan designs with appropriate tax-advantaged accounts

74% of employers report they will increase the offering of account-based health plans between now and 2014

Source: Towers Watson

% of Covered Workers Enrolled with a General Annual Deductible of $1,000 or More for Single Coverage

High Deductible Health Plans

16%

21% *

35% *

40%

46%50% 49%

6%8% 9%

13% *17%

22% *26%

10%12% *

18% *

22% *

27% *31% 34%

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009 2010 2011 2012

All Large Firms (200 or More Workers)

All Small Firms (3-199 Workers)

All Firms

* Estimate is statistically different from estimate for the previous year shown (p<.05).

Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $1,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Average general annual health plan deductibles for PPOs, POS plans, and HDHP/SOs are for in-network services.

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2012.

Among Firms Offering Health Benefits, Percentage That Offer an HDHP/Tax Advantaged Account

High Deductible Health Plans

Note: Tests found no statistical difference from the previous year shown (p<.05).

Note: The 2012 estimate includes 0.6% of all firms offering health benefits that offer both an HDHP/HRA and an HSA-qualified HDHP. The comparable percentages for previous years are: 2005 [0.3%], 2006 [0.4%], 2007 [0.2%],2008 [0.3%], 2009 [<0.1%], 2010 [0.3%], and 2011[1.8%].

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2012.

Transparency in Pricing?

The truth is….contracted rates vary

by as much as even within network.

300%

©2011 ACAP Health Consulting Confidential-Not for Distribution

Clinical Programs

Claims Management Quarterly Reviews

High Cost Claims Compliance with Care Behaviors that need to

be addressed Identify actionable items Tie back to wellness and

prevention

Emphasizes Primary Care

Rx Management Incentivizes Employees

Medical care at an affordable rate

Prevention and Disease Management Outreach

Data Analytics On-Site Clinics

A Shift to Consumer Engagement

Personalized Plans

Tax Advantaged

Accounts

Transparency

ToolsClinical

Programs

Wellness Solutions

Real World Incentives

• Improve the Health of Employee population• Reduce/Control Future Healthcare Spend• Enhance Benefits Package Offered to Employees:

– Recruit and Retain the Best Employees

• Optimize Access to Primary Care• Increase Productivity• Reduce Absenteeism

Objectives of the On-site Solution

• 80% of your health care costs come from 20% of your employees.

The 80/20 Rule

Acute/Episodic

Medication prescribingReferralsLab testingDiagnostic orderingMedication dispensing

Occupational Health

Chronic Condition Management

Cough, colds and fluURI, UTISprains, strainsLaceration Repair

Primary Care & Coordination

Preventative Health

Full physicalsVaccinations, Flu shotsBlood pressure checkBiometric screeningWellness education

Drug TestingWorkers’ CompAccident Triage“Fitness for duty” evaluations

Diagnose and TreatEducate/CounselProactive Outreach

Scope of Services

• Decrease healthcare cost

• Healthier employees• Increase productivity/

Decrease absenteeism• Increase employee

retention• Customized and

Scalable • Minimize risk exposure• Better utilization of

carrier/vendor programs

• It’s FREE• Reduce PTO usage- “on

the clock”• Convenient/ Easy

access to care• Onsite Rx dispensing• Time with provider• Personal care plan• Education• Confidential- HIPAA

compliant

A true WIN- WIN:

Employer Employee

On-site Employer Clinics

THE NEED FOR WC COST CONTAINMENT

• Combined ratio projected to be over 110% for the next several years

• Some markets are pulling back their WC writings• The rising cost of medical is a major issue

impacting WC• Aging workforce and co-morbidity factors will

negatively impact WC claim costs• Medical technologies are producing more costly

medical treatment options

WC Results Expected to Be Challenging

102.0

97.0

100.0

101.0

112.6

108.6

105.1

102.7

98.5

103.6

104.6 11

0.4

116.6

117.1

116.012

1.7

107.0

115.3

118.2

90

95

100

105

110

115

120

125

130

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12F

Workers Comp underwriting resultsare the worst they have been in a decade.

Sources: A.M. Best; Insurance Information Institute. From 12/2012 Insurance Information Institute presentation.

Workers Compensation Combined Ratio

Indemnity53%

Medical47%

Source: NCCI (based on states where NCCI provides ratemaking services ). From 8/2011 Insurance Information Institute Presentation.

Indemnity48%

Medical52%

Indemnity42%

Medical58%1989

1999

2009p

Medical Costs Share of Total Costs for WC is Increasing Steadily

Co-morbidity

Definition: existing simultaneously with andusually independently of another medical Condition

©2011 ACAP Health Consulting Confidential-Not for Distribution

• Hypertension• Drug Abuse• Diabetes• Chronic Pulmonary• Obesity• Pregnancy

Common Co-morbidities

• In 1994, in no state was the percent of adultswho were obese as high as 20%.

• By 2010, all 50 states had adult obesity rates of20% or more. In 12 states, 30% of the adultswere obese.

Workforce Changes

Source: CDC

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2.4%

6.6%

% WC Cased Diagnosed

Co-morbidity Diagnosis- Almost Tripled from

2000 to 2009

Source: NCCI 10/2012 Study on Co-Morbidities in WC

2327

2312 2404

2406

2393 2530

2498 2559 2627

25702632

2627

2562 2674 2859

2896

2723 284228723127

2951 3079

3047 3218

3201 3330

3344

3351

33643396

3334 34263480

3505

35063547 3764

3775

3626 3833 4074

4138

41054213

1027

1022

10261069

1037 1129

1094

1090

1115

1139

1142

1181

1215

1160

1182

1177

1135

1162

1138

1141

1177

1182

1183

1213

11931244

1250 13141375

126213141356

1385

1397

1385

1367

1370 1452

1442

1407

1389 1530

1524

1430 1495 15801633

15051550

1498 1598

1564

1584 16821726

1719 17791835

1842

624

636

641686

668718773

758

789

780

775

801

779

792

762815

790

774

802

765 863926

811 919

928

947

969

1039

9741055

10181076

1057

1085

1085

1072 1171

1152

1133

11511210

1224

1258

1256

11431190

1206

1198

1166 1279

1243

1185 1267

1280

1302

1311

1301

12841381

2473

2043

2067

20432083

2019

2051

2014 2106 22182251

22422283

223422652304

1250

986

500

1000

1500

2000

2500

3000

3500

4000

4500

1998.1

1998.3

1999.1

1999.3

2000.1

2000.3

2001.1

2001.3

2002.1

2002.3

2003.1

2003.3

2004.1

2004.3

2005.1

2005.3

2006.1

2006.3

2007.1

2007.3

2008.1

2008.3

2009.1

2009.3

2010.1

2010.3

2011.1

2011.3

2012.1

2012.3

Age 65-69 Age 70-74 Age 75 & over

Source: US Bureau of Labor Statistics, US Department of Labor; Insurance Information Institute.

There are now over 7.4 million senior workers. This is double the number in

1998. Over the next decade it will probably double again.

(Thousands)

Number of Workers Age 65-69, 70-74, and 75+,

Quarterly, 1998-2012

56

910

12

15

56

9

1112

13

56

8

10

13

15

56

9

12

14 14

0

2

4

6

8

10

12

14

16

20-24 25-34 35-44 45-54 55-64 65+

2008200920102011

Source: US Bureau of Labor Statistics, Nonfatal Occupational Injuries and Illnesses Requiring Days Away From Work, 2011 (Table 10), released November 8, 2012. Insurance Information Institute.

Median Days Away From Work

Median lost time of workers age 65+ is 2-3X that of workers age 25-34. These numbers are pretty stable—they haven’t changed much since 2008.

Older Workers Lose More Days from Work Due to Injury or Illness

• The fundamentals of PIM still work:– Prompt reporting of claims– Good communication with injured workers– Return to work/stay at work/transitional duty programs

• Nurse case management involvement• Medical bill review• Pharmacy program• Post offer physicals• Be creative in your PIM program

WC Practices For Cost Containment

• Company Sr. management committed to safety - zero tolerance for unsafe actions

• Good hiring and HR practices• Thorough training programs• Documented safety programs• Clean/organized worksites• Consistent treatment of employees – no favorites• Low frequency of claims

What Makes A Good WC Risk?

QUESTIONS???