Stratum Benefit Solutions Presentation


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Stratum Benefit Solutions Presentation

  1. 1. Covenant Care – An Affordable Self-Funded Alternative For Employer Groups of 25-250 Employees
  2. 2. <ul><li>Offers a viable alternative to your clients who are fully insured </li></ul><ul><li>Helps you protect your fully insured business with an alternative Fully Funded product </li></ul><ul><li>Provides a clearly defined strategy for truly managing an employer’s real claim costs and those cost drivers, specifically employees who are at risk </li></ul>The Covenant Care Program Introduction
  3. 3. <ul><li>Lifestyle Disease Focus – 3 case studies </li></ul><ul><li>The Covenant Care Program offers an Integrated Results Based Wellness Program with Fixed Monthly Funding Caps. </li></ul><ul><ul><li>What do we mean by Integrated Results Based Wellness Programs? </li></ul></ul><ul><ul><ul><li>Biometric Screenings to determine lifestyle related conditions </li></ul></ul></ul><ul><ul><ul><li>Those results are tied to benefit plans and/or premium differentials </li></ul></ul></ul><ul><li>Case Studies and what we mean by lifestyle related costs </li></ul><ul><li>What is driving the cost increases for most employers </li></ul><ul><ul><li>Precept Ministries </li></ul></ul><ul><ul><li>Benton County </li></ul></ul><ul><li>Risk Management Strategies </li></ul><ul><ul><li>Bravo Integrated Results Based Wellness Programs </li></ul></ul><ul><ul><li>Delphi (MAP) </li></ul></ul><ul><ul><li>TelaDoc </li></ul></ul><ul><li>Spaggregate – Special Aggregate Reinsurance Contract </li></ul><ul><li>Summary </li></ul>The Covenant Care Program Overview
  4. 4. The Health Care Dilemma
  5. 5. <ul><li>How Safeway is Cutting Healthcare Costs – Safeway’s plan capitalizes on two key insights gained in 2005. The first is that 70% of all health care costs are the direct result of behavior. “The second insight, which is well understood by the providers of healthcare, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity. Furthermore, 80% of the cardiovascular disease is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.” WSJ, 6-12-09 </li></ul><ul><li>When All Else Fails: Forcing Workers Into Healthy Habits – AmeriGas Propane Inc. had tried a number of voluntary wellness programs to encourage healthy habits in its employees. But the company concluded that “optional programs just don’t work ” says Bill Katz, Vice President of Human Resources. WSJ, 7-8-09 </li></ul><ul><li>In 2008 PepsiCo introduced a $600 surcharge for smokers. It already offered a smoking-cessation program, but that year, it enhanced it by adding nicotine-replacement therapy such as patches and gum. &quot;The combination of those two elements led to a tenfold increase in participation and increased the quit rate from 20% to 34% in 2008 over 2007,&quot; says Greg Heaslip, benefits vice president. USA Today 6-19-09 </li></ul>Marketplace Trends In Wellness
  6. 6. <ul><li>Lifestyle </li></ul><ul><li>71 cents of the health care dollar is spent on treating conditions that are lifestyle related and potentially reducible by behavioral changes. Prof. Roger Seehafer, Purdue University </li></ul><ul><li>Chronic diseases related to lifestyle account for 75% of the national medical costs. Eleven separate studies by the Centers of Disease Control (CDC) suggest that worksite wellness programs can produce significant improvements in employee health. CDC 2006 </li></ul><ul><li>Average healthcare expenditures for people with diabetes run about $13,243 per person compared with $2,650 per person for people without diabetes. USDOHHS report, September 2003 </li></ul><ul><li>Obesity </li></ul><ul><li>More than one-third of US adults – over 72 million people – were obese in 2005-2006. This includes 33.3 percent of men and 35.3 percent of women. CDC 2007 </li></ul><ul><li>&quot;In view of these alarmingly high rates of obesity in all population groups, CDC has made the prevention of obesity one of its top public health priorities,&quot; said Janet Collins, director of CDC’s National Center for Chronic Disease Prevention and Health Promotion. CDC 2007 </li></ul>
  7. 7. The Issue <ul><li>15% of all plan participants have acute or chronic health conditions </li></ul><ul><li>This group drives 80% of the claims </li></ul><ul><li>59% of next years acute chronic high risk population will come from this years low cost population </li></ul>35% At Risk 50% Healthy 15% Acute Chronic 59% of this years low cost population will be in next years high cost population. Low Cost Population
  8. 8. The Reality <ul><li>Employers have implemented cost shifting strategies to reduce their portion of healthcare costs </li></ul><ul><ul><li>Plan Design Changes </li></ul></ul><ul><ul><li>Plan Contribution Changes </li></ul></ul><ul><li>The positive impact of these changes were/are short lived. Cost shifting will not provide a positive impact to the overall healthcare trend. </li></ul><ul><li>This strategy does not address the root cause of rising health care costs…lifestyle related conditions </li></ul>Reinsurance Premium Administrative Fees
  9. 9. The Solution <ul><li>We strive to discover the root cause of escalating health care costs </li></ul><ul><li>We help employers implement a strategy that will focus on risk shifting and not on cost shifting </li></ul><ul><li>This strategy will enable and motivate employees to take a more active role in managing their health care expenses </li></ul><ul><li>What is the root cause of escalating health care costs? The Claims </li></ul><ul><li>Who is responsible for the increase in health care costs? Employees </li></ul>
  10. 10. Risk Shifting Strategy <ul><li>Case Study 1 – Precept Ministries </li></ul><ul><li>A faith based ministry needed to control their rising health care costs </li></ul><ul><li>Implemented our strategy in 2006 and have experienced a reduction in actual claims costs by as much as 62% </li></ul><ul><li>The ministry has saved $811,576 over past two years </li></ul>Claim Savings
  11. 11. Risk Shifting Strategy <ul><li>Case Study 2 – </li></ul><ul><li>Benton County, AR </li></ul><ul><li>2006 Health plan $500K in the red </li></ul><ul><li>2006 implemented The Covenant Risk Strategy </li></ul><ul><li>2008 Results </li></ul><ul><ul><li>Paid back $500K </li></ul></ul><ul><ul><li>Plan $2.3M in the black </li></ul></ul><ul><li>Success brought to the attention of the national media </li></ul>Claim Savings
  12. 12. Risk Management Strategy – Integrated Results Based Wellness <ul><li>Bravo Wellness offers a HIPAA compliant, integrated results based wellness program designed to implement options that motivate employees to participate in your wellness program and achieve measurable results: </li></ul><ul><ul><li>Increased Premium Contribution and/or </li></ul></ul><ul><ul><li>Plan of benefit differentials </li></ul></ul><ul><li>Bravo’s program includes biometric screenings that give employees financial rewards for achieving healthy outcomes based on the following measurements: </li></ul><ul><ul><li>Body Mass Index (BMI) − Blood Pressure </li></ul></ul><ul><ul><li>Cholesterol Level (LDL) − Tobacco/Nicotine </li></ul></ul><ul><li>A “win-win” process that helps nurture a culture of wellness while holding employees accountable for their lifestyle choices </li></ul>
  13. 13. Risk Management Strategy – Delphi MAP <ul><li>DELPHI MAP (Medical Advocacy Program) </li></ul><ul><ul><li>Empowering employees to become informed purchasers of healthcare </li></ul></ul><ul><ul><li>Advocate Nurses guide and coach employees through their episode of care to higher qualified physicians and the most cost effective facilities </li></ul></ul><ul><li>Empowering employers to reduce/manage their medical cost through a “transparency” solution with an extensive data base that profiles the quality of every specialist and the cost of every medical facility in the USA </li></ul><ul><li>Encourage employers to change their Summary Plan Description to: </li></ul><ul><ul><li>Develop a plan organized approach to benefit payments </li></ul></ul><ul><ul><li>Empower employees through MAP to obtain better outcomes </li></ul></ul><ul><ul><li>Encourage employees with incentives/penalties to change their purchasing habits and </li></ul></ul><ul><ul><li>Set goals and benchmarks for the benefit plan to monitor results </li></ul></ul>
  14. 14. Risk Management Strategy – TelaDoc <ul><li>TelaDoc Medical Services </li></ul><ul><ul><li>A network of board certified Primary Care Physicians providing consultations 24 hours a day, 7 days a week, 365 days a year </li></ul></ul><ul><ul><li>Physicians diagnose routine, non-emergency medical problems via telephone, recommend treatment and prescribe medication when appropriate </li></ul></ul><ul><li>TelaDoc Benefits </li></ul><ul><ul><li>The three key challenges facing healthcare today… </li></ul></ul><ul><ul><ul><li>Access </li></ul></ul></ul><ul><ul><ul><li>Affordability </li></ul></ul></ul><ul><ul><ul><li>Convenience </li></ul></ul></ul><ul><li>Additional Benefits </li></ul><ul><ul><li>Significant cost savings </li></ul></ul><ul><ul><li>No time off needed to “see the doctor” </li></ul></ul><ul><ul><li>Access for rural residents, mobile employees or those traveling </li></ul></ul><ul><ul><li>Normal access time is 30 minutes </li></ul></ul>
  15. 15. The Spaggregate Plan An Attractive Reinsurance Alternative for the Fully Insured Employer <ul><li>For Employer Groups currently fully insured who… </li></ul><ul><ul><li>Want the advantage of Self-Funding, but are hesitant to leave the safety of fixed premiums </li></ul></ul><ul><ul><li>Want to test the waters of Self-Funding without a huge commitment </li></ul></ul><ul><ul><li>Want reports and claim experience to aid in managing benefit decisions </li></ul></ul><ul><ul><li>Want to retain the profit margin of the plan rather than feed the profits of the insurance company </li></ul></ul><ul><ul><li>Want a capped risk based on expected claim factors and fixed costs </li></ul></ul><ul><ul><li>Want to design your own health plan or use the variety of pre-set designs </li></ul></ul><ul><li>With the Spaggregate Plan, the only money the client is required to fund are the administration fees, aggregate premiums and aggregate factors (Fully Funded Equivalent) </li></ul>
  16. 16. Spaggregate Advantages Fully Insured Spaggregate Self-Funded Capped Funding Yes Yes No Lasers No No Yes Access to Claim Experience No (under 100 EE’s) Yes Yes Premiums Fixed Fixed Variable Cash Calls None None Weekly funding of claims up to specific per member Administration Higher Cost, Less Service Lower Cost, Great Service Lower Cost, Great Service Potential for year end savings No Yes Yes
  17. 17. Spaggregate Plan Features <ul><li>Immediate Advance Funding </li></ul><ul><ul><li>The plan allows for a fixed budget each month. If claims exceed the cumulative monthly attachment point, then claims are immediately advanced by Pan American Life. The employer is only responsible for funding monthly factors and premiums on the first of each month </li></ul></ul><ul><li>Terminal Liability Option - can be elected and paid for any time prior to the contract end date. </li></ul><ul><ul><li>Three months of paid run out costs 1.5 months of premium and factors </li></ul></ul><ul><ul><li>Six months of run out costs 2 months of premium and factors </li></ul></ul><ul><li>Unlimited Aggregate Maximum </li></ul><ul><ul><li>LTM - Lifetime Maximum per individuals apply, but unlimited for the group </li></ul></ul>
  18. 18. Covenant Care Plan Design Comparison Premier Plan Plus Plan Access Plan Plan Maximum $5,000,000 $5,000,000 $250,000 Deductible $500 $1,500 $1,000 Coinsurance 80/20 to $12,500 100% after deductible 50/50 to $10,000 Office Visit $20 / $40 100% after deductible $20 / $40 RX Benefit $10 / $25 / $50 100% after deductible $10 (Generic Only) Maximum OOP $3,000 $1,500 $6,000
  19. 19. Hitting The Mark In Controlling Healthcare Costs The Covenant Care Advantage Covenant Administrators Insurance Protection Medicor Bravo Delphi-MAP Tela-Doc/ Care Here Customer
  20. 20. <ul><li>If you have a Fully Insured client who is: </li></ul><ul><ul><li>willing to take an aggressive strategic approach to managing their health care program, </li></ul></ul><ul><ul><li>with the potential benefits of self-funding AND the protection of a fully-funded program, Covenant Care is the program for them. </li></ul></ul>
  21. 21. <ul><li>For General Agency Opportunities or to Obtain a Quote, Contact: </li></ul><ul><ul><li>Robert M. Gearhart </li></ul></ul><ul><ul><li>Stratum Group </li></ul></ul><ul><ul><li>6133 Rockside Road </li></ul></ul><ul><ul><li>Suite 201 </li></ul></ul><ul><ul><li>Independence, Ohio 44131 </li></ul></ul><ul><ul><li>216-901-9133 phone </li></ul></ul><ul><ul><li>216-524-5773 fax </li></ul></ul><ul><ul><li>[email_address] </li></ul></ul>