Value Based Health Plans


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  • Value Based Health Plans

    1. 1. Jim Wisdom, CFPJames L. Wisdom Insurance Services June, 2012
    2. 2.  Skyrocketing health care costs Unaffordable rate hikes Diminished quality of life for employees Less hopeful health outcomes Less perceived value in health plan
    3. 3.  Fewer employees monitoring their health and lifestyle ◦ Over 50% of all health care costs are due to lifestyle Chronic illnesses aren’t detected until the later stages, driving up costs and lowering employee’s overall health and productivity Higher absenteeism and presenteeism Lower employer profitability
    4. 4.  Allow employees to enjoy better health and a better quality of life Employers to have a healthier, more productive workforce Lower, more stable premiums over the short and long-term Employers gain happier, more loyal clients
    5. 5.  Like typical health plans, a Value Based Plans pays an insured’s claim when he/she is sick or injured Unlike typical health plans, Value Based Plans go further, rewarding members to take actions to improve and manage their health The Difference? Health Insurance vs. Healthy Insurance
    6. 6.  Remember this formula: The # of detected conditions + the # of undiagnosed conditions = The # of actual health conditions in a group. It’s not uncommon for the # of detected conditions to equal about one third of the total, which means two thirds of conditions are undiagnosed. See Client Example ( SeeChange Health)
    7. 7.  Undiagnosed conditions, if left undiagnosed until later stages, result in far higher health care claims
    8. 8.  Cervical Cancer Claims Costs ◦ Early Stage Treatment: $16,000/yr. ◦ Late Stage Treatment: $84,000 ◦ Annual Difference: $68,000
    9. 9.  Breast Cancer Claims Costs Early Stage Treatment: $16,000/yr. Late Stage Treatment: $108,000/yr. Annual Difference: $92,000/yr.
    10. 10.  Prostate Cancer Claims Costs Early Stage Treatment: $13,000/yr. Late Stage Treatment: $54,000/yr. Annual Difference: $41,000/yr.
    11. 11.  Colon Cancer Claims Costs Early Stage Treatment: $12,000/yr. Late Stage Treatment: $126,000/yr. Annual Difference: $114,000/yr.
    12. 12.  Lower claims costs Lower health care premiums Early detection saves lives Early, smart intervention increases employee health and productivity
    13. 13.  1,100 undiagnosed conditions times $50,000 annual savings when treated early equals $55 Million in annual savings. Note: From a group with 75,000 employees
    14. 14.  Promote early detection and treatment of serious conditions Encourage members to see their doctor and reward them for taking “Health Actions”
    15. 15.  Subscriber and Spouse voluntarily complete Preventive Health Actions to receive financial incentives Online Health Questionnaire Biometric Screening ◦ Phlebotomist ( blood draw)- 15 minute exam Preventive Care Exams ◦ Preventive Health Actions covered at 100% based on age/gender specific guidelines
    16. 16.  Female Compliance Criteria ◦ 4 Age Categories ( 18-20; 21-39; 40-49; 50+) ◦ 6 Health Actions  Online Health Questionnaire  Biometric Screening  Preventive Exam  Pap Smear  Mammogram  Colorectal Cancer Screening
    17. 17.  Male Compliance Criteria 2 Age Categories ( Age 18-49; 50+) 5 Health Actions Total ◦ Online Health Questionnaire ◦ Biometric Screening ◦ Preventive Exam ◦ Colorectal Cancer Screening ◦ Prostate Cancer Screening
    18. 18.  American Heart Assn. American Diabetes Assn. American Cancer Society American Lung Assn. Nat’l Cholesterol Education Program U.S. Preventive Services Task Force Nat’l Asthma Education and Prevention Program Nat’l Heart, Lung and Blood Institute
    19. 19.  Personal Dashboard allows employees to track progress online. Results of Health Actions may reveal chronic health conditions ◦ Pre-Diabetic Health Actions ◦ Diabetes Health Actions ◦ Asthma Health Actions ◦ Cardiovascular Disease Health Actions ◦ Coronary Artery Disease Health Actions
    20. 20.  Health Questionnaire + Biometric Screening + Preventive Examination = 1. Enhanced Benefits 2. Health Incentive Account Deposits 3. Deductible Credit
    21. 21.  Some plans reward members by lowering members’ coinsurance and annual Out-of- Pocket Maximum Children also get enhanced benefits when employee and spouse ( if any) complete Health Actions Added Bonus: Once employee and spouse ( if any) complete Health Actions, all prior claims for the calendar year are re-adjudicated at the Enhanced benefit level.
    22. 22.  Some plans offer HIA’s $200-$500 in HIA funds available to both Employee and Spouse/Domestic Partner Add’l financial rewards for completing Health Actions related to specific conditions Available to reduce the deductible or IRS approved medical expenses Unused amount may be carried over from year to year Unlike HSA’s, account balance forfeited if employee or employer leaves plan.
    23. 23.  Health Coaching ◦ Coaching Targets:  Depression  Smoking  Diabetes  Stress  Exercise Activity  Weight
    24. 24.  Value Based Plans have offered rate increases averaging 1.5% over the last two years ( far below industry norms) For groups of 51+, some are offering two year rate guarantees Value Based Plans may be attracting a healthier risk pool If this happens, Value Based Plans may continue to experience lower rate increases Conversely, traditional plans may experience higher than average rate increases
    25. 25.  Value Based Plans may be the right approach for today’s challenges Other carriers are trying to catch up Employee choice is key with any group health plan. Work with an Employee Benefits Broker who has experience in all types of health plans ( HMO/PPO, HSA, HRA, Value Based Plans) Don’t forget Senior Planning ( for employees 65+)
    26. 26.  Jim Wisdom, CFP President James L. Wisdom Insurance Services 4607 Lakeview Canyon Road- Suite 482 Westlake Village, CA 91361 Work: (805) 497-9264 Cell: (818)469-6640 Fax: (805) 435-3636 CA License #0699524