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To update the City Council on the development of the
City’s long term efforts to improve employee health
while mitigating ...
Council Study Session
Driver of Change: Claims Trend
Council Study Session
Driver of Change: ACA Tax Liability
Council Study Session
Driver of Change: Employee Wellness
 Only about 20% of employees participated in past
health risk a...
Council Study Session
Systems Approach
Council Study Session
Systems Approach
“An important aspect of a part’s
performance is how it interacts
with other parts t...
Council Study Session
Systems Approach
•Information•Care
•Incentives•Training and
Engagement
Employee
Training
(To win in ...
Council Study Session
Healthy Kirkland Initiative
Participating
• MAC
• Teamsters
• AFSMCE
• Guild
• PSEU
Offered
• IAFF
• Guild NC
Council Study Session
Healthy Kirkland I...
$1,500
DEDUCTIBLE
20%CO-
INSURANCE
(EMPLOYEE)
HRA
CONTRIBUTION
80%
CO-INSURANCE
(PLAN)
$2,500
OUT-OF-POCKET MAX
$1200
POTE...
Council Study Session
Health Concierge Service
 To date there have been over 244 doctor
recommendations
 Participants ha...
Current Medical Model
Symptom reactive
Traditional Health Reacts to Illness and Injury
1. Prolonged wait for appointment
2...
The “Coach Approach”
1. Same or next day appointments
2. 0-2 minute wait in reception area
3. 20-60 Minute appointment wit...
• Between April and the end of
September, 52% of our eligible
participants, including dependents and
children, were seen a...
• Vera has provided the City with
two patient satisfaction survey
results in which 109 of the 479
clinic utilizers respond...
•Sustained success for the Healthy
Kirkland Initiative, will depend on
continued culture change.
•To Facilitate this ongoi...
 Primary Care Provider (PCP) office visits decreased 23.7%
 Expensive specialist visits decreased 13%
 Adjusting for th...
 The high deductible plan lowered City costs. The
City allocated the available funds to employees in
the form of cash con...
 Approximately $800,000 were contributed to HRA
VEBA Accounts since April 2015.
 During that time, 1,217 individual clai...
Council Study Session
Employee Information and Engagement
Whole Health
Council
Learning Management System
Looking back our proposal included a comprehensive strategy that integrated three dynamic features:
1. Consumer Directed H...
 In 2013 the projected 2018 excise tax liability was projected at between $500k and $1.5 million.
 Staying below the Exc...
Council Study Session
Bending the Trend
$781.04
$1,050.19
$1,115.67
$1,240.30 $1,191.40
$804.08
$1,395.74
$168.54
$159.74
$121.70
$139.01
$160.51
$177.25
$176.47
...
Council Study Session
Bending the Trend
$1,379.47
$654.42
$158.86
$163.16
$285.28
$224.02
$-
$200.00
$400.00
$600.00
$800....
Council Study Session
Challenges and New Changes
Wellness
Incentive
Crush
• Late Start
• High Demand
• Criteria Confusion
...
Council Study Session
What’s Next?
High
Performing
Networks
Referenced
Based
Pricing
Leveraged
Partnerships
Growth of
the ...
Council Study Session
Conclusion
After just over 7 months the Healthy Kirkland Initiative has achieved
promising results. ...
Health Rosetta Case Study - City of Kirkland, Washington
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Health Rosetta Case Study - City of Kirkland, Washington

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City of Kirkland, WA is a suburb of Seattle that was, like municipalities, struggling with healthcare costs and feared the coming Cadillac Tax. Their "moonshot" goal was to improve health benefits while eliminating healthcare cost inflation

Published in: Healthcare
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Health Rosetta Case Study - City of Kirkland, Washington

  1. 1. To update the City Council on the development of the City’s long term efforts to improve employee health while mitigating the rising cost of health care, and update the Council on the City’s progress towards compliance with the Affordable Care Act and its possible financial impacts Council Study Session Health Care Update  Improving Employee Health  Bending the Cost Growth Trend  Avoiding Liability Under the Cadillac Tax
  2. 2. Council Study Session Driver of Change: Claims Trend
  3. 3. Council Study Session Driver of Change: ACA Tax Liability
  4. 4. Council Study Session Driver of Change: Employee Wellness  Only about 20% of employees participated in past health risk assessments and biometric screenings  Only 1 spouse participated in 2013 (the last time the City sponsored an onsite event)  The incentive to participate was between $25 - $100
  5. 5. Council Study Session Systems Approach
  6. 6. Council Study Session Systems Approach “An important aspect of a part’s performance is how it interacts with other parts to affect the performance of the whole.” -Russell Ackoff Professor of Management Science Wharton School, University of Pennsylvania
  7. 7. Council Study Session Systems Approach •Information•Care •Incentives•Training and Engagement Employee Training (To win in the market) Consumer Driven Health Plan (High Deductible Health Plan) Market Transparency and Decision Support On Site- Near Site Health Clinic (High Quality Fixed Cost Care)
  8. 8. Council Study Session Healthy Kirkland Initiative
  9. 9. Participating • MAC • Teamsters • AFSMCE • Guild • PSEU Offered • IAFF • Guild NC Council Study Session Healthy Kirkland Initiative
  10. 10. $1,500 DEDUCTIBLE 20%CO- INSURANCE (EMPLOYEE) HRA CONTRIBUTION 80% CO-INSURANCE (PLAN) $2,500 OUT-OF-POCKET MAX $1200 POTENTIAL WELLNESS INCENTIVE $700 NET EXPOSURE Council Study Session Consumer Driven Health Plan Consumer Driven Health Plan *Medical only [Individual Plan] Net exposure after total HRA contributions with incentive: $700 [$2500 - ($1,800)] Employee Plan $600 COK DEDUCTIBLE (HRA VEBA total with wellness incentive: $1,800)
  11. 11. Council Study Session Health Concierge Service  To date there have been over 244 doctor recommendations  Participants have call in to Compass 478 times  Projected savings to the plan are $142,815
  12. 12. Current Medical Model Symptom reactive Traditional Health Reacts to Illness and Injury 1. Prolonged wait for appointment 2. 15 minute wait in reception area 3. 15 Minute interview/vitals with Nurses Assistant 4. 7-12 minute visit with Dr. to address complaint Focus: The Immediate complaint (Symptom or injury) Objective: Restore previous level of functionality Council Study Session Vera Health Center
  13. 13. The “Coach Approach” 1. Same or next day appointments 2. 0-2 minute wait in reception area 3. 20-60 Minute appointment with Doctor or other healthcare professional 4. Teams with Health Coach Focus: Whole Person Objective: Considers whole person in light of personal history and interconnected ongoing health factors Personal empowerment through increased medical IQ and ongoing supportive interactions to facilitate enduring lifestyle changes Council Study Session Vera Health Center Healthy Kirkland Initiative Personal empowerment through the “Coach Approach”
  14. 14. • Between April and the end of September, 52% of our eligible participants, including dependents and children, were seen at the center for a total of 1,735 patient visits, 533 of which are coaching visits. • Approximately 70% of eligible employees and spouses have earned their “Wellness Incentive”. • These 6 month participation rates are the highest on record for Vera. • Because of this robust utilization, City costs for the clinic have actually risen corresponding to a greater decrease in traditional insured claims. Utilization Council Study Session Vera Health Center
  15. 15. • Vera has provided the City with two patient satisfaction survey results in which 109 of the 479 clinic utilizers responded. • From the first survey to the second, we have seen improvement in all categories with overall satisfaction going from 4.3 to 4.48 out of 5. Satisfaction Council Study Session Vera Health Center
  16. 16. •Sustained success for the Healthy Kirkland Initiative, will depend on continued culture change. •To Facilitate this ongoing culture shift, the City has implemented the Whole Health Council made up of City employees and Vera staff. •The Whole Health Council recommendations on issues such as quality of care, services provided and hours of operation. Culture Change Council Study Session Vera Health Center
  17. 17.  Primary Care Provider (PCP) office visits decreased 23.7%  Expensive specialist visits decreased 13%  Adjusting for the 1,950 medical encounters that occurred at the clinic, there was a 37.6% net increase in total office visits  Clinic visits are longer and often address multiple concerns. 0 100 200 300 400 500 600 700 800 900 1000 Office Visits by Month Preventive Visits PCP Specialists Clinic Preventive PCP Specialist Clinic Total Pre (4/1/14 - 3/31/15) 61.4 230.5 211.0 0.0 502.9 Post (4/1/15 - 9/30/15) 46.8 172.3 183.7 289.2 692.0 Change -23.7% -25.2% -13.0% N/A 37.6% Council Study Session Vera Health Center
  18. 18.  The high deductible plan lowered City costs. The City allocated the available funds to employees in the form of cash contributions to individually owned HRA VEBA accounts.  Employees may access these dollars for immediate unreimbursed medical expenses.  Balances accumulate for future use or in retirement. Council Study Session HRA VEBA
  19. 19.  Approximately $800,000 were contributed to HRA VEBA Accounts since April 2015.  During that time, 1,217 individual claims were submitted for reimbursement from HRA-VEBA accounts for a total of $185,064.  The final net gain won’t be known until the end of the year, but current data shows many employees are realizing a substantial monetary benefit that can be carried forward into future years.  This monetary benefit to Kirkland employees did not add any cost to the city. Council Study Session HRA VEBA
  20. 20. Council Study Session Employee Information and Engagement Whole Health Council Learning Management System
  21. 21. Looking back our proposal included a comprehensive strategy that integrated three dynamic features: 1. Consumer Directed Health Plan (CDHP) with an HRA / VEBA health account. The annual contribution to the HRA account will offset the entire deductible. (Trend impact -4.3%) 2. Onsite/Nearsite Clinic. This clinic effectively delivers primary care, Wellness, Rx, and basic lab services at cost, and at no cost to the employees. (Trend impact -2.5%) 3. Concierge Referral Support (Compass): This service provides convenience and real time cost and quality data regarding services that can vary widely in price. (Trend impact -.5%) The City’s revised 2014 renewal projected growth is 10.8%. The accumulative impacts of these strategies results in a sustained projected growth trend of 3%. $650 $700 $750 $800 $850 $900 $950 $1,000 $1,050 2014 2015 2016 2017 2018 2014 Projected Renewal Growth Compass Impact Onsite/Nearsite Clinic Impact CDHP/HRA Impact Accumulative Impact Council Study Session Bending the Trend 5.8% 3% 8.3% 10.8% 10.3%
  22. 22.  In 2013 the projected 2018 excise tax liability was projected at between $500k and $1.5 million.  Staying below the Excise tax threshold would require a sustained trend of 2.5% or less.  Achieved trend reduction: The 2016 downturn of trend (-4.5%) exceeds our original projected trend impact of the proposed plan changes.  The initial success of the Healthy Kirkland Initiative makes it probable that the City will remain below the Cadillac Tax threshold. Council Study Session Bending the Trend $650 $700 $750 $800 $850 $900 $950 $1,000 $1,050 2014 2015 2016 2017 2018 2014 Projected Renewal Growth Compass Impact Onsite/Nearsite Clinic Impact CDHP/HRA Impact Accumulative Impact Actual Renewal Growth 5.8% 3% 8.3% 10.8% 10.3% .5%
  23. 23. Council Study Session Bending the Trend
  24. 24. $781.04 $1,050.19 $1,115.67 $1,240.30 $1,191.40 $804.08 $1,395.74 $168.54 $159.74 $121.70 $139.01 $160.51 $177.25 $176.47 $110.24 $190.95 $86.57 $224.31 $- $200.00 $400.00 $600.00 $800.00 $1,000.00 $1,200.00 $1,400.00 $1,600.00 2011 2012 2013 2014 2015 Funding 2016 CDMH* 2016 Prime* Historical Med/Rx Per Employee Per Month Costs Claims Fixed Fees Clinic Costs VEBA Funding *Projected 2016 Costs Council Study Session Bending the Trend Actual Costs Projected Costs
  25. 25. Council Study Session Bending the Trend $1,379.47 $654.42 $158.86 $163.16 $285.28 $224.02 $- $200.00 $400.00 $600.00 $800.00 $1,000.00 $1,200.00 $1,400.00 $1,600.00 2015 PRIME 2015 CDMH 2015 YTD Plan Comparison Actual Costs Claims Data Through October 31, 2015 Claims Fixed Fees Clinic Costs VEBA Funding ∆ $211.45 PEPM
  26. 26. Council Study Session Challenges and New Changes Wellness Incentive Crush • Late Start • High Demand • Criteria Confusion Paying Claims • New Process • Multiple Cards, Applications and Acceptable Methods • Provider Differences Changes • New Wellness Calendar • New Online Tracker • Enhanced Payment Information and Training
  27. 27. Council Study Session What’s Next? High Performing Networks Referenced Based Pricing Leveraged Partnerships Growth of the Vera Network
  28. 28. Council Study Session Conclusion After just over 7 months the Healthy Kirkland Initiative has achieved promising results. The 4.5% decrease in health care PEPM contributions has exceeded our expectations.  In addition to the effectiveness of the whole systems approach, and the alignment of incentives, this success is due in large part to due to the hard work and diligence of the City staff, especially from the internal services departments, HR, Finance and Information Technology.  Secondly, our employees are to be commended. They have engaged and learned the new system, and have gone out of their comfort zone to engage in this new approach to healthcare.  Finally, The City of Kirkland itself has demonstrated remarkable vision and leadership. The willingness of the City elders to support the management team in the implementation of well thought out innovations is paying off in terms of fiscal responsibility to our tax paying base, as well as all of the benefits to our membership that have been enumerated in this report.

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