Benefit Conference Orlando 2009

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Power of the High-Deductible Healthcare Plan in cost control of Medical Benefits.

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Benefit Conference Orlando 2009

  1. 1. Confidential property of UnitedHealth Group. Do not distribute or reproduce without the express permission of UnitedHealth Group. Consumer Engagement Products, Incentives & Consumerism Joe Ochipinti Vice President, UnitedHealthcare David Hughes Vice President, Human Resources Access Insurance March 3 rd , 2009 <ul><li>Insights. Innovation. </li></ul><ul><li>Healthier Workforce. Lower Costs </li></ul><ul><li>Engaged Consumers. </li></ul><ul><li>Partnering for Performance </li></ul>
  2. 2. Agenda <ul><ul><li>Introductions </li></ul></ul><ul><ul><li>Consumerism at UnitedHealthcare </li></ul></ul><ul><ul><li>About Access Insurance </li></ul></ul><ul><ul><li>Health care strategy </li></ul></ul><ul><ul><li>Program strategy </li></ul></ul><ul><ul><li>Program action plan </li></ul></ul><ul><ul><li>Results </li></ul></ul><ul><ul><li>Best practices </li></ul></ul><ul><ul><li>Convincing senior management </li></ul></ul><ul><ul><li>You can do it! </li></ul></ul>
  3. 3. CDHPs are expected to have 25% share of all types of plans by 2010 Source: Forrester Research Market Share Forecast – All Plan Types PPO Indemnity POS HMO CDHP Market Share (%)
  4. 4. UnitedHealthcare’s Vision: Consumerism <ul><li>We will make better health part of each consumers’ everyday decisions, by: </li></ul><ul><ul><li>reaching individuals as a “market of 1” </li></ul></ul><ul><ul><li>offering services that inspire and simplify engagement, and </li></ul></ul><ul><ul><li>establishing an integrated and connected system for health. </li></ul></ul><ul><li>Doing so, we will improve health and lower costs. </li></ul>
  5. 5. Consumerism traction: UnitedHealthcare <ul><ul><li>Definity Product was first to : </li></ul></ul><ul><ul><ul><li>Pioneer HRA Plans </li></ul></ul></ul><ul><ul><ul><li>Surpass 2.7 million CDH plan members </li></ul></ul></ul><ul><ul><ul><li>Invent Activation Messaging </li></ul></ul></ul><ul><ul><ul><li>Leverage behavior as a key driver of health status and cost </li></ul></ul></ul><ul><ul><ul><li>Charter a bank devoted solely to CDH </li></ul></ul></ul><ul><ul><ul><li>Apply consumerism strategies for 12 million PPO members </li></ul></ul></ul><ul><ul><li>Definity’s experience works for you : </li></ul></ul><ul><ul><ul><li>Learning from Experience consulting </li></ul></ul></ul><ul><ul><ul><li>CDH Dashboard and detailed reporting </li></ul></ul></ul>After 8 years, 24,000 implementations and over 2.9 million plan members Definity CDH solutions deliver best-in-class results. <ul><ul><li>2.9 million members </li></ul></ul><ul><ul><ul><li>1.35 million in HRA plans </li></ul></ul></ul><ul><ul><ul><li>1.56 million in HSA plans </li></ul></ul></ul><ul><ul><ul><li>212,000 are individual HSA plans </li></ul></ul></ul><ul><ul><li>24,000+ employer clients </li></ul></ul><ul><ul><ul><li>170 large, national employers </li></ul></ul></ul><ul><ul><ul><li>Uniprise 2008 growth from 12/31/07 to 1/1/08 is largest ever </li></ul></ul></ul><ul><ul><ul><li>1,700 mid-sized companies </li></ul></ul></ul><ul><ul><ul><li>20,600 small businesses </li></ul></ul></ul><ul><ul><ul><li>12% of membership (large employer) </li></ul></ul></ul><ul><ul><ul><li>8.5% of membership (mid-sized employer) </li></ul></ul></ul><ul><ul><li>575,000 FSA accounts </li></ul></ul>
  6. 6. Consumerism continues to evolve… Traditional 1 st Generation Discretionary Spending 2 nd Generation Behavior Changes 4 th Generation Personalized Health 3 rd Generation Health and Performance … and UnitedHealthcare continues to lead in consumer-driven innovation CDHPs supported by HSA/HRA Our Consumer Engagement Product Spectrum
  7. 7. Consumerism continues to evolve… Traditional 1 st Generation Discretionary Spending 2 nd Generation Behavior Changes 4 th Generation Personalized Health 3 rd Generation Health and Performance <ul><li>Simply Engaged SM </li></ul><ul><li>CDHPs encouraged </li></ul><ul><li>Wellness programs, incentives </li></ul>… and UnitedHealthcare continues to lead in consumer-driven innovation Our Consumer Engagement Product Spectrum
  8. 8. What is SimplyEngaged 2.0 <ul><li>A simple, but formal workplace wellness program…. </li></ul><ul><li>Component 1 : Know Your Numbers biometric screening event (at all locations with 20+ UHC covered screening participants. </li></ul><ul><li>Component 2 : Gift card incentives to national vendor (300+ retailers) for completion of Online Health Assessment, Online Health Coaching Program (5 weeks long) and Telephonic Health Coaching (3-6 months long) </li></ul>
  9. 9. Consumer Engagement is Key Individual employees are employers best hope for improving quality and cost efficiency Factors that affect health are principally behavioral . 50-70% of all diseases are associated with modifiable health risks – and are therefore preventable 10% 20% 20% 50% Source: IFTF, Center for Disease Control and Prevention Access Genetic Environmental Behavior Helping individuals to become aware of their modifiable health risks and engaged in their personal health is the best way to effect change!
  10. 10. Access Insurance At-a-Glance <ul><li>Private passenger auto insurance, twice named as one of the fastest growing companies by Inc. magazine. </li></ul><ul><ul><ul><li>Rapid Growth: </li></ul></ul></ul><ul><ul><li>Sells in 9 states </li></ul></ul>David Hughes VP of Human Resources 275,000 225,000 115,000 Customers 475 375 275 Employees 2009 (Projected) 2008 2007
  11. 11. <ul><li>Control costs for both Employees and Access </li></ul><ul><li>Continue to offer a choice of plans in all States (POS + HDHP) </li></ul><ul><li>Encourage smart consumerism to reduce future cost increases </li></ul>Healthcare Philosophy:
  12. 12. Plans We Offer: <ul><ul><li>Dual Option: </li></ul></ul><ul><ul><ul><li>Choice Plus POS: $30 PCP OV Copay, $500 Deductible, 90% Coinsurance </li></ul></ul></ul><ul><ul><ul><li>Choice Plus HDHP w/ HSA: $2,000 Deductible, 100% Coinsurance+ $1,000 Single HSA contribution; $4000 Deductible +$1500 EE+1 HSA contribution; $4000 Deductible+ $2000 Family HSA contribution </li></ul></ul></ul><ul><ul><li>SimplyEngaged introduced during 2008 Open Enrollment. </li></ul></ul><ul><ul><li>Know Your Numbers and Health Assessment campaign in March 2008 </li></ul></ul>
  13. 13. Healthcare and Wellness Strategy, 2008: <ul><li>Action: </li></ul><ul><ul><li>Added High Deductible Health Plan (HDHP) January 1, 2008 </li></ul></ul><ul><ul><ul><li>Price HDHP and offer Employer contributions to HSA to drive participation </li></ul></ul></ul><ul><ul><li>Robust open enrollment education series with detailed brochures on plan designs </li></ul></ul><ul><ul><li>Educate employees on their important role in controlling future increases in payroll deductions, and we shared actual L/R data </li></ul></ul><ul><ul><li>Introduced SimplyEngaged January 1, 2008 : onsite biometric screening event (March 2008) and online wellness and personal coaching incentives throughout the year </li></ul></ul><ul><ul><li>Senior leadership’s participation </li></ul></ul><ul><ul><ul><li>CFO and VP HR personal commitment to go through the programs </li></ul></ul></ul>
  14. 14. <ul><li>Results: </li></ul><ul><ul><li>35% HDHP Enrollment, 65% POS Enrollment </li></ul></ul><ul><ul><li>55% of employees and 43.5% of total eligible employees and spouses completed health assessment </li></ul></ul><ul><ul><li>110% of expected participants at the Know Your Numbers biometric event attended </li></ul></ul><ul><ul><li>Benchmark set for biometric results to which we can compare 2009 results </li></ul></ul><ul><ul><li>Education on consumerism, paired with tools to help employees live healthier lives resulted in better HDHP plan experience </li></ul></ul><ul><ul><li>Employees engaged in healthcare costs and wellness because of the cost sharing motivation of the plan design itself </li></ul></ul><ul><li>Renewal- HDHP had a loss ratio 23% less than the POS. </li></ul>Healthcare and Wellness Strategy, 2008:
  15. 15. Healthcare and Wellness Strategy, 2009: <ul><li>Action: </li></ul><ul><ul><li>Continue with 2008 strategy (education, information, incentives, and provable pricing advantage) </li></ul></ul><ul><ul><li>We invested even more in the HDHP option to drive more EE’s to that plan, and proved to all that regardless of experience or exposure, cost savings were assured by taking the HDHP option. </li></ul></ul><ul><ul><li>Further increased participation in HSA </li></ul></ul><ul><ul><ul><li>56% HDHP Enrollment (20%+ increase), 44% POS Enrollment </li></ul></ul></ul><ul><ul><li>Next Know Your Numbers biometric event in late April </li></ul></ul><ul><ul><li>Educate new employees as they come in throughout the year </li></ul></ul><ul><li>Goal: </li></ul><ul><ul><li>Maintain an HDHP loss ratio >10% below that of POS </li></ul></ul>
  16. 16. Math for the Employee: Typical Cost = $1000/yr plus 2 office visits for EE, $2000/yr for EE+1 and $3000/yr for Family $ 8,142.20 $ 7,142.20 $4,142.20 $ 2,000 $ 10,142.20 $ 9,142.20 $ 6,142.20   $ 10,854.00 $ 8,274.00 $ 7,854.00 Family $ 5,587.64 $ 3,587.64 $1,587.64 $ 2,000 $ 7,587.64 $ 5,587.64 $ 3,587.64   $ 7,814.88 $ 5,094.88 $ 4,814.88 EE+1 $ 1,990.60 $ 990.60 $ (9.40) $ 1,000 $ 2,990.60 $ 1,990.60 $ 990.60   $ 2,938.56 $ 1,578.56 $ 1,438.56 EE Typical Cost Minimum Cost Maximum Cost Typical Cost Minimum Cost Adjusted Max Adjusted typical Adjusted Min Access Contribution Maximum Cost HDHP     POS  
  17. 17. Math for the Company:
  18. 18. Best practices <ul><ul><li>What did the customer learn that would be of value. From past experience, </li></ul></ul><ul><ul><li>here are a few: </li></ul></ul><ul><ul><li>Communicate, communicate, communicate </li></ul></ul><ul><ul><li>Educate, educate, educate </li></ul></ul><ul><ul><li>Include the communication and education initiatives as part of benefits administration teams annual goals </li></ul></ul><ul><ul><li>Buy in from employees up front is paramount </li></ul></ul><ul><ul><li>Implement right the first time </li></ul></ul><ul><ul><li>Focus on the family </li></ul></ul><ul><ul><li>Continuous feedback - survey participants </li></ul></ul><ul><ul><li>Partnership with finance, HR, and health plan provider </li></ul></ul><ul><ul><li>Must manage three year rolling plan </li></ul></ul><ul><ul><li>Good access on claims, employee, and financial data </li></ul></ul><ul><ul><li>Invest in wellness at a minimum of 4% F&V costs </li></ul></ul>
  19. 19. <ul><li>You can do it! </li></ul>

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