This document discusses how employers are changing the healthcare landscape by addressing chronic conditions and improving population health. It notes that chronic conditions drive 86% of healthcare costs and are caused by behaviors like poor diet, smoking, and lack of physical activity. Employer-sponsored primary care clinics and health coaching programs can help improve health outcomes like lowering cholesterol and A1C levels. Engaged patients have lower costs, with actual costs being 1-7% lower than expected. Analysis of three employers found engaged patients saved over $2.6 million compared to non-engaged patients.
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Leading the Way:
Why Employers Are Changing the
Healthcare Landscape.
IndianapolisHR Indiana 2018 | August 22, 2018|
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Annual Healthcare
Spend by 20251
Shortage of Primary Care
Providers by 20302
Wasted
Healthcare Spend
+30% +100K+$5
trillion
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As of 2012, 50% of Americans had one or more chronic conditions which drive 86% of overall healthcare costs.
We believe that addressing the underlying causes of chronic conditions is the most effective way to influence
changes in health and cost.
Understanding Root Cause
Poor
Diet
Physical
Inactivity
Smoking
Lack of
Health
Screening
Poor Stress
Management
Poor
Standard
of Care
Insufficient
Sleep
Excessive
Alcohol
Consumption
8 Risks & Behaviors
Diabetes
Coronary Artery Disease
Hypertension
Back Pain
Obesity
Cancer
Asthma
Arthritis
Allergies
Sinusitis
Depression
Congestive Heart Failure
Chronic Obstructive Pulmonary Disease
Chronic Kidney Disease
High Cholesterol
15 Chronic Conditions
86%Of total costs for all
chronic illnesses
nationwide
Driven By Caused By
2010 World Economic Forum
Centers for Disease Control and Prevention website. Nov 2017.
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How to Think About Cost
- Catastrophic incidents/risk
- Healthcare policy changes
- Higher cost healthcare innovations
WHAT WE CAN’T CONTROL
- Diverting high-cost visits (e.g., avoidable ER) to high-value
primary and urgent care
- Directly lowering cost on pass-through expenses
(e.g., labs and pharmaceuticals)
- Improving population-based wellness outcomes (e.g., diabetes)
- Facilitating low-cost, high-quality specialist referrals
WHAT WE CAN CONTROL
When it comes to healthcare, there are the things you can control, and the things you can’t.
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Consequences of Poor Health & Impact to Employers
Average annual employer-sponsored family premiums cost employers more than $12,000 a year
A1c
People with diabetes have
healthcare costs 2.3 times
greater than those without
diabetes1
Hypertension
Reduced blood pressure
decreases the likelihood of
stroke, heart disease, and
kidney disease.2
Cholesterol
People with high cholesterol
have about twice the risk of
heart disease as people with
lower levels4.
Estimated healthcare
spending to treat diabetes:
$245 billion
Estimated healthcare spending
to treat hypertension3:
$42.9 billion
Heart disease and
strokes cost5:
$320 billion
1.American Diabetes Association – The Cost of Diabetes, 2. CDC: High Blood Pressure FAQs 3. Agency for Healthcare Research Quality –
Expenditures for Hypertension, 2010, 4. CDC – Cholesterol Fact Sheet 5. CDC Foundation – Business Pulse: Heart Health
(Direct healthcare spending ) (Includes care costs & lost productivity )
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2.0
2013 2014 2015
RelativePrice(1.00=Medicare)
The Price Gap is Continuing to Widen
2016 2017
2.5
3.0
3.5
4.0
4.5
Source: White, 2017, Hospital Prices in Indiana.
Community Health
Systems (CHS) / Lutheran
Overall
Indiana University Health
Ascension
Franciscan Alliance
Community Health Network
Parkview Health
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Access Issues
Exhibit ES-1: Projected Total Physician Shortfall Range1
Population growth, aging:
By 2030, population of Americans
aged 65 and older will grow by 55
percent
Shrinking supply of current providers:
1 in 3 practicing physicians is over 65
and approaching retirement
Limited supply of medical residencies:
BBA of 1997
20,000
2015 2020 2025 2030
Year
40,000
60,000
80,000
100,000
120,000
ProjectedShortfallofPhysicians
104,000
40,800
2030
Range
1. 2017 Update The Complexities of Physician Supply and Demand: Projections from 2015 to 2030
IHS for AAMC 2. Kaiser Family Foundation: State Health Facts, 2014-2016
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Outcomes of successful top talent
21%
Teams with high employee
engagement rates are 21%
more productive.
More productive
2.3X
Highly engaged employee
orgs have 2.3x higher 3-
year revenue growth than
orgs with low employee
engagement.
Greater growth
18%
Customer retention rates
are 18% higher on average
when employees are highly
engaged.
Higher
retention rate
27%
Employees who are
engaged are 27% more
likely to report “excellent”
performance.
More likely to report
excellence
1. Gallup: Managing Employee Risk Requires a Culture of Compliance, March 2016, 2. UNC Kenan-Flagler Business School: Focusing on
Employee Engagement, 3. Colloquy: For Loyal Customers, Look to Your Employees, Feb. 2014, 4. Gallup: Well-Being Enhances Benefits of
Employee Engagement, Oct. 2015
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Emerging Solutions for Employers
Wellness &
Lifestyle
• Nutrition
• Fitness/Movement
• Stress/Mindfulness
• Sleep
Targeting Chronic
Conditions
• 117 million have at
least 1 chronic
condition1
• 1 in 4 adults have more
than one condition1
• 2030: Adults 65+ will
grow by 55%2
A Redefined Primary
Care Model
• Outcomes focused
• Patient-centric care,
experiences
• Whole-health
approach
Importance Care
Navigation /
“Consumerism”
• More consumers
health cost aware
• 40% enrolled in
HDHPs3
• 20M+ enrolled in
HSA accounts4
1. CDC: Chronic Disease Prevention and Health Promotion, 2. Beckers Hospital Review: 15 Things to Know About the Physician Shortage, 3.
CDC: National Center for Health Statistics: National Health Interview Survey Early Release Program, June 2017, 3. Employee Benefit Research
Institute, HSA Account Balances, Contributions, and Other Vital Stats, 2015
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—
Employer
Success
Story.
26,596
Patient visits
78.6%
Employee
engagement
82.8
Patient visit
NPS score
6,450
Health coaching
appointments
Reduction in medication
and laboratory costs
Reduction in
non-emergent ER visits
16.9%
2.7%
Reduction in total
urgent care visit spend
312 A1c
Points reduced across
5,757 patients
3,106
LDL points reduced across
417 patients
Throughout 2017, OurHealth
created patient experiences that
helped lead employees to
healthier outcomes.
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Risk-Adjusted Engaged vs. Non-Engaged Expected Ratio
Costs in the non-engaged
were 3% (2016) to 8%
(2017) lower than expected.
Simply put, the engaged
cohort saved more money.
This translates to a two-year
trend medical and drug
savings of $2.6M over the
non-engaged, or an
average of $420 PMPY.
$2,700
$2,900
$3,100
$3,300
$3,500
$3,700
$3,900
$4,100
$4,300
2015 2016 2017
PMPY(RiskAdjusted)
Engaged Actual Non-engaged Actual Engaged Expected Non-engaged Expected
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—
Patient
Engagement
Analysis.
Do employer-sponsored primary
care clinics improve health
outcomes and save employers
healthcare dollars?
Employer 1: A municipal organization in the Southeast
with approximately 7,000 employees.
Employer 2: A manufacturer in the Midwest with
approximately 750 employees.
Employer 3: A utility system operations organization with
locations in the Midwest with approximately 700
employees.
3 employers 20K patients 3+ years of data
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47.4% of patients of 3,052
identified with prediabetes HbA1c
(5.7 to 6.4) reduced their values to
optimal levels (<5.7)
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of prediabetics improved
to optimal range =
47.4%
$
1.7M
Total
$
562
PMPY
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PercentageChange
Provider visits improvement Health Coach visits improvement
HbA1c Changes by number of visits
Health
Coaching:
When patients engaged with
health coaching and providers
more frequently, they saw greater
rates of improvement to HbA1c
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Emergency Dept.
Utilization:
With access to primary care and
help managing conditions such as
chronic diseases, ER use
decreased for engaged patients
22%less
Emergency
Department: a visit
At
Resulted in
in projected savings
$1,500
$650k
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Cost of Care
Over a trended and risk-adjusted
period (2016-2017), engaged
patients saved their employers
millions when compared to
expected costs.
Engaged patients cost
expected7%1
Savings Non Engaged
$2,600,000