Well­Net Source – Inno­va­tion for a Health­ier Work­force –
Issue No. 4 – Sum­mer 2009

By George J. Pan­tos, Esq. — www.wellnethealthcare.com

Click here to view a PDF ver­sion of the Well­Net­Source publication.

WELCOME TO WELLNET SOURCE

This quar­terly newslet­ter fea­tures news about Well­Net Health­care as well as trends in the medical-benefit sec­tor inclu­sive of inter­views with Well­Net exec­u­tives and advice from indus­try experts. For our exist­ing clients, we wel­come feed­back on Well­Net Source. Please feel free to share the newslet­ter with your colleagues.

For prospec­tive clients, we hope Well­Net Source pro­vides you with some insight into our company’s strat­egy that sig­nif­i­cantly low­ers plan costs and also gives you use­ful infor­ma­tion about the busi­ness of health­care as you nav­i­gate the medical-benefit community.

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CONTENTS

1. CFOs Focus on Soar­ing Cor­po­rate Health­care Costs
2. A Mes­sage from WellNet’s President
3. Well­ness Incen­tives Expected to Increase in 2009
4. Health­care Inter­ac­tive Licenses New Soft­ware Tool
5. Berry Col­lege Case Study
6. Indus­try News

CFOs Focus on Soar­ing Cor­po­rate Health­care Costs

With costs ris­ing annu­ally at nearly three times the rate of infla­tion, cor­po­rate health­care costs con­tinue to rank high on the list of CFO’s worries.

Fifty-three per­cent of CFOs cite high costs for health ben­e­fit pro­grams as a top issue, accord­ing to a recent sur­vey in CFO Magazine.

While typ­i­cally focused on cor­po­rate bud­gets and finances, chief finan­cial offi­cers increas­ingly are play­ing a greater role over­see­ing employee health pro­grams, usu­ally under the wing of human resource exec­u­tives, which account for the third-biggest com­pany expense, trail­ing only cost of goods sold and payroll.

Greater CFO over­sight over cor­po­rate health risk man­age­ment strate­gies reflects a major cul­tural shift tak­ing place at the C-level. The sig­nif­i­cant, adverse impact of health costs on prof­its and pro­duc­tiv­ity are key rea­sons for a more proac­tive man­age­ment and decision-making role by CFOs.

Many employ­ers miss an oppor­tu­nity to improve pro­duc­tiv­ity and their bot­tom line by fail­ing to rec­og­nize and pri­or­i­tize crit­i­cal health con­di­tions when they develop health strate­gies and related inter­ven­tions, accord­ing to a new study pub­lished in the Jour­nal of Occu­pa­tional and Envi­ron­men­tal Medicine.

One top exec­u­tive para­phras­ing an old say­ing recently noted, “When health costs become too high, cor­po­rate health risk man­age­ment becomes too impor­tant to be left to human resource exec­u­tives.” Fac­ing a for­mi­da­ble task, CFOs increas­ingly are turn­ing to tech­nol­ogy to help them cull cor­po­rate claims data to gain a clearer view of what’s hap­pen­ing in their plan and what action should be taken. With pow­er­ful new soft­ware tools, CFOs are able to make real-time strate­gic deci­sions based on an informed under­stand­ing of what’s emerg­ing inside the health plan.

WHY THE CFO?

The finan­cial impact of employee ben­e­fit pro­grams on pro­duc­tiv­ity and prof­its is emerg­ing as a major goal of chief finan­cial offi­cers. Ninety-three per­cent of CFOs believe there is a link between the qual­ity of their company’s health ben­e­fits and the bot­tom line, accord­ing to a sur­vey by the Inte­grated Ben­e­fits Institute.

While this belief is sel­dom expressed in finan­cial terms such as “cash flow” or “earn­ings growth,” research con­firms that cor­po­rate health ben­e­fit pro­grams such as dis­ease man­age­ment and well­ness add sig­nif­i­cant value in terms of employee reten­tion, moti­va­tion and satisfaction.

Wise employee health­care man­age­ment saves money while bring­ing about long-term gains from increased over­all employee well­ness, accord­ing to F. Mark Gumz, CEO of Olym­pus Cor­po­ra­tion of Amer­ica. Con­tin­ued on page 4
Writ­ing in Forbes, Gumz says, “Employ­ees not per­form­ing at their full poten­tial put their com­pa­nies at risk just the way injured ath­letes put their teams at risk. That’s why you need to find ways to make changes in their behav­ior that help them­selves and help the com­pany. It can have a tur­bocharged effect on your business.”

When asked by IBI to rank their ben­e­fit program’s ben­e­fits in order of impor­tance, CFOs gave pre­scrip­tion drug ben­e­fit man­age­ment top hon­ors, fol­lowed by well­ness, employee assis­tance and dis­ease man­age­ment. More than eight in 10 CFOs rated a phar­macy ben­e­fit as “impor­tant,” “very impor­tant” or “cru­cial” to their organization’s health and pro­duc­tiv­ity goals, and six in 10 believed a phar­macy ben­e­fit reduces health-related costs.

Com­pa­nies with huge finan­cial invest­ments in their human capital—their workforce—understand the impor­tance of know­ing the value of their ben­e­fit pro­grams. With tech­nol­ogy, busi­ness strate­gies can be devel­oped and actions taken that can improve the ROI of human cap­i­tal by improv­ing the over­all health of employees.

Know How Health Costs Affect Your Company

All CEOs should know the top cat­e­gories in their health­care spend­ing and address them head-on. The Cen­ters for Dis­ease Con­trol informs us that more than 75% of the nation’s health­care costs can be attrib­uted to patients with just five chronic con­di­tions: con­ges­tive heart fail­ure, asthma, dia­betes, coro­nary artery dis­ease and depres­sion. The National Busi­ness Group on Health esti­mates that U.S. employ­ers col­lec­tively spend $170 bil­lion annu­ally on smoking-related health expenses, lost pro­duc­tiv­ity time and absen­teeism. Know how such costs are affect­ing your company.

A Mes­sage From WellNet’s President

As the gov­ern­ment con­tin­ues to strug­gle to find an answer to man­ag­ing health­care, there is one word that time and time again gets spo­ken: technology.

I com­mend Steve Lohr writ­ing recently in the New York Times for his con­cise state­ment on the impor­tance of tech­nol­ogy in health reform. Mr. Lohr’s arti­cle is a suc­cinct sum­mary of the focus of health­care reform today using tech­nol­ogy designed to lower and man­age health­care expenses, long-term, for all stakeholders.

What Mr. Lohr and the other experts men­tion in the arti­cle very much describes the capa­bil­i­ties of WellNet’s inno­v­a­tive Health­care Per­for­mance Man­age­ment (HPM) software.

Sim­i­lar to ERP (Enter­prise Resource Plan­ning) and CRM (Cus­tomer Rela­tion­ship Man­age­ment) soft­ware for tra­di­tional back-office oper­a­tions, the HPM solu­tion empow­ers cor­po­ra­tions, for the first time, with inno­v­a­tive tools and meth­ods to pro­vide accu­rate, action­able infor­ma­tion in real-time to mea­sure and man­age their health­care expenses as they fis­cally man­age every other aspect of their business.

Lever­ag­ing the pre­scrip­tion drug por­tion of the medical-benefit plan, WellNet’s tech­nol­ogy and advi­sory ser­vices pro­vide vis­i­bil­ity and insight into cus­tomer plan risks and com­bines patient-centric, Facebook-like social net­work­ing ser­vices to improve care, qual­ity and effi­ciency, all oper­at­ing within a fully-integrated, single-user inter­face that saves cor­po­ra­tions hun­dreds of thou­sands to mil­lions of dol­lars annually.

Min­i­miz­ing or replac­ing the annual group health­care pro­cure­ment process alto­gether, HPM pro­vides a com­mon tech­nol­ogy plat­form that sup­ports the shared respon­si­bil­ity between plan spon­sors, mem­bers and providers to man­age health­care and the risk mit­i­ga­tion of costs in a sim­pli­fied, col­lab­o­ra­tive environment.

As you con­sider the pos­si­ble future of health­care, think out­side the box and look for new approaches to deal­ing with age old problems.

- Keith Lemer

WELLNESS INCENTIVES EXPECTED TO INCREASE IN 2009

Despite the cut­backs in some ben­e­fit pro­grams, com­pa­nies con­tinue to add well­ness and health man­age­ment pro­grams to pro­mote health­ier behav­ior among their employ­ees. Addi­tion­ally, com­pa­nies that offer finan­cial incen­tives report sig­nif­i­cantly higher par­tic­i­pa­tion in well­ness and lifestyle pro­grams, accord­ing to a new sur­vey by Wat­son Wyatt of more than 300 mostly large employers.

Incen­tives for employee par­tic­i­pa­tion in well­ness pro­grams that offer a vari­ety of health improve­ment activ­i­ties, such as smok­ing ces­sa­tion and weight man­age­ment, are on the rise. Fifty per­cent of sur­veyed employ­ers use incen­tives, a num­ber expected to jump to 74% in 2009, accord­ing to the survey.

Incen­tives for health risk appraisals are trend­ing up, offered by 61% of employ­ers, up from 53% in 2008. Other pro­grams that fre­quently offer incen­tives to encour­age use include smok­ing ces­sa­tion (40%), weight man­age­ment (34%) and full cov­er­age of pre­ven­tion ser­vices (73%, up from 53% in 2008).

Employer pro­grams to fight dia­betes, for exam­ple, demon­strate one way that health plans are tak­ing action around improved chronic care man­age­ment. A new report by the National Busi­ness Coali­tion on Health finds that among employ­ers sur­veyed, 54% reward patients for com­plet­ing a health risk appraisal, 29% offer rewards for par­tic­i­pa­tion in health coach­ing and 57% offer a reward for par­tic­i­pa­tion in a dis­ease man­age­ment pro­gram. In addi­tion, 27% waive co-payments for some phar­macy ser­vices and 17% waive office visit fees for ongo­ing treatment.

Even mod­er­ate incen­tives can help to engage employ­ees in healthy behav­iors. “WellNet’s clients increas­ingly have found that a small mon­e­tary incen­tive, usu­ally a $25-$100 gift card, works very well to improve par­tic­i­pa­tion in well­ness pro­grams,” says Judy Mueller, pres­i­dent of Well­Net Inter­ac­tive, a Well­Net Health­care affil­i­ate. “For one group, the par­tic­i­pa­tion rate increased by around 18% within the first three months of the incen­tive gift card being in place, in this case, a $50 CVS gift card.

“We have found only a 22% par­tic­i­pa­tion rate with­out incen­tives,” says Mueller. A prop­erly struc­tured incen­tive pro­gram goes a long way in help­ing cre­ate a health­ier and more pro­duc­tive work­force,” says Mueller who admin­is­ters well­ness incen­tive pro­grams for Well­Net Healthcare.

HEALTHCARE INTERACTIVE LICENSES NEW SOFTWARE TOOL

A new soft­ware tool that advances cur­rent tech­nol­ogy used to fore­cast risk expo­sures in group health plans has been licensed by Wells Fargo Insur­ance Ser­vices, a national insur­ance bro­ker, to Health­care Inter­ac­tive, a soft­ware devel­oper affil­i­ated with Well­Net Healthcare. 

The tool uti­lizes med­ical, pre­scrip­tion drug, work­ers com­pen­sa­tion, dis­abil­ity claims and eli­gi­bil­ity data to ana­lyze, model and fore­cast the claims of an employer group health provider that is at risk for the health­care of a group. This includes plan spon­sors, whether fully-insured or self-insured, health plans, health insur­ers and man­aged care organizations.

Henry Cha, pres­i­dent of Health­care Inter­ac­tive, says, “Wells Fargo’s soft­ware tool opens the door into advanced analy­sis of plan data that allows risk to be fore­cast with a greater degree of accu­racy. It is a sig­nif­i­cant break­through that can trans­form data and pre­dic­tive technology.”

The tool facil­i­tates real-time under­writ­ing of group risk on a pure pre­mium basis and also facil­i­tates claim pay­ment adju­di­ca­tion in excess of pre-determined risk thresh­olds. Scott Haas, vice pres­i­dent of Wells Fargo Insur­ance Ser­vices, says, “This is a pow­er­ful new tool that gives employ­ers real-time infor­ma­tion that can help employ­ers gain insight into the rela­tion­ship of their cost dri­vers and risk thresh­olds that ulti­mately deter­mine appro­pri­ate risk pre­mi­ums and can val­i­date appro­pri­ate over­all costs.”

The tool also pro­vides detailed drill down report­ing capa­bil­i­ties spe­cific to the group expe­ri­ence. This capa­bil­ity allows for accu­rate audit­ing of 100% of his­tor­i­cal claims and enables a health plan to cre­ate mea­sur­able met­rics from which account­able per­for­mance stan­dards can be established.

Wells Fargo Insur­ance Ser­vices, the largest bank-affiliated insur­ance bro­ker­age firm in the United States, pro­vides a wide range of risk man­age­ment, insur­ance and finan­cial ser­vices to clients.

New Bill Pro­vides Tax Credit For Well­ness Participation

The “Healthy Work­force Act” (S.1753/H.R.3717) pend­ing in Con­gress would pro­vide a tax credit to busi­nesses to sup­port com­pre­hen­sive work­place well­ness pro­grams. Busi­nesses could receive the tax credit for up to 10 years by estab­lish­ing well­ness pro­grams. Well­ness pro­grams may include behav­ioral change pro­grams that encour­age employ­ees to lead a healthy lifestyle through coun­sel­ing, sem­i­nars, online pro­grams and classes related to nutri­tion, stress man­age­ment and smok­ing cessation.

Case Study - BERRY COLLEGE

Berry Col­lege Focuses on Major Health Cost Sav­ings for its Workforce

Berry Col­lege, an inde­pen­dent, lib­eral arts col­lege in Rome, GA, is using the Active Report­ing Sys­tem (ARS) to iden­tify sig­nif­i­cant areas of cost sav­ings in its health plan cov­er­ing over 500 par­tic­i­pants employed by the college.

Using ARS, Berry Col­lege has iden­ti­fied sev­eral high cost areas result­ing in impor­tant design changes in its self-insured health plan that encour­age greater use of generic drugs in lieu of more expen­sive brand name pre­scrip­tion drugs. “The switch from brand name Rx drugs to gener­ics alone has pro­duced a 6% to 8% return to Berry Col­lege on every pre­scrip­tion drug cov­ered,” says Cindy Marchant, the college’s human resource man­ager. “The ARS pro­gram has helped increase the use of gener­ics over­all by 10% — a pro­jected sav­ing of $238,000 annu­ally,” accord­ing to Marchant.

Berry Col­lege has com­pleted a com­pre­hen­sive Action Plan based on the beta results and is imple­ment­ing plan changes and edu­ca­tional pro­grams designed to meet the goals of ARS, includ­ing the cost sav­ings of gener­ics. A spe­cific edu­ca­tional pro­gram is aimed at encour­ag­ing Berry Col­lege employ­ees to ben­e­fit from a zero co-pay by switch­ing to over-the-counter drugs for gas­troin­testi­nal prob­lems. Another pro­gram encour­ages a switch from brand name drugs to gener­ics for high cho­les­terol prob­lems. Both of these pro­grams are expected to yield sig­nif­i­cant cost-savings in plan drug costs.

An impor­tant com­pon­aent of the ARS pro­gram includes a tuto­r­ial pro­gram designed to edu­cate employee ben­e­fit per­son­nel on how to use the pro­gram. The tuto­r­ial con­sists of ten 15-minute seg­ments over a 30-day period. “The tuto­r­ial is very good, easy to use and highly infor­ma­tive in learn­ing how to mon­i­tor Rx claims at the desk­top on a real-time basis instead of wait­ing for an annual review before tak­ing action,” says Marchant.

Berry Col­lege is one of 250 com­pa­nies par­tic­i­pat­ing in WellNet’s beta program.

Indus­try News

Keys to the Dash: Dash­boards are a pow­er­ful risk man­age­ment tool. The abil­ity to iden­tify, man­age and imple­ment mit­i­ga­tion and con­trols are amongst the most crit­i­cal fac­tors affect­ing a busi­ness today.

Dash­boards can pro­vide enterprise-wide diag­nos­tic and vis­i­bil­ity of gov­er­nance and com­pli­ance require­ments, issue, risk, depen­dency and action man­age­ment for stake­hold­ers and reg­u­la­tors. To effec­tively man­age their busi­nesses in the cur­rent econ­omy, insur­ers are look­ing to man­age their many data sources, both inter­nal and exter­nal, into one cen­tral point and make it avail­able to the rel­e­vant individuals.

Risk & Insur­ance, 3/31/09

CONSUMER DEMAND FOR HEALTH IS STRONG
Con­sumer appetite for elec­tronic health records, online tools and ser­vices con­tin­ues to grow, accord­ing to the 2009 Deloitte Sur­vey of Con­sumer Health­care Con­sumers. While only 9% of con­sumers sur­veyed have an elec­tronic per­sonal health record, 42% are inter­ested in estab­lish­ing PHRs con­nected online to their physi­cians. Fifty-five per­cent want the abil­ity to com­mu­ni­cate with their doc­tor via e-mail to exchange infor­ma­tion and get answers to ques­tions. The sur­vey of more than 4,000 U.S. con­sumers found that 42% favor increas­ing gov­ern­ment fund­ing and incen­tives to sup­port the adop­tion of elec­tronic med­ical records by doc­tors, hos­pi­tals and health plans. Despite strong con­sumer demand, many are still con­cerned about the pri­vacy and secu­rity of their med­ical information.

Health­care IT News.com 4/14/09

POOR EMPLOYEE HEALTH COSTLIER THAN DIRECT MEDICAL COSTS

Health-related pro­duc­tiv­ity costs are sig­nif­i­cantly greater than med­ical and phar­macy costs alone—on aver­age, health-related pro­duc­tiv­ity costs are $2.30 for every $1 of med­ical costs, accord­ing to a new multi-year study of 10 orga­ni­za­tions employ­ing more than 150,000 work­ers. The study also found that when con­sid­er­ing Rx and med­ical costs alone, the top five con­di­tions dri­ving costs are can­cer, back/neck pain, coro­nary heart dis­ease, chronic pain and high cho­les­terol. How­ever, when health-related pro­duc­tiv­ity costs are mea­sured, the top five chronic health con­di­tions dri­ving costs shift sig­nif­i­cantly to depres­sion, obe­sity, arthri­tis, back/neck pain and anx­i­ety. Many employ­ers miss an oppor­tu­nity to rec­og­nize and address these health con­di­tions when they develop cor­po­rate health strategies.

CCH Ben­e­fits, Spencer’s Ben­e­fit Reports, 5/06/09

NEXT STEPS

Meet with WellNet’s exec­u­tive man­age­ment team for an in-person or Web demon­stra­tion. Allow Well­Net to com­plete a free risk pro­file using only a firm’s phar­macy claims. For more infor­ma­tion, visit us at www.wellnethealthcare.com or call 1–800-808‑4014.

Related posts:

1. Man­ag­ing Health-Plan Costs Dur­ing Eco­nomic Downturn
2. ERISA Waivers on Con­gres­sional Agenda