health care consumerism issues and key dynamics - … · health care consumerism issues and key...

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Health Care Consumerism Issues and Key Dynamics

Presented to AMGA Best Practices Collaborative

November 13, 2008

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One View of Consumerism

Employers andPlans Trying to

Increase Engagement and

Accountability

Patients as “Consumers”• Confused � Empowered � Aggressive

• Dis-Informed � Mis-Informed � Informed

• Can’t Pay � Won’t Pay � Pay Some � Cash

• Not Worried � Engaged � Worried Well

• …

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Today’s Discussion

�A Common-Ground Perspective on Consumerism�Consumerism’s Environmental Context�Views Inside the Black Box

�Managed Care�Employers

�Understanding Dynamics in Your Market

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75%

25%

By the Numbers

U.S. Deaths

133 million people in the U.S. have at least on chronic disease.

Chronic diseases account for more than 70% of deaths in the U.S.

Chronic Diseases

Chronic diseases are responsible for over 75% of medical costs in the U.S.

70%

30%

By the Numbers

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Common Strategy

Reducing the Impact of Chronic Disease

Informed Decisions/Use of Resources

Preventionand

Protection

EarlyDiagnosisof Disease

Compliancewith Effective

Treatment

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Examples of the Behavior Gap

Actual Behavior

� More than 50% of U.S. adults do not get enough physical activity to provide health benefits.1

� One-third of U.S. adults are obese.2

� One-fifth of U.S. adults smoke cigarettes.3

� In 2003, almost one-third of U.S. adults had not been screened for high cholesterol within five years.4

� Less than half of U.S. adults age 50 or older have had a recent colorectal cancer screening.5

Recommended Behavior

To reduce the risk of developing chronic disease, the U.S. Centers for Disease Control and Prevention recommend that people exercise, maintain a healthy weight, not smoke and maintain a healthy blood pressure (among other things).

The U.S. Preventive Services Task Force has established recommended guidelines to monitor health risks and detect serious diseases, such as colon or breast cancer.

*Gap*

Prevention/HealthProtection

Preventive Exams for Early Diagnosis

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Examples of the Behavior Gap (cont.)

Actual Behavior

� Just half of those with coronary heart disease who are prescribed a lipid-lowering drug are still taking it six months later; after 12 months the rate falls to 30 - 40%.6

� Of those diagnosed with high blood pressure, only 34% are on medication and have the condition controlled.7

� 60% of employees report not seeing health care quality comparison information, and of those who have, more than half did not use it to select a plan or provider.8

Recommended Behavior

People who are diagnosed with a disease should comply with the treatment recommended by their doctor, including lifestyle changes, taking prescribed medications and receiving ongoing care.

People should make informed decisions about the insurance plan they choose and the care they receive.

*Gap*

Compliance with Effective Treatment

Informed Decisions and Use of Resources

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Behavior Gap

Actual

Behavior

Recommended

Behavior Tactics

EducationCoaching/Consumerism

Web ResourcesDisease ManagementHealth Benefit Design

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Bridging the Gap

Response to Consumerism TacticsStrategy Policymakers Individuals

CDHPs ⇑⇑⇑⇑ ⇔⇔⇔⇔TieredCost-Sharing

⇑⇑⇑⇑ ⇔⇔⇔⇔

Incentives ⇑⇑⇑⇑ ⇔⇔⇔⇔Wellness Management

⇑⇑⇑⇑ ⇔⇔⇔⇔

Disease Management

⇑⇑⇑⇑ ⇔⇔⇔⇔

Decision Support ⇑⇑⇑⇑ ⇑⇑⇑⇑

Health Education & Literacy

⇔⇔⇔⇔ ⇔⇔⇔⇔

National Survey of Employer-Sponsored Health Plans 2006. Mercer. Reducing Corporate Health Care Costs 2006 Survey. Deloitte.

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Consumerism Environmental Context

Burning PlatformHealth Care Costs Threaten Corporate Competitiveness and National Sustainability

Market Solutions Restrained by Fundamental FlawsMisaligned Incentives � Lack of Information � Lack of Infrastructure

Enablers of ChangeHRA/HSA � HHS Cornerstones � Plan & Program Innovations

Spectrum of Consumerism StrategiesEconomic Incentives � Education & Support

Policymakers are experimenting with a range of strategies and tactics. Under the surface, fundamental forces predict that Consumerism—in whatever form—is n ot a health care fad, but a sustained trend.

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Employers are Managing the Health Benefit Supply Chain

EmployersTier 3

Manufacturers and Marketers:

• Prescription Drugs

• Consumer Products

Tier 2

Providers:

• PCPs

• Specialists

• Retail Pharmacies

Tier 1

Intermediaries:

• Health Plans

• PBMs

• Specialty Drug Managers

Rx Benefit

•Employees•Dependents

•Retirees

Demand

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Managed Care’s Perspectives

�Survey Research�Results from Responses Received 8/6/07 Through

8/18/07�169 Survey Invitations to Plans, Provider Groups and

PBMs with Responsibility Areas Including:�Pharmacy�Medical�Contracting, Industry Relations, Quality, Performance, Case

Management, Consumer Engagement

�68 Respondents (39% Response Rate)

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How “Consumerism” is Defined

Consumerism is defined very broadly to include a variety of strategies and tactics to help consumers become more responsible and accountable for their own health, including, but not limited to: consumer-directed health plans (high deductible plans combined with health reimbursement accounts or health savings accounts), price and quality information transparency initiatives, health care decision support, compliance and persistency, and other programs to help consumers better manage their health and health care decisions.

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56%34%

6%4%

High

Mid-High

Mid-Low

Low

Interest in Learning More About Health Care Consume rism

Customer Interest in Consumerism

n = 68

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Consumerism Trends

70%

28%

2%

Increasing

Staying the same

Decreasing

Trend of Health Care Consumerism Within Your Market

n = 61

National

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Consumerism Influencers

38%

21%

14%

10%

7%

3%

0%

3%

21%

38%

10%

4%

7%

7%

7%

3%

3%3%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Large Employers

Health Plans

Health Benefit Brokers

Government Policies

Employee Benefit Consultants

Other

Patient Advocacy Groups

Employer Coalitions

Unions/Employees

Rank 1 Rank 2

n = 29* Other – small and mid size employers and providers of care

Notes: Asked of respondents who ranked the impact on the overall market as 6 out of 10 or above, where 10 = extremely high impact.

Perceived Consumerism Influencers Among Respondents Who Think Consumerism is Impacting the Market

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41%

22%

14%

16%

6%

29%

23%

22%

18%

7%

2%

2%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Meet Demands ofCustomers

Capitalize on PerceivedOpportunity

Keep Up With KeyCompetitors

Differentiate OurOrganization

Mitigate Potential Risk

Other *

Motivation for Interest in Consumerism

TOP TWO Reasons Your Organization is Interested in H ealth Care Consumerism

* Other – Improve health care quality, market convergence, and change required to keep health care moving forward n = 56

Rank 1 Rank 2

18

16%

72%

12%

High

Medium

Low

n = 61

Knowledge of Impact on Patients/Members

Knowledge of Consumerism’s Impact on Organizations’ Patients/Members

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18%

75%

7%

High

Medium

Low

n = 61

Knowledge of Impact on Organization

Knowledge of Consumerism’s Impact on Organization

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How Employers Define Value

Employer Perspective: The Total Value Equation

© 2008 Health Strategies Group, and The Benfield Group,

Totalvalue =

Reduction in direct medical costs and positive effe cts on efficacy, satisfaction, absence, presenteeism, disability, an d safety

Price

TotalValue =

Reduction in direct medical costs and positive effe cts on efficacy, satisfaction, absence, presenteeism, disability and safety

Price

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Employers’ Health Management Philosophy

52% 51%45%

49% 48%

17%

31%

4% 3%

2006 (n=90) 2007 (n=138) 2008 (n=143)

Proactive management to improve employee

health and productivity

Provision of catastrophic coverage only

Provision of benefits for prevention and management

of health conditions

Employers’ Health Management Philosophy


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Impact of Consumerism on Benefit Decisions (Rx)�For the third year, consumerism is identified as one of the

three most influential trends.

n=143

Consumerism

Transparency inprescription purchasing

Value-based pharmacybenefit design

CDHP growth

Total-value measurementfor benefit decisions

Health IT adoption

Quality initiatives

Increasing role of governmentin private healthcare system

Medicare Part D implementation

Consumerism

Transparency inprescription purchasing

Value-based pharmacybenefit design

CDHP growth

Total-value measurementfor benefit decisions

Health IT adoption

Quality initiatives

Increasing role of governmentin private healthcare system

Medicare Part D implementation

39%

20%

10%

10%

6%

7%

3%

15%

20%

19%

17%

14%

6%

5%

13%

10%

15%

11%

15%

13%

8%

10%

67%

50%

45%

38%

35%

26%

16%

15%

8%

2%

1%

3%

2%

3%

Most important

Second most important

Third most important

Trends with Greatest Impact on Pharmacy Benefits in Next 12 to 18 months(Percentage of employers ranking each as a top 3 tr end)


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Stages of Employer Consumerism Approaches

*Arrows indicate percentage movement of jumbo employers from one stage to the next within 2 years.


Health educationHealth and wellness

programsDisease management


programsDisease managementPlan selection toolsLimited cost and

quality informationDecision support tools


programsDisease managementCost and quality

informationDecision support tools

Provide educationand support

Support all andprovide choice

Full speed ahead

• Employees basehealthcare decisions and purchasing on cost and quality data

• Employees are not ready to assume responsibility, but education will increase their involvement

• Employees take increased responsibility for health decisions and purchasing

HMO/PPO/POS/indemnity

HMO/PPO/POS/indemnity and CDHP

CDHP only

Insu

ranc

e m

odel

Em

ploy

er

offe

rsE

mpl

oyer

ph

iloso

phy

Stage 1Pre-consumerism

Stage 2Consumer wake-up

Stage 3Consumer empowerment

55% 39% 6%Percentageof jumboemployers

34%* 6%*


programsDisease management


programsDisease managementPlan selection toolsLimited cost and

quality informationDecision support tools


programsDisease managementCost and quality

informationDecision support tools

Provide educationand support

Support all andprovide choice

Full speed ahead

• Employees basehealthcare decisions and purchasing on cost and quality data

• Employees are not ready to assume responsibility, but education will increase their involvement

• Employees take increased responsibility for health decisions and purchasing

HMO/PPO/POS/indemnity

HMO/PPO/POS/indemnity and CDHP

CDHP only

Insu

ranc

e m

odel

Em

ploy

er

offe

rsE

mpl

oyer

ph

iloso

phy

Stage 1Pre-consumerism

Stage 2Consumer wake-up

Stage 3Consumer empowerment

55% 39% 6%Percentageof jumboemployers

34%* 6%*

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Employers Currently Offering CDHPs

58%62%

34%

45%

Currently In two years

2007 (n=138) 2008 (n=143)

Employers Offering CDHPs(Percentage of employers)


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Barriers to CDHP Growth

n=52

50%

21% 15% 13%

17%

38%

17% 19%

8%

19%

12%

23%

10%

87%

71% 69%

56%

17%

37%

Lack of evidencethey will save

money

Lack of informationemployees need

Lack of employeeinterest

Concern aboutemployee

satisfaction

Concern about effecton employeeproductivity

Most important Second most important Third most important

Barriers Preventing Employers from Offering CDHPs (Percentage of employers with CDHP designs)


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Understanding Your Market

�Adoption/Readiness Segmentation

Market Infrastructure Readiness for Consumerism

ReadyNotReady

Ado

ptio

n of

Con

sum

eris

mB

enef

it D

esig

nsHigh

Low

Collaborationand

Innovation

Dormant Poised

forGrowth

Chaos/Needfor Leadership

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Understanding Your Market (cont.)

�Determining Adoption�Observation—Mix of Own Patients/Plan Designs�Talk with Key Opinion Leaders about Status and Trends

• Talk to:– Coalition Leader– Major Benefit Consultants and Brokers– Major Employers (Benefits, Corporate Medical Departments)

• Ask about:– Benefit Design Trends– Other Program/Support Trends (to Bridge the Gap)– Opportunities for Collaboration

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Understanding Your Market (cont.)

�Determining Readiness�Look for/Ask KOLs about Key “Cornerstones”

• Information Technology Adoption• Quality Information Transparency• Price Information Transparency

�Assess Competitive Market• Hospitals Competing on Quality?• Hospitals Competing on Price?• Employer Direct Contracting with Medical Groups or Hospitals?

�Assess Overall Balance of Power and Power Shifts• Employers vs. Plans vs. Hospitals

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References

1. Centers for Disease Control. Physical Activity and Good Nutrition Essential Elements to Prevent

Chronic Diseases and Obesity 2008. http://www.cdc.gov/nccdphp/publications/aag/dnpa.htm Published February 2008. Accessed July 8, 2008.

2. Centers for Disease Control. Physical Activity and Good Nutrition Essential Elements to Prevent

Chronic Diseases and Obesity 2008. http://www.cdc.gov/nccdphp/publications/aag/dnpa.htm Published February 2008. Accessed July 8, 2008.

3. Centers for Disease Control. Adult Cigarette Smoking in the United States: Current Estimates. http://www.cdc.gov/tobacco/data_statistics/Factsheets/adult_cig_smoking.htm. Updated November 2007. Accessed July 8, 2008.

4. Centers for Disease Control. Trends in Cholesterol Screening and Awareness of High Blood Cholesterol --- United States, 1991—2003. MMWR. http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5435a2.htm. Published September 9, 2005. Accessed July 8, 2008.

5. American Cancer Society. Colorectal Cancer Facts & Figures Special Edition 2005. Atlanta: American Cancer Society,2005. Page 11.

6. American Heart Association. Heart Disease and Stroke Statistics — 2005 Update. Dallas, Texas.: American Heart Association; 2005. http://www.americanheart.org/downloadable/heart/1105390918119HDSStats2005Update.pdf. Page 36.

7. American Heart Association. Heart Disease and Stroke Statistics — 2005 Update. Dallas, Texas.: American Heart Association; 2005. http://www.americanheart.org/downloadable/heart/1105390918119HDSStats2005Update.pdf. Page 21

8. Marlo, K. Employees and Healthcare Decision Making—Supplemental Report Findings from The National Business Group on Health Survey of Employees. NBGH. http://www.wbgh.org/members/secureDocument.cfm?docID=1108 Published January 2008. Accessed July 8, 2008.

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