Chief Medical Officer

LOCKTON

Ron Leopold, MD, MBA, MPH, March 2017

2017: FIVE TRENDS UNFOLDING How we need to shift our thinking.

2

The Five Trends

Health and Productivity Is Hard Coded.

What’s Really Driving Medical Costs?

Health Care Delivery Is Transforming.

Wellbeing Improves Engagement and Work Performance.

The Cost of Our Health Is In Our Own Hands.

3

What’s Really Driving Medical Costs?

20% of a population drives 80% of its costs.

2% of a population drives 50% of its costs.

High Cost claims are different.

Health care inflation is driven by price increases,

not utilization. Think new medical and Rx

technologies.

Specialty Medicines are the fastest

growing driver of high cost claimants. High cost claimants

are made up of cancers, back

conditions, trauma, premature births and

complications of hospitalization and

surgeries.

Chronic conditions are the direct cause of less than a quarter of medical and pharmacy claims

over $50,000 (high cost claims).

High Cost Claimant Predictive Analytics can

sometimes identify these individuals and target

early interventions.

4

What’s Really Driving Medical Costs?

Stop Loss Review your Stop-Loss Strategy and Plan Design.

Data Analytics Run a high cost claimant analysis.

Include predictive and prospective analytics.

Specialty Pharmacy Revisit specialty pharmacy strategies

with current carrier and PBM.

Case Management Review and assess what catastrophic

case management is being conducted. Consider carve-out solutions, if necessary.

Review Request quarterly high cost claimant review with your carrier/TPA.

Audit Consider a having a high cost claimant audit conducted.

Centers of Excellence Look at narrow network and COE

strategies available, especially for Orthopedics and Oncology.

Mind the Gaps Consider an evaluation of high cost

claimants to identify where gaps in information and communication may have delayed care or resulted in more expensive treatments.

5

Health Care Delivery Is Transforming.

How we see the doctor and how providers interact with our medical information will become more efficient.

Employers are increasing leveraging onsite and

near-site health services.

TELEMEDICINE is transforming how we

interact with clinicians. It is being adopted more

widely as an effective adjunct to face-to-face

medical treatment.

NBGH reports that 38% of (large) employers use Centers of Excellence for procedures

other than transplants.

18% of employers offer an HPN/narrow network.

13% differentiate cost sharing to incent employees to access

these care options.

More than 10 percent of U.S. primary care practices, approaching 7,000 altogether, are recognized as Patient Centered Medical Homes by the NCQA.

SECOND MEDICAL OPINION A medical expert physician reviews a member’s clinical information to determine if they have the right diagnosis and are getting the correct treatment for that diagnosis.

We are witnessing a renaissance of local and regional health

delivery systems innovation.

6

Health Care Delivery Is Transforming.

Data Analytics Run a utilization analysis by

geographic area to determine areas of opportunities.

Tele-Medicine Explore telemedicine options with both

carriers and third party vendors. Look for new capabilities in areas like behavioral health and dermatology.

Narrow Networks Look at narrow networks available

through your carrier.

PCMH Ask your carrier where and how they can offer PCMH primary care providers in your network.

SMO / EMO Consider a Second Medical Opinion (Expert Medical Opinion) third party vendor.

Onsite Health Solutions

For larger facilities- consider contracting with onsite health care capabilities.

ACO Identify ACO offerings in major geographic areas.

Patient Advocacy / Transparency

Consider a third party patient advocacy/transparency vendor that can help members access the right care in the right place at the right time.

7

Wellbeing Improves Engagement and Work Performance.

There has been a notable shift in the marketplace from wellness to wellbeing.

The discussion is less around ROI and more around VOI (“Value on Investment”).

In 2016, 59% of employers with more than 200 employees offered a

wellness program.

The Five Pillars of Wellbeing:

1. Physical Health 2. Emotional Health 3. Social Connectedness 4. Job Satisfaction 5. Financial Security

Employers are offering solutions to help employees reduce finance-related stress, including:

• financial seminars • one-on-one sessions with

financial advisers • financial health challenges • student loan repayment

benefits.

Job satisfaction is integral to one’s overall well-being, as

well as to the health and bottom line of organizations,

since it can lead to lower turnover and absenteeism, a

strong sense of organizational citizenship, higher customer

satisfaction and customer loyalty.

Stock values for a portfolio of companies that received high scores in a corporate health and wellness self-assessment appreciated by 235% compared with the S&P 500 Index appreciation of 159% over a 6-year simulation period.

How you feel about yourself impacts your

work performance.

8

Wellbeing Improves Engagement and Work Performance.

Employee Survey Conduct an employee engagement and

satisfaction survey.

EAP EAPs provide confidential problem assessment for employees with personal concerns that may affect job performance, prevent behavioral risks, and promote a healthy workplace.

Wellness Champions More employers are utilizing voluntary

wellness champions as an extension of their wellness staff who help deploy corporate well-being initiatives and relay employee feedback on programs

Stress Management Consider awareness campaigns,

employee training, and resilience or mindfulness training. Employers also offer policies to help employees manage family and financial issues.

Financial Wellness Develop a Financial Wellness strategy.

Identify solutions from wellness vendors and ancillary benefits carriers.

Job Design Reassess job design on the following criteria: sense of control; achievable goals; understanding one’s responsibilities; using personal strengths; work-life balance; fair pay; job security

Community Involvement More employers are rewarding

employees for community service with health-saving account deposits, and offering company matches for charitable giving.

Go For The Award Many employers place great value on

“healthiest places to work,” or “best places to work” regional and national awards.

9

Health and Productivity is Hard Coded.

THE BUSINESS VALUE:

A healthier working population improves absenteeism, presenteeism and workforce performance.

Effective, well-controlled absence management is a key

differentiator for human resource organizations.

For certain industries (manufacturing, utilities,

transportation)- health and productivity capabilities are

critical differentiators for Human Resource planning.

Adding 10 years and 30 pounds to a worker

increases his/her risk for work-related injury

by 2-3X.

Short and long term disability

claims analytics can help predict high

cost medical claims.

The 8% of a working population who submits a short term disability claim per year drives in excess of 50% of the medical

costs of that working population.

There is growing evidence that wellness has a greater short-term impact on productivity,

than medical costs.

10

Health and Productivity is Hard Coded

Organization Bring together representatives from your Wellness Program with your Risk and Safety leaders to identify where processes and goals can and should intersect.

Data Analytics Run an overlap analysis of STD / LTD

claims with employee medical / pharmacy claims.

Data Analytics Run an overlap analysis of biometrics

and workers compensation claimants.

Ergonomics Have a workplace ergonomic evaluation performed to identify workplace and administrative solutions.

Process Connect your wellness and EAP capabilities through warm transfers.

Performance Develop a wellbeing program that utilizes your company’s productivity and performance metrics to determine success.

Absence Management Explore outsourcing or upgrading your

company’s absence management.

Strategic Consulting Consider having a comprehensive

assessment and recommendation performed for your organization’s health and productivity profile.

11

The Cost of Our Health Is In Our Own Hands

In 2016, worker contribution to health care was $5277.

In 2006 it was $2973.

That’s a 78% increase in ten years.

Wearable Devices 3.0.

“It’s my money.”

In 2016, according to Kaiser Family Foundation research,

29% of workers were enrolled in a High Deductible

Health Plan.

Employers are increasingly leveraging high-touch

approaches, like personal health assistants and expert

medical consultations, to high-tech applications such as cost calculators, interactive online

tools, and claims-based personalized messaging.

Decision tools and services address

treatment options, provider choices,

health plan options, health account funding, and

cost/budgeting challenges.

Consumer-directed health care (CDHC) benefits design allows employees to have greater control, choice, and flexibility with their care. This benefit design is typically a high-deductible health plan with a health saving account.

Robert Wood Johnson Foundation: “More people are becoming curious about

the price of their health care, and understand that more expensive does not necessarily mean better. But people still do

not realize that health care prices vary significantly between providers for the

same services.”

12

The Cost of Our Health Is In Our Own Hands

CDHP The marketplace trend toward pairing HDHP with health savings accounts is gaining momentum.

Cost Transparency Price transparency for health services

is essential to engaging consumers in health care decisions, bending the spending curve, and creating a more competitive marketplace.

Third Party Vendor Hub The marketplace is witnessing vertical

integration where more than one mobile application is available through a single portal.

Consumer Medical Information

More employers are partnering with vendors who can provide greater access to online and telephonic condition-specific education and decision support.

FSAs Promote greater individual responsibility for employees' health care spending decisions by allowing savings on a pre-tax basis for out-of-pocket health expenses.

HRAs Offer tax-advantaged savings and provide the most flexibility. ERs can choose the types of expenses eligible for reimbursement and whether unused amounts can carry over.

HSAs Offer tax-free employer and employee contributions, investment earnings and disbursements for eligible medical expenses — and full portability.

Wearable Devices The confluence of activity tracking,

social media health applications and interactivity is exploding in the marketplace. Increasingly employers are taking notice.