The New Health Age The Future of Health Care in America
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1 The New Health Age The Future of Health Care in America
2 Opportunities in the Strategy 1. We are entering a New Health Age. 2. Economic burden on the healthcare system. 3. Heavy economic burden on employers. 4. Finding the opportunity in the shiſt. 5. What key components are necessary to leverage the opportunity?
3 The Current Landscape of Health Care in America America s state of health, the economic models driving health care choices and costs, and America s health care delivery systems do not adequately foster the right incentives for American Stakeholders to (1) increase the quality of their health, (2) improve health care service to everyone, or (3) control health care costs. This reality is contributing to the rapid decline of America s pride, financial strength, and competitive advantage in a global marketplace. It is, therefore, essential for America to acknowledge, embrace, and foster The New Health Age.
4 Who Are America s Health Care Stakeholders? American companies of all sizes Individuals of every age - young, old and in between Public and private sectors Workers and employers Unemployed and employed Patients and health care providers, including physicians, nurses, hospitals, and long term care providers Payers and their beneficiaries Teachers and students Governments and citizens
5 The Dynamic Flows of the New Health Age There are nine dynamic flows that are and will reshape health care in the New Health Age They are grouped into three categories: o How we THINK about health care o How we DELIVER health care o The ECONOMICS of health care
6 The Dynamic Flows About How We THINK About Health Care Sickness à Wellness Ignorance à Awareness / Understanding Opposition à Alignment
7 The Dynamic Flows About How We DELIVER Health Care Treatment à Prevention Reactive à Proactive Episodic à Wholistic
8 The Dynamic Flows of the ECONOMICS of Health Care Procedures à Performance Isolation à Integration Non-Efficient à Efficient
9 The New Structure of Health Care 1. Medical Homes & Health Homes 2. Integrated Delivery Systems (IDS) 3. Accountable Care Organizations (ACOs) 4. Employer ACOs (EACOs) 5. Health Insurance Exchanges
10 Medical Homes Medical homes will function at the center of health care and be the catalyst for community-based collaborative care networks, expanding access to primary care and general health care services. ~ David Houle and Jonathan Fleece
11 Medical Homes Not physical structures Physician driven Patient centered Coordinated care Appropriate care
12 Integrated Delivery Systems
13 Accountable Care Organizations Think of top health care players coming together to collaborate in a board room Agree on sharing bundled, capitated, and performance bonus payments Contract with payers (government and private) Appropriate care Performance based
14 Employer Accountable Care Organizations (EACOs) Employer funded health care benefit plans New world around health management Health care network design and partnering Absenteeism management Workforce productivity oriented
15 EACOs Will Be Critical Passion Creativity WORKFORCE BENEFITS Vision Leadership
16 EACOs Analytics Health Delivery Alignment EACOs Benefit Design Total Health Management
17 Workforce Health Management Today Injury Flu Employees Risk Family Crisis
18 Workforce Health Management Tomorrow Flu Injury Family Crisis RISK
19 Health Insurance Exchanges Expedia model for health insurance Utility styled health management Utility-based platforms Public sector Private sector Economies of scale and skill
20 Improving Client Performance: Keys to Future Success 1. Historical Challenges to Managing and Creating Value in Corporate Benefits 2. Key Levers for Improving Performance 3. Strategic Alternatives for Brokers, Consultants, Service Providers, Insurance & Managed Care Companies
21 Managing Healthcare Inflation: The Challenge Healthcare is NOT a normal economic good Demographics & new technologies Dysfunctional financing system Blended public/private financing, Healthcare reform/medicare/medicaid expansion Externalities Complexity of information Inequality of information
22 A Perspective on Corporate Healthcare Benefits Benefit and healthcare costs have been increasing more than twice the rate of inflation Good : Rate of increase is slowing somewhat Bad : Still out of control relative to other costs Ugly: Cost shiſting has largely failed to change resource utilization Fear of Healthcare Reform blinds many to underlying market dynamics
23 Corporate America has Focused on the Pennies While Letting the Dollars Slip Through Their Grasp Administrative costs reduced while total spend increasing Direct expenses easiest to track while total costs large but elusive Cost shiſting has failed to impact resource consumption meaningfully Behavioral change efforts largely missing the target Twenty years of increasing tensions between employers and employees over benefits
24 While Increasing Global Competition Magnifies the Failings Associated with Employee Benefit Programs Employers challenged to reduce labor costs in an increasingly competitive market Business Process Outsourcing (BPO), particularly in HR Disease Management Wellness Continued cost shiſting to employees Premiums continue double digit growth Healthcare inflation continues to drive benefit costs Group Health Workers Comp Disability HR and benefits administration remain organized in historical towers, functional silos Fragmented Management Limited data integration Focus on function rather than people
25 The Fact of the Matter is Compartmentalized benefit design and administration optimizes towers Economics and information largely siloed Inadequate measurement of real/total costs Underinvestment in coordination Under- and poorly structured behavioral change efforts
26 Wholistic, People-centered Change Define, measure, focus on total costs of illness, injury and impairment Understand and quantify mental health medical cost offset Administration is a tool, not a burden Integrate administration before/whether you integrate risk Align the interests of labor and management Invest in behavioral change
27 The Cost of Managing Employee Absence Time is Money The costs resulting of unplanned, unscheduled employee absence include: Direct Health and Benefit Costs PTO Replacement labor Reduced Productivity Estimates of these costs vary widely From $300 per day for unskilled, hourly wage workers to $13,000 (DuPont study) Blended labor pools & industries range from $600 to $800/day/employee $3000 PEPY The hidden costs estimated to be 40% above and beyond the tracked costs
28 A Fresh Approach New Approach to Managing Benefits Analyze Advise Administer Translated: Evaluate the opportunity Develop or identify solutions (Buy, build, partner) Deliver (directly or indirectly) the solutions
29 One Vision Target: Approach: Reduce costs of illness (including family crisis and mental health, injury and impairment in the workforce Single point of accountability (EACO) Focus on behavioral change in the 20% Personalize incentives/aim at consumer Integrate administration and data (not risk) Measure total impact/capture real costs Key Levers: Benefits Design, Data Analytics, Care and Case Management, DM Value: performance Participate in the financial results based on
30 One Vision Target: Approach: Key Levers: Value: Reduce costs of illness (including family crisis and mental health, injury and impairment in the workforce Single point of accountability (EACO) Focus on behavioral change in the 20% Personalize incentives/aim at consumer Integrate administration and data (not risk) Measure total impact/capture real costs Benefits Design, Data Analytics, Care and Case Management, DM Participate in the financial results based on performance
31 MARKETPLACE WINNERS WILL IMPROVE RESOURCE UTILIZATION AND THE BOTTOM LINE Impact on overall business Benefits Admin HRO Integrated Services Minimal largely a bookkeeping function Off-load low value administrative and transactional functions Substantial financial impact Improved cost control Improved resource availability Improved productivity Impact on Related cost Better enforcement of benefit plan policy Improved decision making in benefits Reduced operational risk - adherence to employment law Process improvement Access to new technology Improved visibility for cost of absenteeism Reduced absenteeism Reduced overtime Impact on Benefit cost More productive use of administrative expenditures Low-value transaction process automation Improved productivity in employee services Avoid capital costs in technology Increase admin expense Control second largest HR cost Reduce H&W cost growth Provide net reduction in overall benefit costs
32
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