Transcript March 3 2008 presentation - NYC

Value-Based Designs:
Investing in What Works in Medicine
Gregory Judd
Center For Health Value Innovation
March 3, 2008
About the Center
• Non-profit expression of David Hom & Jack Mahoney
MD’s work at Pitney Bowes
• “Concept studio” for identifying and developing metrics
and messages for value-based innovation
• Center leaders have researched and qualified valuebased innovations of 80+ companies
• Recurring results identify strategies that work - and that
employers readily grasp
• Innovating employers and executives are eager to
exchange ideas, measures, and results
March 3, 2008
Center for Health Value Innovation
2
What Is Value-Based Design
Value-based design is a health management
tool that
1
2
3
4
Uses data to
Invest in incentives that
Change behaviors to
Reduce financial and health risk (ROI)
March 3, 2008
Center for Health Value Innovation
3
Pitney Bowes Timeline
17 Years of Innovation Using Plan Design to Change Behavior
Costs
begin to
come
down
DATA
Analysis
1990
March 3, 2008
EPO
HCU
19931994
EAPBehavioral
Health
1995
• Algorithms
• Consumerdirected
choice
ValueBased
Benefits
Launch
19971999
2001
First “free”
Rx Design
2002
Center for Health Value Innovation
2007
4
Model Solution: Rx Access Benefit Design
“Traditional” Rx Benefit
Tier 1
Most generic drugs
10% Coinsurance
Tier 2
New Rx Access Benefit
Tier 1
Most generic drugs and
and all brand name drugs
for: • Asthma
• Diabetes
• Hypertension
Most preferred brand
name drugs, including
those for:
10% Coinsurance
• Asthma
• Diabetes
• Hypertension
30% Coinsurance
Tier 3
Tier 2
Most preferred brand
name drugs
30% Coinsurance
Non-preferred brand
name drugs, including
those for:
• Asthma
• Diabetes
• Hypertension
50% Coinsurance
March 3, 2008
Tier 3
Non-preferred brand
name drugs
50% Coinsurance
Center for Health Value Innovation
5
PB Investments
Resulted in Improved Outcomes
 Annual cost of care decreased for both
conditions (asthma and diabetes)
Case Study
Pitney Bowes
SAVINGS OF
$1 MILLION IN
1st -2nd YEAR
 Pharmacy costs decreased
 Hospital admissions declined for people w/
asthma
– Increased for people w/ diabetes (still below benchmark)
 ER visits declined for people w/ diabetes
 Disability costs decreased by 50% [diabetes]
 Changes in medication/possession rates for
both groups
SAVINGS OF
$2.5 MILLION
3rd YEAR
SAVINGS OF
$4+ MILLION
4th YEAR
– Improved adherence
– Types of medications (more controllers, less rescue)
March 3, 2008
Center for Health Value Innovation
6
Evidence of Financial Sustainability
PB Gross Cost
vs Benchmark 1994-2007
$8,000
PB trend
for 2006-7:
3.5%
$7,000
$6,000
$5,000
$4,000
5 year CAGR,
Pitney Bowes
v Benchmark:
6.7% v 12%
$3,000
$2,000
94
19
March 3, 2008
96
19
98
19
00
20
02
20
Center for Health Value Innovation
04
20
06
20
7
Examination of Data Leads to Shift
in Health Investment...
Participants
Total
100%
5%
80%
10%
35%
60%
75%
40%
50%
20%
Non Users
0%
15%
10%
Less than $1,000
$1,000 to $10,000
More than $10,000
March 3, 2008
Center for Health Value Innovation
8
…From Uninvested to Effectively Invested
Participants
Total
100%
4%
80%
9%
37%
60%
70%
40%
50%
20%
20%
10%
Non Users
0%
Less than $1,000
$1,000 to $10,000
More than $10,000
March 3, 2008
Center for Health Value Innovation
9
Center for Health Value Innovation
Mission: We will share evidence that value-based designs
improve health and financial sustainability
Board of Advisors
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Chrysler
Cisco
Cleveland Clinic Health Plan
Corporate Synergies
Detroit Chamber of Commerce
Dow Chemical Company
GlaxoSmithKline
Gulfstream
Health Alliance Medical Plan
Horizon BCBS
Holmes Murphy
Home Depot
Humana
Intercare Solutions
Integrated Health Partners
Johns Hopkins Health Care
King County, Washington
Mayo
Merck
Novartis
Partners in Care
Pitney Bowes
Providence Health Plan
Prime Therapeutics
Procter & Gamble
sanofi-aventis
Set Seg
Toyota
UPS
Abbott (in process)
Novo Nordisk (in process)
March 3, 2008
Board of Directors
Chair: David Hom
President: Cyndy Nayer
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Industry Allies
• World Health Care Congress
• AIAG
• NBCH
• PBMI
• Interface EAP
• Colorado Business Group on
Health
• Larry Boress and Cheryl
Larson of the Midwest
Caterpillar
City of Springfield, OR
Delphi-AIAG
FPL
Hannaford Brothers
HEB
H.E.R.E.I.U.
•
IBM
•
Johnson and Johnson
•
Kellogg
Pfizer
Quad Graphics
State of Colorado
University of Colorado Health Sciences
Center
• Wells Fargo
• Whirlpool
Center for Health Value Innovation
Business Group on Health
New York Business Group
on Health
Resolution Health, Inc.
Navigator MD
10
Keys to Effective Value-Based Design Innovation
over 100 companies interviewed or surveyed
• Gather and share evidence for the
value of investing in health consistently
over time
• Create models to test value-based
concepts with segments of a
population
–
–
Identify highest risk
Construct investment(s) to shift behaviors
• Most effective incentives include
–
–
Metrics
Messaging
• Re-evaluate results at predetermined
intervals
–
Data analysis drives quality improvement
March 3, 2008
Center for Health Value Innovation
11
Large Association of Small Enterprises
Develops Value Based Health Plan
Most companies are under 100 employees
Chamber called on
to dramatically
lower premium
costs without risk
selecting or
slashing benefits
March 3, 2008
Provide
incentives for
healthy
behaviors.
Split benefit
design that
rewards people
for healthy
behaviors and
lowers premium
costs by more
than 10%.
Center for Health Value Innovation
Results
Chamber health
program for over
20,000
companies faces
escalating
premium costs.
Value-Based Design
Problem
Detroit Regional Chamber of Commerce
Significant
market
adoption after
only one-year.
Launched October
2006
More than 60,000
members enrolled.
Premiums discounts
of more than 10%
Dramatic increase in
adoption of disease
management
programs
12
Midwest Company Achieves
Value-Based Results
16,000 employees
Quad Graphics-QuadMed
March 3, 2008
Center for Health Value Innovation
13
Grocery Chain Achieves Value
and Health Improvement
Hannaford Brothers Co.
March 3, 2008
Center for Health Value Innovation
14
14
Midwest Health Plan Achieves
Value-Based Results for Employees
Total costs
estimated at
nearly $9 million.
Reduce
financial
barriers to
maintaining
health.
Move all meds for
diabetes and
asthma to Tier 1
of formulary to
improve
compliance &
adherence.
Results
Carle Clinic
medical costs
for asthma and
diabetes were
projected to
reach more
than $3 million
in 2007.
Value-Based Design
Problem
Health Alliance Medical Plans
Diabetes and
Asthma show
cost/benefit
Rx Utilization
Diabetics 8.8%.
Asthmatics 6.9%
Med Possession
Ratio >.8
Diabetics 10.6%
Asthmatics 32.7%
Monthly Rx Costs*
Diabetics 19.5%
Asthmatics 56.7%
*compared to control
population
March 3, 2008
Center for Health Value Innovation
15
Mid-Market Company in Southeast Achieves
Results with Value-Based Design
6,000 employees
SCANA
March 3, 2008
Center for Health Value Innovation
16
16
Global Multi-Site Company
Assesses Risk & Safety
350,000 employees
IBM
March 3, 2008
Center for Health Value Innovation
17
17
Municipality Reduces Disability Days
[fully insured]
450 employees
City of Springfield, OR
March 3, 2008
Center for Health Value Innovation
18
18
What We Are Learning
• Employers, unions, brokers & consultants, health plans, & health
systems are embracing Value-Based Design concepts - & creating
their own innovations
• Regional adoption across stakeholders, led by strong renegade,
leads to action
• Innovators are finding VBD results are sustainable
• Innovators span health care stakeholders
•
•
•
•
•
Preferred Health Systems/Wichita
Great West Life/State of Co/ Intercare Solutions (CA)
PIC/ Horizon BCBS/Quality Collaboration/State of NJ
H.E.R.E.I.U. as model for Taft Hartley Plans
Health Alliance Medical Plans plus 10-12 more regional and national health
plans/PBMs have or will have models
• Prime Therapeutics has launched an Efficiency Rx Plan
• Aetna VB Rx is launched
March 3, 2008
Center for Health Value Innovation
19
Key Concepts in a Culture of Health
• Health, and health management, is
everyone’s responsibility
• Incentives reinforce positive behaviors
• Culture of health is part of the
organization’s fabric
• Value-Based Designs do not require
– Complicated intent
– Sophisticated data
March 3, 2008
Center for Health Value Innovation
20
What’s in the Future?
• Communities of learning
– Worksite
– Community/geographic area
– Aggregators
– Focused on condition, goal, “people like me”
– Social/virtual
• Diverse
• Unpredictable
• Tied to incentives that propel change
March 3, 2008
Center for Health Value Innovation
21
Evidence of the Ascent of Value-Based
Design is Emerging...in A Lot of Places
www.googlefight.com
March 3, 2008
Center for Health Value Innovation
22
Questions/Contact
Gregory Judd
[email protected]
203-231-1372
March 3, 2008
Center for Health Value Innovation
23