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April 24, 2008

It’s Time for Comprehensive Health Care Reform

 The efforts of HCAT to improve the health of our low wage worker members are patches on a dysfunctional system still leaving them underinsured  Employer sponsored coverage falls short for these members and many other Americans  Only through a reform plan that ends the fragmentation in our medical system leading to overuse, misuse and underuse can we begin to match the general health care outcomes and realize similar savings as the other industrialized nations

What We Know

GENERAL INFORMATION

 More than half of employees or their dependents have a chronic health condition that will require ongoing care

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– Chronic illnesses drive approximately 75% of health care costs

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 Wellness is increasingly important in fighting obesity, which is associated with a 35% increase in spending on health care services

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– Estimates of ROI for obesity wellness programs is up to 1:54  Preventive health screenings continue to play an important role in managing health costs – – About ⅓ of diabetics do not know they have the disease

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A 10% reduction in cholesterol levels can result in a 30% reduction in the incidence of heart attacks and strokes

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Sources: 1) Hewitt Associates Research, April, 2008 2) American Medical Association, “Strategies to Address Rising Health Care Costs”, 12/07 3) “Weights and Measures: What Employers Should Know about Obesity”, The Conference Board, 2008 4) Centers for Disease Control and Prevention (CDC), “Preventing Diabetes and Its Complications” 5) Cohen, JD. “A Population Based Approach to Cholesterol Control,” American Journal of Medicine, 1997, as reported by the CDC

SEIU Health Care Access Trust

A Taft-Hartley Plan

 Set up to take in newly organized low wage workers – – – Child Care Home Care Janitors  Average income before organizing – Janitors and Home Care workers – minimum wage – $6.50

– Child Care Workers – $9.00 to $20.00 per child care day

Health Care Access Trust Members

OUR MEMBERS’ PROFILE

 45 – 48 years old  80 – 90%+ female  Largely Latino, African, African American, Rural Caucasian  Inconsistent or no previous health care  Multiple untreated chronic diseases  Have learned how to use the ER as their doctor

Why There Will Be High Cost in the Future

THESE MEMBERS HAVE SERIOUS UNTREATED ILLNESSES

 In one bargaining unit 45% of the members surveyed self-identified as having one or more chronic diseases – mostly high blood pressure and diabetes  They are likely to have undiagnosed acute problems such as cancers and serious heart disease  Members tend to have multiple jobs and serious economic strain leading to high stress  Members usually do not have leave to take care of their health without losing income

Why Are These Members Low Cost Today?

 Employers are unwilling or unable to provide adequate funding for health care: – –  Therefore members are at best underinsured  If they have insurance – Cannot afford the co-pays and co-insurances for necessary services – Little or no money in early contract years Tend to favor high deductible/high co-insurance plans Are constantly afraid of high bills if a doctor finds something wrong

Opportunity for Greater Engagement

THE PARADOX

 How much to spend preventing future expenses and how much to spend controlling today’s highest costs?

95% 59% of future high cost population comes from today’s low cost population* 5%

of Members

70% 20%

of Members

Claims Costs **

Sources: *2006 Center for Disease Control, **UnitedHealth Claims Data, 2007

Our Philosophy

Recognize you can’t do it all with $175 pmpm Try to get chronic disease treated Make it easy to see the doctor Have at least some drug and diagnostic covered Short change hospitalization and hope you can find community resources to help

Walking the SEIU Talk in Our Own Sponsored Plans

IF WE ARE WALKING THE TALK We have to look seriously at evidence-based medicine We have to encourage personal responsibility We have to address chronic disease more creatively We have to realistically address smoking and weight control

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WHY TRY IT?

 VBID overlays a quality of life calculation on evidence based medicine  It differentiates copayment rates based on the value of the medical service to the individual and to the system  It drives patients into essential services by eliminating financial barriers to those services – critical to low wage workers

Our Partners

University of Michigan Department of Public Health

Dr. Mark Fendrick

UnitedHealth Care Value Based Insurance

Design Team

SEIU Locals 1 and 26

Milwaukee and Minneapolis Janitors Respectively

Challenges to Implementing VBID for Low Wage Workers

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 Our members are on limited plans due to financing from employers  Some of our employers do not see it as their responsibility to improve their employees' health or explore new avenues for health care provision  Our members have little or no experience with the health care system  A challenge to insurers even with ASO contracts  Incentives – how do we do that in a Taft-Hartley?

How Is This Different?

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OTHERS SEIU HCAT APPROACH

Plan design ensures access for targeted clinical services Whole person approach:   Ensure access via plan design Education and engagement via integrated care/coaching programs  Incentives for success: Healthy actions and outcomes

FOCUS CONSUMER ENGAGEMENT

Chronic population and Rx costs Pharmacy gaps, care management Encourage prevention and compliance across broad population  Unique strategies for high/low cost populations  Reflects all costs of maintaining health Consumer level approach – customized communications, retail marketing

Implementing a VBID Plan

IDENTIFYING HEALTH ISSUES

 Health Risk Assessment  Biometric Screening  Age appropriate physical exams

GETTING MEMBERS TO THE RIGHT PROGRAM

 Healthy and want to stay that way  Smoking and weight issues  Chronic disease issues  Acute illness

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Benefit Design and Incentives

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Enrollment Options

with additional options for those with identified chronic conditions – Option 1 – Preventive – Option 2 – Weight and/or smoking cessation – Option 3 – Chronic disease control 

Eliminate Barriers to Care

– to the extent possible zero co-pays for necessary services and drugs 

Incentive Plans

that are clear and actionable by members – if you do this, you get that

Care and Coaching Programs

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 Enhancements to existing disease management programs based on voluntary enrollment using incentives  For selection of program option – “best fit” review of care based on Biometric Screening, Health Assessment, prior claims

Value Based Insurance Design

THE QUESTIONS WE ARE ASKING

 Will the Local leadership be receptive?

 How will the members receive these kinds of plans and how do we make them understandable?

 Will the employers be willing to work with us on implementing these plans?

 How do we implement this kind of plan for workers who have very limited coverage?

 Will the insurers we work with be able to administer this kind of program?

 Could VBID actually help this population control its chronic disease?

Evaluation of the Program

PREVENTIVE CARE PROGRAM WELLNESS LIVING WITH CHRONIC DISEASE ACCESS

Utilization Data Utilization Data Utilization Data

HEALTH LITERACY SELF EFFICACY

Survey Survey Survey Survey Survey Survey

OUTCOMES

HRA HRA HRA

Optimal Results

 Positive member experience  More engaged, knowledgeable members  Richer, more effective but still affordable benefits package  Maximize SEIU HCAT’s member and employer health investment

What About VBID for Excellent Comprehensive Plans

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THE BENEFITS

 Should reduce acute incidences due to chronic disease – good for the system and the patient  Provides better value for the health care dollar – financial drivers move patients to high value services

THE CHALLENGES

 Is seen as a reduction in benefits because of added cost to low value services  Requires commitment on the part of employers to having a healthy workforce, not just saving money

Health Care Access Trust