Transcript Slide 1

Wellness & Prevention: a key component of a functional and
harmonious healthcare system
François Millard FSA, FIA, MAAA
September 24, 2010
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Wellness as an essential ingredient to curb trend in a transformed health
system: Evidence from South Africa
2
How Vitality works
3
Applying the principles in the US corporate environment
4
The integrated medical home/ wellness home
2
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Wellness as an essential ingredient to curb trend in a transformed health
system: Evidence from South Africa
3
South African healthcare has been through a
transformation similar to what the US faces
Guaranteed access and coverage
No exclusions for pre-existing conditions
Restrictions on premium rating
Prescribed minimum benefits
Penalties for not purchasing insurance
South Africa
US
a
a
a
a
a
a
a
a
a
X
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Drivers and Remedies of Medical Costs
=
Cost
Frequency
of Sickness
Risk
=
Member
Drivers
Remedies
x
Utilization
of Services
x
Treatment
x
Cost
x
Member
Risk
Lifestyle
Technology
Disease burden
Treatment protocols
Wellness &
Prevention
Cost per
Services
Utilization Management
Benefit Rules
Treatment
Supply and demand of
medical products and
services
Provider and services
contracting.
Benefit Rules
Cost sharing mechanisms
Managed Care & Cost shifting
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Healthcare is riddled with market failure
Benefits are immediate,
price is hidden
Under consumption of
preventive care
Sickness
Benefits are hidden, price
is immediate
Wellness
Lack of information
True efficacy of different health and wellness
approaches is not well understood
Over optimism
People tend to overestimate their abilities and
health status
Hyperbolic discounting
Future rewards of a healthy lifestyle are
significantly undervalued relative to cost today
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The Discovery Healthcare Model
Triangle of healthcare utilization
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Impact of the combined model on
long-term medical inflation trend
Discovery medical trend vs. Industry (1993 = 100)
700
600
500
400
300
200
100
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Discovery
2005 2006 2007
Industry
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2
How Vitality works
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Vitality provides a co-ordinated approach to
lifestyle modification
Knowledge
Active
Care
Integrated network of partners in
communities and additional coverage
through local events and devices
Integration of best available lifestyle
resources and care networks (e.g.
nutrition, biometrics, smoking, disease
specific interventions and coaching)
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Publication of Vitality cross-sectional studies
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VIP Study 1: impact of Vitality
engagement on hospital-related costs
Risk-adjusted hospital admission costs: engaged vs. not engaged Vitality members
Not engaged benchmark
100%
90%
30-40%
15-20%
10-15%
80%
70%
60%
50%
40%
30%
20%
10%
0%
*
P < 0.001 for all categories (including overall result) except cancer where P < 0.01
*Categorisation based on diagnosis-related groupers using ICD-10, CPT-4 and local procedural codes
Source: “Participation in an Incentive-based Wellness Program and health care costs: Results of the Discovery Vitality Insured Persons Study”. Please do not quote without written permission 12
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from Discovery or PruHealth.
VIP Study 2: Vitality engagement is correlated
with lower cost of chronic disease
Risk-adjusted hospital cost for chronic members: engaged vs. not engaged Vitality members
Not engaged benchmark
100%
20-30%
8-10%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Multiple metabolic
conditions
Mental illness
Cancer
Hypertension
Dyslipidaemia
Beneficiaries with single conditions
P = 0.001 for multiple metabolic conditions, all single conditions are not statistically significant
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Longitudinal Vitality study1
Longitudinal Vitality study: relationship
between increasing activity and the odds
of hospitalization
% of members using
the gym benefit
31.1
31.8
27.0
24.8
21.1
1
2
3
Year
4
5
Odds ratio for hospitalization
in Years 4 to 5
Evidence of significant changes in cohort fitness
engagement over time
1.00
3%
7%
10%
0.95
13%
0.90
0.85
0.80
0.5
1.0
1.5
2.0
Number of additional gym visits
per week from Year 1 to Year 3
(for initial inactive members)
1A
retrospective analysis of 304,000 adults over the period 2004 to 2008, covering 33,196,197 member months of data. The analysis
was designed to test for:
 Significant changes in engagement with fitness-related activities over time
 Whether these changes were associated with changes in the probability and cost of hospitalization
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Applying the principles in the US corporate environment
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Application to Client’s Population
(7,000 employees): Medical Cost
Claims Cost by Risk Category
2009 Employee Allowed Cost per month - Consistent Cohort
$900
$800
Per Employee Cost ($)
$700
$600
1. Health
Maintenance
2. Risk & Cost
Management
$500
Excess Cost
$400
Excess Cost
$300
$200
$100
Base
Base
Base
Low Risk
Moderate Risk
High Risk
$0
Methodology overview: Numbers shown represents a constant cohort of almost 5,000 employees present within the base period (2007) and
2008 Vitality year. Claims are Age & Gender adjusted.
Costs increase as risk factors increase. Interventions are aimed at keeping the low
risk low, and reducing or managing high risks
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Engagement
Client 7,000 employees: Tracking of simple and complex behaviors
Average Workouts per Month
(Verified and qualified workouts Only)
Breakdown by type of activity
Average workouts per month
First Quarter Comparison
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
13,864
8,412
5,437
Policy Year 1
Policy Year 2
Policy Year 3
The large increase in physical activity is
driven by the combination of total
participants and average workouts. The
overall results for the 3rd policy year are
especially promising.
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Directional US Vitality experience:
Client 7,000 employees.
Systolic Blood Pressure
Risk factor prevalence (verified results):
employees and spouses (2009 vs. 2008)
Total Cholesterol
(Movement of members with High SBP identified in the first policy year)
250
300
200
179
142
69
100
0
High Risk
Moved to @Risk
Moved to Low Risk
Member Count
390
400
203
200
150
87
100
75
41
50
0
High Risk
Moved to @Risk
2009 Risk Group
High Risk 2008
High Risk 2008
2009 Risk Category
Total Cholesterol
50.3
30.0
20.0
34.2
24.2
10.0
Remain at High
Risk
Moved to @Risk
2009 Risk Group
Moved to Low
Risk
Average Activities Per Member
60.0
40.0
2009 Risk Category
(Engagement associated with movement of members)
(Engagement associated with movement of members)
50.0
Moved to Low Risk
2009 Risk Group
Systolic Blood Pressure
Average Activities Per Member
Member Count
500
(Movement of members with High TC identified in the first policy year)
45
40
35
30
25
20
15
10
5
-
42
35
29
Remain at High
Risk
Moved to @Risk Moved to Low Risk
2009 Risk Group
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4
The integrated medical home/ wellness home
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The integrated Medical Home / Wellness Home:
A model for a holistic, integrated healthcare system
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Fundamental principles of the Medical Home:
Commonality to Vitality design
Component
Description
Vitality
Practice organisation
(partnerships)
Partners in the network must be of sufficient
scale and sophistication to play a role in the
patient’s care co-ordination
Organised wellness network of defined
partners helps members navigate the
market complexity and lack of co-ordination
Practice organisation
(funding)
Model needs to be affordable to ensure
broad-based implementation, and requires
different reimbursement funding models that
allow for staffing, capital investment and
scale
Network model removes / reduces financial
barriers to engagement through partner
channelling and funding structures. Funding
model facilitates partnership economics
Health information
technology (data and
support)
Integrated electronic patient records support
decision making and proactive care. Add
‘customer relationship modules’
automatically feeds back to the member with
prompts and educational material
Verified and self-reported data used to
generate a personalised pathway to health
maintenance / improvement on a dynamic
basis. CRM model feeds back immediately
to the member with education and advice
Health information
technology (quality
measures)
Central co-ordination role that tracks data
from multiple sources and interactions, and
uses it for better clinical management
Back-end partner integration that allows for
real-time collection of data from all network
partners, and which feeds into the members’
dynamic health pathways
Health information
technology (evidencebased medicine)
Clinical pathways that ensure that doctors
do the right things at the right time
Scientifically-derived, independently verified,
clinical pathways at the individual member
level
Patient experience
Factor patient opinion and experience into
the clinical management process
Interactive process of knowledge
organisation; ongoing monitoring of survey,
online and partner interactions
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Key Observations
1
Wellness reduces the cost of chronic illnesses and encourages changing
lifestyle behavior
2
Engagement keeps people in the healthcare system and therefore
encourages a longer-term investment in healthcare
3
Engaging consumers to change their behavior has driven down
healthcare costs
4
This is a key component of a functional and harmonious healthcare
system
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Wellness & Prevention: a key component of a functional and
harmonious healthcare system
François Millard FSA, FIA, MAAA
September 24, 2010
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