Transcript Project name - TCN | Wooster, OH 44691

HEALTHCARE COST
REDUCTION
HOW A MIDWESTERN MANUFACTURING COMPANY
REDUCED THEIR PER CAPITA HEALTHCARE EXPENSES
BY 14% FROM 2013-2014
Topics
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Executive Summary
Background
Study Methodology
Results
Takeaway
About Us
Executive Summary
Objective
Results
The average annual premiums for employer sponsored
family health coverage increased by 80% since 2003*.
Companies are seeking ways to increase benefits to
employees while decreasing their healthcare costs. A
midwestern manufacturing company, Pride of the Hills
(“PHMI”), increased their number of employees by 22%
from 2013-2014 while decreasing their health care costs
by 9% using telehealth.
The study demonstrates that PHMI enjoyed a 47% decrease
in primary care payments, and a 26.5% decrease in
specialist payments during the study period. There were
also a number of other cost savings.
The purpose of this study is to determine how and why
they succeeded in reducing their costs and how this
strategy can be used to help other companies.
• A reduction in the number of primary care visits ( -33.5%)
and specialist visits (-39.5%)
*Utilization can vary dramatically by provider. Average CMDNow first
year utilization is 15-25%. Teladoc first year utilization is below 3%
Some of the multiple reasons that the integration of a
telehealth program saved the company money are:
• An overall decrease in the utilization of the emergency
room
• A shift in plan mix (more employees elected high
deductible plans)
• An insurance discount offered by the insurer because the
company added the telehealth program
• Additional reasons mentioned in the study
Procedure/Methodology
• Procedure
A rapidly growing manufacturing company PHMI with locations near
Wooster and Millersburg Ohio was selected for the study. They
were studied for the period June 2012 through May 2013 and for
June 2013 through May 2014. Reports were obtained from their
major medical provider – Medical Mutual of Ohio and their Director
of Human Resources. Parameters studied were claimants, claim
records, payments, provider specialty, plan participation, place of
service, and absenteeism. Their telehealth was provided by
CMDNow – a subsidiary of PSC Technology Inc.
• Key assumptions
• In the 2012-2013 period, PHMI had 105 employees; in the 20132014 period, PHMI had 135 employees
• PHMI began their telehealth program in March 2013.
• All variables were recorded and tracked on a monthly basis
• The study was completed July 2014
Key findings/results
• The key features of the telehealth program
were:
• 24/7 access to a physician via phone/cell phone or
video consult
• Employees were encouraged to take advantage of
the program
 No co-pay, No deductible
 Employee education at the time of enrollment AND
periodically throughout the year
• Access to the doctor was convenient
 On a 24 hr basis average wait time was about 20 min
 During normal business hours average wait time was
under 5 min
 Employee could consult the doctor at work
Key findings/results
• When given the choice between a
more expensive major medical
plan or a high deductible plan
coupled with a telehealth
program, the number of people
choosing the more expensive
program dropped from 88% to
52%.
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3.5
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2.5
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1.5
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0.5
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Expensive
High
Deductible
Key findings/results
• The change in plan mix in Year 2
resulted in a savings to PHMI of
$71,680 when 58 employees
chose an HDHP that cost PHMI
$103 less per month.
Key findings/results
• The program was designed for
high utilization and was
successful.
• PH utilization the first year of the
program was 63% *
*Utilization can vary dramatically by provider. Average CMDNow first year utilization is 15-25%. with a high of
86% Teladoc average first year utilization is below 3%.
Key findings/results
• The result of high telehealth utilizations was a dramatic reduction in the payments for
all physicians (-31%) and in the payments for primary care (-47.1%)
Key findings/results
Because many patients tend to
use the emergency room instead
of a primary care physician, the
emergency room visits also
plummeted in Year 2 saving PHMI
8% on their emergency room
costs despite having 13% more
employees.
Key findings/results
Paid Time Off For Illness in Days
• The convenience of the telehealth service
meant that employees actually sought care
earlier and resolved health issues more
quickly also parents could consult with a
doctor on behalf of a sick child from work.
Paid time off plummeted. From $53,505
in year 1 to $25,682 in year two with 13%
more staff.
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• The average paid time off for illness in
Year 2 was approximately 50% of that of
Year 1.
0.5
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1.5
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2.5
Key findings/results
• For all of the reasons above, PHMI was able
to negotiate a 1.5% discount with its major
medical provider resulting in savings
substantial enough to pay for almost 50% of
the telehealth service.