Vestar HR Leadership C Conference f Health Costs: A Major - - PowerPoint PPT Presentation

Equity Healthcare Status Update November 9, 2010

Vestar HR Leadership C f Conference

Health Costs: A Major C-Suite Concern

Pre miums a re Outpa c ing Wa g e s Why Costs Inc re a se

■ Wa ste a nd une ve n qua lity

100%

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Unhe a lthy life style s

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L a c k of e ng a g e d e mploye e s G t t hifti

73% 87%

60% 80%

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Gove rnme nt c ost shifting

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Ma lpra c tic e

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Provide r pa yme nt syste ms

43% 59%

40% 60%

p y y

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He a lth re form will incr

e ase c osts

11% 25% 4% 7% 10% 12% 15% 20% 3% 5% 7% 10% 14% 18%

0% 20%

Solution: Cre a tion of E quity He a lthc a re

2000 2001 2002 2003 2004 2005 2006

Premiums Wages Inflation

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Solution: Cre a tion of E quity He a lthc a re

Sourc e : KF F / HRE T 2006 E mploye r He a lth Be ne fits Surve y, BL S Consume r Pric e Inde x.

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The Equity Healthcare Value Proposition

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A Private Equity Initiative focused on helping portfolio companies manage health care costs

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EH uses volume to get below-market rates AND:

◘ Customized clinical model outreaches to at-risk employees

 Decreases unnecessary care  Increases employee engagement in lifestyle choices  Separate unit dedicated to EH clinical team dedicated to each company  Separate unit dedicated to EH….clinical team dedicated to each company  Increased staffing ratios with higher and broader skill sets  More robust utilization management process

◘ Integrated data base points to company-specific risks and opportunities ◘ Integrated data base points to company-specific risks and opportunities ◘ Offers other turn-key products and services (biometrics and eligibility audit)

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Plug-and-play approach:

P tf li d i it b fit l ◘ Portfolio company designs its own benefit plans ◘ Continues to use brokers/consultants of its choice ◘ Can stay in after divestiture

EH f t f fit d l ith i t d t tf li i

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EH fees are a not-for-profit model with income returned to portfolio companies

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Strategic Focus



Growth….will look for compatible PE firms, other partners

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Evolution of the core product….move earlier and later in the health-illness spectrum, more focus on wellness and provider choice

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Expanded EH services….more use of the integrated data base, p g , more customized recommendations, more proactive best practice sharing Benefit design enhance incentive strategies to drive engagement

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Benefit design….enhance incentive strategies to drive engagement and steerage + benefit design optimization

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Private sector-driven reform…drive health plans to innovate in measurement, consumerism, payment reform---help shape marketplace

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Equity Healthcare Integrated Clinical Model

Member and Provider Outreach

Vendors

Behavioral Health / EAP

External Vendors

Centers of Excellence 24-Hour Nurse Line Medical Claims

D A

EH Model provided through

Preadmission calls Enhanced Discharge Planning Post Discharge Calls Case Management Integration with Vendor Partners Personal Health Advocate Pharmacy

HRA

Maternity Pharmacy Claims Lab Data

T A W A R Health and Wellness Programs P R E D I

through Aetna and Anthem with

Integration with Vendor Partners Medical Director/Support Staff Disease Management

Customer Service

Online Coaching

Care Alerts

Telephonic Coaching

Demo- graphics Behavioral Health Claims

R E H O U S C T I O N

dedicated clinical and claims/CSA teams

& Modules

S E

Integration of data with Health Risk Assessment/ teams

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Health Risk Assessment Biometrics

Equity Healthcare Reaches Critical Mass

 One of the Largest Private Employer Purchasers  6 Participating Private Equity Companies  300,000 members and $1.5B annual spend

34 Portfolio Company Members as of 1/1/2011

W l N V t M b

TOTAL ENROLLMENT: EMPLOYEES – 144,362 MEMBERS – 298,212

 Welcome New Vestar Member

◘ Consolidated Container Company

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Equity Healthcare Model Results

 Overall aggregate EH ROI of 13:1 which includes ASO fee

reductions and claims savings

 3-5% decrease in cost trends due to:

◘ Higher identification and engagement results than standard models ◘ Double digit improvement in population health ◘ Double digit improvement in population health ◘ Improvement in utilization statistics ◘ Increased network utilization ◘ Significant improvement in population risk scores

 Even better trend results demonstrated for portfolio companies

with incentive based programs

 Good operational service statistics  Outstanding satisfaction results from EH Employer Summits

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◘ Educational, networking opportunities, solution oriented

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EH Hospital Utilization is Down

EH BO B 2009

Days/1000

Represents $8.1M in Annual Savings

Millima n EH BO B 2010 180 200 220 240 260 280 300

ER Visits/1000

EH BO B 2010 EH BO B 2009

Represents $1.1M in Annual Savings

160 165 170 175 180 185 190 Millima n

in Annual Savings

Know More, Feel Better, Stay Healthy BOB and year over year results reflect employers enrolled in EH in 2009 and 2010. Current = Incurred 06/09 to 02/10 and Paid 06/09 to 05/10; Prior = Incurred 01/09 to 09/09 and Paid 01/09 to 12/09 8

What’s New with EH

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New CEO (Dr. Robert Galvin)

◘ 20 years on employer side (GE): health benefits, CMO, policy ◘ Primary Care Physician – still doing clinical care

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Creation of Employer Advisory Group

◘ 8 employers representing full diversity of size, industry, and PE Firms

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EH website used for networking and data sharing

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Other products and services

◘ Turn-key solutions with preferred pricing and enhanced services ◘ Biometric Initiative with Quest Diagnostics (fully integrated into model) ◘ Radiology Management with US Imaging ◘ Dependent Audits with Continuous Health ◘ Stop Loss with SunLife

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Future Initiatives

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Future Initiatives

◘ Wellness ◘ Decision Support ◘ On-site flu shot programs

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p g ◘ e-second opinion program- (Cleveland Clinic, Harvard)

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Portfolio Company Due Diligence Process

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EH contract with vendors expires 12/31/11

◘ Currently in a RFP process with national carriers A ti i t d fi li ti id F b 2011 ◘ Anticipated finalization mid-February 2011

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EH portfolio company marketing process to begin late February 2011

◘ Determine if portfolio company is eligible for EH (i.e., self insured) ◘ Provide deeper overview of EH ◘ Analyze company’s current health benefits and cost performance ◘ Present EH evaluation (i.e., fees, services, guarantees, discounts, disruption)

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Portfolio company provides Go/No Go decision

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Sign contracts with EH, insurers, data base vendor Implementation begins

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Implementation begins

Activities Occur in Conjunction with Renewal Schedule

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Activities Occur in Conjunction with Renewal Schedule

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