Leveraging Health: Value-Based Designs Drive Accountability and Outcomes Cyndy Nayer, co-founder and CEO Presentation in Canada ©Center for Health Value.

Leveraging Health: Value-Based Designs Drive Accountability and Outcomes

Cyndy Nayer, co-founder and CEOPresentation in Canada

©Center for Health Value InnovationOctober 2010

Alignment and Accountability Is the Foundation

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It takes multiple data points to identify, improve, and measure value in health

Just as it takes multiple stakeholders to align incentives and drive dividends in health, wealth and performance.

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2010-2011 Board of Directors

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Buck Consultants Johns Hopkins HealthCareCaterpillar [Michael Taylor MD] Journal CommunicationsCity of Springfield Or Jack Mahoney ~ Pitney BowesDetroit Regional Chamber of Commerce Cyndy Nayer Genesis Health System Partners in CareGoodyear/Whirlpool Plumbers and Pipefitters Local 525 H/W Fund

Group Health Cooperative Premera BC/VivacityBob Holben ~Gulfstream Quad/Graphics; QuadMedPeter Hayes ~Hannaford Quest DiagnosticsHealth Alliance Med Plans State of ColoradoHorizon BCBS NJ Univ of Colorado Health SciencesHumana WellPointIBM WhirlpoolIHP/Battle Creek Yum!Intercare Insurance Solutions

What We Do

We are in relentless pursuit of innovation in benefit design that delivers rapid engagement, predictable cost trends, and accountability across stakeholders.

– Thought and Action Leadership– Forum for innovation– Communication that links innovation across

communities

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We are in relentless pursuit of innovation in benefit design that deliver rapid engagement, predictable cost trends, and accountability for outcomes.

•Thought and Action Leaders for guidance and analysis

•A forum that links innovation with innovators to intervene in the delivery system for greater efficiency and engagement

•Award-winning experts in business health performance who share our experience in an ongoing campaign

•Pull the plug on the health care blame, and •Re-focus on the improvement of health for the sustainability of our communities.

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Center publishes the first book on levers of VBD; white papers, evidence

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Also publishes evidence on sectors, innovation, outcomes www.vbhealth.org

We Were Founded on Value-Based Design, but We Never Thought It Was Only the Insurance

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Uses Data to invest in incentives…

…and services that change behaviors

for improved health, quality, performance and financial trend

Value-based design is aQUALITY IMPROVEMENT TOOL for the

CONSUMER AND PLAN SPONSOR AND PROVIDER

The Value of Health is Our Economic SurvivabilityHow much health is that dollar delivering?

• VBD is an ENGAGEMENT TOOL• VBD focuses on OUTCOMES• VBD has remarkably changed and matured

– Data Design Delivery DIVIDENDS

• VBD is driven by data that drives the suite of performance tuners: LEVERS– Prevention/Wellness, Chronic Care, Care Delivery

• VBD can be tracked along the Health Value Continuum©

• VBD is sustainable and applicable at the small-large employer AND at the community level

• VBD builds the Health-Wealth-Performance Portfolio©

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DESIGN: Value-Based Template

IncentivesPlan Design

Resources

Data

Prevention and

Wellness

Chronic Care Mgt Care

Delivery

SHIFTING THE FOCUS TO CANADAHow much health is that dollar investment delivering?

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Stunning US/Canada facts

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US Canada

Overweight 67% 60%

Obese 33% 25%

Chronic Disease “contribution” to total costs

75% costs 60% costs

HIT $2009-2010 $57B $3B

Diabetes #1 Yes Yes

HTN 27.8% 27.4%

HTN Adherence Rates 52.5% 36.3%

70% of deaths are attributable to complications of HTN

Dividend Examples From the Literature• Wellness and Prevention

– Engagement of over 50 percent of employees eligible for the program

– Risk reduction of over 8 percent for physical activity

– Long term smoking quit rates of 34 percent• Reduction in 10 days productivity absence pppySep 28 Occupational & Environmental Medicine

– Program participants had 10 percent lower costs then non-program participants

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Care Continuum Alliance and CHVI Oct 13 2010 in publication

Additional Costs from Overweight and Obesity

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Overweight Obese

Doctor Visits $4 $51 Emergency Room Visits $6 $70 Hospital Admissions $9 $499 Absenteeism days $46 $308 Presenteeism days $202 $216

Source: Thomson Reuters Fact File. "A Multi-worksite Analysis of the Relationships Among Body Mass Index, Medical Utilization, and Worker Productivity." JOEM, January 2010.

Dividend Examples From the Literature: Chronic Care Mgt

Reduction of non-adherence by 7-14%Improved guideline adherence of 24 – 27%Increased beneficiary engagement from 23 to 47%Decrease in Emergency Department visits by 26%Decreased trend costs for employees with diabetes by

6 percentage points, bringing these total costs in line with general population trend

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Care Continuum Alliance and CHVI Oct 13 2010 in publicationNayer, Berger, Mahoney. Wellness, Hard to Define, Reduces Trend Up to 50%. Population Health. 2009

Total Medical, Rx & Productivityper 1000/FTEs

$400,000$200,000 $600,000

Loeppke, et. al. JOEM 2007

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Impact on Lost Productivity Costsdemonstration model: Rheumatoid Arthritis

-19% -26%

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Integrated Benefits Institute 2009

Dividend Examples From the Literature: Care Delivery

Significant improvement in absenteeism ratesUp to 24% reduction in disability days; 8.4% cost reduction for

reduced total risks10.9% cost reduction = 5.7 weeks for lower risk in back pain7.4% reduction in costs for mental well-being = 2.6 weeksNet savings per program participant of over $5,000Significant improvements in guideline adherence for preventive

and care management services such as mammographyOverall downward shift in risk including lower cholesterol,

improvements in diet and better management of blood pressure

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Care Continuum Alliance and CHVI Oct 13 2010 in publication

Application Value-Based Design: Building Health-Wealth-Performance

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Target Productivity Savings Levels

$ Productivity Gains

Added Workdays

% Increase in Human Capital Growth FTEs

1% $ 118,469 212 0.06% 0.8

Adherence will drive value through productivity gains, reduced financial trend

Modeled with IBI

Return-to-Work Comparison

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Cost Savings Analysis from One Plan Sponsor:

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Relentless Pursuit…

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28 October 2010

CIGNA and Merck Help Customers Better Manage Diabetes

Model Program Improves Health Outcomes and Reduces Overall Costs

•Blood sugar levels improved by more than 5 percent

•Individuals who participated actively in CIGNA’s diabetes support program were more likely to control their blood sugar than those not in the program

•87 percent of people taking Merck’s Januvia® and Janumet® took their medications correctly

•Savings could be as much as $8,000 per person when medications are taken properly

www.vbhealth.org/blog

If Value Is Built on Outcomes, then Purchasing Must Be Built on Outcomes for Alignment

• Outcomes can be measured by determinants– Clinical– Financial– Operational (Process)– Community

• Outcomes-Based Contracting must align incentives between or across the signers of the contract– Health Plan/Plan Sponsor– Manufacturer/Service Organization

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We Have Defined the Process that Leads to Outcomes-Based ContractingTM

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• Engagement and accountability are the focus

• Aligning incentives and paying for outcomes is the method

• Sharing the results and influencing a new payer strategy is our mission

• Uses the framework of the Health-Wealth-Performance Portfolio©

The Tool that Will Accelerate Health Value

Provides a RECIPE for the priority changes in benefits design that the plan sponsor must implement to improve value through engagement and accountability. www.vbhealth.org

Funding provided by:

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Innovator DNA

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ARE YOU AN INNOVATOR?• Innovators embrace a mission for change.• Make mistakes• Take risks• Display courage• Transform ideas into powerful impact• Provide to the general community to change

the ecosystem

HBR Vol 87 #12, Dec 2009

• Cyndy Nayer, co-founder and CEO

• [email protected]

• www.vbhealth.org

Get Involved

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