1. TOTAL POPULATION MANAGEMENT MASI WINTER CONFERENCE FEBRUARY 21,2013

2. Bo Hartsfield – Vice President, Employee Benefits Consultant Cobbs, Allen & Hall, Inc Dave Douglas – National Vice President of Sales Healthstat, Inc David Greene – Director of Marketing and Training Cobbs, Allen & Hall, Inc. Total Population Management

3. The Issues – Rising Healthcare Costs We are unhealthier but we’re living longer PPACA – Groups wanting to be self funded – Managing Worker’s Compensation Costs Current Trends Co-morbidity The Solutions – Consumerism Plan Design Transparency Onsite Clinic – Worker’s Comp Management Best Practices from a former underwriter Total Population Management

4. THE PRESENT STATE OF HEALTH CARE

5. The Cost of Health Insurance

6. Health Care Cost – A Look at Wellness The Obesity Issue Trends by State 1985-2010  35.7% of the U.S. Adult population qualify as obese  Approximately 17% of children & adolescents are obese (ages 2-19)  No state has an obesity rate less than 15% (the national goal) “Children will be entering adulthood heavier than they’ve ever been at any time in human history.” – Dr. David Ludwig, director of the childhood obesity program at Children’s Hospital in Boston Percent of Obese (BMI ≥ 30) in U.S. Adults U.S. Obesity Trends. CDC.com. Feb. 2012. Apr. 2012 Parker-Pope, Tara. “Obesity Rates Stall, But No Decline.” The New York Times. 17 January 2012. 6 April 2012..

7.  Arthritis, heart disease, cancer and diabetes are the leading causes of death and disability in the U.S.  70% of all deaths and 75% of the $2.6 trillion the nation spends on health care services  Asthma is the most common chronic disease in children  7 million children currently have asthma  Health-related work productivity losses are estimated to cost the U.S. $260 billion each year  In a study with over 1.3 million employed OptumHealth HRA participants:  56% reported having at least one health problem. 31% reported being a high risk for health problems  An average of 1.99 days per month of work missed due to health  9.04 days at work per month but with limited performance “ Pappas, S. “Obesity’s Hidden Job Costs: $73 billion”. msnbc.com 8 Oct. 10, 2 Feb 11. World Health Organization. “Asthma”. May 2011. Apr. 2012 Mitchell, Rebecca. “Measuring Health-Related Productivity Loss”. 14 April 2011. 11 April 2012. National Center for Biotechnology Information. Chronic Diseases

8. WHAT ARE YOUR OPTIONS?

9. High Deductible Health Plans  Employees need to have some “Skin in the Game ”  Co-pay driven health plans disguise the cost of healthcare from the consumer  Consumers must become aware of their medical spend  Develop a plan design that drives consumer behaviors  High Deductible: Deductibles of $1,000 or higher for an individual  Pair plan designs with appropriate tax-advantaged accounts  74% of employers report they will increase the offering of account-based health plans between now and 2014 Source: Towers Watson

10. % of Covered Workers Enrolled with a General Annual Deductible of $1,000 or More for Single Coverage High Deductible Health Plans * Estimate is statistically different from estimate for the previous year shown (p<.05). Note: These estimates include workers enrolled in HDHP/SO and other plan types. Because we do not collect information on the attributes of conventional plans, to be conservative, we assumed that workers in conventional plans do not have a deductible of $1,000 or more. Because of the low enrollment in conventional plans, the impact of this assumption is minimal. Average general annual health plan deductibles for PPOs, POS plans, and HDHP/SOs are for in-network services. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2006-2012.

11. Among Firms Offering Health Benefits, Percentage That Offer an HDHP/Tax Advantaged Account High Deductible Health Plans Note: Tests found no statistical difference from the previous year shown (p<.05). Note: The 2012 estimate includes 0.6% of all firms offering health benefits that offer both an HDHP/HRA and an HSA-qualified HDHP. The comparable percentages for previous years are: 2005 [0.3%], 2006 [0.4%], 2007 [0.2%], 2008 [0.3%], 2009 [<0.1%], 2010 [0.3%], and 2011[1.8%]. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2012.

12. Transparency in Pricing? The truth is….contracted rates vary by as much as even within network. 300% ©2011 ACAP Health Consulting Confidential-Not for Distribution

13. Clinical Programs  Claims Management  Quarterly Reviews  High Cost Claims  Compliance with Care  Behaviors that need to be addressed  Identify actionable items  Tie back to wellness and prevention  Emphasizes Primary Care  Rx Management  Incentivizes Employees  Medical care at an affordable rate  Prevention and Disease Management Outreach Data AnalyticsOn-Site Clinics

14. A Shift to Consumer Engagement Personalized Plans Tax Advantaged Accounts Transparency Tools Clinical Programs Wellness Solutions Real World Incentives

15. Improve the Health of Employee population Reduce/Control Future Healthcare Spend Enhance Benefits Package Offered to Employees: – Recruit and Retain the Best Employees Optimize Access to Primary Care Increase Productivity Reduce Absenteeism Objectives of the On-site Solution

16. 80% of your health care costs come from 20% of your employees. The 80/20 Rule

17. Acute/Episodic Medication prescribing Referrals Lab testing Diagnostic ordering Medication dispensing Occupational Health Chronic Condition Management Cough, colds and flu URI, UTI Sprains, strains Laceration Repair Primary Care & Coordination Preventative Health Full physicals Vaccinations, Flu shots Blood pressure check Biometric screening Wellness education Drug Testing Workers’ Comp Accident Triage “Fitness for duty” evaluations Diagnose and Treat Educate/Counsel Proactive Outreach Scope of Services

18. Decrease healthcare cost Healthier employees Increase productivity/ Decrease absenteeism Increase employee retention Customized and Scalable Minimize risk exposure Better utilization of carrier/vendor programs It’s FREE Reduce PTO usage- “on the clock” Convenient/ Easy access to care Onsite Rx dispensing Time with provider Personal care plan Education Confidential- HIPAA compliant A true WIN- WIN: Employer Employee On-site Employer Clinics

19. THE NEED FOR WC COST CONTAINMENT

20. Combined ratio projected to be over 110% for the next several years Some markets are pulling back their WC writings The rising cost of medical is a major issue impacting WC Aging workforce and co-morbidity factors will negatively impact WC claim costs Medical technologies are producing more costly medical treatment options WC Results Expected to Be Challenging

21. Workers Comp underwriting results are the worst they have been in a decade. Sources: A.M. Best; Insurance Information Institute. From 12/2012 Insurance Information Institute presentation. 12/01/09 - 9pm Workers Compensation Combined Ratio

22. Source: NCCI (based on states where NCCI provides ratemaking services ). From 8/2011 Insurance Information Institute Presentation. 1989 1999 2009p Medical Costs Share of Total Costs for WC is Increasing Steadily

23. Co-morbidity Definition: existing simultaneously with and usually independently of another medical Condition ©2011 ACAP Health Consulting Confidential-Not for Distribution

24. Hypertension Drug Abuse Diabetes Chronic Pulmonary Obesity Pregnancy Common Co-morbidities

25. In 1994, in no state was the percent of adults who were obese as high as 20%. By 2010, all 50 states had adult obesity rates of 20% or more. In 12 states, 30% of the adults were obese. Workforce Changes Source: CDC

26. Co-morbidity Diagnosis- Almost Tripled from 2000 to 2009 Source: NCCI 10/2012 Study on Co-Morbidities in WC

27. Source: US Bureau of Labor Statistics, US Department of Labor; Insurance Information Institute. There are now over 7.4 million senior workers. This is double the number in 1998. Over the next decade it will probably double again. (Thousands) Number of Workers Age 65-69, 70-74, and 75+, Quarterly, 1998-2012

28. Source: US Bureau of Labor Statistics, Nonfatal Occupational Injuries and Illnesses Requiring Days Away From Work, 2011 (Table 10), released November 8, 2012. Insurance Information Institute. Median Days Away From Work Median lost time of workers age 65+ is 2-3X that of workers age 25-34. These numbers are pretty stable—they haven’t changed much since 2008. Older Workers Lose More Days from Work Due to Injury or Illness

29. The fundamentals of PIM still work: – Prompt reporting of claims – Good communication with injured workers – Return to work/stay at work/transitional duty programs Nurse case management involvement Medical bill review Pharmacy program Post offer physicals Be creative in your PIM program WC Practices For Cost Containment

30. Company Sr. management committed to safety - zero tolerance for unsafe actions Good hiring and HR practices Thorough training programs Documented safety programs Clean/organized worksites Consistent treatment of employees – no favorites Low frequency of claims What Makes A Good WC Risk?

31. QUESTIONS???