Cooperative Health Overview Managed by

Agenda NJPA Overview Benovate Overview What is happening? Why? (trend) The Cooperative Health Program Creating the Savings with Competitive Bidding The Impact on our Clients

Who is NJPA? National Joint Powers Alliance Cooperative Purchasing Government Agency National Solutions under Contract NJPA Cooperative Health Program

Who is Benovate? NJPA Cooperative Health Program Manager Develop Low Risk “Health” Pools Health Management Risk Management Cost Containment

Benovate solutions to control costs Utilize Predictive Modeling for Health Engagement Health Assessments & Screenings Focus on Sleep, Stress, Lifestyle, Disease Prevention Health Coaching & Advocacy Health Technology & Web Based Solutions Custom Wellness & Care Plans Health Rewards Platform Employer Outreach & Hospital Integration

Why? Healthcare Trends Average Annual Premiums for Single and Family Coverage, 1999-2013

Why? Healthcare Trends Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999-2013

NJPA Conclusions Traditional Consumer Driven Plans Weren't Working Network Model was antiquated. Employers could benefit enough to want to extend healthcare into the workplace. Employees needed better more convenient access to care and care coordination Traditional care model assumes one size fits all Traditional wellness was only a piece of the puzzle The Problem is “Trend”, no end in sight without a different model How many doctors or clinicians? Who in the room thinks the Affordable Care Act will result in lower costs? How many carrier reps? Who in the room knows what their health insurance renewal will be in 2015? How many insurance brokers? Would you like to know? People in the wellness industry? My goal today is not to sell you on Benovate, my goal is to ask you to consider an alternatve HR professionals? Model of healthcare, one where hospitals can be profitable, brokers continue to provide Business Owners or Senior Executives? valuable service to their clients, carriers become more profitable and one where doctors get paid to keep their patients healthy…..Tough Sell?.. Maybe..but lets give it a shot.

Changing the Game: Gaining Control of Risk Create Neutral Risk, Lower Future Exposure School Districts Municipalities Health Management Required Non-Profits Higher Education

Cooperative Health: Creating a Health Rewards Pool 2015 Avg: 5% (From Soft Quote) 20% 2014 2014 2015 Avg: 12.8% 30% 15% 15% VS. 50% 15% 15% 45% 43%* Current Fully Insured or Self Funded Benovate Partially Self Funded Option

Cooperative Health: Creating a Health Rewards Pool Goal Loss Ratio: < 25% Long Term Premium Control 45% 15% 15% 43%* * Leverage Improved Claims Experience for Lower Premium Benovate Partially Self Funded Option

Returning your Money Achieving the Goal of 25% Less then Underwritten Creating a Health Rewards Pool Returning your Money Achieving the Goal of 25% Less then Underwritten

Employer Use of Funds Sample Employee Use of Funds Sample Reinvesting in Health Sample Group 90 Lives (Bronze Plan: Employer 60% Payment) Max Premium: $400,000 Available Incentive: $100,000 Goal Loss Ratio: $300,000 Total 2014 Claims: $320,000 Employer Use of Funds Sample Fund Incentives Programs Allocate % to Captive Offset Health Management Expenses Reduce Premiums Next Year Employee Use of Funds Sample Fund FSA/HSA/HRA Health Bonus Health Rewards Voluntary Benefits

Goal: Health Rewards Captive

Health Rewards Program Benefits Lower Costs Better Health Managed Risk Max Risk is Total Premium Aggregate Risk Policy for Claims Over Premium Specific Loss Policy Per Person ACA Compliant Lower Cost Structures Efficient Administration Transparency Prevention Focus vs Treatment Lifestyle Change Safer Work Environment More Productive Employees Increased Awareness Lower Presenteeism, Absenteeism

Controlling Health Care Costs The Health Care Cost Equation http://www.istockphoto.com/stock-photo-12992851-row-pebbles.php?st=e58b7d8

Healthcare Cost Equation Healthcare Services Costs (Costs) Multiplied by (x) Healthcare Services Utilization (Utilization) (=‘s) Equals Total Healthcare Costs

4 Strategies To Control Costs Gain Control of the Cost Structures Predict Disease Predict “Un-health” Create Transparent Cost Structures Review & Audit (before you pay)

#1 Control Costs: Create a Pre-disease Model Avg Cost of Heart Attack; $67,000, Avg Cost to Prevent, $3,700 Cost Predictive Health Modeling determines risk by condition and lifestyle. Drives “appropriate” Utilization.

#2: Determining Health Risk Health Risk Assessment Stress Risk Assessment Behavior & Lifestyle Data Biometric Data ~Readiness & ROI – this gives us a snapshot of each employer group, in terms of where they’re at and how we can best work with them. We want to make sure they have all the resources in place that are necessary for a program like ours to truly have an impact. ~Beyond the traditional biometric and Health Risk Assessment data, we gather data around Stress, Behavior, and Lifestyle. This allows us to create a more “wholistic” view of health; which is important when the goal is to create lasting change and see a true ROI *USHC HRA gathers data around these 7 factors: Age, Gender, Ethnicity, Lifestyle (exercise, tobacco use, diet, stress, etc.), Biometrics (blood chem., BP, BMI, etc.), Medical History, Family History (with a signed waiver)

#3: Transparent Cost Structures Transparent Pharmacy Benefit Management “Cost Plus” and “Reference Based Billing” Insurance Captive, Claims Data & Management True “3rd party” Third Party Administration

“Cost Plus” or “Referenced Based Billing” Transparent Pharmacy 500 Employee Company: Re-priced Pharmacy Represented 22% of the total plan cost Spread elimination: $119,426 of $741,000, 16% Rebate Reduction Estimate: $8,000, 1% Therapeutic Substitution: $14,076, 1.8% Total Savings: $141,502; 19% Total Savings Typical Charge Master Network Discount, 30-70% off of what? Medicare plus 150%-400% Cost Plus Medicare plus 54% Reference Based Pricing, Medicare plus 100-150% “Cost Plus” or “Referenced Based Billing”

Level Funded, Unbundled Self Funded, to Captive Benefits No Risk Contribution Like Minded Employers Control Costs Today Manage Trend in the Future Lower Cost Increased Transparency Reporting and Cost Control “3rd Party”, Third Party Administrator

Strategy #4: Medical Bill Review Alabama Union Group 100% of all OON claims reviewed had adjustment $376,196 in savings adjustments Average claim reviewed $22,935 $10,449 average savings per claim Arkansas Company (small group) 100% of all claims (17) had adjustments $311,000 in savings adjustments Average claim adjusted $37,423 $18,297 average savings per claim

4 Strategies to Control of Utilization Align your “group utilization” Eliminate “One Size Fits All” Health Management Data Driven Plan Design, Cost Focused Consumerism Drive Appropriate Utilization, Incent Care Plan Execution, and True Lifestyle Change

#1 Group Utilization Summarized The Kitchen Table Plan Cost Deductible Co-Pay Rx Costs “The Value” The Plan vs No Plan My Plan vs My Spouses Plan Employer A vs Employer B

Avoiding One Size Fits All #2 Customized Intervention Avoiding One Size Fits All Marketing Message Across the Entire Population

#3 Standardize Plan Design Rate Step Correlation to Employee Plan Selection If I have healthcare needs, premium costs are irrelative. If I am healthy and young, I may look for alternatives. If I am single and young, I may just waive and pay the PPACA penalty.

#4 Driving Appropriate Utilization Wisdom of the Medical Home Primary Care Physician Relationship works well Patients rate relationship and respect highly Biggest factor in deciding whether or not to participate Higher rates of preventative care delivered National best practice control of targeted chronic diseases

Determining Risk Standard Biometric Panel Stress, Sleep, & Lifestyle Health Risk Assessment Stress Risk Assessment Behavior & Lifestyle Data Biometric Data

The “Big Four” Mental and Nervous System, Metabolic, Cancers and Musculoskeletal Predictive Modeling developed for over 60 conditions and lifestyles. Those conditions and lifestyles that impact cost and quality of life the greatest fall into four broad categories of conditions or disorders: Mental and Nervous System, Metabolic, Cancers and Musculoskeletal

Control Costs: Stratify Risk Aggregate Disease Risk Report So… what happens after we’ve gathered all that data? We put all the data we gather through our Predictive Modeling tool – our algorithms take all that data and allows us to report not only on risk factors like poor nutrition, low exercise, etc. but also risks for cancers, mental health issues, metabolic, pulmonary, and musculoskeletal conditions, and their potential costs. Once we’re able to look at a group in terms of risk, we stratify the risk, and provide focused solutions for each category; making sure that the dollars being spent are most appropriately channeled. For those that fall into the Elevated, High, and Serious Risk categories, we emphasize a disease management focused approach. These are the folks we need to pay attention to - through a variety of incentives, making sure the individuals with chronic conditions are engaging with their health coaches and primary care physicians on a regular basis. For the participants that fall into the Moderate Risk category, we provide what would most closely resemble “traditional wellness” offerings: Physical and Nutritional Programming, healthy activity challenges, tobacco cessation, community health engagement programs, etc. And for those that fall into the lower end of the spectrum – their program looks different. If they’re already healthy, we provide resources that help them to focus on stress mitigation, incentivizing each participant to engage in activities that reinforce positive health behaviors and reward balanced living. This can be anything from visiting a financial planner, to taking continuing education classes, to utilizing the preventative appointments.

One Size Does Not Fit All There must be an understanding where the costs really are…and where they are going

Conditions & Lifestyles Mapped

Cost of Care: Revenue & Expense Modeling by Condition, Network Alternative

Health & Lifestyle Coaching Physical, financial, relationship & personal development health Individualized Coaching Employee and Family Stress Management Improved Health Assistance Navigating Disease Physical Health Relationships Career/Growth Finance

Access to Assessments & Data Personal Health Desktop The Personal Health Desktop (PHD) is a secure, online HIPAA-compliant web portal accessible from any Internet-connected device. This system provides participants secure access to features including: Medical history/lab results Health Risk Assessments Personal Health Assessment reports Risk Resolutions guidelines Medical library Health Counts rewards program

Provider & Community Engagement Earning Points, Rewards, or Dollars for Care Plan Engagement Improved Health And… True Lifestyle Change

Goal: Data Driven Consumerism Benovate’s “Your Data” Approach Give the consumer the data and tools Incent Participation Provide Coordination

Summary: Tying it All Together Employer Strategy & Savings Continuum Hospital - Provider Relationship Strategies Plan Design Options (HDHP) Alternative Funding Plans Risk Pool Management Wellness Strategies 4% - 8% 7% - 10% 2% - 3% 5% - 6% 5% - 7% Employee cost- shift to target Plan Utilization Fixed Costs, Plan Flexibility & Reinsurance Plan Design, Contribution & Population Alignment Population Health Management & Improvement On-site Medical Clinics Narrow Physician Networks Hospital Cost Plus Contracts

Phased Deployment of Solutions Assessments & Early Intervention Custom Wellness & Care Plans Incentives for Healthy Choices Health & Lifestyle Discounts Lower Cost Health Management Our process is built upon five very important steps to improving health and decreasing cost

Measureable Outcomes

Per Participant Risk Burden Trend

Connectivity

Considerations for Engagement Request and analyze your data Target areas for improvement Phased Approach; Manage then Engage in Health Community Initiative: Affiliate

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