Four ways to deliver a value case that resonates with stakeholders.
Although data to support wellness program value is not as strong as it could be, there is a predominant belief that these programs can have a significant impact on reducing our healthcare costs. This idea is supported by numerous provisions in the Patient Protection and Affordable Care Act (PPACA) that support prevention and health management efforts, like expanding the Health Insurance Portability and Accountability Act’s (HIPAA’s) wellness program exemption to allow employers to offer greater incentives for participation.
These incentives for employers, coupled with the Medical Loss Ratio (MLR) provisions, lay the foundation for why insurance companies should offer wellness programs. As health insurance exchanges seek to increase transparency of plan offerings by creating a common platform for sharing information, and the essential health benefits define what expenses must be covered by insurers, wellness programs can serve an important role in differentiating an insurance company and help it stand out among its competitors.
However, just offering a wellness program is not sufficient. Employers and consumers want to know the value of a specific program and will ask for data to substantiate claims that it achieves its proposed goals.
PPACA calls for the evaluation of some employer-based wellness programs to determine their effectiveness. This increased focus will likely carry over to plans offered by insurers and their programs will receive greater scrutiny. If a review is not favorable, it could have a dramatic negative impact on a plan’s MLR calculation. Whether insurance companies develop wellness programs on their own or contract with a company, they must be able to deliver a value case that resonates with each of these stakeholders. To do this, companies must address four questions:
1. Does our wellness program work?
There are many types of wellness programs and data tends to vary on the level of their effectiveness. Individualized, targeted programs seem to work best, but results differ based on demographics of the population being served, level of employer and individual engagement and type of program.
Although generic data may be useful in the short-term, employers and individuals want to know if a particular program works, how well and for what population(s). Insurers need to establish a baseline set of measurements for a target population and track outcomes over a period of time-preferably multiple years. One of the biggest concerns about data today is that there is no proof that positive health outcomes can be achieved and sustained over time. Being able to provide this information will improve a plan’s position with prospective customers.
2. Does it work better than the competition’s program?
Creating differentiation means understanding what competitors offer-and how well the offerings work. As employers and consumers try to determine where they should invest their healthcare dollars, having information that demonstrates how much better one program works than another is very helpful. It lends credibility to the message and can help justify additional cost for participation.
Insurance companies need to understand what else is being offered to their customers and how their offering compares. This can be accomplished by conducting a literature search or retrospective cohort study. In the short-term, leading plans that have demonstrated clinical outcomes can set the bar that other companies must achieve.
3. How does it help consumers/employers save money?
Intrinsically, it makes sense that by addressing factors that cause health problems, costs for managing health concerns are reduced over the long-term. However, that case needs to be demonstrated in a way that makes sense today. Insurance companies need to develop the economic story for why participation in their programs makes sense. Employers are interested in data that shows a reduction in doctor visits or pharmaceutical use, i.e. activities that reduce their healthcare costs.
Another growing area of interest is efforts to address absenteeism and presenteeism, or how to help employees miss minimal work and ensure optimal productivity when they are there. For consumers, it could be cost-offsets like incentives for participation (for example, a reduction in premium costs or a discounted rate for participation). This data needs to be specific and understandable. General data that does not demonstrate a reduction in high cost health areas is not sufficient.
4. Do we know our target audience and what matters to them?
The challenge with gathering data is ensuring that it’s what the target audience needs to make a decision. This involves understanding each stakeholder’s questions and developing an appropriate business case for each.
Consumers want information that speaks to their personal use, like what’s expected of them, what savings they will they see and how quickly. Employers want similar information but of a larger population that may have varying demographics.
When evaluating the success of a plan’s program, regulators will be looking at impact on the broader population health. Data must be developed and summarized into a story that resonates with each audience appropriately.
The future is now
With healthcare costs skyrocketing to unsustainable levels, there is agreement that these costs must be contained. The PPACA legislation has made it clear that private insurers must play a core role in reducing these costs. The insurance companies that develop wellness programs based on sound clinical and economic evidence will be best positioned to differentiate their offering and maximize market share in the evolving marketplace.
Kimberly E. White, M.B.A. is a consultant at Numerof & Associates, Inc.