BeneFIT DesignTM: Seven Steps to Value-Based Health Benefit Decisions, which was unveiled today at the National Press Club in Washington, D.C., provides a road map and guide for employers who want to change the way they approach benefit design, for healthier employees and better returns on their healthcare investment. The authors are Pitney Bowes leaders Jack Mahoney MD, Corporate Medical Director and global health care management director, and David Hom, Vice President of Strategic Initiatives.
Michael Critelli, Chairman and CEO of Pitney Bowes, and a staunch advocate for health care and healthy communities, introduced BeneFIT Design, noting it would be highly valuable for every executive nationwide to read. He wrote the book’s foreword along with Mark McClellan, M.D., Senior Fellow at the AEI-Brookings Joint Center for Regulatory Studies, former Administrator for the Centers for Medicare and Medicaid Services, and former Dommissioner of the Food and Drug Administration.
A year ago, Mahoney and Hom wrote Total Value/Total ReturnTM: Seven Rules for Optimizing Employee Health Benefits for a Healthier and More Productive Workforce in hopes of stimulating a national discussion and exchange of ideas and experiences among businesses and other employers regarding healthcare. The response and requests for books were overwhelming and led to three print runs with 30,000 copies printed for distribution to businesses, municipalities, universities, benefits advisors and Fortune 500 CEOs.
“The goal of the first book was to provoke discussion and challenge CEOs, CFOs and HR executives to rethink their benefits plans and strategies,” Critelli said. “The Total Value/Total Return message resonated with readers, and people wanted more detail. BeneFIT Design picks up where the seven rules left off with seven concrete steps that any organization can take to help develop value-based health benefits,” he concluded.
The seven steps walk employers through the process of how to collect, organize, analyze and respond to the employee health data they already have or can readily obtain, but they don’t necessarily tap when making benefit design decisions.
“We learned first-hand that it can be a real battle to stop looking at benefits as an exercise in cost management and containment,” Mahoney said. “Evidence-based medicine is the buzzword today, but we believe we should be talking about evidence-based benefits and interventions in managing health investments.”
McClellan, a doctor and an economist, praised Pitney Bowes, a leading mailstream technology provider, for its leadership in this effort.
“None of us can transform the healthcare system alone; all stakeholders need to take responsibility and action if we are to achieve better care,” he wrote. “Pitney Bowes has taken major steps in this trend.”
EVIDENCE-BASED INTERVENTION
Intervention starts with helping employers diagnose the problems specific to their employee population, what’s driving their healthcare expenditures and what outcome they want versus what they are getting.
“The key here is data,” Hom said, acknowledging that the task can seem daunting. “In laying out the book, we tried to make the task as easy and unthreatening as possible.”
The book’s step-by-step approach is illustrated by a fictional supermarket chain and helps employers learn how t
. Gather data related to employee health from a wide variety of key sources.
. Spot patterns in the data that are relevant.
. Determine which behaviors may be underlying those patterns (not just employee/dependent behaviors, but also behaviors of health plans and healthcare providers).
. Pinpoint the elements of current benefit designs that may be driving those behaviors.
. Design benefits and other workplace interventions to encourage new behaviors.
At every step, Mahoney and Hom point out, employers need to evaluate their plan decisions and design against the FIT Design™ matrix:
FIT stands for: F Fact-based. Are benefit decisions driven by data and a clear understanding of the needs and interests of all stakeholders? Fact-based means always keeping your finger on the pulse of the organization, its employees, and their needs.
I Integrated. Are benefit decisions integrated within your organization’s health management strategy and business operations? Are key stakeholders aligned? Integration requires breaking free of the silo mentality.
T Targeted. Based on appropriate data, what health/disease-management needs exist and provide the greatest opportunities for realizing total value? Like a laser beam, all of your energy and resources can be focused on a specific, targeted issue for maximum return on investment.
7 STEPS STARTING WITH VALUE
Pitney Bowes’ experience validates the steps outlined in BeneFIT Design because the company actually lived them as it was redesigning its own health benefits plan. The first step involves defining what value means to the organization. That starts with simple questions, such as why do we offer health benefits, how would changing, trimming or eliminating benefits change our organization and our culture, is how we value benefits aligned with how other stakeholders value benefits and what do our benefits say about the way we value our employees?
While Step 1 lays the groundwork of defining parameters, the next three delve into the nitty-gritty of collecting and understanding data.
In its own data gathering, Pitney Bowes looks at direct medical costs and indirect costs including sick days, disability and workers’ compensation. The company also considers presenteeism, where the employee is at work but not 100 percent effective because of ill health. Indirect costs constitute as much as two-thirds of the total cost of healthcare to an organization.
Mahoney and Hom emphasize the need to maintain employee confidentiality while gathering data in accordance with the Health Insurance Portability and Accountability Act of 1996. “If your employees don’t have complete trust that their health records will be kept private, they will hesitate to participate in interventions such as health screenings or health risk appraisals,” Mahoney and Hom write. If that happens the veracity of the data is compromised.
Most employers can collect information from their plan administrator and Step 1: Define value disability and workers’ compensation carriers. Data should be collected Step 2: Collect data regularly, and should distinguish employees from dependents, and be sorted Step 3: Organize your data further for specific chronic conditions. Finally, analyze the data by costs, such as ambulatory services, hospital stays, emergency visits, screenings and Step 4: Analyze your data imaging. Step 5: Target your initiatives
For other valuable data, employees are the best source. Tools such as Step 6: Pitch your initiatives to the C-Suite health risk appraisals can be powerful in helping employees understand their own health and risk factors and in assisting employers in comprehending the Step 7: Implement your initiatives distribution of risk factors across the population base.
Next Mahoney and Hom lay out a series of tables and matrices for organizing findings into meaningful data groups and then, in Step 4, begin walking readers through analysis.
It was this step four years ago that led Pitney Bowes to make one of its most pivotal discoveries. The data had shown that three chronic illnesses — diabetes, asthma and hypertension — were major cost drivers for the company. In these disease groups, hospital stays and emergency room visits were up, but something odd was happening with treatment. People weren’t taking medications. Digging deeper, the Pitney Bowes team discovered that employees with diabetes who had fewer than nine refills of medication to control the disease experienced higher medical costs the following year. Once companies discover and identify trends such as these,
Mahoney and Hom point out, they then have the opportunity to redesign benefits and target interventions to have the highest impact on health, costs, and overall value.
Moving to Step 5 (Target your initiatives), the authors discuss the application of the AIM model (act, invest and manage) in targeting resources and interventions based on data findings. As an example, Mahoney and Hom developed the maverick idea to lower coinsurance for medications within selective chronic disease groups rather than raising the out-of-pocket costs for employees. They then established metrics for monitoring progress and desired outcomes. The bottom line: Pitney Bowes realized a net savings of $1 million in 2004 and continues to report significant overall healthcare savings due to its value-based health benefit initiatives.
The final steps discussed in the book are making recommendations to the C-Suite and implementing approved initiatives.
“The proof of your value-based strategy is in your people,” the authors conclude. Health is an investment and healthy employees make healthy companies.
BeneFIT DesignTM: Seven Steps to Value-Based Health Benefit Decisions, funded by GlaxoSmithKline, was distributed to the media and executives attending the World Health Care Congress 2007 in Washington, D.C.
ABOUT PITNEY BOWES
Pitney Bowes provides the world’s most comprehensive suite of mailstream software, hardware, services and solutions to help companies manage their flow of mail, documents and packages to improve communication. Pitney Bowes, with $5.7 billion in annual revenue, takes an all-inclusive view of its customers’ operations, helping organizations of all sizes enjoy the competitive advantage that comes from an optimized mailstream. The company’s 86 years of technological leadership have produced many major mailstream innovations, and it is consistently on the Intellectual Property Owners Association’s list of top U.S. patent holders. With approximately 35,000 employees worldwide, Pitney Bowes serves more than 2 million businesses through direct and dealer operations. More information about the company can be found at www.pb.com.
For More Book Information, Contact:
Jamie Buelt, en Q strategies for GSK
(o) 515-248-1797 or (m) 515-249-1857
jbuelt@enqstrategies.com
For Information on Pitney Bowes, Contact:
Colette Cote, Pitney Bowes Inc.
203-570-6061
Colette.Cote@pb.com