The Primary Challenges Solved by NavigatorMD
The current trend in health plan modeling is the practice of transferring the cost for healthcare from the employer to the employee in the form of higher co-payments, higher deductibles and higher premiums. This cost-sharing is applied to all plan members uniformly without regard to health risks. Thus the vast majority of health plans offer no incentive to modify behavior. Consumer Driven Health Plans, or plans in which members are encouraged to negotiate fees directly with their healthcare providers, most often employ cost-shifting. Studies show that this method inhibits adherence to best healthcare practices and decreases pharmaceutical compliance. The result is that cost-shifting does not diminish but fuels inflation of healthcare costs, creating the exact opposite effect of what is intended.
The challenge to creating more effective health plan modeling is to align health plan investment with incentives so that health behavior modification dramatically reduces health plan costs by reducing risks.
NavigatorMD provides solutions to these challenges by giving employers the means to effectively incentivize plan members to change their behavior and therefore reduce costs. NavigatorMD's patent-pending software identifies the health risks in the plan and reveals the causes of these risks. This information then allows the plan to mitigate the risks by addressing the specific causes.
Unique and Innovative Approach to Managing Healthcare Costs
Two key challenges for employers today are:
1. Controlling ballooning healthcare costs;
2. Improving employee productivity lost due to poor health.
NavigatorMD addresses both challenges. NavigatorMD allows companies to control healthcare costs by incentivizing employees and dependents to use best healthcare practices and thus reduce much of the cost associated with chronic illnesses and conditions.
One of our current clients provides an excellent example of the dramatic cost of non-compliance within at-risk populations. This client has 9,458 health plan members of whom 374 are diabetics. Of those 374 diabetics, only 13 are in compliance with best practice standards of care for diabetics. The cost to the health plan of the 13 diabetics in compliance is $52,958, or an average of $4,073.69 per diabetic plan member over a 12-month period.
Over the same 12 months, the 361 non-compliant diabetics cost the plan a total of $2,523,182, or an average of $6,989.42 per diabetic plan member.
Each non-compliant diabetic plan member cost our client 172% more than each compliant member.
Dramatic cost savings are realized by fostering adherence to best healthcare practices in other chronic illnesses and conditions. Over time, adherence to best healthcare practices will improve the excess use of health care services through reduced hospitalization and emergency room usage.
Today, only a handful of the largest U.S. organizations address the challenge of controlling costs using plan design to incentivize members to improve adherence and compliance. They have invested millions of dollars and as many as twenty years in health data analytics, and trial and error in health plan design. Their results thus far are encouraging.
Gulfstream Aerospace, "shifted its focus from viewing the cost of health care as simply an expense to seeing the cost of health management as an investment opportunity.....and reduced total health cost [inflation] to 3.4% per year over the last 4 years."[1]
TheHotel Employees and Restaurant Employees International Union (HEREIU) WelfareFunds realized a drop from a 14.5% increase per year at baseline to less than a4.5% increase the next two years in Total Medical Cost inflation.[2]
SCANA implemented an incentivized, value-based health plan and turned a 50%healthcare cost increase into a 5% healthcare cost decrease over 5 years.[3]
PaulGrundy, MD, Head of IBM Global WellBeing Services and Health Benefits, "........But perhaps the most treatable disorder is underinvestment [in healthcare and] healthcare information technology. We know that investing in information is key to better health resource utilization."[4]
All these value-based health management accomplishments and results for these large organizations are made at high internal and external data management costs. Their plan and demographic data integration is not smoothly and seamlessly integrated in low cost platforms, rather, it is "across silos".[5]
Data integration from separate database silos requires much manual work and intervention. And all strategies involve the continuous tracking of health data, clinical data, impacts and financial outcomes over time.
But even inventive approaches and positive results such as these pale in comparison to those possible with NavigatorMD because of its advanced software design.
Indeed, David Hom, who, as former Vice President in the Strategic H.R. Initiatives Department at Pitney Bowes, worked for fifteen years on the highly regarded Pitney Bowes healthcare initiative, recently observed, "NavigatorMD can do in six months what it took Pitney Bowes 16 years to do and, NavigatorMD can do the analysis in 60 seconds. And now, through NavigatorMD, all employers - regardless of size - can take advantage of this power."
Visionary companies outside of the Fortune 500 realm have started to embrace the value-based health management approach and are achieving dramatic savings and even reversing trends.
Another example of the impact on healthcare costs using Value Based Healthcare Management is found in a published study on the efforts of TI Automotive, a global supplier of integrated fluid storage and delivery systems for cars and trucks.
TI Automotive's Cartersville, Georgia, facilities employ 250 people. With annual healthcare expenditures rising by double digits, TI Automotive sought a way to control costs. An analysis of their health plan claims revealed a high number of claims for cardiovascular disease. In 2004, TI implemented a value based health management approach that provided, among other incentives, low-cost screenings, physician office visits, lab work and drug therapy for asymptomatic members.
Though TI Automotive experienced a short-term rise in healthcare costs, including the costs of the wellness program, the longer-term result was a decline in costs accompanied by increased productivity and improved employee health. Results are illustrated in this chart[6]:
NavigatorMD products will allow thousands of U.S.employers to control and manage their health plans in a way that will save hundreds of billions of dollars in healthcare costs as well as dramatically improve the health and productivity of Americans.
[1] The Center for Health Value Innovation
Gulfstream Case Study, April 2008
[2] The Center for Health Value Innovation
HEREIU Case Study, December 2007
[3] The Center for Health Value Innovation
SCANA Case Study, December 2007
[4] The Center for Health Value Innovation
IBM Case Study, November 2007
[5] The Center for Health Value Innovation
SCANA Case Study, December 2007
HEREIU Case Study, December 2007
[6] TI Automotive Presentation by Terri Forman, Benefits Manager
Institute for Health and Productivity Management
7th Annual International Conference
October 17-19, 2007