The concept of value-based benefit design is still an evolving one, but it boils down to the market's effort to determine how to best derive value out of a health care plan, says Stephanie Elliott, director of activation strategies at UMR. EBA spoke with Elliott and client Rebecca Shipley, director of total rewards at Vail Resorts, about the success Vail has achieved in a few short months by using VBBD with its unique employee base.
Tell us about UMR's philosophy when it comes to VBBD.
Elliott: UMR's value-based benefit plan starts with consumer-driven health. That's the foundation. [It starts with] an HRA or HSA, or some other form of account-based benefit. We then add on care management programs and a very targeted health management strategy based on the needs of the employer population we serve. The third piece to the value-based design is really incentivizing. Sometimes it can be penalties inversely but we typically try to include positive incentives for members to pursue specific behaviors, and therefore [better] health outcomes.
Value-based benefits . . . can be very much a turnkey product. It's hard to customize and maybe it's targeted at one or two specific diseases or conditions, and UMR really has created an offering that's more flexible than that.
How did you approach Vail's plan?
Shipley: My benefits manager, David Ganick, and I really worked on this together with UMR. When we came into Vail Resorts, Vail had the traditional PPO plan and I had come from a previous employer that had implemented CDH with an HRA. Coming into Vail Resorts [it was about] really getting a sense of our population and trying to figure out what makes us unique. We are definitely a young, healthy population and as you can imagine the vast majority of our employees are active every single day, skiing on the mountain.
So what we wanted to do was build a plan that really celebrated that and became more of a health plan as opposed to what we viewed traditional plans as being sick plans.
With the CDHP that Stephanie was talking about, we really believed in that philosophy and put an HRA in place [with] first-dollar coverage provided by the resort and then we wanted to figure out ways that when employees when into the next part, their deductible, how can we really encourage people to engage in that and offset a little bit of their deductible by offering to put more of their HRA dollars in.
Given that this was our first year and we rolled it out Aug. 1, 2011, we put [forth] what we felt were really important incentives in place. The first one was just a health screening and if you went to the health screening and got your numbers you got $100.
The second one we did was we worked with UMR and used their online tutorial and had a quiz at the end of that and if our employees did that we gave them $75. So that's a really important thing that we really wanted to stress that education and communication with them. Then we did an online health risk assessment. If they did that they get $50. Then we did a $25 incentive for flu shots.
What are the specific health targets of the Vail plan?
With us trying to be really specific and unique to our population, we have a high pregnancy rate because of the youngness of our population, but an interesting twist to that is because a lot of our employees are in high altitude locations we actually have a high premature rate. Which is very costly.
So what we implemented in addition to the incentives is a maternity management program which encourages pregnant employees or dependents to engage in these programs and really try to have a healthy pregnancy and learn and be engaged. They get dollar amounts put in their HRA buckets for each trimester they stay engaged in the program. Our thought on that is, first of all, most importantly if we can prevent a premature birth from one of our employees, wouldn't that be fantastic? And, as you might imagine, if we prevent one premature birth that's upwards of half a million dollars.
What we're also trying to focus on is because of our unique population we have a lot of musculoskeletal claims that come in. It's our No. 1 issue, with knees and shoulders. So we're really trying to work with UMR in understanding where our claims are coming in and how do we keep evolving our incentive and help people engage in the things that are really individual and unique to our population.
How is it looking now?
It's good. The biometric screenings we're just shy of 60% of people engaging in those, which are pretty good numbers that we're excited about. And the other ones are coming up as well. Again, we're in this constant communication in trying to make sure that we're reaching out to our employees and we're reminding them, constantly in front of them - including building an external website that they can always have access to, and again we're seeing those numbers come up pretty nicely.
We have about 4,700 people on the plan. On the incentives so far in seven months we've contributed over $360,000.
Elliott: Some clients will try to use incentives at the beginning of the year to get folks engaged, that's very common. But what we have a tendency to see is that people engage during open enrollment and then they fall off. Vail was very thoughtful about designing an approach that left those incentive structures open the majority of the year. People have a tendency to come onto the plan, engage and stay engaged because there's activities throughout the year that they can do that really holds their attention.
How did Vail communicate the VBBD plan to employees?
Shipley: We started our communication strategy about 4-6 months before we went live. We tried to use every media possible. We went up and did focus groups with our employees first before we did anything. We just wanted to hear what they were scared about, what they wanted and what they were frustrated about in the focus groups. We then incorporated that and came back and did a full-on training with employees and said, 'Come and learn and do these open houses with us.' We'll do a presentation they can take back and ask questions. Additionally, we opened it up to spouses and dependents on the plan because we know that sometimes the person who's really engaged in the plan is actually not our employee but a dependent. So we opened it up in an attempt to get them comfortable and engaged with that.
Lastly, we actually engaged with our community. So we actually went to our hospitals and our providers and walked them through the plan as well so they felt they could understand and support it and engage in it with us when it went live as well. . . . I think a lot of employees they don't want to understand their benefits until they have to and then they're reacting out of fear. So if we could take some of that anxiety away from them and also make them feel like they were part of the process, now they're interested in it.
Has the plan seen financial savings?
As you might imagine, cost savings is certainly key to us trying to get ahead of the national trend, but for us one thing I would say is our executive team really supported this and bought in, which is a big help as well. But we also talked about being really, really clear about yes, we're concerned about the cost savings, but not at the expensive of our employees. And our CEO made that very clear and we were all really clear about that.
The other thing that really motivates us is we're just constantly trying to stay ahead of this and we never think that this is going to be some silver bullet where we're going to have negative medical trends all of a sudden. We're just trying to stay ahead of it and then keep evolving the plan so it doesn't get stale, and keep making sure we're aware of what our employees want.
How are employees motivated?
As far as motivation we really believe that what's been lacking in health care is people understanding it and realizing that they have a role in it versus in some cases where there's kind of an entitlement around benefits that a lot of employers are dealing with. So if we can keep people motivated and engaged - we're self-insured - there's so much win-win on that. One of the commitments that we have is when we see favorability or we see the plans running well, we're not actually interested - believe it or not - in pocketing the cost savings but taking those and reinvesting them in programs.
Like right now we're really focused on what's our next step with wellness? And finding a wellness partner that can complement the plan, constantly evolving it and working with UMR to gain even better transparency on medical costs.
When we talk about value-based and how there's so many different definitions I would say one of the things that we love about the consumerism platform and the value-based side is that as an employer it's so great to be able to have that flexibility to create something that mirrors the uniqueness of our population and I think that's been a big difference for us.
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