Consumer-Directed Care

Consumer-Directed Pioneers Trying New Strategies For Chronic, Healthy Enrollees

Reprinted from the Feb. 2, 2007, issue of INSIDE CONSUMER-DIRECTED CARE, a biweekly newsletter with timely news and insightful analysis of benefit design, contracts, market strategies and financial results.

Veteran sponsors of consumer-directed health (CDH) plans say they're moving beyond their account-based health plans and incorporating new strategies to help chronically ill enrollees manage their conditions. Other new programs encourage healthy employees to stay that way.

At the Health & Human Capital Management Congress in Washington, D.C., Jan. 17 to 19, benefits directors from Kroger Co., Staples Inc. and Wells Fargo & Co. detailed behavior-changing programs they've added to their CDH strategies. The conference was sponsored by World Congress.

On Jan. 1, Wells Fargo entered its fifth year with a health reimbursement arrangement (HRA)-based strategy from UnitedHealth Group's Definity Health division. The financial firm says about 30,000 of its 165,000 eligible employees are enrolled in one of two HRA-based plans. The company also offers more traditional managed care options such as HMOs, PPOs and point-of-service plans.

Program Helps Chronically Ill

An analysis of Wells Fargo's claims data - conducted by researchers at the University of Colorado at Denver - determined that employees who have a chronic condition are less likely to enroll in a CDH plan than are employees who are healthy. Patients with arthritis, for example, were 22% less likely to opt for one of the HRA-based plans. Researchers also concluded that chronically ill patients who did enroll in a CDH plan were less likely to seek care than were those enrolled in a more traditional managed care plan. According to 2004 claims data, chronically ill enrollees covered by a Definity plan had 19% fewer inpatient visits and 10% fewer prescriptions than did chronically ill enrollees covered by more traditional plans.

"That's not necessarily a good result," said Sally Wellborn, Wells Fargo's senior vice president of corporate benefits. "We want to lower health care utilization that is inappropriate, but we don't want to discourage appropriate care."

While employees who fail to receive necessary care could face more serious conditions down the road, they also could become less productive, Wellborn told attendees. Each year, diabetic employees take almost 30 sick days per 100 full-time employees with the condition. For employees with high blood pressure, the number of days lost is triple that of diabetics.

Through a new program dubbed Rewards for Action, enrollees diagnosed with one of five chronic illnesses can earn up to $500 a year (in HRA dollars) for taking steps to manage their condition. The program is open to employees as well as all covered family members. The first step — worth $50 — is to successfully complete an online educational program about the condition. Participants earn another $150 if they seek recommended care (e.g., glaucoma tests for diabetics). The third step — worth another $150 — requires participants to demonstrate that they monitor their health. A final $150 is awarded to enrollees who appropriately have prescriptions filled during a six-month period.

So far, 27% of Wells Fargo's diabetic members are enrolled in the program. Wellborn said participants generally are enthusiastic early on in the program, but tend to lose momentum over time. "We need to figure out a way to keep [employees] engaged. The bottom line is healthy employees are more valuable to Wells Fargo."

Kroger Carves Out Preventive Drugs

Grocery story giant Kroger is now in its third year with an HSA-based option from Anthem BlueCross and BlueShield (now part of WellPoint, Inc.). For 2007, Kroger added a second HSA-based option. The options are available to its 70,000 managerial, administrative and nonunion hourly employees. Its other 220,000 employees are covered through collective-bargaining agreements. This year, enrollment in the CDH plans jumped dramatically from 4.6% of eligible employees in 2006 to 23%, said Theresa Monti, director of corporate health and welfare benefit programs.

For HSA-based plans, the full cost of pharmaceuticals must be included in the deductible. While the Treasury Department gives employers the ability to exclude certain preventive drugs from the deductible, few employers have taken advantage of that rule. For 2007, Kroger categorized 13 classes of drugs as preventive. Those drugs, which include insulin, prenatal vitamins and medications to treat hypertension, are now covered through a copayment plan. "That [change] was well received by our population," Monti said.

Monti, who spoke at a Jan. 18 conference session, also said some Kroger employees were reluctant to enroll in an HSA-based plan because they feared that they wouldn't yet have an HSA balance to cover expenses that came up early in the year.

To counter that concern, the grocer contributed half of this year's annual deductible in early January rather than splitting the annual contribution into 12 monthly installments. Kroger also now matches employee HSA contributions up to $500 for employees with single coverage ($1,000 for family coverage).

Strategies Must Include Healthy People

During a keynote presentation on Jan. 19, Dee Edington, director of the University of Michigan's Health Management Research Center, said wellness programs aimed at the chronically ill are not enough. Employers, he said, must also target healthy employees.

"The low-risk people of today could be the high-risk people of tomorrow," Edington told attendees. "Don't just offer incentives to people who lose weight or who quit smoking. You also need to offer incentives to people who are your best risks. Keep your healthy people healthy."

Staples is now in its third year with an HRA-based plan from Lumenos. Last July, it added an HSA-based option. During a Jan. 17 presentation, Nancy Lazgin, director of global benefits at Staples, said her firm is piloting a program that encourages employees to walk during their lunch hour. The Walk@Work program was piloted at three locations, and 33% of employees have participated. While the company set up competitions between stores based on the number of miles employees collectively walked, employees took it a step further and launched competitions between departments. "Now we want to take that [program] to the next level and keep that group focused on their health," she told attendees.

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