Wellness Programs Under HIPAA

Preventive*PLUS Wellness Program

Why Preventive*PLUS Health Management

Employers are in desperate need of a solution to more effectively manage rising health care costs. To date, the market has not been able to provide employers a system to effectively manage health care costs beyond basic supply side cost controls administered through HMO’s and PPO’s. Consider the following: The National Coalition on Health Care states:

In 2005 (the latest year data are available), total national health expenditures rose 6.9 percent -- two times the rate of inflation . Total spending was $2 TRILLION in 2005, or $6,700 per person (1). Total health care spending represented 16 percent of the gross domestic product (GDP)

Since 2000, employment-based health insurance premiums have increased 87 percent, compared to cumulative inflation of 18 percent and cumulative wage growth of 20 percent during the same period

The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $11,500 in 2006. Workers contributed nearly $3,000, or 10 percent more than they did in 2005 (3).The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712).

External forces, such as demographic changes, proliferation of expensive medical technology, defensive medicine, and commercialization of health care are and will continue to drive health care cost and utilization upward.

In spite of the grim reality of skyrocketing health care costs, the fact remains that health care expenses can be much more effectively managed; not so much by renewed focus on supply side of health care, but by proactively managing the demand of health care services. Health management programs and pro-active intervention techniques have been scientifically proven to reduce health risks for a fraction of the cost of the health care cost savings realized. Consider the health care consumption facts:

80% of health care costs are consumed by 20% of employees (MTBC 34).

67% of health care costs are caused by preventable illnesses.

40% of current health care demand is avoidable

Individuals with multiple health risks consume 2-4 times more health care resources than individuals with fewer than 2 health risks.

healthcare risks

As most supply side health cost management strategies have already run their course (having shown their inherent limits as evidenced by the rising growth rate in health care costs), integrated prevention which focuses on addressing the drivers of health care consumption (demand) is the only remaining viable long term health cost management strategy for companies to adopt moving forward. As case data shows, employers that do not aggressively reduce the health risk prevalence within their employee populations will pay substantially higher costs for their health care costs than companies that do.

Preventive*PLUS provides an integrated health management solution to enable employers to more effectively manage their health care costs. Preventive*PLUS’s solution works with the employer’s health benefit plan structure and focuses on effectively managing the demand (i.e., drivers of demand) for health care resources.

Preventive*PLUS Health Management Principles

Employers are paying for the vast majority of employee health care cost and therefore should
take greater responsibility in establishing health management programs.Companies must take
the lead role in implementing health management plans.
Individuals must modify their behavior to reduce the chance of occurrence of a certain set of health risks.The long term goal is to bring to an absolute minimum level the occurrence of all potentially preventable health risks in each employee population.
Individuals must modify their personal health care utilization behavior.It is necessary to provide direction and incentive mechanisms to optimize the appropriateness of decisions consumers make in the selection of health care services.
Individual and aggregated data must be used to identify health factors targets and priorities.\Health factors must be targeted and prioritized.
Primary, secondary and tertiary prevention techniques must be deployed at the individual level.Avoidance, detection and treatment of health risks need to be managed through an integrated approach.
A full range of intervention modalities must be used to promote health management.One or more intervention modalities, such as formal incentives, health factor exams, laboratory testing, self-directed change materials, patient referrals are to be brought to bear to address target health factors.
Health management strategies must be based on a shared responsibility model between both the employer and the employee.Requires a paradigm shift from the entitlement (reactive) health care benefits model (whereby the employee believes it is his right to be have the employer be responsible for health care expense, sick leave and disability) to a shared responsibility (proactive) model (whereby the employee takes full responsibility for his/her health and greater ownership in the cost of health care benefits).