Manufacturing Change Near-Site Medical Partnership

Manufacturing Change Near-Site Medical Partnership

Molding a Healthy Workplace Le Sueur, Inc. Our Change Drivers Our Process Our Outcomes

About Le Sueur, Inc. Le Sueur Inc. is a foundry Founded in 1946 $70 million 400 employees

Change Drivers Primary Issues 1. Environment /Culture 2. Location 3. Inefficiency 4. Demographics LSI Medical & Rx Claims Per Employee Per Year $10,000.00 $8,909.11 $9,000.00 $8,388.74 $8,000.00 $7,222.42 $7,000.00 $5,212.02 $6,000.00 $5,130.85 $5,000.00 $4,154.68 $4,000.00 $3,000.00 $2,000.00 $1,000.00 $0.00 2007 2008 2009 2010 2011 2012 PEPY Gross Claims PEPY Net Claims Linear (PEPY Gross Claims )

Change Drivers: Issue #1 Environment /Culture Inherently dangerous Highly male & single Multi-generational Change resistant

Change Drivers: Issue #2 Location / Access Vanishing competition Eroding discounts Five year Cost to LSI = $1,289,300 compared to discounts in the Twin Cities

Change Drivers: Issue #3 Inefficient Use - Creating Catastrophic Risks Current colon cancer plan paid over $300,000 in 36 months Early identification and intervention is critical This is equal to over 100 colonoscopies Preventive Adverse Care Risk Stratification Trending Down Emergency Use - 4X higher cost and 4X higher use Care Gaps

Change Drivers: Issue #4 Demographics

Change Drivers: Issue #4 Demographics Co-morbidities Volume of claims Acuity of claims

Change Drivers Decision Points Can we maintain our employer of choice model? Can we negotiate better discounts? How do we remove barriers to care (point of service cost)? How can we re-educate our participants about health? Can we re-engineer our program to reward appropriate use? How do we improve care experience in the community? How do we leverage existing resources?

Our Process Alternatives Considered Do nothing: Not realistic or sustainable Wait for Exchanges: Fees and taxation Loss of EE goodwill On-Site Care Clinic: Infrastructure barriers Capital expense Outsourced near-site : Introduce competition Loss of community goodwill Find a Community Medical Partner: Focus on prevention Case manage chronic conditions

Our Process Alternatives Considered Find a Community Medical Partner: Quality primary care Focus on prevention Case manage chronic conditions Patient advocacy Occupational health when needed A provider with a shared goal and vision: Improving community health Existing infrastructure = no start-up costs Patient volume allowed for a significantly greater discount

2010 2011 2012 2013 Understand the reality of the situa<on Establish owner s ongoing support Nego<ate provider pricing/services Measure and report Review claim data and establish baselines and trends. Select broker partner (David Mar<n Agency) AQend 5th Annual Congress on On- Site Health Clinics Iden<fied focus areas (preven<on, diabetes, tobacco use) Begin Employee Health Awareness Fairs Ini<ate RFP s for on- site providers. Develop financial models for on- site and near- site op<ons Develop company- wide health vision Conduct medical provider search Implement mul<- year communica<on strategy Assess alterna<ve vendors for added- value Begin biometric screenings and health assessments Implement steerage to low cost/high quality primary care prac<ces Determine metrics and repor<ng Coordinate process through health plan Model mul<- year EE incen<ve strategy Implement findings from workplace audit to create a suppor<ve environment for health Implement tobacco- free worksite Refine release <me policy Develop and implement steerage through benefit design Develop and roll- out employee & spouse informa<on mee<ngs Maintain visible and ac<ve senior leadership support Bring in addi<onal community resources (i.e. mammograms) Monitor implemented programs to ensure op<mal performance Connect occupa<onal, financial and emo<onal health with resources Proac<ve outreach and target at- risk par<cipants Evalua<on and ROI/VOI determina<on

Our Plan: Modified Triple Aim Employees and Family Members Le Sueur Inc Our Partner Provider

Our Plan Employees /Families Le Sueur, Inc. Our Partner Provider Align incentives with appropriate care Remove financial barrier to low cost primary care Engage and re-educate participants Influence lifestyle choices through trusted physician and care team relationships Identify latent health risks Identify and measure population health risk profile Establish benchmarks - MN Community Measurement Impact medical costs through: ü aggressive provider discounts ü control over specialty referrals ü enhanced care management/disease management ü improved health and employee satisfaction Reduce work comp issues. Improve lost work time/fml(a) Maintain viability of an independent community-owned clinic Expand patient base Re-establish ownership/control of the patient - back to primary care Implement a systematic/proactive patient outreach to ensure care coordination Evaluate and report on a replicable new model between employers, the community and provider systems

Our Plan: Employee Incentives The Message Personal choices and options are important. Where to get care is your choice (and it will stay that way) LSI s cost continues to increase 20% annually you can keep what you have, it just costs more We all have a shared responsibility Two Separate Participation Rewards Reduced Medical Plan Premiums for proof of preventive care completion including all applicable cancer screens No cost primary care at LSI's partner clinics Must attempt to follow Dr.'s orders to remain in the program

Our Outcomes So Far ER Visit Utilization Metric Type Aug 2010 - July 2012 Aug 2012 - June 2013 Variance ER Visits Per 1000 228.1 177.1-22.3% ER Visits resulting in an Admission % of Admissions 41.0 46.4 13.2% Inpatient Utilization Inpatient Days Per 1000 526.7 137.4-73.9% Average Length of Stay Average Days 7.9 2.7-65.8% Total Admissions* Per 1000 66.4 50.6-23.7% Imaging Utilization CT Scan Per 1000 78.3 50.6-35.4% MRI Scan Per 1000 75.7 48.8-35.6% Drug Utilization Pharmacy Scripts Per 1000 7,882.3 9,597.8 21.8% Pharmacy Scripts Mail Order % of Mail Order 26.1 30.5 16.6% Pharmacy Scripts Brand Drugs % of Brand Drugs 25.9 22.9-11.7% Office Visit Utilization Total Office Visits* Per 1000 3,584.2 3,640.3 1.6% Regular Office Visits Per 1000 2,736.6 2,673.3-2.3% Preventive Office Visits Per 1000 331.0 489.8 48.0% Behavioral Health Office Visits Per 1000 376.1 357.9-4.8% Other Utilization Chiropractic Visits Per 1000 939.4 681.4-27.5% Physical Therapy Per 1000 913.1 573.0-37.2% Deliveries Per 1000 3.4 7.2 112.4% ü Reducing utilization in target areas ü Increasing utilization in focus areas

Our Outcomes So Far Le Sueur - % with Gap Thru Oct. Thru May VH Norm 2012 2013 Mammo 40-49 y/o 61% 48.72 % 47% Mammo 49-69 y/o 49% 39.53% 44% Colonoscopy 80% 69.42% 72% ü Participants adhering to screening recommendations ü Reducing long term and immediate risk through identification and intervention

Our Outcomes Our Community Provider Family Practice Number of LSI Patients Outpatient Number of LSI Patients 250 200 150 100 64 203 120 100 80 60 40 75 108 50 20 0 July 2010 through July 2012 August 2012 through June 2013 0 July 2010 through July 2012 August 2012 through June 2013 Family Practice Total Paid Outpatient Total Paid $ 180,000.00 $ 160,000.00 $ 140,000.00 $ 120,000.00 $ 100,000.00 $ 80,000.00 $ 60,000.00 $ 40,000.00 $ 20,000.00 $ 0.00 $ 18,617. July 2010 through July 2012 $ 164,802. August 2012 through June 2013 $ 160,000.00 $ 140,000.00 $ 120,000.00 $ 100,000.00 $ 80,000.00 $ 60,000.00 $ 40,000.00 $ 20,000.00 $ 0.00 $ 104,815 July 2010 through July 2012 $ 144,013 August 2012 through June 2013

Our Outcomes So Far Impact of Changing Trend* $12,000.00 $10,377.52 $10,000.00 $8,000.00 $6,000.00 $6,966.48 $4,000.00 $2,000.00 $4,154.68 2007 2008 2009 2010 2011 2012 2013 PEPY Gross Claims with 16.5% YOY Trend PEPY Gross Claims Actual *The difference in the PEPY historical claims trend projected through July 2013 compared to performance and actual PEPY claims: Gross savings $1,091,533.74 ($10,377 - $6,966.48 x 320)

What s Next? Wellness Pilot- Phase II

Referral Integration Opportunities Mental Health / Substance Abuse No copays for visits effective 5/1/13 Nutrition/dietitian counseling Three visits at no cost Coverage not related to a diagnosis code Most common referral reason for pilot referrals Overweight/obesity, high cholesterol or high blood pressure Community mammogram effort No cost diabetes supplies (at REHC) Glucometer Insulin Test strips Well-being coach onsite (24 32 hours/week) Physical therapy onsite managed by GWR

Onsite Injury Prevention Program ü On-site provider at LSI two days/week ü Referral and training opportunities

Lessons Learned Determine your partners and resources; the proper consultant is paramount Don t be afraid to reach out to medical providers Understand what is driving your claims/costs; focus is critical to success Don t underestimate your employees capacity to change their thinking Communicate 10 10 This is an investment; find vendor partners willing to invest upfront e.g., stop loss and disability carriers Be patient. There will be many challenges along the path to implementation

Spark Any Questions? More Information? Dick Seidenstricker Le Sueur Incorporated 1409 Vine Street Le Sueur MN 56058 507.665.6204 x 203 dseidenstricker@lesueurinc.com