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View More Press Releases by Center for Health Value Innovation

Press release:

Center for Health Value Innovation Cites HEREIU’s Dramatic Achievements In Value-based Design

Issued by: Center for Health Value Innovation

Date: July 16, 2008

ST. LOUIS & LAS VEGAS, July 14, 2008 -- The Center for Health Value Innovation (www.vbhealth.org), the nation’s premier organization dedicated to establishing value and producing evidence for sustainable health and financial improvement, announces impressive employee health behavior advances from its value-based design member organization the Hotel Employees and Restaurant Employees International Union Welfare Fund (HEREIU), a multi-employer Taft-Hartley Trust Fund helping to meet the healthcare needs of participants working in the hospitality industry.

Jerry Reeves, M.D., chief medical officer, HEREIU will highlight these achievements at the Third Annual Executive Forum on Rx Benefit Management for Employers and Health Plans: “Enhancing Employee Performance, Productivity, Health and Outcomes Through Innovative Pharmacy Benefit Design Strategies,” July 21-22, 2008, Las Vegas, NV.

“Achieving this success can be characterized as a total surround sound experience,” says Reeves. “It’s been an all-out collaboration with physicians, the employer, the pharmacy benefit manager, our customer service representatives, the Preferred Provider Organization network, the Employee Assistance Program and the on-site nurse – who was critical in making the process work. We even included the executive chefs in adjusting menu choices in the employee cafeteria.”

The Fund manages welfare for employees in the restaurant and hotel businesses, with 90,000 employees and 250,000 covered lives nationally. In 2004, the Fund began implementing a value-based health pilot program in a West Virginia HEREIU plan of 3,000 covered lives and now reports that total medical cost trends dropped from 14.5 percent per year at baseline to less than 3 percent the next two years – saving $2 million in the first year. Additionally, within three months, more than 60 percent of participants in health coaching raised their personal knowledge level of their body mass index (BMI), blood pressure, blood sugar, and cholesterol, and had made a visit to their doctor.

In the year before revising the health benefits and programs, obesity and poor lifestyle choices continued to rise, putting lives at risk and driving rampant cost trends. Compared to other HEREIU populations, the West Virginia numbers were grim: 75 percent were overweight; 29 percent had diabetes; radiology costs were 85 percent higher; drug costs were 48 percent higher than sister plans with similar case mix. Concomitant with implementing value-based design, HEREIU put into place several care management, health education, and pharmacy management programs aimed at chronic health conditions affecting the workforce.

“This situation was not sustainable,” adds Reeves. “We scrutinized the root causes of poor health within this population in order to create a plan that asked participants to enroll through a Health Risk Assessment (HRA),” says Reeves, noting that the plan includes biometric screenings, reduced barriers to chronic care treatment, personalized health coaching that set specific goals and improved total health management, and reinforced positive health choices with incentives that included no-cost supplies and reduced-cost treatments for diabetes, high cholesterol, and high blood pressure.

Specifically, HEREIU’s value-based design included mandatory health coaching calls, generic drug co-pay waivers, free self-care book and tobacco cessation program, on-site clinic, cost and prescribing transparency, co-insurance incentives, and steerage to better value providers particularly for diagnostic imaging.

“This was new behavior for this group, but adherence levels rose once we removed barriers,” adds Reeves. “For example, we made it clear that their out-of-pocket costs would decrease if they utilized a nearby free-standing clinic for diagnostic imagining for CT scans – which cost the patient $300 less. We also demonstrated to both the employers and the prescribing physicians the value of alternative drugs that are just as effective and cost less than brand name products.”

The data validate program strengths:

  • Three-year annual cost trend at less than 3 percent
  • Drug cost trend at negative 9 percent
  • 60+ percent know their biometric numbers – up from about 3 percent when the program began
  • Generic fill rate: Increased 18 percent
  • Good nutrition: Increased 50 percent
  • Good exercise: Increased 25 percent

The next step for HEREIU is to clone its West Virginia value-based program to other HEREIU populations around the country in order to create a widespread culture of health and personal engagement in health decisions.

According to Cyndy Nayer, president and executive director of the Center, “HEREIU is a leading example of the potential for value-based design. Jerry Reeves is incredibly generous in his vision, sharing it with others who want to improve population health and yet decrease the health cost trends for their companies. By sharing these success metrics with current and potential members of the Center, we provide leadership and a forum for information exchange.”

About The Center for Health Value Innovation

Launched in 2007, The Center for Health Value Innovation is a not-for-profit (501c3) organization representing industry stakeholders committed to sharing the evidence that value-based health designs improve health status and reduce health cost inflation. Members include large and mid-size employers, health plans, integrated delivery systems, self-funded unions, municipal and state governments, medical management firms, pharmacy benefits management companies, vendor organizations and others which benefit from analytic tools, educational programs and collaborative connections to innovators in value-based health design.

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