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IHS Trend on Investment Analysis
A Third Party Review of the IHS Health Management Program on Medical Cost Trends

Abstract

Interactive Health Solutions (IHS) works with over 1000 employer groups nationally to control employer health care costs through the IHS Population Health Management program. To measure the effectiveness of the IHS program, a respected, highly credentialed, third party consulting company called Zoe Consulting analyzed a sample of 2 1/2 years of medical claims data from a mix of over 300 employer groups – some that used IHS programs and some that did not. The findings from the study were that employer groups who used the IHS program had a 54% lower medical trend during the 2 1/2 year study time frame compared to employer groups that did not use the IHS program. Also, employers who used the IHS program and a disease management program had a 65% lower medical trend during the 2 1/2 year study period compared to those that did not use IHS. The following information describes the study design, methodology, outcomes and the IHS actions taken based on the study conclusions.

Introduction

Founded in 1992, Interactive Health Solutions (IHS) works with employer groups to curb healthcare cost increases through their Population Health Management (PHM) strategy. This process leverages the employers' existing health plan and employee incentives to engage the entire plan membership – employees and spouses – in effective health management. The IHS strategy begins by using the health benefit plan to provide preventive health evaluations to plan members either at the worksite or through a network of national testing facilities. To drive participation, IHS clients create incentives that reward participants with lower health benefit contributions during the year – the goal is 80% or more participation in the first year. In follow-up to their testing, participants receive access to a suite of printed, on-line and telephonic tools that educate the individual on how to maintain good health. In the second year of programming, IHS works with the employer to set incentives based on specific health outcomes for individual participants. The goal is to reward healthy people who stay healthy and at-risk participants who effectively manage their controllable conditions.

Historically, IHS client satisfaction and retention remain very high (98.5% participant satisfaction and 93% annual client retention rate). These measures demonstrate a strong perception of value and effectiveness from the IHS program. However, to definitively show that the IHS program controls costs and to identify additional strategies that will enhance program value to employers, Zoe Consulting conducted an independent analysis of claims data from IHS client and non-client groups.

Claims Study Design

Independent Third Party Analysis
As an unbiased third party expert, Zoe Consulting analyzed medical claims data for IHS clients compared to similar employers that did not use the IHS program. Zoe was chosen because of their extensive expertise in health and productivity management programs and their accomplished body of work in their industry. Some of the achievements of Zoe Consulting include:

  • Winner of two C Everett Koop Awards for outcomes achieved in maternity and disease management
  • Award winner for leadership in worksite wellness, and in health and human performance
  • Recent publications include Managed Care Outlook, HcPro Book on ensuring success through your health and disease management programs, DMAA Journal, DMAA book chapter
  • Population Health and Productivity Analysis which identifies what is driving costs in covered populations and is used for planning purposes; and/or, Program Evaluations for groups including:
    • Princeton University
    • The University of South Carolina's Center for Healthcare Policy & Research
    • Metropolitan Washington Airports Authorities
    • Boddie-Noell Enterprises (Hardee's Restaurants)
    • Pilgrim's Pride
    • CenterPoint Energy, and the State of Delaware
  • Peer review process including physicians, University of South Carolina School of Public Health, epidemiologist, statisticians, technology, and data analysts

Study Methodology
Zoe collected medical claims data from over 300 employer groups representing 50,492 individuals between July, 2004 and June, 2007. Zoe's methodology included a peer-review process and input from the University of South Carolina's School of Public Health, Medical Doctors and other subject matter experts.

The study was based on a control to study group evaluation that integrated IHS health risk assessment and biometric data as well as intervention influence (ex. disease management or large case management) to evaluate and trend employer group populations based on their program type.

The definitions of Program Types are:

  • No Program – The employer group did not use IHS services during the study period
  • IHS Only – The employer group used the IHS program but did not incorporate a disease management program during the study period
  • IHS & DM – The employer group used both the IHS program and a disease management program (DM). To improve functionality and outcomes, the IHS data was interfaced with the DM

The study incorporated processes to eliminate biases by factors such as incentive driven participation, demographics, and plan design. For instance, when evaluating cohorts, Zoe studied medical claims on a group level in order to discount for adverse selection and eliminate any bias based on participants versus nonparticipants. Also, the age and gender composition between the Program Type groups matched closely to eliminate demographic bias. Last, Zoe analyzed total medical spend, including employee and employer medical costs, to eliminate any plan design bias such as changes in deductibles or co-pays.

Results

Claims Trend Analysis
During the 2 1/2 year time period of the study, the study groups had between 54% (IHS Only) and 65% (IHS & DM) lower medical cost trend compared to the control group (No Program).

Key Study Highlights

  • Employer groups with No Program: Total claim costs grew by 24% over 2 1/2 years
  • Employer groups using IHS Only: Total claim costs grew by only 11% during same time span
  • Employer groups using IHS & DM: Total claim costs grew by only 8%

Aggregated Trend by Program Type

Conclusion

Healthcare cost trends continue to create financial concerns for employer groups with a future that forecasts much of the same – rising costs. These cost increases are driven by a variety of factors but, clearly, employers need to seriously assess strategies to mitigate trends.

Based on the data evaluated by Zoe Consulting, employers who have implemented the IHS program have outperformed employer groups without the IHS program over time. The core conclusion from Zoe Consulting is that "IHS is producing the desired outcomes for employers groups who participate in their program."

The recommendations by Zoe for employer groups, as highlighted in the study, were to:

  • Create Market Penetration: Continue to promote the IHS program to employer groups in order to reduce or maintain current medical trend. Groups who are not using the IHS program need to reconsider and evaluate the results they could have achieved based on the study outcomes.
  • Use as Employer of Choice Initiative: While the IHS program has proven to be beneficial in reducing costs, it is also a benefit enhancement and can be used to improve recruitment and retention of talent.
  • Increase Participation: Greater employee participation would contribute to greater return on investment and improved outcomes for the employer group.
  • Focus on Lifestyle Related Risk Factors: Up to 70% of all health care costs are related to lifestyle and are preventable. IHS programs should continue to place major emphasis on addressing lifestyle related health issues like diabetes, hypertensions, cholesterol, smoking and obesity.
  • Engage Moderate Risk Participants: The greatest opportunity to accelerate positive results, besides improving participation, is by engaging with moderate risk participants. Traditionally, these participants are at early stages with their health issues but are trending to become higher risk risk/higher cost plan members. The IHS program can deliver a greater cost savings to employers by more actively connecting with moderate risk individuals and correcting their health issues before the problems develop into more serious, costly concerns.

In summary, the IHS program has proven to deliver results and is recommended for employer groups that are searching for a pro-active strategy to reduce or maintain their medical trend. Employers are encouraged to make managing costs a key strategic initiative through IHS services.

Additionally, employers can improve their outcomes from the IHS programs by strategically incorporating incentives to drive participation rates for employees and plan member spouses – a win: win proposition for all parties. Last, IHS can accelerate the already productive outcomes by continuing to focus on preventable conditions and by actively engaging moderate risk participants.

IHS Response

In response to the findings from the study conducted by Zoe, IHS has focused working with employers to leverage their health plan design in order to maximize participation and improve participant engagement and results. This process includes:

  • Health Plan Premium Differentials to incent plan members to participate in the IHS program in the first year of the program being offered.
  • IHI Risk Rating of each participant on their lifestyle related, preventable health risk factors. The risk rating, called the Interactive Health index (IHI), provides each participant with a measurable, annual health score and a goal to achieve when the person retests next year.
  • Pro-active, 12 Month IHS Outreach by an IHS Masters Degree level health coach to counsel the participant on their health issues and insure that the participant is on target to meet their health goals by next year.
  • Quick Test opportunity for each participant to retest with IHS within six months after their initial evaluation to assess their progress with managing their lifestyle related clinical risk factors.

Through the IHI process, participants are more engaged and results are improved as outlined on the next page.

IHI Program – Result Highlights:

  • High Participation - 80-90% participation including employees and spouses. Virtually, the entire plan member population is engaged in prevention.
  • Healthy People Stay Healthy – Nearly 100% of the low risk rated participants maintain their healthy status from year to year.
  • High Risk Participants Improve – 45% of the high risk participants became low risk after one year.
  • Lifestyle Related Behaviors Improve – 41% of smokers are found to quit and 20% of the overweight population hit their BMI goals in year two.
  • The Majority Wins – 81% of the population meets their health goal from year to year.
  • Budget Neutral Program - the IHS program becomes a budget neutral solution. The incremental benefit contributions from participants who do not qualify for their incentives creates a funding mechanism that eliminates employer funding for the IHS program.

The bottom line is a program that engages more than 80% of the population, shows that more than 80% of the participants make their measurable health goals from year to year, and requires no funding from the employer.

Contact Info

IHS is the nation's premier Population Health Management Company. IHS works with more than 1,000 fully-insured and selfinsured companies with one million + total employees. Client companies nationwide range from firms with 50 to 50,000 employees. The IHS program engages employees in a comprehensive process that stresses early detection, testing and aggressive follow-up before health problems take hold.

For further details, please contact:
Joseph O'Brien, President, IHS
847-754-2696
j.obrien@interactivehs.com