protecting your bottom line in three steps · gimme three steps 1. ... losses comprise the largest...

Copyright © The Graham Company 2014. All Rights Reserved.

Protecting Your Bottom Line in Three Steps

May 17, 2017Presented by Bette McNee


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Gimme Three Steps1. Hire Only the Best and Treat Them Well

2. Ensure Realistic Expectations

3. Build Processes with Auto Safeguards

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Hire the Best

1. Reject Insanity2. Attributes3. Overhaul4. New Process

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Know What You Seek1. Action oriented /Have initiative2. Intelligent3. Ambitious/Creativity/ Problem

solver4. Autonomous/Dependable5. Leadership/Self-

confidence/Success Seeker6. Cultural Fit/Fit with team7. Upbeat/Positive

Outlook/Personable8. Empathy/Compassion/Patience

9. Confident/Pride in Work10. Successful /Set Goals/Enjoy

Accomplishment11. Honest12. Detail Oriented13. Modest/Good judgment/Humble/

Not Confrontational14. Hard Working15. Marketable/ Do they represent

your brand?16. Passionate

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Probing Questions1. Tell Me Your Story2. Word Association3. Biggest Misconception about You?4. Want To Do, Not To Do in 5 Years?5. Worst Kind of Job for You?6. Co-Workers Say About You?7. Biggest Critic Say About You?

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Behavioral Interviewing1. Give me a specific example of a time when you

had to conform to a policy with which you did not agree.

2. Tell me about a time when you had too many things to do and you were required to prioritize your tasks.

3. What is your typical way of dealing with conflict? Give me an example.

4. Tell me about a recent situation in which you had to deal with a very upset resident or co-worker.

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Integrity Testing1. What is it?2. Legal?3. Cost?

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Ensure Realistic Expectations1. Ask Right Questions and Listen

a. Not – Can I Help You?b. Why Need Services?c. Why Choose Us?d. What Can We Do to Help You?

2. Stop Saying Risk of Decline!a. “High Risk for Falls - Goal: Will Have No Falls in next 90

Days”b. “High Risk for Weight Loss – Will Not Lose Greater than 5

Pounds in Next 90 Days”3. Educate Family on Progression of Disease and

Supportive – Not Curative - Approaches

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Build Processes with Safe Guards1. Orientation & Mentoring2. Ongoing Education3. Communication – Shift Change, Department,

All Staff4. Feedback & Appraisal5. Skills Competency Assessment6. Expos - Safety Fair, Safe Resident Equipment

Demonstrations, Wound Care/Skin Care 7. Teaching Audits – Safety, Environment of Care

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Questions?


Keeping Employees Healthy & Controlling Workers’ Compensation Costs

May 17, 2017Presented by Tom Morrin


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Workers Compensation System1. Doctrine of Exclusive Remedy

a. Sole recourse for employees against employers for injuries due to covered work related injuries

b. Exceptions (varies by jurisdiction)i. Gross Negligenceii. Exempt or Illegal Employmentsiii. Third Party Over Actionsiv. Dual Capacityv. Loss of Consortium

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Workers Compensation System2. Statutory Coverage

a. Provides Medical and Indemnity Coverage according to the Workers Compensation State Law that is applicable

b. Medical Coverage, including Rehabilitation is unlimitedc. Indemnity Coverage per State Statute

i. % of Weekly Wages, subject to maximum weekly payment

a) Varies by StateØ60% – 75% of weekly wages Ø$300 - $1,200 maximum weekly payment

ii. Lump Sum payments for Scheduled Injuriesa) Death, Loss of Hearing, Loss of Eye Sight, Loss

of Finger etc.

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Workers Compensation Pricing Parameters

Payroll x Rates = PremiumEstimated Payroll by Classifications

• Classified based on primary activity as developed by state rating systems

• Payroll includes salaries, commissions, bonuses and overtime (limited)

• Limitations on Executive Payrolls

Election options for Partners, Sole Proprietors

*Rules Vary by State

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Payroll x Rates = Premium

Regulated by State or Collection of States (NCCI)• Applied to Payroll per $100

Developed from loss and exposure data by classification


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Payroll x Rates = Premium

Modified by• Experience Modification Factor (EMF)• Safety Credits, if eligible• Schedule Credits/Debits• Loss Cost Multipliers• Drug Free Workplace Credit• Managed Care Program Credit• Miscellaneous Other Credits (vary by state)


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Experience Modification Factor (EMF)

1. The experience rating formula is built on comparing actual vs. industry average loss experience.

DID: “Actual Losses” SHOULD: “Average Expected Losses”

2. 1.00 indicates an average risk. 3. Greater than 1.00 indicates a risk that is worse than

average.4. Less than 1.00 indicates a risk that is better than

average. Do you want to be Average?

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Experience Modification Factor (EMF)

2013 2014 2015

Experience Rating Period

2016

Most Recent YearNot Included in Calculation

2017

EMF Effective for 2017 Year

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SELFINSURANCE

CAPTIVES

RETROS &

LARGEDEDUCTIBLES

GUARANTEED COST

Higher RiskLower Risk

Lower Reward

HigherReward

Program Alternatives Comparison

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Losses Comprise the Largest Portion of the Insurance Dollar

Loss Prevention and Claims Management

“Traditional Insurance Dollar”

+ =35¢

Fixed Costs65¢

Losses (Variable)

Premium Dollar

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1. What can you do to affect losses to ultimately control your insurance costs over the long term?

a. Prevent losses from occurring (frequency)b. Control losses that do occur (severity)

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Steps to Prevent and Control Losses:

a. Management/Leadership Commitment b. Employment Policiesc. Proactive Safety Programsd. Aggressive Claims Management

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Management/Leadership Commitment

a. Management Leadershipb. Management Commitmentc. Accountability Procedures

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Employment Policiesa. Hiring Procedures b. Pre-Employment Physicals (Job Descriptions)c. Substance Abuse Testingd. Compensatione. Company Benefitsf. Turnover %g. Seasonal/Part Time Laborh. Employee Leasing/Temps

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Safety Programs• Safety Coordinator/

Champion• Employee/Safety

Orientation• Written Safety

Program• Job Safety Analysis• Incentive Programs• Employee Training• Supervisory Training

• OSHA Compliance• Safety Committee• Self – Inspections• Emergency

Preparedness• Fleet Management

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Claims Managementa. Claim Coordinatorb. Accident Investigationc. Claims Reporting Proceduresd. Designated Medical Facilitiese. Post Accident Contact with Injured Employeef. Return to Work Programg. Catastrophic/Emergency Claim Proceduresh. Trend/Loss Run Analysisi. Claim Reviews

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Questions?


Contain Medical & Rx Cost to Recruit & Retain Employees

May 17, 2017Presented by Dan Jordon


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How Effective is Your Benefits Plan?

Agenda:1. Risk Pool Management Overview2. Health Care Funding Arrangements

1. Funding Continuum 2. Prescription Drug Solutions3. Data Analytics

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Risk Pool Management - Question

Which do you think is a better Health Risk Pool, a company where the average age of their health plan membership is:

a. 43or

b. 33

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Risk Pool Management

• In Medical coverage, the healthy subsidize the sick. • 5% of the population drive almost 50% of costs!

• If young, healthy people drop off your plan, costs will adjust accordingly.• Risk Pool Management is the idea that a group health plan should do its best

to attract and retain as many young/healthy individuals to the plan, in order to subsidize the unhealthy/high-utilizers that already exist on the plan.

• The best way, we find, to attract these individuals is to offer plans that are attractive from a contribution standpoint.

• Trend we see in Non-Profit Organizations:• Much greater employer contribution % for Single Tier vs. Other Tiers • Not many children on the plan• A continuous year over year increase in average age of membership• Healthcare costs keep rising faster than Medical Trend

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Risk Pool Management

• A continuous year over year increase in average age of membership, without any Risk Pool Management leads to healthcare costs rising faster than Medical Trend

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Risk Pool ManagementAv

erag

e An

nual

Spe

ndin

g

Age Group

The rising healthcare costs to employers has created a continuous increase in employee medical contributions as well as increased deductible exposure/cost. The outcome for many employees is not having the money to invest for their retirement. This can have a negative impact, as it forces people to work further into retirement age, thus remaining on your insurance plan and incurring more medical claims when statistically they have the worst risk.

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Risk Pool Management – Warning Signs

• Watch out for: Elimination of Health Benefits for Spouses who are eligible for coverage through their own employer. • Non-Working Spouses are typically the worst risk on a health plan.

• Watch out for: High Employee & Children Contributions• A typical child (age 2-26) will incur an average of $1,000-$1,200 in paid medical

claims per year. We believe it would make sense to incentivize those children to be on your plan to help subsidize a currently enrolled high-utilizer.

• By lowering the Employee & Child contribution amount, our goal is to attract as many children onto your plan as possible. Children ages 2-26 are, on average, proven low claim utilizers who further help to maintain a young risk pool.

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Health Care Funding Arrangements

Self-Insured

Fully-Insured

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Types of Funding Arrangements

• The Graham Company recommends reviewing your Medical and Prescription Drug plan Funding Arrangement each year.

• Types of funding arrangements include: • Fully Insured

• “Bundled” (Claims, Stop Loss, Administrative Costs)• Partially Self-Funded

• Level Funded Programs• High Deductible Plan with Health Reimbursement Arrangement

• Captive Arrangements• Self-Funded

• “Unbundled”

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Fully Insured vs. Self-Funded

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Self Funded – Case StudyEE EE+SP EE+CH EE+CHren FAM EE EE+SP EE+CH EE+CHren FAM EE EE+SP EE+CH FAM EE EE+SP EE+CH FAM

a. PlanAdministratorb. StopLossInsurerc. StopLossContractPeriodd. SpecificStopLossDeductiblee. AggregateStopLossLevel

f. CurrentEnrollment 82 42 14 11 47 82 42 14 11 47 82 42 25 47 82 42 25 47g. TotalEnrolledEmployes

h. FixedCostsi. AnnualPremiumj. HSAFundingk. AdministrativeFeesl. StopLossPremiumm. ACAFeesn. TotalFixedCosts

o. ProjectedClaimCostp. ProjectedAnnualClaimsCost(Graham)q. ProjectedAnnualClaimsCost(Carrier)r. MaximumAnnualClaimsExposuret. TotalProjectedExposure(Graham)u. Increase/(Savings)vs.Currentv. %Increase/(Savings)vs.Currentw. TotalMaximumExposurex. Increase/(Savings)vs.Currenty. %Increase/(Savings)vs.Current

z. TotalProjectedExposure(Graham)aa. Increase/(Savings)vs.Renewalbb. %Increase/(Savings)vs.Renewalcc. TotalMaximumExposuredd. Increase/(Savings)vs.Renewalee. %Increase/(Savings)vs.Renewal N/A N/A -6.48% -6.48%

N/A

N/A

N/A

$764,916

-3.27%

$516,267

8.13%

$516,267

N/A N/A ($248,649) ($248,649)

N/A N/A ($865,404) ($515,088)

$3,073,188 $3,838,104 $3,589,455 $3,589,455N/A N/A -22.55% -13.42%

$3,323,017$249,829

$3,589,455

16.80%

N/A N/A $2,972,700 $3,323,017

N/A 24.89% 16.80%

$2,972,700

$3,073,188 $3,838,104 $3,589,455

N/A

$505,680

$2,817,337$2,817,337$3,083,775

N/A ($100,488)

$3,073,188 $3,838,104 $505,680

N/A N/A $2,467,020$2,458,550 $3,147,246 $2,467,020

N/A N/A $3,083,775N/A N/A

Self-Funded(MatureBudget)

BCBSABCCompany

12/12$100,000125%

196

$0$0

$176,400$329,280

$0

Current Renewal-FullyInsured(+24.89%) Renewal-Self-Funded(Immature)

BCBS BCBS BCBSN/A N/A ABCCompanyN/A N/A 12/12

$100,000(PoolingPoint) $175,000(PoolingPoint) $100,000N/A N/A 125%

$0 $0 $176,400

196 196 196

$3,073,188 $3,838,104 $0$0 $0 $0

$0 $0 $329,280$0 $0 $0

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Long Term Budgeting

Year1 Year2 Year3 Year4 Year5

IllustrativeBudget $3,323,077 $3,522,462 $3,733,809 $3,957,838 $4,195,308ActualClaims(Illustrative) $2,972,700 $3,507,786 $3,577,942 $4,221,971 $4,095,312

Reserve $350,377 $365,053 $520,920 $256,787 $356,783

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Mitigating Cost over Time

Year1 Year2 Year3 Year4 Year5ILLUSTRATIVENEWBUDGET@3% $3,323,077 $3,439,385 $3,542,566 $3,648,843 $3,758,309Projectedw/CostContainment $2,972,700 $3,418,605 $3,384,419 $3,892,082 $3,658,557

Reserve $350,377 $371,157 $529,304 $286,065 $385,817

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Prescription Drug Solutions1. As prescription drug costs continue to rise, it is important for employers to

understand the trends behind prescription drug costs and what they can do to better manage their prescription drug expenses.

i. Prescription drug spending in the United States increased over 14% in 2015.ii. This increase is due to a number of factors—a major one being a 31% increase in

spending on specialty medications.

2. The Graham Company provides a thorough analysis of your prescription drug program, with the goal of identifying ways to reduce your prescription drug costs each year. This analysis includes:

i. Pharmacy Benefit Manager (PBM) Contract Review ii. Employee Drug Adherence Reviewiii. Drug Mixing & Employee Engagementiv. Rx Price Transparency

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Prescription Drug Solutions – PBM Contract Review

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Prescription Drug Solutions – Employee Drug Adherence

1. With health insurance costs continuing to rise, so do prescription drug copays. Further, with the growth of high-deductible health plans, many employer-sponsored insurance programs no longer offer prescription copays. This can potentially lead to employees not being able to afford their maintenance medications, and not adhering to what they’ve been prescribed.

a. If medications are not being taken, a large medical claim could occur. 2. One solution we offer provides employees with an affordable and convenient

option for meeting their prescription needs, and can help maximize savings through the use of fixed-priced, high-quality generic medications.

3. Companies are providing free access to needed prescription medications to treat ongoing conditions to employees. By offering free generic maintenance medications, companies have been able to reduce both plan and member Rx costs, as well as better manage population medical risk (by way of improved member prescription compliance/adherence and thereby less emergency room and hospital visits).

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Prescription Drug Solutions – Drug Mix, Employee Engagement & Price Transparency 1. We provide our clients with the technology to engage their members to

make better decisions with their prescription medicine.

2. We also examine your prescription drug claims, and provide a cost savings analysis. These cost savings can be achieved through greater employee engagement, and drug switching, where available.

AnalyzeClaims

EngagePopulation

MeasureSavings

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Data Analytics• Progressive employers are using data to effectively manage human capital risk and costs. We empower

our clients to make data-driven decisions by integrating and analyzing their benefits and risk program data.

• We replace manual, static reports with a dynamic, web-based analytics environment. With frequent data feeds, we deliver timely, actionable insights you can use to make strategic decisions.

• We work with you to create a customized strategy that meets your objectives. You receive product specific (medical, pharmacy, workers’ compensation, etc.) dashboards, reports, and key performance indicator metrics. We help you mine the data to investigate why issues are occurring. Get answers to your questions quickly, not in weeks.

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Questions?

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Thank You

Dan Jordon Vice President, Employee Benefits Consultant

(215) [email protected]

protecting your bottom line in three steps · gimme three steps 1. ... losses comprise the largest...

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