towers perrin's health care 360 performance study - value for your organization

December 2008 - January 2009

© 2008 Towers Perrin

Towers Perrin’s Health Care 360 Performance Study

Value For Your Organization

2© 2008 Towers Perrin

In today’s challenging environment, employers must be able to actively engage their employees and manage overall health care costs. But effective management is impossible without the right information. By benchmarking your performance to other top companies, you can begin to gather data that will help you better focus and direct your efforts.


To succeed, companies must go beyond mere cost containment and implement a broader, more strategic approach to health care. Towers Perrin’s Health Care 360 Performance Study can help.

Metrics/Desired Outcomes

Financial Performance

Consumer Engagement

PopulationHealth

DesignDeliveryFinancial

ManagementChange

Management

Strategyand

Governance

Strategic Levers

The Health Care 360 framework and diagnostic help create integrated solutions and drive holistic results


Overall goal:A healthy organization with efficient benefit programs, acceptable

benefit costs and a productive, engaged workforce


Traditional benchmarks such as total costs by plan, total costs by industry, and employee contribution rates help your company pinpoint where plan design and vendor modifications may be warranted.


Medical cost benchmarks

Actual Cost Comparison

Database ABC

*Total costs represent an enrollment weighted average of all plan types.

Indemnity CDH HDH PPO POS HMO Total*

$8,987$7,956

$6,689

$9,088 $9,317$8,580 $8,807

Your actual costs are 5% above the benchmark in total.*Key Message

N/A N/A

$6,600

$9,319

N/A N/A

$9,277

Indemnity CDH HDH PPO POS HMO Total*


Medical cost benchmarks: Industry breakouts

$8,807 $8,929 $9,277

Total for All Plan Types

Database ABCManufacturing

Database Findings: Your Cost vs. Your Industry Cost

Your company has higher costs than your industry.Key Message


Medical cost benchmarks: Employee cost sharing

Database ABC

Total Program Employee Dependent*

*Dependent includes spouse, children, family, etc.

Employee Contributions as a Percentage of Total Cost: Database vs. Your Company

21%

15%

Employers are reviewing the difference in employer “subsidy” between employee and dependent coverage.

Key Message

19%

12%

24%

16%


Our approach actuarially adjusts your total cost benchmark to account for your company’s unique demographics, family size, geography and plan design richness — resulting in a benchmark that is analytically meaningful and actionable.

10


-3%

14%

2% 1%

13%

Medical cost benchmarks: Overall program efficiency

Overall program efficiency measures the performance of your total program against the overall database average. Overall efficiency results are a function of both the efficiency of each plan offered and the enrollment in each plan.

ABCAdjustment FactorsCustom

BenchmarkDatabase Actual

Age/ Gender

FamilySize

Geography Plan Value Composite

$9,980$9,277

Your total program is 7% more efficient than the database. This translates into a current savings of $1.6 million.

Key Message

$8,807

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By benchmarking nontraditional measures such as population health

and disability factors, we help you develop the comprehensive view needed to address a uniquely complex issue.

12


Population health benchmarks

Database Findings: Employee Predictive Profile (EPP)

EPP Health Status Score

4945

59 59

72

25th percentile

50th percentile

Average

75th percentile

ABC

Your population’s demographics suggest that the health of your population is below average.

Key Message

13


Population health benchmarks

Database Findings: Short-Term Disability and Workers Compensation Measures

WC Incidence/100 EEsSTD Incidence/100 EEs

STD incidence is above average. WC incidence is above average.

Key Message

8.04

3.10

5.40

6.40

8.20

25th percentile

50th percentile

Average 75th percentile

ABC

9.16

2.30

5.806.30

10.80

25th percentile

50th percentile

Average 75th percentile

ABC

14


Towers Perrin’s Health Care 360 Performance Study provides a foundation that allows you to coordinate actions and drive meaningful results.

We’ve worked with many companies to deliver quantifiable value in this area. We welcome the opportunity to share our insights and perspectives with your company.

Visit www.towersperrin.com for more information.

towers perrin's health care 360 performance study - value for your organization

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