whirlpool corporation healthworks -...

WHIRLPOOL CORPORATION HEALTHWORKS

Managing Health Care Costs and Creating a Culture of Health

BHCG Behavioral Economics EventEd Mohr, Vice President Total Rewards and Recognition

September 21, 2011

2

AGENDA

i. Whirlpool Background and Overview

ii. Health Benefit History

iii. Planning to Impact Trend

iv. Laying the Foundations for Change and Improvement

v. Incorporating Health and Wellness

vi. Engagement-Focused Incentive Structure

vii. Impactful Results

viii. Lessons Learned

ix. Looking Forward

x. Q&A

3

World’s #1 Major Appliance Company

$18+ Billion In Revenue

Products Sold In More Than 130 Countries

67,000 Employees World-wide

4

Every home … Everywhere …

5

Six Eras In Our 100 Years

• Manufacturing• One Product• One Customer

1911-1948 1948-1970 1970-1980 1980-1990 1990-2000 2000-now

• Product expansion tofull-Line

• WhirlpoolBrand

• U.S. tradeexpansion

• GlobalizationEuropeLatin AmericaAsia

• Multi-Brand:KenmoreWhirlpoolKitchenAidRoper/Estate

#1 U.S. #1 N. America #1 Globally

• Brand-Focused Value Creation

• Innovation• Maytag

At The Core Of Whirlpool Corporation’s Success …

6

…Our Employees

Employee Wellbeing – A Priority At Whirlpool

7

July 25, 1917

“Dear Mrs. Hill,

This year we are starting a new system - which is the giving to our men, who have been with us a certain length of time, a vacation with pay.”

8

AGENDA









ix. Looking Forward

x. Q&A

9

Cost Focus Through The Years

1930’s 1970’s 2000’s

Health Care Benefits History

Pre-2004 :

• Traditional PPO designs with limited cost management opportunities?

• Numerous designs for union/non-union groups

CEO mandate: Get net company spend increase to 0%

10

AGENDA









ix. Looking Forward

x. Q&A

11

Planning To Impact TrendTrend Reduction Factors Illustrative

Starting with our current medical trend of 8%, we understood modifications to our plan design, contribution strategy could impact trend. Additional best practices could push that further

Plan Trend

Plan Trend

Plan Trend

Plan Trend

Consumerism

Consumerism

Consumerism

Consumerism

Incentive

Structure

Incentive

Structure

Health

Mangement

Health

Management

Health

Management

Cost-Shifting

(Plan Design &

Contributions)

Cost-Shifting

(Plan Design &

Contributions)

Cost-Shifting

(Plan Design &

Contributions)

Cost-Shifting

(Plan Design &

Contributions)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

No Interventions Shift Cost-Sharing Through Reduction

in Plan Design and/or Increased

Contributions

PLUS

Robust Health Management

Programs

PLUS

Incentive Plan that drives

engagement in meaningful

activities

PLUS

Focus on Consumerism

2009Pre-2004 2010 20112004 - 2008

12

Major changes in Ohio networks, plan design changes, and other projects forecasted to mitigate

healthcare cost trend of 9.5%. Current PEPYforecast indicates improvement over 2007.

Gross cost trend

Internal administrative

costs

Tobacco credit and incentive

changes

Ohio network change

Employee contribution

increase

Performance guarantees and

Rx formulary rebates

HRP, PPO, Rx plan changes

2007 plan change

carryover

High cost claims

negotiation

Other reductions, non-healthcare and retiree

$ T

housands

ACTIVE HEALTHCARE WATERFALL– 2008 COST TREND MITIGATION

$-

All other

-Incentive breakage $x.xxM

-Plan carryover

likely favorable

+$x

-All other

2Whirlpool Confidential

13

Gross cost

trend

Other costs 2008 plan

change

carryover

EE

contribution

Networks

and direct

contracting

Rx clinical

changes

Rx

coverage

changes

Medco drug

collaborative

fees

Dependent

eligibility

audits

United ASO

fees and

clinical

credits

All other

Welborn

HCC

EAP

Medicare

COB

LTD clmnts

Retiree

dep.

$900

ACTIVE HEALTHCARE WATERFALL – 2009 COST TREND MITIGATION $ T

ho

usan

ds

$-

3Whirlpool Confidential

14

AGENDA









ix. Looking Forward

x. Q&A

15

Laying The Foundations For Change And Improvement2004 was a catalyst year for aggressive change in employee benefits

• Implemented CDHP options

• Increased tobacco surcharge to $500

2006 Maytag merged into the Whirlpool Corporation

• Maytag costs were slightly lower than existing Whirlpool Corporation

• Maytag designs were traditional PPO-based with BCBS Iowa

2007 conducted a plan design evolution

• Too rich a benefit offering to effect change among the population

• Began the creation of a robust health management offering

16

AGENDA









ix. Looking Forward

x. Q&A

17

21

Significant Investment For Employee HealthImplementation of a wide range of health improvement programs with multi-modal

delivery to engage participants at all risk levels

Whirlpool Healthworks

Condition Management

Disease Management

Programs

Value-Based Benefits for

Diabetics

Nutrition and Fitness

Wellness Portal

Community Wellness Activities

Fitness Classes

Preventive Care

Vision

Wellness Exams

Biometric Screenings

Dental

Flu Shot

On-site Services

Lifestyle Management

Diabetes Management

Health Coaching

EAP

Pharmacists

Biometric Screenings

Family Services

FSA

Maternity Management

EAP

24 Hour Nurseline

Life Insurance

Health Improvement

Health Coaching

Health Assessment

Tobacco Cessation


Weight Management

AGENDA









ix. Looking Forward

x. Q&A

19

20

Incentive Structure Targeting Impact ActivitiesAnd Engagement

Rewards Plan

Level 1 Level 2

Higher Deductible Lower Deductible

60% Coinsurance 80% Coinsurance

High Out-of-Pocket Exposure

Modest Out-of-Pocket Exposure

5-Tier Rx Structure

I-account dollars available

Savings Plan

HDHP

Qualifying High Deductible

85% Coinsurance

Modest Out-of-Pocket Exposure

5-Tier Rx Structure

HSA Incentive dollars available

Incentive Structure Targeting Impact ActivitiesAnd Engagement In Rewards Plan

Entry Criteria

Health Risk Assessment

Complete 4 Activities (min. 1 / quarter) to Maintain Level 2 Rewards Plan Status

• Health Assessment• Wellness Exam• Disease Management Program• Lifestyle Management Program• Case Management• Onsite Health Coaching• Maternity Management• Biometric Screening • Mammogram• Prostate-Specific Antigen (PSA) blood test or DRW• Colonoscopy• LifeDirections (EAP)• Dental Cleaning• Routine Vision Exam

21

22

Incentive Structure Targeting Impact ActivitiesAnd Engagement I-account Funding

Rewards Plan I-account Activities

$200

Disease Management


$100

Health Assessment

Wellness exam

Case Management

Onsite Health Coaching

$50

Biometric Screening

Mammogram

PSA blood Test or DRE

Colonoscopy

LifeDirections (EAP)

Dental Cleaning

Routine Vision Exam

$25

Community Wellness Activity

On-site Wellness Activity

Flu Shot

Fitness Program

Weigh loss program

Sports Team

Savings Plan I-account Activities

$250

Health Assessment

Wellness exam

Case Management

Onsite Health Coaching

Disease Management


$100

Biometric Screening

Mammogram

PSA blood Test or DRE

Colonoscopy

LifeDirections (EAP)

Dental Cleaning

Routine Vision Exam

$50

Community Wellness Activity

On-site Wellness Activity

Flu Shot

Fitness Program

Weigh loss program

Sports Team

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Year 1 Participation

Consumerism/Behavior Change Programs

79%

25% 27%

5%2%

63%

Health

Assessment 2010

Biometric

Screening

Lifestyle

Management

Program

Onsite Health

Coaching

Flu Shot Weight Loss

Program

Activity

Perc

en

t C

om

ple

ted

= Estimated Participation

Year 1 Participation

Population Health Programs

66%

28%

3%

57%61%

15%

73%

42%51%

17%

1% 4%

39%

4%

Case M

an

Disea

se M

an Prg

Comm

unity

Wel

lnes

s

Dental

Mam

mog

ram

Ons

ite W

elln

ess

PSA/DRE

Sports

Tea

m

Vision

Exa

m

Welln

ess

Exam

Colono

scopy

EAP

Fitnes

s Act

ivity

Mat

ernity

Man

Activity

Resu

lt

= Estimated Participation

24

AGENDA









ix. Looking Forward

x. Q&A

25

Impactful Results

Compliance Rates and Benchmark Analysis (analysis by Thompson Reuters)

• Breast and colon cancer screening rates improved between 2009 and 2010 by

4 percentage points and 6 percentage points respectively

• Diabetic quality rates improved by 10 percentage points for HbA1c and lipid

tests year-over-year and 3 percentage points for micro albumin test rates

• For the cardiac drugs evaluated, 2010 had higher compliance rates by at least

6% as compared to 2009 with the exception of angiotensin II blockers

• 2010 cardiac drug rates were also above benchmark for the majority of drugs

26

Impactful Results

Value-Based Design for Diabetics (analysis by Thompson Reuters)

Compliance rates for diabetes increased between 2009 and 2010

• Office visits for diabetic patients declined by 5% however, diabetic

education visits increased significantly (368%)

• Diabetic medications also experienced at least a 6% increase in tier 0 drugs

as a proportion of total days supply year-over-year

• Medication compliance for ACE inhibitors and hyperlipidemics experienced

a 6 percentage point and 7 percentage point increase from 2009 to 2010

27

Impactful Results

Reward Plan Incentives and Participation (analysis by Thompson Reuters)

For reward plan members 94% had at least one completed incentive activity for

2010

• The largest portion of activities by volume (25%) were for Health

Assessment completion

• Routine exams for dental, wellness, and vision along with biometrics were

also among top volume activities

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Impactful Results Trend

$0

$2,000

$4,000

$6,000

$8,000

$10,000

2007 2008 2009 2010 2011 (Est)

PEPY Gross PEPY Net Linear (PEPY Gross) Linear (PEPY Net)

Results demonstrate our commitment to each element of our strategic plan

• Plan design and contribution is foundational to engaging employees

• Robust Health Management Programs assist in driving behavior change and increased consumerism

• Continuous improvement with strong measurement capabilities is critical

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AGENDA









ix. Looking Forward

x. Q&A

30

Lessons Learned

Don’t be afraid of being aggressive in making changes

• Do socialize with senior leaders, HR and operations management staff –

and not just once a year

• May mean re-communicating multiple times as people learn at different

rates

Vendor partnership and accountability are essential

• Discounts matter, but support for strategic initiatives matter more

• Don’t be afraid to change if you aren’t getting what you need – but be

clear on what those needs are

Your Benefits / HR team will be challenged, engaged and tired!

31

AGENDA









ix. Looking Forward

x. Q&A

32

Looking ForwardFocus on Consumer Education

• Importance of health to the participant and Whirlpool

• Strengthen long-term health focus including ties to retirement well-being (health and wealth)

• Implement “Concierge Center of Excellence” approach for radiology

Company Culture of Health

• Reiterate basic messages to enhance understanding of plans and desired objectives

• Enhanced communications and continued dedication to wellness programs

Moving our Population to Action

• Outcomes-based incentive structure

• Base contribution level on maintaining or improving biometric scores33

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AGENDA









ix. Looking Forward

x. Q&A

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