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Collaborative Saves Employers $11M in Healthcare Costs Over 3 Years

 |  By Margaret@example.com  
   September 21, 2011

Three years ago the Kansas City Collaborative began as a pilot program to help employers work with their health insurers to improve the health of their employees. Using value-based benefit design, employers identified health benefits and wellness programs with track records of delivering high quality, evidence-based, cost-effective care.

KC2, as it is known locally, recruited 15 employers with 400,000 employees to participate, including H&R Black, Sprint, the American Academy of Family Physicians and the City of Kansas City. The collaborative is led by the Mid-American Coalition on Health Care. The effort  is supported by the National Business Coalition on Health and Pfizer Inc.

The pilot program is winding down and so far KC2 companies have saved about $11 million in direct healthcare costs, according to the reports from nine employers representing 56,000 workers. The remaining employers will report their data at a later date.

Steps taken by employers to achieve the savings include:
  • 60% offered preventive care treatments that required no copayments
  • 60% waived copays for medication for employees enrolled in chronic disease management programs offered by their health plans
  • 50% charged lower employee insurance premiums for employees who completed a health risk assessment, received an annual physical, stopped smoking, or reduced their body weight by 5%
  • 30% implemented new benefit programs to help employees quit smoking
  • 100% of the employers added healthy cafeteria and vending machine options
  • 89% offered onsite fitness facilities or other options to help employees increase their level of physical activity

Melissa Campbell, benefits manager at American Century Investments, explained that KC2 empowered employers to analyze health and claims data and to refocus healthcare benefits to meet the particular needs of their employees.

Most of American Century's employees are in their mid-40s so the company wanted to create a suite of prevention services to "catch problems early and treat them cheaply," said Campbell The company was able to convince its health plan to remove the age barriers for preventive services such as mammograms and colonoscopies. "We believe it is up to our employees and their doctors to decide when they need a mammogram or colonoscopy."

She added that utilization of services has increased—63% of employees used preventive services in 2001. "Our employees know we want them to have a doctor, get their annual check-ups, and know their biometric numbers like blood pressure."

Data assessment includes more than 100 metrics such as blood pressure and cholesterol rates, explained Sara Poage, vice president for the Mid-America Coalition on Health Care. The goal is to find out where the costs really are. Obesity, for instance, wouldn't necessarily show up in claims data, but would become more obvious through a review of biometric data.

While there was some initial pushback from health plans in providing the data companies needed to implement value-based benefit design, those issues were eventually resolved. "Providing better information directly to employees, enables them to make better health decisions, resulting in better health overall," said Tony Sun, M.D., medical director for United Healthcare Heartland States.

Campbell said that over the course of the pilot her relationship changed with CIGNA, American Century's health insurer. "It became a very open relationship. Before the collaborative I just thought of them as a vendor who provided contract services. Now I see that they want to work with us. It's a real mindset change for me."

With a successful pilot behind them, all of the KC2 employers are expected to continue in the collaborative. The pilot focused on prevention and improving healthcare, next the employers want to tackle obesity and pre-diabetes conditions.

 

 

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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