Phoebe Putney Health System decreased its year-over-year spend by 15.3% while also lowering healthcare costs that its employees paid by analysis, automation, incentives and a proactive wellness approach.
The not-for-profit network of hospitals, clinics and medical laboratories that services 500,000 Georgia residents in 35 counties transformed its wellness program while saving $10.7 million and decreasing employee risk by 27%, according to a third-party independent analysis presented at this year’s Employee Benefit News Benefits Forum & Expo in Boca Raton, Fla.
With the help of Provectus Health Strategies, a Georgia-based corporate wellness strategy company, the health system restructured its per-member per-month model. Phoebe’s model, which was reflective of a traditional PMPM wellness plan, had employees with high-cost chronic conditions spending the least money, while the healthy base of employees paid the most money.
“The PMPM model is not going to solve the problem here,” said Patrick Cooper, CEO of Provectus Health Strategies. “We need something different, we need to leverage the data to reach the goals we want to reach.”
With what Cooper called a “proactive wellness approach,” the company began investing based on need of services, and in low-cost awareness programs, such as biometric screening benchmark, education and employer commitment communications, that were enforced across the company to maintain the conditions of healthy employees.
Phoebe also began to spend money on certified coaches to help “compromised employees,” such as those with managed medical conditions, make a lifestyle change. Those employees spent 30 minutes each month working on exercise and diet and also had access to wellness coaches.
Employees with chronic conditions then received expensive nursing services, discounted prescriptions, free testing supplies and medical devices, along with the services provided to “compromised” employees.
“Where the big spend is [employees with chronic conditions], that’s where we need to be putting our dollars,” said Cooper. “If we want a big return, we need to do big investment.”
Under the new model, which included incentives such as premium credits, HRA and HSA dollars, health supplies and exercise dollars, Phoebe reported a change in employee engagement. The shift in wellness for its 4,500 employees also moved the needle financially. The company went from spending $12,286 per member per year in 2013 to $8,651 in 2016, a 15.3% decrease.
Data chose the direction
The tactical approach to population health informed the strategy in the following years, according to Phoebe. Biometric screenings helped Phoebe determine their employees’ risks, which in turn helped them focus on prevention. The claims data helped Phoebe determine the cost, while the savings guided the potential for greater margins.
The company was able to break down the needs of its employee base from the initial assessment, review the industry for what works and what doesn’t, and create a plan that focused on curbing healthcare spend, said Will Peterson, AVP of human resources at Phoebe Putney Health System.
Provectus worked with Phoebe and its vendors, carriers and employees to automate the data flows for real-time analysis regarding eligibility, claims, biometric values, wearable device data, diagnosis and compliance, medical device and supply order and billing details, among other categories. The automation also helped improve accountability within the organization, according to Phoebe.
Although the health system has seen significant improvement — blood sugar, cholesterol, blood pressure, BMI, participation and risk score has held constant or decreased for between 78% and 92% of the population — employees initially had consternation. However, widespread adaption occurred when employees saw the program was permanent and it continued to offer personalization, Peterson said.
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