Consumer Driven Health Care
Employer Update February 2005
AcademyHealth National Health Policy Conference
February 2 – 3 2005
Who We Are
Medtronic is the world’s leading medical
technology company, providing life-long
solutions for people with chronic disease
Over $10 billion in annual sales
32,000 employees world-wide
Established in 1949 by Earl Bakken, inventor of
first external pacemaker
Driven by the Mission
Established consumer driven plan in 2001
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1999 – 2000
Development stages
Your gonna what???
The only people to sign up will be the young
and healthy!!
It won’t work!!
It is too complex for people to understand
Participant’s won’t use the tools!!
Health care is different..
And so on, and so on……….
Why Consumer Driven Health Care?
Desire to deliver health care to employee group through
an alternative delivery system that:
Changes employee behavior from receivers of health care to
informed consumers of health care
• Eliminate role of plan as gate keeper
• Enable/educate employees in their role of managing their own
health
• Strengthen relationship between patient and physician
Provides greater access to the right kind of information
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Internet based data base
Nurse and pharmacy hotlines
Outcome and quality information
Access to procedure and prescription price information
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Why Consumer Driven Health Care?
Appropriately aligns the financial elements of health care
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Investment in health, rather than cost of treatment
Provides choice of various levels of employee deductibles
Provides control over personal care account
Price information on medical services and prescription drugs
Personalized on-line statements that show total cost of health care of
employee and dependents
Includes broad range of tools/services such as:
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Access to over 60 centers of excellence
Nurse Line and Health Coach
Subimo
“Ask a Doc”
Is an integral part of Medtronic’s “Total Well-Being” initiatives
Medtronic Consumer Driven Health Plan
Health Coverage
Personal Care
Account (PCA)
90% - 10% Co-insurance
`
$1,000 Single
$1,500 EE + 1
$2,000 Family
Preventive Care
At
100%
(in network)
PCA pays first and
Applies to deductible
Low
$1,750
Medium
$2,750
High
$3,750
$2,625
$4,125
$5,625
$3,500
$5,500
$7,500
Choice of Deductible: Employee Choice
Then Co-insurance
In-Network 90% / Out-of-Network 80% to
A maximum based on the plan design
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Demographics and Enrollment 2001 - 2005
Participation
2001
2002
2003
2004
2005
1,300
2,200
3,100
4,000
4,500
84%
41%
29%
12.5%
13%
19%
21%
24%
% Change
Participation as % Elg’s
13%
Average Age
41
41
41
41
41
Avg # Members
2.60
2.72
2.68
2.67
2.68
Claims Analysis
Plan participants have illness burden higher
than traditional plans
Organ transplants
Cancer
Pre-mature births
Others
Significantly higher utilization of nurse line
resulting in fewer office calls
Higher utilization of generic prescriptions
Above is consistent from year-to-year
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Risk Adjusted Analysis
Conducted risk-adjusted analysis of claims (2001 and
2002 and again 2002 - 2003) to determine whether or not
CDHP was attracting higher risks (does the plan attract
participants with higher incidents of chronic disease?)
Analysis showed that CDHP risk was significantly
higher than traditional plans against which it was
compared (PPO/HMO)
Although risk in plan was higher, risk-adjusted cost
analysis showed no significant difference
(met objective of being cost neutral)
Results to Date
Cost Impact
Budgeted to be cost neutral
• Minnesota based employees slightly lower than expected
• Non-Minnesota employees slightly higher than expected
Expect to reduce health care costs over the long-term
Cost increase from 2001 – 2002 approximately 7%; 2002 to
2003 approximately 8%, and approximately 8% - 2004 over
2003
Personal Care Account Activity
Participants with a Rollover
2002: 59%
2003: 57%
2004: 52%
2005: 51%
PCA dollars rolled over
2002: 28%
2003: 20%
2004: 20%
2005: 34%
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Health Coaching
Participation Rates
Medtronic participation rate is 13.9%
Inbound calls
Outbound calls
9.4%
4.5%
Definity Book of business is 10.5%
Participation rate is approximately 3 times the
benchmark
Health Coaching
Top Ten Calls
Gastrointestinal
Dermatology
General health information
Musculoskeletal
ENT
Urology
Respiratory
Infectious disease
Ophthalmology
Back pain
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Other
Web Utilization
Employees utilization
Dependents utilization
58%
47%
Topics Accessed
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My account
Provider search
Health care pricing
Health care research
Generic drug substitution
Generic substitution rate has increased from 88% to 94%
Conclusions
Emphasize consumer driven health care as one of the
key components of health & wellness resources
Provide various methods of communications to
employees about their health plan options and the
mechanics of the consumer driven plan
Personal financial responsibility will increase
awareness of actual costs of services
Awareness can and will change behavior over time
Employees will try alternatives for health care delivery
No magic bullet – this is one of many solutions (will
consider HSA for 2006)
Do it for the right reasons!!
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