Cooperative Health Overview

1. Cooperative Health Overview Managed by

2. Agenda • NJPA Overview • Benovate Overview • What is happening? Why? (trend) • The Cooperative Health Program • Creating the Savings with Competitive Bidding • The Impact on our Clients

3. Who is NJPA? • National Joint Powers Alliance • Cooperative Purchasing • Government Agency • National Solutions under Contract • NJPA Cooperative Health Program

4. Who is Benovate? • NJPA Cooperative Health Program Manager • Develop Low Risk “Health” Pools • Health Management • Risk Management • Cost Containment

5. Benovate solutions to control costs • Utilize Predictive Modeling for Health Engagement • Health Assessments & Screenings • Focus on Sleep, Stress, Lifestyle, Disease Prevention • Health Coaching & Advocacy • Health Technology & Web Based Solutions • Custom Wellness & Care Plans • Health Rewards Platform • Employer Outreach & Hospital Integration

6. Why? Healthcare Trends Average Annual Premiums for Single and Family Coverage, 1999-2013

7. Why? Healthcare Trends Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999-2013

8. NJPA Conclusions • Traditional Consumer Driven Plans Weren't Working • Network Model was antiquated. • Employers could benefit enough to want to extend healthcare into the workplace. • Employees needed better more convenient access to care and care coordination • Traditional care model assumes one size fits all • Traditional wellness was only a piece of the puzzle • The Problem is “Trend”, no end in sight without a different model

9. Changing the Game: Gaining Control of Risk Create Neutral Risk, Lower Future Exposure • Non-Profits • Higher Education • School Districts • Municipalities Health Management Required

10. Cooperative Health: Creating a Health Rewards Pool 2015 (From Soft Quote) 2014 2015 2014 20% Avg: 12.8% Avg: 5% 15% 30% 15% VS. 15% 15% 43%* 45% 50% Current Fully Insured or Self Funded Benovate Partially Self Funded Option

11. Cooperative Health: Creating a Health Rewards Pool Goal Loss Ratio: < 25% Long Term Premium Control * Leverage Improved Claims Experience for Lower Premium 15% 15% 15% 15% 43%* 45% Benovate Partially Self Funded Option

12. Creating a Health Rewards Pool Returning your MoneyAchieving the Goal of 25% Less then Underwritten

13. Reinvesting in Health Sample Group 90 Lives (Bronze Plan: Employer 60% Payment) • Max Premium: $400,000 • Goal Loss Ratio: $300,000 • Available Incentive: $100,000 • Total 2014 Claims: $320,000 Employer Use of Funds Sample • Fund Incentives Programs • Offset Health Management Expenses • Allocate % to Captive • Reduce Premiums Next Year Employee Use of Funds Sample • Fund FSA/HSA/HRA • Health Rewards • Health Bonus • Voluntary Benefits

14. Goal: Health Rewards Captive

15. Health Rewards Program Benefits Better Health • Safer Work Environment • More Productive Employees • Increased Awareness • Lower Presenteeism, Absenteeism Managed Risk Lower Costs Lower Cost Structures Efficient Administration Transparency Prevention Focus vs Treatment Lifestyle Change • Max Risk is Total Premium • Aggregate Risk Policy for Claims Over Premium • Specific Loss Policy Per Person • ACA Compliant

16. Controlling Health Care Costs The Health Care Cost Equation

17. Healthcare Cost Equation Healthcare Services Costs (Costs) Multiplied by (x) Healthcare Services Utilization (Utilization) (=‘s) Equals Total Healthcare Costs

18. 4 Strategies To Control Costs Gain Control of the Cost Structures • Predict Disease • Predict “Un-health” • Create Transparent Cost Structures • Review & Audit (before you pay)

19. #1 Control Costs: Create a Pre-disease ModelAvg Cost of Heart Attack; $67,000, Avg Cost to Prevent, $3,700 Cost • Predictive Health Modeling determines risk by condition and lifestyle. • Drives “appropriate” Utilization.

20. #2: Determining Health Risk • Health Risk Assessment • Stress Risk Assessment • Behavior & Lifestyle Data • Biometric Data

21. #3: Transparent Cost Structures • Transparent Pharmacy Benefit Management • “Cost Plus” and “Reference Based Billing” • Insurance Captive, Claims Data & Management • True “3rd party” Third Party Administration

22. Transparent Pharmacy • 500 Employee Company: Re-priced • Pharmacy Represented 22% of the total plan cost • Spread elimination: $119,426 of $741,000, 16% • Rebate Reduction Estimate: $8,000, 1% • Therapeutic Substitution: $14,076, 1.8% • Total Savings: $141,502; 19% Total Savings • Typical Charge Master • Network Discount, 30-70% off of what? • Medicare plus 150%-400% • Cost Plus Medicare plus 54% • Reference Based Pricing, Medicare plus 100-150% “Cost Plus” or “Referenced Based Billing”

23. Level Funded, Unbundled Self Funded, to Captive Benefits • No Risk Contribution • Like Minded Employers • Control Costs Today • Manage Trend in the Future Benefits • Lower Cost • Increased Transparency • Reporting and Cost Control “3rd Party”, Third Party Administrator

24. Strategy #4: Medical Bill Review Alabama Union Group • 100% of all OON claims reviewed had adjustment • $376,196 in savings adjustments • Average claim reviewed $22,935 • $10,449 average savings per claim Arkansas Company (small group) • 100% of all claims (17) had adjustments • $311,000 in savings adjustments • Average claim adjusted $37,423 • $18,297 average savings per claim

25. 4 Strategies to Control of Utilization • Align your “group utilization” • Eliminate “One Size Fits All” Health Management • Data Driven Plan Design, Cost Focused Consumerism • Drive Appropriate Utilization, Incent Care Plan Execution, and True Lifestyle Change

26. #1 Group Utilization Summarized • The Kitchen Table • Plan Cost • Deductible • Co-Pay • Rx Costs • “The Value” • The Plan vs No Plan • My Plan vs My Spouses Plan • Employer A vs Employer B

27. #2 Customized Intervention Avoiding One Size Fits All Marketing Message Across the Entire Population

28. #3 Standardize Plan DesignRate Step Correlation to Employee Plan Selection If I have healthcare needs, premium costs are irrelative. If I am healthy and young, I may look for alternatives. If I am single and young, I may just waive and pay the PPACA penalty.

29. #4 Driving Appropriate Utilization Wisdom of the Medical Home • Primary Care Physician Relationship works well • Patients rate relationship and respect highly • Biggest factor in deciding whether or not to participate • Higher rates of preventative care delivered • National best practice control of targeted chronic diseases

30. Determining Risk Standard Biometric Panel Stress, Sleep, & Lifestyle • Health Risk Assessment • Stress Risk Assessment • Behavior & Lifestyle Data • Biometric Data

31. The “Big Four” Mental and Nervous System, Metabolic, Cancers and Musculoskeletal

32. Control Costs: Stratify RiskAggregate Disease Risk Report

33. One Size Does Not Fit All There must be an understanding where the costs really are…and where they are going

34. Conditions & Lifestyles Mapped

35. Cost of Care: Revenue & Expense Modeling by Condition, Network Alternative

36. Health & Lifestyle Coaching Physical Health Relationships Career/Growth Finance Physical, financial, relationship & personal development health Individualized Coaching Employee and Family Stress Management Improved Health Assistance Navigating Disease

37. Access to Assessments & Data • Personal Health DesktopThe Personal Health Desktop (PHD) is a secure, online HIPAA-compliant web portal accessible from any Internet-connected device. This system provides participants secure access to features including: • Medical history/lab results • Health Risk Assessments • Personal Health Assessment reports • Risk Resolutions guidelines • Medical library • Health Counts rewards program

38. Provider & Community Engagement • Earning Points, Rewards, or Dollars for Care Plan Engagement • Improved Health • And… True Lifestyle Change

39. Goal: Data Driven Consumerism Benovate’s “Your Data” Approach • Give the consumer the data and tools • Incent Participation • Provide Coordination

40. Summary: Tying it All Together Employer Strategy & Savings Continuum Hospital - Provider Relationship Strategies Wellness Strategies Plan Design Options (HDHP) Alternative Funding Plans Risk Pool Management 7% - 10% 4% - 8% 5% - 6% 5% - 7% 2% - 3% Employee cost- shift to target Plan Utilization Fixed Costs, Plan Flexibility & Reinsurance Plan Design, Contribution & Population Alignment Population Health Management & Improvement On-site Medical Clinics Narrow Physician Networks Hospital Cost Plus Contracts

41. Phased Deployment of Solutions Our process is built upon five very important steps to improving health and decreasing cost

42. Measureable Outcomes

43. Per Participant Risk Burden Trend

44. Connectivity

45. Considerations for Engagement Request and analyze your data Target areas for improvement Phased Approach; Manage then Engage in Health Community Initiative: Affiliate

46. Thank you!