03/27/06 - Carpenters Care March Newsletter

Volume 21, Number 1 - March 2006 A/R

In This Issue

• New Trends in the Healthcare Marketplace
• Profile of the Carpenters Health and Security Plan Population
• Strategic Initiatives for Improving Healthcare
• Mayo Clinic Expertise for Carpenters and Their Families

Improving Healthcare for Carpenter Families
A Message From the Board of Trustees

This edition of the Carpenters Care Newsletter introduces the Carpenters Health and Security Plan’s new Wellness Program – an important healthcare initiative designed to provide useful resources to improve the health and lives of carpenters and their families.

The first article in this newsletter “New Trends in the Healthcare Marketplace” describes certain healthcare trends that make a wellness program an important component of our healthcare plan. The second article “Profile of the Carpenters Health and Security Plan Population” describes how healthcare dollars are spent by this plan and why a wellness program will be beneficial. The third article“Strategic Initiatives for Improving Healthcare” describes two new healthcare initiatives the plan will take in 2006. The first is a comprehensive wellness program that includes important and easily accessible resources from Mayo Clinic. Disease management is the second initiative. More on disease management later in the year. The last article provides an overview of the healthcare and wellness resources that will be provided by the plan and Mayo Clinic. The Mayo Clinic Guide to Self-Care will be arriving by mail shortly. Ask Mayo Clinic, a 24-hour nurse line, will be available to you and your family some time in April. Mayo Clinic HealthQuest Newsletter, a monthly wellness newsletter, will be mailed to your home beginning in July. Other Mayo Clinic resources will be announced and available later in the year. Wellness is an important step for the Carpenters Health and Security Plan. It also represents an important shift in plan culture. We hope all of you will take full advantage of these important resources in the months and years to come.

New Trends in the Healthcare Marketplace

Today’s healthcare marketplace may be characterized as a study in dissatisfaction. Patients and consumers are dissatisfied with spiraling costs. Providers are under pressure from third-party payers and consumers alike to hold the line on costs. New prescription drugs and hi-tech medical innovations continue to increase healthcare spending. Cost pressures are expected to continue for the foreseeable future. The physician community has reacted to an increase in malpractice lawsuits in some cases by practicing defensive medicine, doing additional diagnostic work of questionable value. Also, physicians have reacted negatively to the interference by large insurance carriers and managed-care organizations in their practice patterns. Physicians have complained about the inordinate amount of time spent dealing with paperwork at the expense of time spent with patients.

Similarly, hospitals complain that they are underpaid by Medicare and Medicaid and in many urban settings, significant amounts of care are provided for which the hospitals are never paid. In order to attract the best practicing physicians, hospitals find themselves in competition with each other to acquire the latest and sometimes the most expensive new diagnostic and surgical equipment. As hospitals and clinics seek a return on their technology investments, there is increased pressure on physicians to order expensive imaging and diagnostic work.

Carpenters and their families also have a stake in the healthcare economy. As you know, wage increases over the past several years have been consumed by increased healthcare costs. The chart above shows how your hourly contribution rates for the Carpenters Health and Security Plan have increased over the last several years. The overall increase from 2000-2006 has been approximately 230%.

The Carpenters Health and Security Plan provides a variety of benefits, including medical, dental, routine vision, time loss, medical expenditures, including prescription drugs, account for nearly 75% of the total healthcare dollar. The Board of Trustees expects that these medical costs will continue to escalate.

Many people believe that the American healthcare system is the best in the world. There is ample evidence that, in many instances, this is true. However, several recent studies focusing on cost and quality issues have shed new light on the healthcare system’s ability to deliver quality care. Medicare, for example, recently compared patient outcomes in a high-cost Medicare marketplace with outcomes for similarly situated Medicare beneficiaries in a lower-cost marketplace and found that there was no change in the quality of care between the high and lower-cost delivery systems. So higher costs alone do not guarantee higher quality.

A recent study published in the New England Journal of Medicine points quite clearly to problems with quality across the nation. The study looked at the medical records for thousands of adults across 30 acute and chronic conditions, as well as preventive care, in 12 major cities. The resulting evaluation of over 400 indicators of quality of care showed that only 54.9% of participants in this study received the recommended care for their specific medical condition. Recommended care means evidence-based care; that is, treatments and practices that have been proven to deliver the best medical results. While most people have confidence in their physicians, the quality of care concern is not in dispute.

Another study by the Midwest Business Group on Health found that approximately 30% of total healthcare spending is unnecessary, as a result of poor quality of care. Poor quality, in this study, is defined as overuse, under use, and misuse of healthcare resources. This second study goes on to make several recommendations for improving quality in the system.

It recommends that purchasers and providers alike become more focused on value-based measures of healthcare. There is widespread agreement that higher quality care results in a long-term lower cost. The correct treatment and medication at the appropriate time is the key to long-term cost management.

The Carpenters Health and Security Plan, over the next couple of years, will be introducing to you a variety of tools and services designed to improve the quality of care that you and your family receive. Increasing the quality, and therefore, the value of health services purchased by the Carpenters Health and Security Plan is an important part of maintaining plan benefits for the long term.

Profile of the Carpenters Health and Security Plan Population

The Carpenters Health and Security Plan is self-insured. This means that the risk of a serious medical episode is spread across a large number of individuals. In this plan, carpenters, spouses and dependent children total around 20,000 lives. While a few families may have extremely high medical expenses in a given year, many families will have only routine or preventive care. For example, in a recent plan year, just 3% of covered families accounted for 33% of the plan’s total costs. Similarly, 20% of the plan’s families accounted for 75% of the plan’s total costs. As the Board of Trustees reviewed strategies for managing costs going forward, particularly in the higher health risk categories, it needed more specific information about plan spending. To do this, the Board requested a research project to build a profile of the health of Carpenters Health and Security Plan members.

The study looked at the recent claims history of our plan population. It looked at diagnostic information, which medical procedures and treatments were performed, and which prescription drug medications were administered. The study first separated the population among healthy individuals, individuals with acute only conditions, and individuals with chronic conditions. Acute care refers to the occasional injury or illness for which there is a cure or healing process, typically a onetime event. Chronic conditions refer to those diseases or health states which are ongoing, such as diabetes, asthma, or heart disease. Often individuals with chronic conditions may have one or more chronic diseases coexisting. After categorizing individuals into healthy, acute only, and chronic categories, the study looked at the plan’s expenditures for these categories. These are shown in the chart below.

As you can see from this chart, about 28% of the plan population were categorized as healthy, meaning they only had preventive care and no acute care during the study period. This group accounted for only one-half percent of the plan’s healthcare costs in the study period. Over 47% of individuals in the plan during the measurement year received some treatment for an acute condition. However, this group accounted for less than 25% of the plan’s total cost. Approximately 25% of the plan’s participants (carpenters and dependents) received care for chronic conditions and expenditures for these individuals accounted for about 75% of total medical expenses.

The study goes on to focus on chronic conditions more closely and further categorizes the state of chronic disease within the population.

As you might be guessing, the majority of the plan’s expenses for its chronically ill members are generated for those with a progressively deteriorating condition or a life defining disease state. Therefore, as the Board of Trustees considered strategies for improving the quality of care and for addressing the long-term cost of care, it became apparent that multiple strategies would be required. With appropriate care and medication, individuals who have self-manageable or clinically-controllable chronic conditions can manage those conditions successfully. The objective for these individuals is to avoid further deterioration of their health status by providing better tools to manage their chronic conditions. The strategy to help people in these higher risk categories with more serious chronic conditions is to help them be certain they are getting evidence-based medicine, also known as clinical best practice.

Some conclusions can be drawn from this type of study. First, because of the high costs involved, making even modest improvements in the health status of the chronically ill will have benefits for the entire plan. Second, no single strategy is optimal for dealing with chronic illnesses across the board. As the plan begins initiatives to address chronic disease and health status, the Trustees will periodically update the plan’s profile to measure the progress of individuals with chronic diseases.

Strategic Initiatives for Improving Healthcare

As you know from the first two articles in this newsletter, concerns abound regarding the quality of healthcare and the ability of individuals to manage chronic diseases. It’s a challenge for individuals and families to navigate the complexities of the healthcare system, let alone finding assurances that they receive appropriate care along the way. So there’s a need for good information about health and disease, and resources to deal with the complexities of the healthcare system.

Throughout its history, the Carpenters Health and Security Trust has operated primarily as a claims payer. Trust activity was focused on reimbursing plan member medical expenses and counseling members about their plan benefits and how they work. To deal effectively with the challenges posed by quality of care issues and managing chronic disease, the plan will need to provide ways to transmit information to plan members and help them with their conditions.

A successful strategy for doing these things needs to be voluntary in nature, provide individual support in a manner that protects privacy, and finally, it needs to be cost effective. Plan resources used for improving the quality of care and helping individuals manage chronic disease need to be measured against the success of these programs in stablizing or reducing costs over the long haul. An immediate return on investment from providing information and support is not expected; however, a long-term improvement in the overall health profile will provide a positive return on investment.

The plan’s strategic initiatives separate themselves into two broad categories. The first set of initiatives are wellness strategies. Wellness strategies are ways to provide people with accurate expert medical information about a specific condition or conditions. This includes information about prescription drugs and therapy alternatives. It also includes providing tools to improve overall health, including useful information about weight management, diet and nutrition, clinical stress factors, fitness, and prescription drugs. The focus of wellness strategy is to provide people with meaningful information as well as voluntary resources to manage medical conditions.

The second broad set of strategic initiatives is called disease management. Disease management programs offer a variety of ways in which individuals with higher risk health profiles and significant health issues can directly communicate with clinical experts who are knowledgeable about the health condition at hand. The focus of disease management is helping members with serious conditions effectively navigate the healthcare delivery system.

While the plan cannot dispense medical advice, it can bring you in contact with accurate and understandable information. While it cannot recommend a specific physician to you, it can give you information from medical specialists to help you improve the quality and content of your physician relationships.

You and your family, by way of hourly contributions to the plan, have a significant investment in its long-term success. The bargaining parties have added $.20 an hour to the Carpenters Health and Security Plan contributions effective June 1, 2006. They have also directed the Trustees to implement wellness and disease management intiatives in an effort to control plan costs. This further increases your financial stake and long-term interests in the outcomes of these initiatives.

Mayo Clinic Expertise for Carpenters and Their Families

The Board of Trustees of the Carpenters Health and Security Plan is pleased to provide carpenters and their families health resources from Mayo Clinic. Mayo Clinic is a not-forprofit, integrated practice of medicine that is over 100 years old. It integrates clinical practice with extensive research and education programs. Here is more information on these tools and resources from Mayo Clinic experts.

Mayo Clinic Guide to Self-Care
In April, you will be receiving this comprehensive medical reference book. It will help you answer common everyday health questions as well as identify health issues before they become more serious. It represents the collective knowledge of some 2,000 Mayo Clinic physicians and researchers in dozens of medical specialties.

Ask Mayo Clinic
Ask Mayo Clinic is a 24-hour nurse line. Ask Mayo Clinic nurses will help you determine appropriate levels of care and guide you to available health resources. The nurse line is staffed by experienced registered nurses who draw on the resources of Mayo Clinic. This is a multi-lingual service.

Mayo Clinic HealthQuest Newsletter
In July, you will begin receiving a monthly newsletter discussing current health topics. In addition to health and wellness information, watch for items specific to the Carpenters Health and Security Plan.

E-Health Program
Later this year, the Carpenters Health and Security Trust will roll out a Mayo Clinic website for your use. It will include healthcare information, decisionmaking programs, behavioral change content, and a health risk assessment tool. All of the materials on this site are developed and written by Mayo Clinic health experts. Carpenters Trusts are in the process of bringing up a multipurpose website for our benefit plans. Watch for more information this fall.

The Mayo Clinic Advisor lifestyle coaching Program
This is another telephonic resource to provide you with one-on-one counseling regarding weight problems, exercise issues, nutrition, and stress management. This will be offered as part of the Mayo Clinic Health Risk Assessment on Carpenters Trusts e-Health Program Website launching later this year.

The Board of Trustees looks forward to bringing you these resources from the health experts at Mayo Clinic. As a not-forprofit research based organization, and one of the most trusted names in health care, they represent a good strategic fit in undertaking wellness and health promotion initiatives.