Viking Range Uses Care Management Technology to Save on Health Costs
Feb 1, 2012
In November 2011, an employee at Greenwood, Mississippi-based kitchen appliance and cabinetry manufacturer Viking Range Corporation, who suffered from type-2 diabetes, began seeing disruptive fluctuations in her blood sugars, with readings often exceeding 300 milligrams per deciliter.
But thanks to Viking Range's employee wellness program, the employee was able to speak with a Registered Nurse Care Manager to gain more information about blood sugar regulations and healthy lifestyle tips that could be implemented in order to help achieve better controlled readings. Looking at the employee's diet, the Care Manager was able to recommend changes to her everyday life that. In conjunction with doctor-prescribed medication, this would help her gain a better understanding of— and more control over—her diabetes and blood sugars.
The estimated cost of a hospitalization related to uncontrolled blood sugars is $8,702—an ominous figure that Viking Range could have eventually seen in the final tally of its annual health plan costs, which seemed to increase ceaselessly.
Like most companies that provide health benefits to their employees, Viking Range wanted to find a way to stem the rise of its health plan costs. But unlike most companies, the firm was able to do so—achieving millions of dollars of savings in annual medical and pharmaceutical claims from 2009 to 2010.
With the implementation of a plan-governing strategy known as Healthcare Performance Management (HPM), Viking Range utilized predictive modeling to target and engage high-risk employees within its plan, and help them take preventative health measures through high-touch care management.
The HPM discipline— similar in principle to Enterprise Resource Planning (ERP) or Customer Relationship Management (CRM)—enables healthcare stakeholders to proactively manage their health plan spending, improve healthcare return on investment and empower employees to make more cost-effective healthcare decisions to achieve healthier lives.
From 2009 to 2010, the company reported that it saved $1.16 million on annual medical and pharmaceutical claims. Viking was able to substantially reduce its annual medical and pharmaceutical costs per employee and saw a 13 percent drop in the probability of high-cost medical and pharmaceutical claims and a 9 percent decline in hospital admissions.
Self-insured Viking Range, which has been named by the Mississippi Business Journal as one of the "Best Places to Work in Mississippi" every year since 2006, provides healthcare coverage— including medical, dental, vision and pharmaceutical benefits to approximately 800 employees and dependents. That translates to over 1,400 covered members.
Until recently, Viking, which in addition to manufacturing high-end kitchen appliances also includes operations in hospitality such as cooking schools, restaurants and a spa, covered all health premiums. That resulted in low deductibles and copays for employees, many of whom have been with the company for over nine years.
"It is such a differentiator to employees when a company has a rich benefits program, including its healthcare coverage. We've really taken pride in being able to offer that to our employees," says Beth Tackett, Director of Human Resources for Viking Range. "On the other hand, you can definitely see how that could be a drain on profitability."
Indeed, with year-after-year increases in healthcare costs, the company found it was unable to provide the same benefit coverage.
To combat rising health plan costs, Viking modified its benefit coverage and shifted some of the premium cost to employees. But this did little to impact costs and became an additional financial burden to employees.
"The adjustments we were making -- such as increasing deductibles by $100 -- had a minimal impact on offsetting costs . . . but they were having a huge impact on many employees," Tackett says.
Viking saw that the cost shift was only a short-term fix, which didn't address the root of the issue or improve health plan performance. Viking searched for an alternative solution.
In January 2010, Viking turned to WellNet Healthcare Group, a Bethesda, Maryland-based healthcare management company that specializes in managing health risk and increasing company operational effectiveness through increased productivity and lower healthcare costs.
WellNet analyzed Viking's historical claims data and placed its employees into varying "risk buckets" through unique predictive modeling that reported statistics on Viking Range's population. The analytic software compared Viking's plan data in real time against national risk statistics collected in the Johns Hopkins Bloomberg School of Public Health's Adjusted Clinical Groups database.
The reporting process found that there were 35 high-risk members and 292 medium-risk members within Viking Range's covered population. These two groups accounted for $1.6 million and $1.7 million in claims costs, respectively.
At-risk plan members were determined to be high-, medium- or low-risk based on the number of cumulative health conditions they had. The more conditions an employee had, the higher the risk of a catastrophic claim within the health plan.
The predictive modeler utilized 60 different areas of health to determine risk level, including conditions in cardiovascular, endocrine, musculoskeletal, malignancy, respiratory, skin or eye, hematologic, psychological, and neurologic areas. Predictive modeling tactics helped move the health plan from condition-screening to action on an employee-specific level.
In response to the findings, WellNet, Viking Range, and third party administrator Mutual Assurance Administrators, developed a wellness program based on the principles of Healthcare Performance Management that centered on the areas of risk identified in the modeler. The designed wellness program would target at-risk plan members based on what conditions were driving their elevated risk statuses and then take steps to address and improve those conditions via lifestyle changes, newly suggested questions to ask their doctors, or simple alterations in diet and exercise.
In addition to providing Viking's administrators with the software necessary to aggregate real-time claims data, WellNet helped the company understand the factors that were driving their health plan costs, including employee lifestyle decisions.
"WellNet delivered in-depth analysis of our healthcare plan without compromising our member's privacy. This allowed us to take actions, which were far more cost-effective than the conventional approaches. Care Managers began to engage with each of our high-risk members to monitor progress and ensure that our members were being complaint with their medications," Tackett explains.
Viking's wellness program includes employee access to a patient-centric health improvement portal where they can "chat" with a Registered Nurse Care Manager and see all of their health insurance information in one secure, HIPAA-compliant application. Included in the portal are applications where members can take health risk assessments (HRAs), review their prescriptions, view the status of their current claims, and keep track of plan-specific benefits and programs.
Dedicated Care Managers reach out to high- and medium-risk plan members, identified by the predictive modeler. Dedicated Care Managers are also engaging plan members in an active dialogue to discuss issues they may have or advise them on ways to better achieve their health goals: perhaps to lose weight, stop smoking, or find ways to adhere to doctors' orders.
One Viking Range employee identified as at-risk by the predictive modeler worked with a Care Manager to take better control of her high blood pressure (BP), which usually hovered around 130/80. In conjunction with the employee's doctor-prescribed medication, she worked with a Care Manager to outline dietary changes that would aid in lowering BP levels, such as cutting back on fried, processed, and high-sodium foods to limit sodium intake to 1500 milligrams per day. She was encouraged to eat more fruits and vegetables and increase water intake in place of soda.
Uncontrolled blood pressure can pose upwards of $5,051 per member in potential costs. By working with the employee, Viking avoided those potential costs.
While Viking was initially concerned with employee acceptance of the care management program, most employees appreciated receiving personal assistance with their health issues.
"We were concerned that employees might feel uncomfortable discussing sensitive issues because most people don't even have the opportunity to discuss their medical condition at length with their own doctor," Tackett says. "Typically, they're accustomed to seeing a doctor for a very brief time, getting a prescription, and then going straight to the pharmacy. It was heartening to get positive feedback from employees on their experiences with their Care Manager."
In an effort to reach more employees, Viking Range holds a health fair every year where Care Managers are available to answer any member questions regarding the wellness program, prescriptions, returned lab work, or any other health concerns.
The fairs, which have been extremely well received by Viking's employees, offer plan members a chance to complete onsite biometric screenings, such as blood checks, weigh-ins and blood pressure readings, and then immediately sit down with a Care Manager to ask any questions and discuss the results. Information on the cost-saving advantages of switching from brand-name to generic prescriptions, among other strategies, is also shared with employees.
"We have created a workplace that has a wellness mindset," Tackett says.
Since the wellness program's implementation, Care Managers have actively engaged 54 percent of Viking's high- and medium-risk employees. This above-industry average success stems from the use of highly-targeted campaigns with informative mailings and Care Manager outreach, on-going communication with employees, and incentives to encourage participation.
"We have the good fortune of being able to offer employee gift cards for use with our hospitality group. We have a fine dining restaurant, a spa, a cooking school as well as our Viking retail store. Employees who participate with their Care Manager receive a $75 gift card upon completion of their initial 90-day program,” says Tackett.
Even after receiving their gift cards, most employees continue to stay engaged with their Care Manager.
In addition to incentives, the program is greatly supported by Viking's senior executive leadership.
"Our founder and CEO, Fred Carl, Jr., is a real champion for us. He truly understands the value of the employees and what their contributions do for this company," says Tackett.
As a result of embracing an HPM strategy and wellness program, Viking Range is able to offer employees a more comprehensive range of health services at an affordable cost. The enhanced total benefit offering allows the firm to stay competitive with other manufacturing employers when it comes to attracting employees.
"It is a very good recruiting opportunity for us," Tackett says.
The HPM strategy has also had a positive effect on employee productivity. "There's no doubt that the employees who have participated in the process are more productive," says Tackett. With the company's reported average attendance rate at 99 percent, that additional productivity translates into significantly higher output.
Viking's pharmaceutical costs have increased due to increased adherence by employees to their prescriptions during the first year of implementation. But these costs have been more than counter-balanced by lower medical claims costs and a reduction in hospitalizations.
"We've now been able to see a dramatic difference in our ability to understand the factors that are driving our health plan costs," Tackett says.
Costs stabilized and eventually fell during the second year. "We're now seeing medical costs on a per member per month basis being reduced," says Tackett. "As we remain engaged and active with this approach, we expect healthcare costs to continue to decrease."
Viking has been pleased with the program's success over the past two years, but realizes that it is still in the early stages of being able to reap the long-term benefits associated with years of regular employee engagement. Continual and early evaluation of at-risk members will help to keep Viking Range abreast of possible future plan risks that can be addressed early on to keep plan costs lower than they've been in previous years.
"We want to be able to work with employees even more strategically. We intend to offer more education to them and really engage them," Tackett says. "It is great that we have a 54 percent participation rate, but we certainly would love to have 100 percent participation in the future."
"There are always going to be people each year who show up in those high- and medium-risk categories. If we don't work together to manage their wellness appropriately, then nobody wins," she concluded.
About The Author
George Pantos is the Executive Director of the Healthcare Performance Management Institute (www.hpminstitute.org <http://www.hpminstitute.org> ), a research and education organization dedicated to promoting the use of business technology and management principles that deliver better and more cost-effective healthcare benefits for employers who cover their employees.
