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Healthy Workforce = Healthy Economy

Healthy Workforce = Healthy Economy. Ron Calhoun, Managing Director, Aon’s National Health Care Practice. Prepared by Aon Risk Solutions / Aon U.S. Health & Benefits For the VA Chamber – Health Care Conference – June 7, 2012. 86%. 33%. 300,000. 32%. 1%–1.5%. 2.3%. 10%. Double.

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Healthy Workforce = Healthy Economy

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  1. Healthy Workforce = Healthy Economy Ron Calhoun, Managing Director, Aon’s National Health Care Practice Prepared by Aon Risk Solutions / Aon U.S. Health & Benefits For the VA Chamber – Health Care Conference – June 7, 2012

  2. 86% 33% 300,000 32% 1%–1.5% 2.3% 10% Double Worsening Health Risk—A National Problem It starts with Obesity: know theNUMBERS of Americans will be overweight or obese by 2030 based on current trends of adults in the U.S. are overweight and 34% are obese deaths per year may be attributable to obesity of children in the U.S. are overweight or obese increase in the risk of coronary heart disease mortality for each 2.2 pound increase in body weight increase in claims cost for each unit increase of BMI of all medical spending is accounted for by obesity, compared to 6.5% in 1998 the new onset of diabetes for a weight gain of 11–18 pounds over 10 years Sources: various academic and governmental publications Consulting | U.S. Health & BenefitsProprietary & Confidential | 10068O01.PPT/005-J8-11728 Unit7 12/2012

  3. Behavioral Factors Lack of Health Screening Poor Stress Management Smoking Physical Inactivity Insufficient Sleep Poor Standard-of-Care Compliance Excess Alcohol Consumption Poor Diet 8 Behaviors and Risks Top 15 Most Costly Conditions 80% of Total Costs of All Chronic Illnesses Worldwide Source: 2010 World Economic Forum Consulting | U.S. Health & BenefitsProprietary & Confidential | 10068O01.PPT/005-J8-11728 Unit7 12/2012

  4. Reform. Rising Cost. Declining Health. What Now? “Play by New Rules” “Play Differently” “Stay” “Pay” Given the uncertainty of reform, many employers are developing contingency plans for the possibility of each path Consulting | U.S. Health & BenefitsProprietary & Confidential | 10068O01.PPT/005-J8-11728 Unit7 12/2012

  5. Reform Presents Opportunities and Challenges • Decision Time: In or Out? • Health Reform is Important, But… • Legislation should guide your strategy, not govern your strategy • The Headwinds Are Strong • Demographics, advanced treatments, lifestyle, legislation—all push costs upward • The Stakes Are High • Medical is the most highly valued benefit, by a margin of 2 to 1, and is no longer “fringe” • There Will Be Continued Risk • Government will respond to political as well as market shifts, and is not coming to employers’ rescue = + Driving dual RESULTSof lower cost and improved health Increased INTENSITYon individual accountability Continuous FOCUS on plan design and care delivery models “Never waste a good crisis” Reform presents an opportunity for new considerations Consulting | U.S. Health & BenefitsProprietary & Confidential | 10068O01.PPT/005-J8-11728 Unit7 12/2012

  6. The Current Reality for Providers: Volume → Value • Value-Based Purchasing: A concept that links payment directly to the quality of care provided and is a strategy that can help transform the current payment system by rewarding providers for delivering high-quality, efficient clinical care. • Migration from Fee-For-Service Reimbursements towards Value-Based Reimbursements requires Organizational Transformation: • Strategic • Financial • Clinical • Operational Consulting | U.S. Health & BenefitsProprietary & Confidential | 10068O01.PPT/005-J8-11728 Unit7 12/2012

  7. The Path Forward:Public and Commercial Health Care Reform is Transformative • Changes to the revenue model • More people enrolled in government programs, at reduced/changed reimbursement levels, including outcomes-based payment • New models like Accountable Care Organizations and Patient-Centered Medical Homes create opportunity for new revenue • More patients enrolled in “consumer-driven” plans, expecting to understanding cost and quality before receiving care • Benefit programs will change, with incentives for healthy behaviors • Increased incentives for health improvement and for use of own facilities/providers • Integrated care delivery models may lead to narrower provider network for employees • Staffing and labor challenges • Compensation model will shift as revenue model changes • Attraction of highly specialized clinical resources will be critical Health Reform Will Transform the Health Care Industry—How Will Your Organization Take Advantage? Consulting | U.S. Health & BenefitsProprietary & Confidential | 10068O01.PPT/005-J8-11728 Unit7 12/2012

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