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Incentives – What Works?

Employers and health plans spend a significant amount of money on incentives designed to improve employee health, but many are disappointed with the results. While employers want their workers to improve productivity and reduce absences, and health plans want individuals to adopt healthier behaviors and reduce their risks of developing chronic conditions, costly incentive-based programs oftentimes fail to achieve these results.
Financial incentives are widely used as a means of motivating individuals to take action to improve their health. Incentive payouts typically take the form of cash or cash equivalents, such as gift cards, reductions in premiums, or co-pays. As part of the Patient Protection and Affordable Care Act, group health plans will be able to give premium reductions of up to 30% to employees who participate in wellness programs, starting in 2014. Today, payers typically reward actions such as taking a healthcare risk assessment (HRA), signing up for a wellness program, or speaking with a disease management health coach. A few payers have begun rewarding actual behavior change outcomes, such as reaching a normal blood pressure or achieving a body mass index reduction of 10%.
There is increasing evidence that, when applied correctly, incentives can be somewhat effective in driving behavior change. The real problem is that when not designed or applied correctly – as is most often the case – incentives can be a waste of money, deliver a false sense of accomplishment to individuals, and distract employers and health plans from retooling their efforts to create effective programs to improve health and productivity.
In a recent survey by the Healthcare Intelligence Network that captured the latest trends in health and wellness incentives from 139 organizations. Almost two-thirds of survey respondents — 63 percent — offer health and wellness incentives for participation in health promotion programs.
The top five programs that have shown the most positive response to incentives are:

HRA completion: 32 percent

Weight management: 14 percent

Preventive screening: 13 percent

Onsite wellness or exercise: 13 percent

Disease management: 11 percent

As you evaluate implementing incentives to motivate your work force to consciously choose to live a healthier lifestyle, consider the design and application of the incentives and pay close attention to best practices to achieve the desired results. A thoughtful, well designed incentive program can clearly be effective in driving positive behavior.

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Quarterly Newsletter

 

The latest information from Parker, Smith & Feek.
We have five industry specfic versions: (Click the links to view)

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For the commerical insurance version – click here.
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Heart Attack!

Bob McCleskey is CEO of Sellen Construction, a friend of Parker, Smith & Feek’s and we are more than happy to share his story with you.
I'm writing this in the hopes that my friends and family, and their friends and families, and so on…, can learn something from a recent experience of mine. Some of you know a few of the details but I'll give a quick summary and then share a few thoughts that I hope will help you and others avoid what happened to me.
The short version is that I had a heart attack a few weeks ago. The overwhelming reaction from everyone is that I am the last person they would ever have imagined this happening to. A very good friend of mine told me that the fact that it happened to me means that it can happen to anyone, and that I need to share my story. So, I'm on mission…
A few facts about me:
I'm 52 years old; 6'-4" and 192 pounds; I get annual physicals religiously; I have low blood pressure and low cholesterol and no health issues; I've played sports and/or exercised at least 3 times per week my whole life; I eat mostly natural foods and drink only moderately; and I have no family history of heart disease. The picture of health, right? Wrong! I have coronary heart disease, but I didn't know it.
What happened?:
Three weeks ago I was playing in a basketball tournament at the Washington Athletic Club and I came out near the end of the first half. Less than a minute later I felt dizzy and passed out. My heart stopped. My eyes opened, but I wasn’t there. People near me did all the right things – checked for a pulse (none), called 911, found an automated external defibrillator (AED) machine nearby, applied the pads to my chest, and administered a shock that got my heart beating again, but only for a few seconds. CPR was then started, about 30 chest compressions… then I took a deep breath. I'm told that I was without a heart beat for less than three minutes (after 3 to 5 minutes brain damage becomes an issue). It turns out that I had a 30% to 40% plaque buildup in a coronary artery and it burst, completely closing off the artery and stopping my heart (this is the definition of a heart attack and it's the number 1 killer of men and women in the U.S.). The defib and the chest compressions opened my artery enough to get my heart going again, long enough to get to the hospital where they inserted a stent to fully open the artery.
What you can (MUST!) do:
1) Whatever your age is start or keep doing all the obvious things like watching your diet, exercising, not smoking, getting enough sleep, and regular checkups… Here's a link for more info on this topic from the Mayo Clinic:
http://www.mayoclinic.com/health/heart-disease-prevention/WO00041
2) Get CPR training. It might help you save a life, and not just in the event of a heart attack. The Red Cross offers classes eveywhere. Go to:
http://www.redcross.org/portal/site/en/menuitem.d8aaecf214c576bf971e4cfe43181aa0/?vgnextoid=aea70c45f663b110VgnVCM10000089f0870aRCRD&vgnextfmt=default
3) Think about where an AED machine might be appropriate in your workplace, or even in your home, and work to make it happen. Here’s a link for more info on AEDs:
http://www.aedsuperstore.com/assets/images/pdf/aedbrochures/BuyersGuide.pdf
4) Most importantly, and please listen to this: If you are in your 40s or older, if you don’t already have a relationship with a cardiologist, and even if you have none of the other risk factors for heart disease, go get a test called a Coronary Calcium Scan, also known as an EBT test. I’m no expert but my very highly regarded cardiologist is adamant about getting people in to have this scan. It is designed to show the amount of calcified plaque in your coronary arteries. Not every doctor is a big believer in this test but my doctor says that, in my case, the scan would have picked up significant calcified plaque, even 5 years ago, and I would probably have been put on a few drugs that could have drastically reduced my risk for a heart attack. The scan takes only 20 minutes from start to finish, there is no prep involved the night before, no dyes injected, nothing invasive. Depending on the results your doctor will recommend next steps, if any, and will use it as a baseline for similar tests in the future. At the very least this will get your family doctor more educated about your heart, or it will get you connected with a cardiologist who can guide you. Here are two links – one to a National Institutes of Health web site for more info on Coronary Calcium Scans; the other for a Seattle clinic that provides these scans. Call TODAY to get your scan.
http://www.nhlbi.nih.gov/health/dci/Diseases/cscan/cscan_whatis.html
http://www.swedish.org/Services/Heart—Vascular-Institute/Heart—Vascular-Services/Diagnostic-Services/Coronary-Calcium-Scan
I’m a lucky guy – living proof that a heart attack can happen to anyone. I just happened to have mine in a place that thought ahead far enough to have defibrillator machines within easy reach and people trained in using them (thank you Dan and Nic!). My prognosis is excellent because I was revived so quickly and I’m in good physical condition. The almost tragic story here is that this was probably preventable with a simple and relatively inexpensive scan. The cost for the scan is about $200 but it is not covered by most insurance plans. If you can't afford it there are creative funding sources out there. Contact me and I'll fill you in.
One thing that any one of you would learn through an experience like this is that a lot more people rely on you and care about you than you ever imagined. If you can’t make time to do the "4 step plan" for yourself, then do it for the people who love you. You have many fans out there, including me, who want to have you around for a long time. And if you are over 40, I pledge to bug each and every one of you until you at least take my advice and get a scan or talk to your doctor about getting the scan.
One final request, email, blog or tweet this and share this with your friends and family and ask them to do the same.

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They say time flies when you are having fun!

I was going through the press release section on our website, and came across one from September 8th 2009 – Parker, Smith & Feek Appoints New Chief Operating Officer
I had to read the date twice before I convinced myself that it really had been 18 months since I started in my new position.
It has been a whirlwind 18 months; Parker, Smith & Feek continues to outperform the majority of the insurance industry, we achieved our sixth and seventh PAR Excellence awards for quality management and we were recognized as one of the nation’s top independent insurance brokers by being named as “Best Practice” agency.
While it’s nice looking back and realizing just how proud I am of what our company and employees have achieved. It is the new initiatives, the new technology, and the new opportunities that really get me excited.
With the first quarter coming to an end, and as we head deeper into 2011 you can expect to see some exciting changes and initiatives that continue to reinforce Parker, Smith & Feek as a market leader.

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Health Care Reform: What Can Employers Do Now?

Neither advocates or opponents of the 2010 Health Care Reform bill are satisfied with the provisions of the bill, which attempted to accomplish two major goals—more coverage for more Americans and containment of escalating healthcare costs. Plan renewals effective September 23, 2010 and later include a number of popular provisions that benefit the insured: expanded preventive care, inclusion of children up to age 26 on parents’ policies, elimination of pre-existing conditions for children under 19, removal of lifetime maximum limits, and the phase out of annual maximums. In 2014, the pre-existing condition exclusion will be eliminated for everyone. The challenge is that all these coverage expansions cost money and the success of Health Care Reform is dependent upon full participation by everyone in the country.
The constitutionality of the Patient Protection and Accountable Care Act (ACA), as the Health Care Reform bill is officially named, has already been challenged in four separate federal court cases. While two have been decided in favor the federal government, two have ruled the individual mandate—the requirement that everyone must purchase insurance—unconstitutional. In one case, brought by twenty-seven states, federal judge Roger Vinson ruled that not only was the individual mandate unconstitutional, but in the absence of a severance clause, the entire law must be thrown out. Clearly, we will continue to see negotiation, debate, and challenges to the ACA law.
Regardless of one’s opinion on the specifics of the ACA, most of us know that reforming our health care industry is of paramount importance. Our current health care spending is unsustainable and will have increasingly disastrous effects on American lives and businesses. The Department of Health & Human Services has compiled alarming information on health costs as a percentage of Gross Domestic Product:

This steady increase hobbles employers’ ability to invest in other areas and may even threaten their viability. Businesses continually search for ways to manage escalating health care costs and often face difficult choices: sacrifice quality for price when choosing a program; cost-shift to employees through increased deductibles, out-of-pocket expenses, and increased employee premium contributions; or eliminate health care benefits entirely.

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We are ready for Real-Time – the Sequel

In 2002 Parker, Smith & Feek recognized the process for submitting and retrieving information from insurance carriers electronically was hopelessly out of step with modern technology. The vision was to create a system that would answer the decades-long goal of entering information once and having it transfer to all of the carriers that need it and having their responses return instantly. Within a couple of years we brought online our application called “MarketLINK” and, despite the silly name, it achieved this electronic dream.
To our clients, carriers and to us it was a savior. We could run reports and know exactly what the carrier appetites were for a given market, region or practice. The information entered was electronically distributed to all parties and could be used again at the next renewal. Yet the most important factor was that it was simple for everyone to use and created a direct real time connection between the broker and the carrier. Our submissions would rise to the top of the carrier list thereby helping our clients quickly receive the best coverage for their needs.
Not long after we brought MarketLINK online the insurance industry started buzzing about an industry-wide “Real-Time” idea. Not surprisingly it was a process that would allow the entire industry to achieve something similar to what we were already using. It was a brilliant concept that holds great promise but, unfortunately, it has hit a few speed bumps.
Since it was independent of the carriers and since most brokers did not have skilled database and data transfer technicians the concept needed a middle man to come to life. Like white knights riding in on silicon horses, the vendors responsible for the primary software for insurance brokers, our agency management systems, would implement “Real-Time” for us and directly connect it to the software we are already using.
To this day the software vendors preach at conferences to insurance brokers that we must use Real-Time because it is the future of the industry. Simultaneously they meet with carriers saying they must sign agreements to use their software because they do not want to be unable to communicate with the brokers. By bringing both parties to the table and handing the bill to the insurance carriers everyone would have seamless data transfer and our clients would be happy.
Not all the carriers were convinced that they needed a middle man to collect data that really is a private matter between the client, broker and carrier. Nearly every carrier kept a broker web site that often includes more features than is available in the Real-Time system – just in case. As a result the brokers find themselves using both the carrier web sites and the Real-Time software because there are different features available in each. So while this new electronic communication frontier has achieved the goal of tens of thousands of transactions it is also true that everyone is keeping one foot outside of it.
One of the concerns insurance carriers have with Real-Time is the control given to the software vendors. If at any point in time the software vendor feels like changing the arrangement they can do so and there has been some evidence recently that this is exactly what is happening. If the insurance carrier does not like the arrangement they can bail and return to their web site, which some have threatened to do, which is now forcing the brokers to think twice about putting their eggs in the fragile Real-Time basket. The utopian dream was a communication system that was direct between the broker and carrier, not this mixed up world we have inherited.
The industry has reached the moment where Real-Time should move to the next phase. In an era of HTML5, fiber optic connections, social media and decentralized networks there is no reason that carriers and brokers cannot exchange data directly. Back in 2001 when Parker, Smith & Feek started MarketLINK it was an exciting but somewhat complicated task but technology has evolved to the point that every broker could implement such a system. All the pieces to make the dream come to life are waiting to be tapped, from high speed internet to a database infrastructure that can handle direct communication, so all that remains is the basic software architecture to put the process in place. Brokers and carriers can start developing this bridge to a decentralized network and allow the relationship we have developed directly exist in cyberspace. If an independent software vendor wished they could easily sell a system that allows the communication to happen without a middle man needing to charge fees per insurance transaction and controlling the process. Direct communication is possible and with a little effort all insurance brokers can finally implement the one on one electronic infrastructure they have dreamed of for decades.

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What were we thinking?

It might be my age, but I cannot remember a time when wearing a denim shirt was fashionable. The 80s maybe? But they ended over two decades ago.
Several of the above shirts were found in an unused filing cabinet in the office and we are lucky enough to have five of these shirts to give away. Be one of the first five people to email web@psfinc.com and one of these shirts can be yours.
We are immensely proud of our company’s history (74 years and counting), but I think that this sartorial part of our history should have stayed hidden in the closet.
* Not available for PS&F employeess. Shirt sizes & styles are limited

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What is your personal legacy?

We recently had an opportunity to bring together our Account Executives from our Bellevue and Anchorage offices. We invited Tom Flick to give a motivational presentation on the importance of leadership, teamwork, and continuous improvement in business. You may remember Tom as the former quarterback of the Rose Bowl Champion Huskies and as a NFL quarterback for seven years. These days Tom uses his football experience to help companies like ours.
Many aspects of Tom’s message resonated with me, in particular a challenge he gave us: “what is your personal legacy?” Certainly, we all look to be impactful at work and in our families, to be remembered positively for not just what we accomplished ourselves, but for how we helped others. Another critical aspect of legacy is the work we do improving our community.
This is both a corporate and an individual responsibility. As an organization that has had the privilege of operating for 74 years, PS&F feels a deep social responsibility to give back to the community that has done so much for us. Even during these challenging economic times we have steadily increased our corporate giving, coming at a time in our country when it was needed most. We know this also serves to better connect our employees with their community and further enrich their experience at PS&F. We encourage our staff to be involved personally and we support their service with non profit organizations.
Hopefully, what we are building as a company and as individuals is a legacy that speaks to how we improve the lives of others by sharing our good fortune – giving of our money, time and talents. There are lots and lots of good reasons to do that, including what it inevitably does for you as an individual.
As business people we understand that community service provides the opportunity to connect with current and prospective clients. You get a chance to meet influential people you may not otherwise have an opportunity to interact with, and create what is often called social capital. While this is a natural outgrowth of service, it isn’t, or should not be, your sole motivation for getting involved. There are many reasons – that will also benefit you – that are just as important.

There is no better way to hone your leadership and general business skills than to volunteer – especially if your work leads to serving on committees or boards.If you can contribute as a volunteer, working with paid staff and other volunteers, you can do almost anything in a for-profit business. Being a volunteer leader means leading by influence. There is no rank, no corporate hierarchy among volunteers. Volunteers serve because they want to, not because they need or have to. Lead a volunteer board at a non profit and learn what real leadership is.

Many non profit organizations are fascinating businesses in and of themselves. Your current job may not give you the opportunity to work with financial statements, to have first hand experience as to how social systems and government funding works. You’ll see sides of business that you otherwise would never have been exposed to on the for-profit side and it will make social and political issues far more relevant and understandable.

You’ll know more about social and community services and be better equipped to help your family and friends connect to organizations that can help them. I can’t tell you how many times I have been able to help my friends find essential services in times of need and to expedite their access of those services.

Want to sharpen your sales skills – go raise money for a non profit organization. To be effective in fundraising you need to understand sales strategy: creating a value proposition, developing a universe of prospective donors, and making ‘asks’.

Perhaps the best reason of all comes from a magazine article my wife, Kelly, shared with me recently. A Stanford University study, begun in 1921, followed 1,500 elementary students through their lives. When the researchers looked for correlations among those people who lead the longest, healthiest lives they found they were giving people, actively involved in helping their families and neighbors.

Good luck to you in creating your personal legacy and know that regardless of what you give to make your community or this world better, you’ll get back far more.

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A fresh set of eyes can often solve an old problem.

New staff bring fantastic energy mixed with their new ideas and are a breeding ground for change. Often their ideas seems like a huge course adjustment but based on the history of the organization or attempts in the past it really is a small but important move that might save a few seconds of staff time. Those few seconds are minor but when multiplied out over years it can add up to a meaningful productivity enhancement. One of those minor change moments was recently presented to us and we have been thinking through ever since.
The idea initially seemed like a major change: We want a dashboard showing charts and graphs of revenue tied to FTE (staffing hours) information. The individual seemed confident we should be able to just buy a dashboard program for a few thousand, install it and the problem would be solved. Of course, it is never that easy. Charts and graphs are relatively simple and we have a half dozen ways we could do that in short time including using SSRS, ASP, .Net or just connecting Excel to the data directly. The revenue data was already available on our SQL Server tied to departments and staff. So, what was the hang-up? That dreaded FTE staffing information. As it turns out, we had been struggling on that issue for half a year. The dashboard graphing was cake but getting missing data seemed like a dilemma.
When approaching any problem the first question you have to ask is: What is the solution worth to you? In this case we were chatting with the Chief Financial Officer so this was a question right up his alley. Every hurdle can be jumped but knowing how valuable it is can tell us whether we are going to make our staff learn to jump it or whether we can buy a Catapult 3000 to launch us over the problem. After you have a budget in mind it allows you to go back to the root problem which is, in our case, how do we get the data so we can report on it?
The “free” solution is to continue to collect the data manually. While it does not require any products be purchased it is a time consuming option that will require a particular individual to do the calculations perfectly every month. The slightly more accurate and “press a button for the report” approach would be to program an application separate from our human resources system on our SQL Server, but the down side here will be that information will be entered both in our application and the HR system not to mention require technical time to program it. The Catapult 3000 idea is to upgrade our main database for tracking staffing hours to one that allows our intranet reporting system to access that information directly.
We are still investigating what our reporting puzzle is worth to us but I am confident whatever option we choose to get over this hurdle will be valuable to our agency for years to come and underscore how having a fresh set of eyes can highlight minor changes that bring major improvements.

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Workers’ Compensation Getting Attention in Olympia

Governor Gregoire’s Senate Bill 5566, concerning long-term disability for injured workers and costs to the Workers’ Compensation program, was introduced by Senator Jeanne Kohl-Welles on February 1. Overall, the proposed bill takes some steps to help reduce the costs of the current Workers’ Compensation system in this state, which is something that the Governor hasn’t done in the past. It has received mixed reviews, so I thought I would take a look at how these proposed changes may affect us.
The most significant change will be the introduction of a ‘medical provider network,’ a system that is utilized in most other states and has proven to help control the cost and utilization of medical care. I have seen provider networks dramatically reduce the cost of each visit and the number of visits overall when they are applied correctly. They should have the desired effect for Washington state, too.
The more controversial portion of the bill provides a 30% increase in permanent partial disability awards. This is an effort to decrease the number of pension claims, but I am not sure it will have the intended affect and may actually increase costs. What I believe needs to be included in this reform bill is the ability for L&I and self-insured employers to enter into voluntary settlements with injured workers in order to conclude their claims quickly and fairly.
Changes in Washington’s Workers’ Compensation program are clearly necessary. Rates have increased 12% overall this year, and the actuaries and state auditors are telling us this was not enough. I think Gregoire should have stretched further to reform the current system.

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Social Media is just a tool!!

The other day, I had a discussion with the marketing team from a prominent national retailer about how marketers are placing so much emphasis on social media. From those discussions, which became a heated debate at times, I found that were definitely two camps. Some live for social media and are totally convinced that it is the next major breakthrough in how we go about engaging customers/clients. Others are not completely convinced that it’s the next best thing, but do see its value as a marketing tool. I’m definitely in the latter camp, especially in the B2B environment.
Your social media strategy should revolve around what you want to achieve as part your overall marketing strategy. Too many B2B marketers let their marketing strategy be dictated by how these sites work or rely too heavily on social media as a medium, and end up missing opportunities. Remember that social media is like any traditional marketing medium and start your strategy by following the same basic marketing principles.

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Judge Rules PPACA Unconstitutional – What do employers need to know

Second Federal Judge Rules the PPACA Unconstitutional
On Monday, January 31, a federal district judge in Florida ruled the Patient Protection and Affordable Care Act (PPACA) unconstitutional. Like a similar earlier ruling from a judge in Virginia, the Florida courts principal concern with the law involves a provision of the PPACA which requires individuals to pay a penalty if they do not carry some form of health insurance. This “individual mandate” provision goes into effect beginning in 2014.
The ruling adds to a growing list of federal court cases related to the PPACA. Two other federal judges have already issued rulings in favor of its constitutionality, and additional suits are pending. Federal appeals courts in both the 4th and 6th circuits are already planning to hear appeals, but ultimately the issues will be decided by the Supreme Court. The biggest impact the current court decisions have is to add to the already vigorous debate in Congress regarding the future of the legislation.
What do Employers Need to Know?
The rulings have no immediate effect on employer sponsored benefit plans. Both judges who have ruled the law unconstitutional have allowed all aspects of the PPACA to stay in effect pending the outcome of the appeals process. Also, in the Virginia case, only the individual mandate provision was ruled unconstitutional. If upheld, that case would not directly impact other provisions of the PPACA such as adult child eligibility to age 26.
At this point, employers should proceed with current benefit plan changes that are a result of the PPACA, and continue to monitor developments in the courts. It is expected that the Supreme Court will address many of the outstanding issues prior to their 2014 effective date. Let’s just hope that happens soon enough for employers to be able to effectively respond to any changes that may result from the Courts decisions.

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