Humana offers lower costs for healthier workers

The insurer says it will refund money to employers if it doesn't show cost savings on claims after three years.

By Jonathan G. Bethely — Posted May 21, 2007

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Humana says it is offering a money-back guarantee on plans it manages for large, self-insured employers.

The Louisville, Ky.-based health plan says it will guarantee that those employers' health care claims costs will increase by no more than 6% to 9% a year, depending on the specific plan, over the next three years, or Humana will refund up to 40% of the fee it charges to administer benefits.

Humana says it will keep those claims costs down by instituting wellness programs for its client companies' employees.

Employers would sign three-year deals with Humana, rather than review contracts annually. Employers then would allow Humana access to employee contact information. Employees would be required to fill out online health assessment forms and would be encouraged to share them with their physicians.

"All of Humana's clinical programs are focused on helping members have a better dialogue with their physicians," Humana spokesman Jim Turner said. "The success of any employer all comes back to the improved health of the employee."

But SmartResults -- available to self-funded businesses with 300 or more employees -- does not offer any financial incentives to physicians, Turner said.

While some physicians credit Humana for attempting to emphasize better health for patients, they also would like Humana and other insurers who institute wellness programs to be more up-front with physicians about what is expected from them.

"If the physician is part of the coordinated effect, [Humana] would see positive results," said Clarence Chou, MD, a psychiatrist and president of the Wisconsin Medical Society.

Humana's program is another example of the creative lengths health plans are going to in an effort to reduce costs, analysts said.

For example, WellPoint recently announced it would give all of its employees bonuses for members' increased use of preventive measures such as immunizations, cancer screenings and diabetes management.

Pat Kennedy, a managed care consultant in Rockville, Md., said competition is pushing plans to come up with different ways to save costs while also improving member health.

"It takes years to put these programs together," Kennedy said. "You're going to see others [health plans] following over the next three years because that's what they've been working on."

Humana is confident in its SmartResults plan because of the success of its consumer-driven health plan program, SmartSuite.

Turner said that from 2002 to 2006, members in SmartSuite plans saw their annual costs increase only about 4.2%, compared with the national average increase of about 11%.

Meanwhile, the firm said, its studies show that SmartSuite participants had higher-than-average rates of prescription compliance and accessed preventive care "on a par with national utilization standards," thus showing that "employers are not simply shifting costs to employees." SmartSuite has about 450,000 enrollees.

SmartSuite is offered as part of SmartResults, but employers also can choose traditional PPO plans.

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