Maricopa County's employee health-care initiative.

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A major concern for finance officers is how to significantly and continuously reduce the organizations medical expenditures and simultaneously increase employees' satisfaction with their health-care benefit. Maricopa Court, Arizona, has done just that. Since the county embarked on its employee health-care transformation in 2001, it has held employee and employer medical and pharmacy cost increases to 6.2 percent and 8.3 percent, respectively, which are below national trends, while increasing employee satisfaction with their health benefit to 94 percent for two consecutive years, despite plan design changes and increased premium costs.

ORGANIZING THE INITIATIVE

Continuously improving the county's $144 million employee health-care program, which covers 12,000 employees and 18,000 dependents, required strong top-down leadership. Senior executive management gave considerable thought to organizational structure and strategy, including taking practical and noteworthy steps to demonstrate that employee health care would have high organizational visibility and significance.

To ensure that the appropriate healthcare focus and financial stewardship would be provided, the county manager and deputy county manager in charge of the Office of Management and Budget (OMB) decided to create a single, stand alone employee health-care department. The department, called Employee Health Initiatives, would report directly to the county manager through the deputy county manager in charge of OMB. This structure demonstrated to the organization and to the community that employee health care is a vital part of Maricopa County's strategic vision and mission, and a critical part of the organization's business and financial plan.

Vision and Mission

The Maricopa County Employee Health Initiatives Department vision is for employees to enjoy a healthy lifestyle so they can live well into the future.

The department's mission is to provide competitive health benefit programs and promote healthy lifestyle and wellness so that Maricopa County can have a healthy and productive workforce.

It was seen as imperative that the employee health-care unit not be embedded within other complex competing operating areas such as compensation, pensions, recruiting, employee relations, diversity, training, payroll, etc. The latter approach could diminish the importance of the health-care initiative, making it one of many sometimes competing duties. Most organizations put employee health care within the massive agenda of the human resources department, and they hire human resources professionals to manage the health-care unit. Some jurisdictions make health care part of risk management, where the effort is often led by lawyers or finance professionals. Maricopa County's employee health-care program owes much of its success to deciding to emphasize employee health care as a high-visibility, stand-alone organization.

Another significant decision was that the members of the Employee Health Initiatives team should have extensive executive public- and private-sector managed health-care backgrounds. Health-care professionals such as those found in HMOs or similar organizations have the health-care operation skill sets needed to manage a health-care unit effectively The members of the health-care team also need to build and maintain a strong operating partnership with like-minded experts in the procurement, legal, budget, finance, facilities, technology, communications, research, and public health departments. The synergy generated by this type of partnership creates tremendous leverage for a campaign to improve health-care costs and outcomes. It also allows the health-care specialists to focus on what they know: health care.

GETTING STARTED

Senior officials must first determine what they want to "win at" in the short term to meet the employee health-care needs of the day, and every organization's needs and institutional culture differ. Maricopa County started by narrowly defining the core business of its employee health-care unit and relocating all the primary employee health-care business functions in one organizational unit. The unit's main business products and services were defined as:

* medical plans

* pharmacy plans

* dental and vision plans

* employee assistance and behavioral health plans

* short-term disability plans

* ergonomic evaluations

* wellness programs

* managing a physical fitness center

* managing mobile on-site prostate screening exams, dental services, and mammography screening exams

The unit's core health-care business priorities do not include functions such as pension and leave plan administration, discount programs, or anything else outside the scope and mission of providing quality and affordable health care to county employees and their dependents.

Maricopa County also chose not to follow the usual practice of using the word "benefits" in describing the health-care unit. "Benefits" can imply entitlement and subtly encourage participants to use the plan in ways that work at cross purposes with strategies encouraging health, wellness, prevention, consumerism, and resource conservation. It might seem like mere semantics, but when an organization attempts to change the way it has always done things, this kind of symbolism is an important part of communicating about the new system.

Similarly, the county made incremental departures from the status quo as quickly as possible, without overly rushing the implementation. The goal was to limit any groundswell of snap judgments among employees that the program's money-saving features would make it cut-rate. On the other hand, if the implementation takes too long, employees could become concerned that they--management--plan to take things away,

CREATING AND MEASURING SATISFACTION

Maricopa County built momentum and credibility for its new health-care program by assertively and demonstrably holding health-care vendors accountable for the delivery of timely, quality services, and by providing county employees with the opportunity to voice their satisfaction or dissatisfaction with the EHI program--and to do so anonymously, The program also uses the same independent and externally controlled surveys to measure the performance of its health-care vendors and effect continuous improvement. Employees can also indicate any concerns with the employee health-care program through a countywide advisory committee. Measuring and improving customer service to employees and their dependents, and dealing effectively with employee complaints and concerns, builds a solid foundation for continuous improvements in employee satisfaction and cost reduction.

The county also uses focus groups and other survey techniques to solicit employee interests and gauge employee satisfaction or dissatisfaction with employee health-care programs. In fiscal 2008, 94 percent of Maricopa County's employees were satisfied with the health plan, compared with 77 percent in 2001, and 85 percent were satisfied with the pharmacy plan, compared with 76 percent in 2003 (see Exhibit 1).

WHIP IT INTO SHAPE

The Wellness Health Incentive Payment Program (WHIP) soon emerged as a financial management technique to challenge vendors and provide them with financial incentives for meeting the county's goals, as well as recognizing exceptional contractual performance in specific health screening, administrative, and other areas. The county sets specific goals for its vendors, based on nationally recognized performance standards. If a vendor exceeds all the goals, the county makes a specified incentive payment to the vendor. If a vendor fails to meet the goals, the vendor refunds money to the county.

Even when vendors fail to meet the criteria, however, their continuous efforts to improve can lead to an overall improvement in service and access to quality health care for plan participants. For instance, under the program, the county's primary general medical vendor offers a 24-hour health information line. One of the ways this service benefits the county is by allowing participants to discuss their symptoms with a nurse, who can direct them to urgent-care facilities instead of hospital emergency rooms. This both allows the member faster access to care and reduces the eventual claim costs.

The county also reduces an employee's health-care premium by $240 a year for voluntarily completing a biometric screening and health risk assessment. Maricopa County receives an executive summary report showing aggregate health data that will reveal the prevalence of certain conditions within the Maricopa County workforce, such as the percentage of employees with high blood pressure. This data is used to improve employee worksite wellness programs and overall employee health status. The assessments allow the vendors to reach out to members who are identified as being at risk of future high-dollar claims and help direct them to appropriate levels of care, since early intervention can help lower long-term medical costs while improving quality of life. The vendors also help promote consumerism by providing tools that allow employees to compare quality outcomes of medical facilities, including recovery rates, outcomes, cost of procedures, and number of times the facility performs that procedure per year.

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As a result of the WHIP program, and other factors, the county has begun to develop a culture of wellness, and costs have increased at a significantly lower rate than the national average. The county achieved an approximate 2 percent reduction in medical inflation, which resulted in a premium savings of $2 million in 2007. (See Exhibit 2 for the county's employee medical plan trend experience.)

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