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Comprehensive Mental Health Insurance Benefits:
Case Studies
U.S. Department of Health and Human Services
Substance Abuse and Mental Health Services Administration
Center for Mental Health Services
Office of Managed Care
VIII. Appendix C: Employer Case Studies
A. Bank One
Company History / Profile
In 1998, Bank One became the fourth largest U.S. bank holding company as Banc One Corporation merged with First Chicago NBD (FCNBD) Corporation5 to form Bank One. The merger completed Bank One's transition from a decentralized company with strong regional management to a nationally organized corporation. Bank One now operates five national lines of business: Commercial Banking, Credit Card, Retail Banking, Finance One, and Investment Management. Its credit card business, operating the First U.S.A. and First Card brand names, is the world's largest issuer of VISA credit cards. The corporation's investment management sector ranks as one of the Nation's 25 largest mutual fund managers.
The merger has posed significant challenges because of Bank One's size and international presence. The company's 90,000 employees operate in more than 2,000 banking centers in 34 States and 11 countries around the world. Bank One's decision to restructure its operations along national lines compounded the general turnover and transition in the workplace. One of the first corporate priorities identified after the merger and restructuring involved consolidating the company's benefits. After comparing and evaluating the legacy benefit packages and management strategies, Bank One identified each company's best practices and developed a single approach for corporate implementation. As a result, Bank One adopted FCNBD's method(s) of managing employee health care and costs, an area in which FCNBD had earned a national reputation.6
Factors Influencing Company's Decision to Provide Comprehensive Benefits
Bank One recognizes that providing comprehensive benefits is mutually beneficial for employer and employee because it reduces overall corporate costs and ensures a healthy workforce. The company has developed a comprehensive data monitoring system to evaluate benefit management decisions. In the 1980s, the company realized that its benefit structure discouraged employees from seeking outpatient care. Popular opinion held that increasing access to outpatient services would result in overutilization and increased costs. When FCNBD increased outpatient coverage, however, it experienced decreased mental health costs per employee. Between 1985 and 1997, mental health costs fell from 15 percent to 6 percent of total health costs. The company identified other indirect cost savings not included in cost-benefit analyses. For example, Bank One's benefit plan has gained national recognition and has been a formal component of the firm's recruiting and retention strategies.
Mental Health Benefits
Description of Benefit Options
Bank One offers employees several coverage options. Employees can choose among a variety of HMOs,7 a POS plan, a PPO plan, and a traditional indemnity plan for physical health care. All non-HMO enrollees receive a uniform set of mental health benefits. Tables 2, 3, and 4 provide specific information on Bank One's mental and physical health plans.
Mental health benefits must be accessed through the EAP. Although the EAP serves as the gateway to the mental health benefit, the EAP network includes all contracted mental health providers. Integration of the EAP and the mental health network yields a benefit structure offering three free outpatient visits (traditional EAP visits) followed by incremental increases in cost-sharing requirements as the number of visits increases. These networks also facilitate continuity of care, since patients can continue treatment with the same provider. In 1993, FCNBD decided to contract with a pharmacy benefit manager; the new prescription drug benefit covers 85 percent of pharmaceutical costs without a deductible and applies to medications for both physical and mental illnesses.
Employee Assistance Program
Established in 1979 to address chemical dependence in the workplace, FCNBD's EAP has experienced significant change in the past two decades. Currently, the first three mental health outpatient visits count as EAP visits. To ensure broad EAP utilization, employee materials advertise the benefit. The company also requires all managers and supervisors to take a class called "Managing the Troubled Employee." Employees frequently talk with managers about health concerns and often receive referrals from supervisors directly into the EAP.
Traditionally, 5 percent of Bank One employees have used the EAP annually. The EAP most frequently deals with stress, emotional disorders, marital and family difficulties, alcohol and drug dependencies, and problems coping with aging parents. In addition, program professionals work as case managers for patients with short-term disabilities.
Benefit Management
Bank One's benefits department manages the HMO, PPO, and POS plans and administers the self-insured indemnity plan, wellness programs, and on-site care. The company's benefit managers rely heavily on data gathered through Bank One's integrated health database. Bank One uses Integrated Health Data Management System (IHDMS) data to guide decisions about contract renewal; if an HMO performs poorly, Bank One may terminate the contract. In addition, the company monitors indicators (e.g., recidivism rates) to determine which providers and hospitals are producing the best patient outcomes.
The company has created an internal diversity-monitoring group to ensure that Bank One benefits are responsive to its diverse employee population. It uses this group to customize the mental health benefits to Bank One's specific employee population. For example, if the company found that women were seeking EAP services more than men, the program would be directed to develop a plan to address the specific needs of women.
Bank One's medical department oversees the EAP and on-site medical centers. Bank One has adopted FCNBD's strategy of using the medical centers to play an integral role in designing the wellness, mental health, and other key components of the plans. The medical centers also help evaluate ongoing quality of care.
As it experienced increased employee enrollment in managed care in the 1990s, FCNBD began to forge partnerships with its vendors to provide higher quality patient care. The database enables Bank One to approach its HMOs and PPO with evidence of effective treatment protocols. By demonstrating that a specific treatment protocol is cost-effective, the company can convince a vendor to offer such care.
Key Program Components/Best Practices
- Integrated Health Data Management System enables Bank One to analyze clinical outcomes, disease management, and short-term disability.
In 1986, Bank One began to search for ways to manage health care and disability costs more effectively and to evaluate the impact of benefits and wellness programs on overall health costs. FCNBD's medical department created the IHDMS computer system to track direct and indirect costs related to health and disability (Burton & Conti, 1998). FCNBD was one of the first companies in the Nation to examine systematically the indirect costs related to decreased productivity, absenteeism, and short-term disability.
Medical department staff, including occupational health nurses, EAP psychologists, and counselors, enter data directly into the database. A variety of security measures, including multiple levels of encryption, ensure confidentiality of the records. Currently, the system integrates demographic and personnel data for active employees, dependents, and retirees; data on work-site wellness programs; safety records and accident reports; medical claims; workers' compensation and short- and long-term disability claims; EAP records; clinical factors; and productivity data (Burton & Conti, 1998).
The system can provide information, such as clinical outcomes, disease management, and short-term disability, useful in designing and monitoring the mental health benefit.
- Clinical outcomes: Using IHDMS information, Bank One can monitor patient utilization patterns to determine the efficacy of a particular treatment for a particular illness. Comparing outcomes of different treatment paths for individuals with the same diagnosis can reveal differences in patient outcomes and cost-effectiveness. The company then can encourage providers to use the more effective clinical strategies. Bank One also can examine information such as hospital readmissions to determine the quality of care being provided.
- Disease management: FCNBD analyzed 1993-1995 direct and indirect costs associated with five common chronic diseases identified in its workforce: depression, diabetes, asthma, hypertension, and ulcers (Burton & Conti, 1998). Of these diseases, depression resulted in the most employee absences per event, resulting in the greatest direct and indirect costs.2 This information served as a catalyst in the initiation of a depression disease management program.
According to IHDMS data, implementation of a disease management program decreased medical costs for depression from $71 per covered employee in 1993 to $61 per covered employee in 1995 by shifting care to outpatient settings. While outpatient costs increased and pharmacy benefit costs quadrupled, inpatient costs declined sufficiently to result in an overall cost savings. The benefits department is now working to identify the characteristics and specific benefit needs of the larger and more diverse employee population.
- Short-term disability: Bank One's short-term disability management program unites intense case management with early intervention. Bank One solicits information concerning disability absences from managers and employees. An employee's physician must submit a disability form, or the company may suspend salary and benefit payments. Once a physician reports the disability, Bank One assigns a case manager to follow treatment and to support the employee's return to work.
Bank One's EAP provides case management for disabilities involving psychiatric conditions; the company recognizes that many instances of disability are caused by either a mental health problem or a comorbid mental health condition. The care management program has reduced average work days missed from 46 to 40 days, a figure in line with the company's goals. The company found that before case management was implemented, 18 percent of employees who accessed the EAP did so more than once in a 12-month period, compared with 16 percent afterward.
- Medical centers provide on-site risk assessment, education, and care.
Bank One operates on-site medical centers in several locations throughout the country. These centers provide a variety of services including treatment of ill or injured employees, wellness programs, short-term disability management, and periodic health evaluations. Under the aegis of these medical centers, FCNBD established a comprehensive Wellness Program in 1984. This program, continued by Bank One, provides a variety of programs--including health education, health risk assessment, an on-site mammography program, and prenatal classes and care--designed to improve the health status of employees and their families in order to reduce unnecessary treatment and disability costs (Burton, 1998).
Employee Satisfaction / Performance Data
The benefits department uses IHDMS data to evaluate contract providers and to provide detailed cost and productivity data. The company monitors short-term disability occurrence rates, average length of each disability event, recidivism rates, and other information to provide a comprehensive picture of the HMO's mental health program.
Bank One also evaluates employee satisfaction and service utilization. Annual report cards detailing satisfaction with and quality of each HMO are given to each employee during benefit enrollment and to each MCO. In 1993, when the company began using a pharmacy benefit manager, FCNBD also began tracking pharmacy data.
Lessons Learned and Challenges Remaining
Bank One has learned key lessons from its experience providing comprehensive mental health benefits; it also has identified several specific challenges.
Lessons Learned
- Increased emphasis on mental health benefits (combining low cost-sharing requirements, expanded services, no separate benefit caps, and a sophisticated EAP) can result in lower total health expenditures.
- Collecting and accurately managing health care data can help improve patient outcomes. A comprehensive data management system can help determine the impact of benefit changes. However, if analysis is limited to tracking and examining direct costs, the total costs of a disease can be seriously underestimated.
- Company benefit plans should reflect the specific characteristics of their employee workforce. Thus, since its workforce includes significant numbers of relatively young, female workers (a population with a higher rate of depression than men), Bank One developed specific programs to target depression.
Challenges Remaining
- The Bank One merger requires consolidation of mental health benefits across multiple new employee populations and geographic regions. Information from three times as many employees now must be integrated into its IHDMS database. Bank One currently contracts with over 50 HMOs, dividing employee mental health services across many different providers. The company is now integrating the EAP and mental health benefits for all non-HMO enrollees into a single plan. Furthermore, it is consolidating its HMO contracts.
- Bank One is working to improve its relationship with vendors. While the goal is a partnership between the two entities, Bank One is further along this path with some HMOs than with others.
- Bank One must develop methods to valuate covered employee and family functional status and quality of life.
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