 |
This Web site is a component of the SAMHSA Health Information Network. |
|
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
F. Company X
NOTE: This company has withdrawn its name from the study to avoid publicity during pending union negotiations. It participated fully throughout the process, provided researchers with all necessary information, and reviewed the case study. Other than the company name, no information has been altered. Some information concerning the company history and profile has been generalized to maintain confidentiality.
Company History / Profile
Company X is a large, multisite employer in the aerospace and electronics industry with a mixed product line including manufacturing, engineering, and construction components. It serves both government and commercial clients throughout the world. Company X's 100,000 U.S. employees place it among the 50 largest employers in the country. The company has recently experienced rapid growth, with significant merger and acquisition activity in the past 5 years. While the corporate consolidation and restructuring are now complete, the company continues to face the multitude of challenges inherent in forging one corporate culture from many different heritages.
In addition to consolidating its organizational structure, Company X had to integrate the disparate benefits from each of its component businesses. In designing a universal benefit, the company hoped to maintain overall equality and to provide the most comprehensive coverage possible. Uniting several benefit plans proved challenging because every plan had unique features; selecting the highest levels of coverage from each legacy plan proved cost prohibitive. The benefits administrators reached a compromise by maintaining aggregate employee benefits at or above their previous levels of coverage.
Factors Influencing Company's Decision to Provide Comprehensive Benefits
Company X recognizes that health care, and specifically mental health care, has a significant influence on employee satisfaction and productivity and therefore attempts to provide high levels of access to treatment, including on-site counseling when necessary, for employees and their families. The corporate leadership firmly believes that health care delivery must focus on investing in cost-effective systems that deliver a high quality of care.
Mental Health Benefits
Description of Benefit Options
Company X's recent benefits consolidation coincides with the company's transition to a unique, regional system of benefit administration. Before the mid-1990s, Company X maintained fee-for-service health coverage. The rising price of health care shifted significant costs to the company because it failed to use the cost-containment strategies of managed care. Company X also faced a fragmented risk pool as each business sector purchased its own health benefits.
As it began operating under managed care, Company X decided to streamline its oversight and consolidate its regional purchasing power at the same time. The company perceived that contracting with one vendor to cover its entire workforce in a region presented a unique advantage in purchasing and administering benefits. Company X developed its first Regional Health Plan (RHP) in 1996 for New England and currently offers RHPs in eight regions where it has a large employee base and significant purchasing power. Each RHP offers two plan options: an HMO and a POS. While nearly three-quarters of Company X's 100,000 U.S. employees receive coverage from an RHP, the company does provide health coverage through several different arrangements. For example, approximately 15,000 employees living outside these main regions receive benefits via a national umbrella plan. This study will focus on those employees receiving RHP coverage. The following table provides specific information on one of Company X's RHPs.
In addition to simplifying benefits through regional management, the company has recently consolidated all the legacy benefits of its subsidiary companies into one Unified Benefit Plan. These unified benefits vary significantly because of differences between RHPs. Furthermore, although all employees in a region have the same plan, it does not necessarily provide uniform coverage across the region because of differences in State mandates. Because Company X is fully insured for its RHPs, it does not receive ERISA preemption and must comply with sometimes vastly different State regulations (e.g., mental health parity laws).
Company X remains dedicated to developing comprehensive physical and mental health benefit options; most RHPs offer identical cost-sharing requirements for physical and mental health but have more restrictive annual day/visit limits for mental health coverage. Furthermore, full coverage for mental health care requires precertification from the EAP. Prescription drug coverage, 100 percent with a $5 copayment for generic drugs and a $5 copayment plus the cost difference for name-brand drugs, does not vary for physical and mental health. Company X offers benefits to full- and part-time employees, their spouses, and their children.
All but one of Company X's RHP vendors take responsibility for mental health coverage. Prudential, which operates the Texas RHP, carves out its mental health benefit to Magellan. In Texas, Magellan also operates the EAP. Company X contracts with United Behavioral Health to provide EAP services for the remaining 63,000 employees covered under the RHPs.
Employee Assistance Program
Company X believes its EAP serves a valuable purpose by providing early intervention and increasing access to mental health care. Employees can receive up to eight sessions annually for each specific incident. Company X ensures that its vendors conform to this eight-session model and share the vision that an EAP should provide an additional path designed to encourage employees to access mental health care. While 50 to 70 percent of EAP users are successfully treated within the eight sessions offered by the EAP, Company X strongly encourages its EAP providers to refer patients to the mental health network. Although employees must receive precertification from the EAP before accessing the mental health benefit, Company X prevents its vendors from using the EAP to restrict access to necessary services.
Following the model that an EAP should facilitate mental health care utilization, the EAP treats both traditional psychiatric conditions and V-Codes, which are problems such as grief or marital difficulties that do not meet DSM-IV criteria. Company X also requires the EAP to provide services to all employees and family members whether or not they purchase health benefits. The company believes the wellness of others in the household directly affects an employee. Consequently, making the EAP available to everyone in the household proves the most effective method of assisting the troubled family member and returning the employee to full productivity.
Although Company X contracts with external vendors, EAP counselors provide on-site services in some locations. Company X has found this on-site availability to be very effective in reaching employees who would not otherwise use the EAP. Employees who prefer to see a counselor off-site retain that option at all locations. Approximately 5 to 10 percent of Company X's employees access the EAP every year.
Benefit Management
When Company X ushered in managed care during the 1990s, it recognized that its industry experience represented an excellent source of knowledge about procuring contractors through competitive bidding. Company X modified these practices to develop a procurement system for MCOs based on a single-contractor purchasing strategy with competitive bidding. Company X solicits proposals from vendors and evaluates them using the following criteria:
- Provider access: provider network (hospitals and physicians), geographic access, percentage of open panels, referral circles, degree of continuity/network disruption, and care transition;
- Clinical quality: National Committee for Quality Assurance accreditation, HEDIS measures, disease management programs, formulary status, provider profiling, mental health and substance abuse delivery, and intense case management;
- Administrative capability: member services, claim processing, account management, Y2K compliance, and third-party administrator interface; and
- Financial: plan stability, market share, provider contracting, multiyear versus single year, rate assumptions, premiums and working rates, and performance guarantees.
After selecting several vendors as finalists, Company X's benefits managers visit each MCO to discuss clinical care and management issues more directly and examine the company's administrative capability firsthand.
Consolidating its purchasing power in each region enables Company X to negotiate favorable contracts that provide high levels of service to all employees. Operating longer-term (3- to 5-year) contracts with RHP vendors limits administrative expenses incurred in the rebidding process and makes Company X's annual costs more predictable. The company also recognizes that long-term contracts have significant advantages; a long timeframe enhances the MCO's ability to meet Company X's goals.
Although Company X contracts with MCOs on a fully insured basis, the company sees itself as an active benefits manager. For example, Company X analyzed employee usage data and held meetings with the primary care physicians (PCPs) that its employees used most frequently. By speaking with these physicians about access to mental health care, the company gained a better sense of its employees' needs. After an employee survey revealed a lack of specialists in one region, the company initiated community meetings with other employers to help ameliorate the shortage.
Company X also meets regularly with its EAP vendors to discuss EAP operation. Company X has worked diligently with United Behavioral Health to ensure the vendor understands Company X's eight-session model and its conception of the EAP as a path to services.
In addition to individual management, Company X participates in the Massachusetts Healthcare Purchaser Group (MHPG), a conglomeration of employers brought together to address cost and quality issues with managed care. The coalition of 60 public and private health care purchasers representing over 2 million New England residents works in four main areas: cost, quality, education and member support, and public policy. The consortium issues annual "cost challenges" to MCOs, in an attempt to limit increases in premiums, as well as a Rate Analysis Report detailing how plans spend the purchasers' money. It also evaluates health plans through two instruments: a Comprehensive Plan Evaluation (including total value, quality, cost, organizational stability, and member services indicators) and a Guide to Health Plan Performance, an annual report card on quality of care and member satisfaction. The MHPG recently designed an HMO survey examining five areas of health plan quality: mental health, prescription drugs, customer service, hospital and doctor relations, and management of chronic illnesses (Pham, 1999).
Key Program Components / Best Practices
Company X's health benefits include several innovative features, many of which relate to the company's proactive approach to increasing access to mental health care.
- Partnerships provide innovative physical and mental health care.
Company X's use of only one RHP vendor per region facilitates the development of a relationship between the company and the MCO. By focusing on a small number of RHPs, Company X can devote time to establishing these relationships. Company X's partnerships have yielded concrete improvements in employee mental health care.
Company X's regional delivery system makes it an ideal candidate to participate in pilot programs because it has a large group of geographically localized employees. Its long-term contracts also ensure a continued employee base for the study. In such situations, Company X employees receive specialized and focused treatment and the vendor has the opportunity to evaluate specific interventions. In Massachusetts, for example, Company X has developed a partnership with Blue Cross/Blue Shield to provide integrated co-case management (physical and behavioral health) since 1997. Members diagnosed with cancer, heart disease, eating disorders, or other illnesses that indicate potential improvement from treating comorbid psychiatric conditions such as depression or anxiety can receive this integrated co-case management. The process ensures that the treatment team actively communicates and collaborates, resulting in integrated, cost-effective, and improved care for the member.
- Company X facilitates early intervention through supervisor training.
Because supervisors interact with employees daily, Company X hopes they can provide a first line of limited support for mental health problems. The company offers extensive supervisory training primarily focused on providing employees with access to support and helping them receive treatment through the EAP or the benefits plan.
- A comprehensive response moderates negative impacts of critical incidents.
The company offers a variety of services in the wake of critical incidents, such as natural disasters that affect employees, on-site injuries or deaths, and other events that serve as a source of employee distress. For example, the Columbine High School shootings involved the children of several employees. Company X provided immediate counseling services to employees, families, and others in the community. Because of its large presence in the area, Company X felt that the school was part of the Company X community and joined the large outpouring of support by sending mental health providers directly to the school. Workers from the external EAP also came on-site at the company's Denver area offices to offer counseling.
Employee Satisfaction / Performance Data
Company X operates extensive monitoring networks for its EAPs. Monthly reviews of employee satisfaction and quarterly meetings with the vendors enable the company to monitor the EAPs closely. The quarterly meetings focus on targeted performance indicators that Company X can compare to benchmarked data from other EAPs. Company officials also participate in an EAP roundtable, in which they share specific performance data, and in a national EAP group composed of representatives from Fortune 500 companies, which discusses model EAP practices and issues specific to EAP management.
Company X includes performance standards in all its RHP contracts. Every RHP conducts annual employee surveys and shares the results with Company X. Company X and the MCO then respond to any areas targeted by employees as requiring improvement. The company also examines several other types of performance indicators, including human resources staff surveys, utilization rates, telephone response rates, and claims payment timing.
Lessons Learned and Challenges Remaining
Company X has identified several key lessons learned from its experience providing comprehensive mental health benefits and recognizes specific areas in which the company must strive to meet challenges.
Lessons Learned
- Company X believes that health care delivery requires a regional approach. The company could not provide the same comprehensive and specialized benefits by contracting with one national carrier. No region is exempt from difficulties in relation to managed health care, but each region has specific and distinct issues.
- A purchaser must determine goals for its EAP. Company X believes that an EAP should increase access to care instead of act as a gatekeeper to limit access. A company must clearly communicate its preferred approach to EAP access at the beginning of any contract.
- Companies must develop adequate performance standards and must define those standards clearly. For example, Company X has had difficulties assessing utilization rates because vendors do not use consistent methodology in reporting these figures. Some EAPs report the total number of existing open cases while others calculate utilization through the number of new open cases. Using open cases may underrepresent the case load.
- The company believes its attempts at early intervention, including supervisory training and access to support or treatment before a problem becomes critical, have had significant impacts on improving overall behavioral health.
Challenges Remaining
- Company X faces significant barriers to assessing the performance of mental health benefits. The company's pooled arrangement for employee leave does not differentiate between sick leave and vacation, making it impossible to link plan performance with productivity or absenteeism. Furthermore, benefits consolidation has created difficulties in integrating different payroll platforms, preventing the company from examining employee absence accurately. In the near future, Company X will be able to track employees with short- and long-term disability; the company currently has a system in which employees on disability receive case management and integrated mental health care if necessary.
5 First Chicago NBD Corporation represents a December 1995 merger between First Chicago Corporation and NBD
6 This case study will present some of the history of FCNBD's initiatives because Bank One has inherited many of the key resources the company uses to manage healthcare benefits.
7 The HMO Options are too numerous and varied to list in tables.
8 This section is based on Motorola's "FACTS 99," the Motorola website (www.motorola.com), and the 1998 Summary Annual Report "Managing Change Positioning for the Future" from Corporate Communications.
9 Motorola contracts with 23 HMOs nationwide, including Cigna, Kaiser, United Healthcare, Humana, and Aetna/US Healthcare. Because coverage of services varies according to HMO, specific benefit information could not be represented in a table format.
Table of Contents | Previous | Next
|
|
