National Behavioral Consortium PRICING STRATEGIES AND VALUE Discussion Leader: Tom Bjornson Founder & CEO, Claremont Behavioral Services January 23, 2008

What’s an EAP? Objectives? Place at Table? Counseling Benefit? Productivity Tool? Focus on Outcome Metrics vs. Process

Versions of EAP: Disability Plan Sponsored -Ceridian Health Plan Sponsored -Blue Cross of California -Aetna -Cigna Large MBHO -Magellan -Value Options Regional MBHO -NBC Founders Agency-based -Family Services Regional EAP -Chestnut -Claremont Internal Staff Models Medical Human Resources

Problem Identification and Referral Triggers Case Consultations Managers, HR, Labor Leaders Self Referral Promotion, Awareness, and Perceived Value Employees & Family Members EAP Case Management and Advocacy Initial Response & Case Handling Coordination EAP Counseling Life Management Disease Management Critical Incident Health Promotion & Wellness As Needed, Behavioral Health Benefits and On-Going Care Case Closure EAP Best Practices

Summary of Internal Referral Triggers Benefit Admin. & Disease Management Identifying depression, stress, anxiety, physical conditions (high blood pressure, back conditions); then managing improvement Best Practices, AA & Legal Compliance Ameliorating employee complaints regarding employment practices like harassment and supervisory methods Critical Incidents & Trauma Response Responding to traumatic events, co-worker accidents, robberies, natural disasters Work Performance Management Execution of progressive discipline programs to address work performance problems; and facilitating a skillful management response Labor-Management Collaboration Labor contract administration, handling grievances and finding ways to collaboratively resolve work issues and discipline situations Internal Security & Threat Management Proactively and routinely identifying and handling employee threats of violence or other disruptive behaviors Absence Management Addressing causes of time away from work, including issues of co- morbidity; and engaging conditions requiring commitment to change Administrative Financial Events Responding to wage garnishments, early access to retirement accounts, tax liens and other financial crises DFW & Drug Testing Identifying, treating & managing substance abuse cases to clear outcomes Employee Retention & Turnover Focusing on retaining the top 20% of the workforce and managing improvement in the bottom 20% Workers’ Comp & Safety Prevention, early intervention, case-finding & return-to-work support Organizational Change Support Minimizing negative employee impacts of mergers, downsizing, acquisitions, major policy changes

Goals for EAP Relationship Cost Transparency & Alignment of Motives for Increasing Utilization Embedding Stakeholder Use of Referral Triggers Interface – Disease Management, Health Promotion & Behavioral Benefits

Capitation Conflicts with EAP Role Capitation = Taking risk against program use Misaligned Motives & Commodity Services Declining Utilization by At Risk Individuals Management Services – “Lost in Translation” Low Expectations & Cynicism = Lack of Internal Support Cost of Treating vs. Cost of Not Treating

Performance Based Pricing Models Case Rate : Variability Based on Utilization -e.g. $500 per clinical case and $125 per work life case Claremont’s Model : Capitated Retainer, plus Fee for Service Counseling Visits -e.g. $1.75 PEPM for all program services, plus $85 per visit actually used - Performance Guarantee : Management Referrals Risk Sharing : Based on Employer Metrics & Outcomes

Rate Comparison with Current EAP Vendor * Claremont’s Utilization Goal Current Rate$2.25 PEPM Clinical Utilization3% Number of Visits Per Case1.9 Current Vendor’s Rate & Results Claremont’s Performance Rate Utilization LevelPerformance Rate ($1.40 PEPM + $87/Visit) 3%$1.81 PEPM 6%$2.23 PEPM 9%*$2.64 PEPM 12%$3.05 PEPM 15%$3.47 PEPM

Performance Guarantee for Management Referrals: A pre- determined number employees will be referred to EAP by management each year. A refund of $400 for each “case” below this guaranteed level will be made, if required: Number of guaranteed management referrals is generally 1% of the employee population; Performance Guarantee only available if the group selects Performance Pricing. Performance Guarantee

Pricing Implications Basis for Role Change and Market Perception of Value Market Need & Cost Impacts Well Documented Different Value Story for Benefits’-Overcome Cynicism & Practices EAP Clinical Outcomes For what? How many? To what outcomes? EAP & Employer Metrics Need for Internal Ownership, Planning & Stakeholder Engagement