TrestleTree Takes Root with Pilot Gig

TrestleTree Inc. has sprouted two significant customers that say the Fayetteville health care consulting firm could save them some serious green.

TrestleTree, which uses Webcam conferencing to connect chronically ill patients with “personal health coaches,” has contracted with the state of Arkansas to provide a pilot program for a group of 12,000 state employees.

The firm has also landed a deal to provide disease management for W.C. Bradley Co., a diversified Columbus, Ga., conglomerate that employs thousands and makes everything from Char-Broil gas grills to Zebco fishing rods.

TrestleTree’s coaches are primarily pharmacists who work one-on-one with employees afflicted by one of several chronic illnesses that account for most company health care expenses — diabetes, high blood pressure, high cholesterol, asthma and obesity. United States Food & Drug Administration studies show that the 20 percent of an employee base that’s likely to suffer from these diseases accounts for 80 percent of a firm’s health costs.

Privately held TrestleTree, which started in 2000 with $1.2 million from 11 “angel” investors, provides its services for a participation-based fee. Ted Borgstadt, the firm’s president and CEO, declined to disclose the fee structure but said the company guarantees a positive return on investment during the first year of use on hard-dollar savings alone. Soft-dollar savings, tough to quantify effects such as increased productivity, are on top of that.

Sharon Dickerson is executive director of the state employee benefits division of the Arkansas Department of Finance & Administration, which administers health insurance plans for about 31,000 state employees and retirees and 46,000 active and retired public school teachers. Both groups include covered employee dependents.

Dickerson said she believes the voluntary program can cut state insurance costs. If it does, she said, the insurance board could expand the program and offer it to the rest of its membership.

“There are not a lot of ways to wring savings out of health plans anymore,” Dickerson said. “What TrestleTree is doing is getting to the heart of where we need to be — at the member level. If we can change employee behavior and make them accountable, that’s going to give the employee an opportunity to improve their health which in turn will save the state [insurance] plan money.”

Who’s Included

The state of Arkansas TrestleTree test will only include state agency employees and retirees who are covered by QualChoice of Arkansas, one of several Little Rock health plan vendors who contract with DF&A to provide health coverage. One school district, which Dickerson said has not yet been chosen, will also be part of the test.

DF&A is simultaneously conducting a pilot program with Corphealth Inc. for about 12,000 additional employees/ retirees who are covered by Health Advantage, an independent licensee of the Blue Cross Blue Shield Association. Corphealth is a behavioral health administrator and DF&A’s main mental health vendor.

The two test groups are being kept separate so their cost-cutting results may be measured independently. Corphealth, Dickerson said, operates more on a predictive model while TrestleTree typically manages what are already chronic diseases.

An additional 3,500-3,600 state employees who are on plans with Blue Cross Blue Shield of Arkansas are not part of either test. The University of Arkansas, University of Arkansas at Little Rock and University of Arkansas for Medical Sciences won’t be part of DF&A’s deal with TrestleTree either, because they operate their own benefit plans.

Dickerson, who’s also a registered nurse, said she and the DF&A board were sold on giving TrestleTree a shot after studying its model and audited results. She was impressed that TrestleTree is expanding its Fayetteville coaching center by hiring about 10 new professionals including nurses, nutritionists and health psychologists to bring a “team approach” to consulting.

“We have believed for a long time that pharmacists and nurses are an integral part of a health system, and that most people have not used their services to the fullest advantage,” Dickerson said. “We think this model is interesting and exciting. The whole concept seems like something we need right now.”

W.C. Bradley is privately held and tight-lipped. But it employs about 3,000 at its headquarters, according to the Columbus Ledger-Enquirer newspaper. W.C. Bradley has a real estate company and even owns PGA Tour Stop and the World Golf Hall of Fame at the World Golf Village in St. Augustine, Fla.

Proven Results

TrestleTree, a self-described “health transformation company,” completed a pilot program last summer with J.B. Hunt Transport Services Inc. of Lowell. Watson Wyatt Worldwide of Washington D.C., one of the nation’s largest benefit consultants, did an independent audit of that program to measure its savings to the freight carrier.

Watson’s findings, which will be published this fall in national human resources trade journal Employment Relations Today, showed a 45 percent reduction in J.B. Hunt’s hard-dollar medical claim costs. It said the trucking firm received a 150 percent ROI and a 300 percent reduction in absenteeism.

“In the first nine moths of the program, TrestleTree produced an ROI that’s equivilent to what the big national disase managment firms have been doing,” said Bruce Kelley, a senior consultant at Watson Wyatt.

“For every dollar invested in the program, TrestleTree produced a $1.50 return. J.B. Hunt liked it and is expanding their program. Employees liked it. It improves the quality of employees’ lives and saves money.”

Last August, Mark Greenway, J.B. Hunt’s vice president of human resources, said TrestleTree is a paradigm shift that works because it helps reshape behavior. About 200 J.B. Hunt employees volunteered to participate in the program. Many gave emotional testimonials about how TrestleTree’s Webcam consultations improved their health and helped them save co-payments and other health care costs.

Borgstadt said companies on the Fortune 1000 list, along with other large, self-insured agencies, are its target client base. Those firms employ half the nation’s population, Borgstadt said, and are experiencing 13-15 percent annual healthcare cost increases vs. budget increases closer to 5 percent.

According to the American Journal of Health, 25 percent of the total dollars spent on health care in the United States goes toward treating illnesses and diseases resulting from unhealthy habits and other modifiable health risks.

Borgstadt said his firm’s aim is to use an interactive approach to affect change in the everyday behavior of patients. He said his company can save corporate America $5 billion by 2010.