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Agenda Item
ASR
Control 21-001046 |
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MEETING DATE: |
12/14/21 |
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legal entity taking action: |
Board of Supervisors |
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board of supervisors
district(s): |
All Districts |
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SUBMITTING
Agency/Department: |
County Executive Office (Approved) |
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Department contact
person(s): |
Kim Derrick (714) 834-2564 |
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Lauren Pierson (714) 834-5376 |
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Subject: Approve Contract for
Administration of Health Management Program
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ceo CONCUR |
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Clerk of the Board |
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Concur |
Approved Agreement to Form |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current Year Cost:
N/A |
Annual Cost:
N/A |
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Staffing Impact: |
No |
# of Positions:
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Sole Source:
N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: N/A
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RECOMMENDED ACTION(S):
Authorize the Chief Human Resource Officer or designee to execute a contract with WebMD Health Services Group, Inc. for the administration of the Health Management Program for the County of Orange employees, effective May 1, 2022, through April 30, 2025, renewable for two additional one-year terms per Board of Supervisors policy.
SUMMARY:
Award of contract to WebMD Health Services Group, Inc. for the administration of the Health Management Program for the County of Orange.
BACKGROUND INFORMATION:
In 2014, as agreed to through labor negotiations, the County implemented the OC Healthy Steps Wellness Program (Program). The Program is designed to help employees become aware of their risk factors and key information that impact their health, as well as provide cost-effective health management interventions to assist employees in maintaining or improving their health.
The Program consists of three components: a Biometric Screening (measuring blood pressure, cholesterol, body mass index and blood glucose level), a Health Risk Assessment (HRA) and a Non-Smoking Attestation. County employees who participate in the Program annually receive a 5 percent reduction of their health plan premium.
StayWell Company LLC (StayWell) has been the administrator of the Health Management Program for the last six years. During this time, an average of 87.5 percent of incentive eligible employees have earned their wellness credit through the Program. The Program has been very successful in controlling the cost of the health plan premiums. The annual average increase in County health plan premiums over last five years has been 3.9 percent, which is significantly lower than the industry average of 5 percent to 7 percent. It is estimated that this has resulted in approximately $41.8 million in savings for the County over the five years. StayWell’s performance has been excellent in the last six years, achieving 100 percent of their Performance Guarantees.
The current contract with StayWell expires on May 12, 2022, and, in anticipation of the contract expiration, Human Resource Services (HRS) issued a Request for Proposal (RFP) on May 28, 2021, to solicit proposals from qualified vendors. The Orange County Preference Policy (OCPP) was applicable and incorporated into this solicitation. None of the qualified proposals are located in the County nor registered with the Disabled Veteran Business Enterprise. The RFP closed on July 8, 2021, and the County received six proposals. One of the proposals failed to meet the minimum qualification requirements established in the RFP. As a result, the County received five responsive proposals from the following vendors, alphabetical order:
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· Active Health |
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Optum |
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Virgin Pulse |
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Vitality |
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WebMD Health Services Group, Inc. (WebMD) (formerly StayWell) |
RFP EVALUATION PROCESS:
An RFP evaluation committee consisted of four members, including staff from HRS/Employee Benefits and OC Waste and Recycling. A County Deputy Purchasing Agent (DPA) presided over and attended all committee meetings to monitor the selection process.
The
evaluation committee was charged with selecting a proposal that best meets the
needs of the County based on the following criteria:
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· Background and organizational structure |
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· Ability to meet minimum qualification requirements |
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· Overall responsiveness to the RFP |
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· Degree of compliance with the Model Contract |
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· Fees |
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· Agreement to offer performance guarantees with fees at risk |
The evaluation process consisted of three phases:
PHASE I
Each committee member individually evaluated the proposals in accordance with the pre-determined criteria outlined above and independently scored each proposal. The members of the evaluation committee met to discuss their individual observations, comments, and scores for each criterion in the proposals. The DPA documented the committee members’ scores and established a rank order for the proposals.
PHASE II
The two highest scoring vendors were selected as finalists and requested to make a presentation to the evaluation committee. Following the presentations, the members of the evaluation committee completed the scoring process.
PHASE III
As a final step in the evaluation process, the finalists were asked to provide a Best and Final Financial Offer. The offers were presented to the panel for evaluations and the members were given the opportunity to make final scoring adjustments. See Attachment E for the final scores of each proposal.
RFP Scoring
The table below represents the collaborative scoring effort made by the committee and is the basis for the HRS recommendation. The results from the evaluation committee are presented in rank order below:
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Proposer |
Final Score |
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WebMD |
80.8 |
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Active Health |
66.1 |
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Virgin Pulse |
56.4 |
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OptumHealth |
49.4 |
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Vitality |
45.4 |
Recommendation and
Additional Information
WebMD received the highest overall evaluation score as shown above. WebMD is an indirect, wholly-owned subsidiary of WebMD Health Corp. In September 2017, WebMD Health Corp. was acquired by Internet Brands, a KKR & Co. L.P. portfolio company, and is now a wholly-owned subsidiary of Internet Brands (and is held in the legal entity known as Micro Holding Corporation and MH Sub I, LLC under the Internet Brands umbrella). In March 2020, WebMD Health Corp. acquired the incumbent, StayWell.
WebMD is the leading provider of health information and services to consumers, physicians, health care professionals, employers and health plans through public and private online platforms. WebMD supports 100 direct clients and 2,000 clients across their business groups. Additionally, WebMD currently services 13 government clients and supports over 63 million lives.
Over the last six years, StayWell, now owned by WebMD, has been the County’s vendor for the administration of the Health Management Program for the County of Orange. As the highest scoring and recommended vendor, WebMD’s proposed very competitive pricing compared to the other proposals and their experienced account management team understands the needs and expectations of the County and provides valuable industry insight, customized solutions and exceptional service.
WebMD met all the County’s minimum qualifications and required minimal edits to the Scope of Work. WebMD will administer the Program and will provide online health trackers, telephonic coaching and wellness challenges. WebMD will subcontract with two national biometric screening providers, Quest Diagnostics and TotalWellness complete the Biometric Screening services for the County.
WebMD offers a holistic approach to wellbeing that will broaden the focus of the County’s Health Management Program to support the whole person. The results from the 2020 HRA show that the County’s rate of stress prevalence is higher than StayWell’s book of business. Stress was the second highest risk health risk among the 90 percent of employees that completed the HRA in 2020. Furthermore, the results show that only 58 percent of the employees feel they have appropriate coping skills, leaving 42 percent needing support with developing coping skills to effectively manage stress.
WebMD partners with meQuilibrium to deliver an integrated stress and resilience solution that helps individuals increase their resilience and emotional wellbeing by combining the precision of a personal coach with the convenience of an online solution. The program identifies, through an online assessment, the root cause of stress for individuals and provides a highly personalized program of coaching, training and interactive exercises to build and apply applicable resilience skills.
Results from the County’s HRA show that over the five-year period prior to the pandemic, finances were in the top three of the highest sources of stress among County of Orange employees. According to WebMD’s 2020 Employee Wellbeing Report, 51 percent of employees reported feeling more stressed and anxious as the result of the pandemic, with concerns related to their financial situation being the number one concern impacting their social health.
WebMD’s Enrich financial wellness platform offers engaging, effective, online financial programs that are customized to each participant, offering a personalized approach to help individuals meet their financial goals.
Human Resource Services is very satisfied with WebMD’s (StayWell) performance under the current contract, which has provided valuable programs and resources to support the County employees’ wellbeing. During this time, the Program has consistently achieved greater than 90 percent health assessment completion and an average of 87.5 percent of incentive eligible employees earning their full health benefit incentive. Throughout the term of the current contract, StayWell has achieved 95 percent or higher of their Performance Guarantees. Under the new contract, WebMD is offering a 12.12 percent increase in fees at risk for the WebMD ONE platform, core services and health coaching.
In addition, WebMD is offering the County credits totaling an annual maximum amount of $75,000. The first credit of $50,000 will be available to the County upon reaching year-to-date fees of $750,000 during the program year. An additional credit of $25,000 will be available to the County upon reaching year-to-date fees of $1 million during the program year. The $75,000 annual credits may be used towards programs, new products and/or data files.
Human Resource Services has verified there are no concerns that must be addressed with respect to Contractor’s ownership/name, litigation status or conflicts with County interests. As such, Human Resource Services requests approval of the contract before your Board today to continue the administration of the Health Management Program for the County of Orange employees.
WebMD Proposed
Model Contract Modifications
The contract before your Board contains language modifications to the County’s model contract, which have been deemed acceptable by Human Resource Services, County Counsel and Risk Management. See Attachment C for Risk Assessment of Insurance Terms.
Insurance Provisions: Risk Management has approved but requested Professional Liability Insurance and Network Security & Privacy Liability be increased. Contractor agreed to $3 million. In addition, WebMD proposed language to state that the Professional/Cyber Liability policies will not be required to waive all rights of subrogation against the County, its elected and appointed officials, officers, agents and employees when acting within the scope of their appointment or employment.
Compliance with Laws: WebMD proposes language stating the County acknowledges and agrees that it is ultimately responsible for confirming compliance of its benefits and wellness program with applicable federal and state laws.
Termination: Should the County terminate this contract due to breach of contract, the County will be responsible to pay for services rendered to the date of termination, and reasonable, non-cancelable expenses.
Change of Ownership/Name, Litigation Status, Conflicts with County Interests: WebMD proposed edits to the language that will not require the County to agree to the assignment of the Contract.
This Contract includes subcontractors. See Attachment B for information regarding subcontractors and Contract Summary Form. StayWell, now owned by WebMD, is the County’s current vendor for these services. The Contractor’s performance has been confirmed as satisfactory. Human Resource Services is very satisfied with WebMD’s performance under the current contract. In order for the contract before your Board to take effect on May 1, 2022, StayWell has agreed to terminate the current contract with StayWell on April 30, 2022. As such, Human Resource Services requests approval of the contract before your Board today to continue these services provided with WebMD. A copy of the WebMD contract is on file in the office of the Clerk of the Board.
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CONTRACT AND PRIOR BOARD
ACTIONS: |
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On August 25, 2020, the Board approved Amendment Number Three to extend the StayWell contract for a seventh year for the term of May 13, 2021, through May 12, 2022, for a contract amount estimated at $1,404,100 and revised estimated contract total of $7,854,000. |
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On July 16, 2019, the Board approved Amendment Number Two with StayWell to extend the contract for a sixth year for the term of May 13, 2020, through May 12, 2021, for a contract amount not to exceed $7,264,000. |
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On April 10, 2018, the Board approved Amendment Number One with StayWell to extend the contract for a two-year term effective May 13, 2018, through May 12, 2020. |
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On May 12, 2015, the Board approved execution of the Contract with StayWell for the administration of a Health Management Program effective May 13, 2015, through May 12, 2018, renewable for two additional one-year terms per Board policy. |
FINANCIAL IMPACT:
The total cost for the three-year contract is estimated at $4,324,100 million. The actual cost will vary based on employees participating in the Program and the various Wellness programs.
Appropriations for this contract are included in Budget Control 056 FY 2021-22 Budget and will be included in the budgeting process for future years.
The proposed contract includes provisions that the contract is contingent upon the availability of funds in the budget approved by the Board for each fiscal year the contract remains in effect or operation. In the event such funding is terminated or reduced, the County may terminate the contract, reduce the County’s maximum obligation, or modify the contract, without penalty.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A – Contract with WebMD Health Services Group,
Inc.
Attachment B – Contract Summary Form
Attachment C – Risk Assessment Form
Attachment D – Redline Contract with WebMD Contract
Attachment E – Final Scoring Sheet