Working Towards Wellness*
The Business Rationale
June 2008
Ruxandra Băndilă
Marketing & Business Development Director
*connectedthinking
Agenda
People and Health
The Business Rationale
Wellness Programs
People and Health
Growing Chronic Disease Epidemic
Trend in death from chronic and
communicable diseases
80%
Other causes
Chronic disease
Millions of deaths
70%
60%
50%
40%
30%
20%
10%
0%
2005
2015
2030
Chronic-Disease-Related Deaths
by Income Region
Share of all deaths
100%
80%
60%
40%
2005
2015
2030
20%
0%
High
PricewaterhouseCoopers
Upper
middle
Lower
middle
Low
• Responsible for 1/2 of
all deaths in the world
• Will account for 2/3 of
deaths in the next 25
years
• This is occurring despite
the fact that chronic
diseases are largely
preventable
• Globalization has
caused convergence
with the increase in
chronic disease to be
even greater in
emerging economies
Source: World Health Organisation
June 2008
Slide 3
People and Health
Poor Behaviors Drive Poor Health
• More than 400 million people are obese and over 1 billion are
overweight globally. The number of obese people is expected to
grow by 75% by 2015
- In the US, the obesity rate has grown from 15% to 32% in the past
25 years
- Half of all households in Brazil and 75% in Russia have at least
one obese person
- Mexico has the second-highest prevalence of obesity among the
countries of the Organization for Economic Cooperation and
Development, after the United States
- The obesity rate in Britain is 23%, and there are now cities in China
where the obesity rate is over 20%
• Risk factors such as smoking, alcohol use, obesity and hypertension
are expensive, accounting for 1.5% of the gross domestic product in
China and 2.1% in India
• In 2000, there were nearly 5 million smoking deaths worldwide June 2008
PricewaterhouseCoopers
Slide 4
People and Health
Poor Health Impacts People - Our Most Important Asset
In the 21st century, people are a cornerstone for an
organization’s success. Building and sustaining a culture of
health and vitality pays dividends for an organization and its
people.
PricewaterhouseCoopers
June 2008
Slide 5
The Business Rationale
The Four Pillars of the Business Rationale for Wellness
•
•
•
•
Productivity
Human Capital
Healthcare Costs
Sustainability
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June 2008
Slide 6
Millions of deaths
The Business Rationale
Productivity
•
Lost Productivity Related to Health Risks
40.0%
34.5%
35.0%
30.0%
25.4%
25.0%
Base Productivity
Incremental Cost
17.4%
8.3%
20.0%
15.0%
10.0%
•
17.1%
17.1%
17.1%
Low Risk
Medium Risk
High Risk
•
5.0%
0.0%
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•
Productivity losses associated
with poor health risks are as
much as 400% of cost of
treating chronic disease
Includes unplanned absences,
reduced workplace
effectiveness, increased
accidents and negative impacts
on work quality or customer
service
Studies show that multiple
health risk factors multiply the
losses in productivity
Stress and depression are
intertwined with work & life
environmental factors in
impacting human capital
effectiveness
June 2008
Slide 7
The Business Rationale
Productivity
Costs Associated with Health Risk
Medical &
Pharmacy
Presenteeism
Absenteeism
Short-Term
Disability
Long-Term
Disability
PricewaterhouseCoopers
June 2008
Slide 8
The Business Rationale
Human Capital
• Organizations invest an average of $290 in labour costs to
generate $1,000 in revenue
- Helping employees work longer and have more productive
lives, can protect this asset in the face of growing labour
shortages globally
- An organization that shows that it values its workers is
more likely to attract, retain and motivate employees
• The demand for talented people is increasing, and an ageing
workforce is creating an additional drain on organizations’
workforces
- China will be moving from an era of labour surplus into an
era of labour shortage as early as 2010
- Health & wellness is helping some organization distinguish
themselves as employers of choice
June 2008
PricewaterhouseCoopers
Slide 9
The Business Rationale
Healthcare Costs
• Chronic disease which is largely preventable is increasing
burden on employers, individuals and social programmes
- Impact on health systems, taxes and costs of coverage
• The risk factors that lead to chronic disease are cumulative, as
are the costs associated with them
- Metabolic syndrome, which includes a combination of
obesity and other health risks, is associated with a two to
nine times higher prevalence of chronic diseases
• In the US, people with chronic disease account for more than
75% of the nation’s US$ 2 trillion in medical spending
PricewaterhouseCoopers
June 2008
Slide 10
The Business Rationale
Sustainability
• The epidemic of chronic disease – a product of both
environment and behaviours – is a social phenomenon that is
as equally prevalent and preventable as issues such as global
warming, infectious diseases, poverty, terrorism, clean water
and basic infrastructure
• As the economic burden of chronic disease grows, it could
crowd out monies needed to improve other critical issues as
well as to meet basic needs such as education and
infrastructure in both industrialized and emerging economies
PricewaterhouseCoopers
June 2008
Slide 11
The Business Rationale
The Four Pillars of the Business Rationale for Wellness
Value Proposition
• Employee Vitality and
•
•
•
•
Productivity
Human Capital
Healthcare Costs
Sustainability
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Engagement
• Improved Organizational
Performance
• Reduced Absenteeism
• Enhanced Loyalty
• Employer of Choice
• Reduced Healthcare
Costs
• Mitigated Burden on
Health System
• Corporate Image &
Citizenship
June 2008
Slide 12
The Business Rationale
Working Towards Wellness
The Path to a Healthy and Productive Organization
In the 21st century, people are a cornerstone for an
organization's success. Building and sustaining a culture of
health and vitality pays dividends for an organization and its
people.
Today
Tomorrow
• An increasing concern
over talent acquisition
and retention
• Lost productivity affects
global competitiveness
• Spiraling health costs
burden companies and
societies
• Aging workforce seeks
new and dynamic
workplace experience
• Build and maintain a high
performing workforce
• Align incentives and
resources supporting
corporate culture of health
• Enhance workforce
engagement and loyalty
• Improve productivity and
functionality
• Improve health and reduce
burden of health costs
Develop
People
and
Health
Strategy
Deploy
Resource
s and
Support
Sustain
a
Healthy
Culture
Defining the Strategy / Executing and Sustaining the Solution
PricewaterhouseCoopers
June 2008
Slide 13
Wellness Programs
Requires a coordinated approach with 4 elements:
Leadership
Culture
• promote active leadership of senior
management in wellness initiative
• align wellness goals with business
strategy
• create a supportive environment and
culture focused on wellness
Wellness
• target interventions based on unique
characteristics of employee population
• offer incentives to encourage
participation and better outcomes
• use targeted and ongoing mass
communication
People
PricewaterhouseCoopers
• collaborate with external parties through
public-private partnerships
• establish evaluation and monitoring
programmes to measure change,
outcomes and financial impact
Process
June 2008
Slide 14
Wellness Programs
Execution Framework (I)
Importance and difficulty of execution framework
Importance and difficulty of execution framework
100
100
94
89
90
83
82
82
80
70
70
60
50
53
41
53
47
40
38
30
30
24
24
24
20
10
0
Targeted and
Creating a
ongoing mass
supporting
communication environment and
culture
Active
leadership of
senior
management
Evaluation and
mentoring
Sum of important and very important categories
PricewaterhouseCoopers
Aligning
Targeting
w ellness goals
interventions
w ith business based on unique
strategy
characteristics
Use of
incentives to
encourage
participation
Collaboration
w ith external
parties
Sum of difficult and very difficult categories
June 2008
Slide 15
Wellness Programs
Execution Framework (II)
Chronic
disease is a
growing burden
Employers
bear increasing
costs and can
impact risk
factors
Corporate
Wellness
programmes
are diverse
Applying a gold
standard can
lead to effective
• 60% of deaths
• Private health
• Most large
• Execution
worldwide
spending up;
limited public
health budgets
employers offer some
kind of wellness
programme
• Active Leadership
• Shared
• Variation in
• Supportive
public/private
impact
corporate
commitment,
approach and impact
Environment
• Targeted interventions
• Few have taken
• Communication
• Growing by 17% in
next 10 years and
fastest in low income
countries
• Only 3% of health
spending goes toward
prevention in OECD
countries
global approach
• Limited
public/private
coordination or
collaboration
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• Business Alignment
• Health incentives
• Public/Private
Partnership
• Evaluation and
monitoring
June 2008
Slide 16
People are a cornerstone for an
organization’s success. Building a
culture of health and vitality pays
dividends for an organization and its
people.
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