The material provided herein is for informational purposes only and is not intended as legal advice or counsel.

Charles Bruder

November 2, 2011

 Health Care Costs: Costs projected to jump 9% in 2011 ( PriceWaterhouse Coopers,
June 2010)
 Most Illnesses Can Be Avoided: Preventable illnesses make up approximately 70% of the entire burden of illness and associated costs in the United States (WELCOA, Six
Reasons for Worksite Wellness)
 Expanding Work Week: Typical American now works 47 hours a week, 164 more hours than only 20 years ago. (Julien Schor, Harvard Economics professor)
 Increased Stress Levels: 78% of Americans describe their jobs as stressful and the vast majority indicate stress levels have worsened over past ten years. (WELCOA, Six Reasons for Worksite Wellness)

WHY WELLNESS PROGRAMS?
RISING COST OF HEALTH CARE

 High Adoption Rates: More than 81% of America’s business with 50 or more employees have some form of health promotion program (WELCOA)
 Lower Health Care Costs: Wellness programs reduce health care costs for companies by about 26% and cut sick leave by an average of 28% (American
Journal of Health Promotion, 2010)
 Effective Recruitment/Retention: 22 of Fortune magazine’s “100 Best
Companies to Work For” – businesses that enjoy national recognition for desirable benefit packages, plan to add a total of 87,750 jobs this year. (Fortune magazine Top 100 Companies to Work For, February 23, 2010)

•Reduce employee healthcare costs
•Increase employee productivity
•Reduce absenteeism
•Reduce disability and workers’ compensation costs
•Promote healthier, more satisfied workforce
•Improve corporate profitability

WELLNESS PROGRAMS
How Do Your Employees Stack Up?
Statistically, for every 100 employees in your company:
• 5 have diagnosed diabetes
• 10 have undiagnosed diabetes
• 12 are heavy drinkers
• 15 are bothered by excess stress
• 23 have total cholesterol (>240)
• 27 have no regular exercise
• 29 have elevated blood pressure
• 33 use tobacco products
• 46 have high overall coronary risk
• 60 are outside recommended weight range
Source: Center for Disease Control

WELLNESS PROGRAMS
Plan Design Options
Program
Model
Quality of
WorkLife
Traditional
Approach
Main
Features
Fun activity focus
No risk reduction
No high risk focus
All voluntary
Site-based only
No personalization
Minimal incentives
No spouses served
No evaluation
Mostly health focus
Some risk reduction
Little high risk focus
All voluntary
Site-based only
Weak personalization
Modest incentives
Few spouses served
Weak evaluation
Primary
Focus
Morale-Oriented Activity-Oriented
Health and
Productivity
Management
Add productivity
Strong risk reduction
Strong high risk focus
Some reqd activity
Site and virtual both
Strongly personal
Major incentives
Many spouses served
Rigorous evaluation
Results-Oriented

WELLNESS PROGRAMS
The Quality of WorkLife Model
Quality of
WorkLife
A good “fit” with:
• Smaller worksite
• ROI low priority
• New to wellness
• Not sure about EE reaction
• Limited follow-through capability
• Weak corporate direction

WELLNESS PROGRAMS
The Quality of WorkLife Model
Primary Wellness Targets
 Fun events
 Stress relief
 Nutrition
 Community service
 General wellness information
 General health information
Participation: 15% to 35%
Approximate Cost/EE/Yr: <$45
Likely ROI: <1:1.0
Quality of
WorkLife
Typical Activities
 Health fair
 Lunch and learn sessions
 Wellness “event”
 Community sponsorship
 Chair massage option
 Free fruit
 Wellness materials in HR
 Health cartoons circulated
 Nutritious pot lucks
 Movie events
 Company games
 Celebrity event

WELLNESS PROGRAMS
The Traditional Model
Traditional
Approach
A good “fit” with:
• Medium size or larger worksite
• ROI moderate priority
• 2-10 years of wellness
• Employee reaction a concern
• Some follow-through capability
• Follows corporate direction

WELLNESS PROGRAMS
The Traditional Model
Primary Wellness Targets
Everything from the QWL Model plus…

OWS
 Cholesterol
 Blood pressure
 Tobacco use

Obesity

Medical self-care
 Physical activity
Participation: 28% to 58%
Approximate Cost/EE/Yr: $46-
$150
Likely ROI: 1:1.5 to 1:3.0
Traditional
Approach
Typical Activities
Everything from the QWL Model plus…

Health risk assessment (HRA)
 Biometric testing option
 Fitness club memberships/facility
 Weight management program

Smoking cessation program

Web-based health information
 Healthy cafeteria/vending options
 Self-care book
 Preventive medical benefit coverage

Wellness newsletter

Short term incentive program

WELLNESS PROGRAMS
The HPM Model
Health and
Productivity
Management
A good “fit” with:
• Larger work force
• ROI very high priority
• Very mature wellness
• Prepared to educate employees
• Strong follow-through capability
• Strong virtual corporate program and site-driven

WELLNESS PROGRAMS
The HPM Model
Health and
Productivity
Managemen t
Primary Wellness Targets
Everything from the TA Model plus…

Productivity
 Injuries (All)
 HC utilization issues
 Presenteeism

Resiliency

Integrated programming
 Health consumerism
Participation: 65% to 95%
Approximate Cost/EE/Yr: $250-$450
Likely ROI: 1:2.5 to 1:6.5
Typical Activities
Everything from the TA Model plus…

HRA (incented and used for targeting with 80% minimum)
 Risk stratification and incented interventions
 Telephonic coaching
 Medical self-care and consumer workshop
 Injury prevention

Benefit linked incentive
 Wellness achievement incentives
 Resiliency initiative for productivity
 Spouses also served
 Integrated programming (Level I & II)

Uses HPM framework

Onsite Clinic

WELLNESS PROGRAMS
Return on Investment

Category
Participation in HRA
Tobacco/Nicotine:
Physical Activity
Blood Pressure:
Glucose:
Cholesterol:
Body Mass Index:
Benefit Advisory Coaching:
Impact
2011
Wellness Goals
Complete
Affidavit: Tobacco Free
-or-
Completion of Smoking
Cessation Program
Completion of
Shape Up the Nation
Walking Challenge
Participate
Participate
Participate
Participate
Participate
Up to 20% Reduction in Premium Contribution
2012
Wellness Goals
Complete
Negative Test Result
-or-
Completion of Smoking
Cessation Program
Completion of
Shape Up the Nation
Physical Activity Challenge
<135/90
< 110
<4.0(Cardiac Ratio)
<30.0
Complete
Up to 20% Reduction in Premium Contribution
2013
Wellness Goals
Complete
Negative Test Result
-or-
Completion of Smoking
Cessation Program
Completion of
Shape Up the Nation
Physical Activity Challenge
<120/80
< 100
<4.0(Cardiac Ratio)
<25.0
Complete
Up to 20% Reduction in Premium Contribution


Incentive can range from small tokens to 20% premium reduction

Gradual progression from activity to results based
 Must have a “Wellness Champion” on the management team
 Consider a “turnkey platform”

Employee portal drives engagement
 Questions…..

WELLNESS PROGRAMS
How Benefit Sources & Solutions Can Help
• Certified Wellness Planning Coordinators
• Wellness program design assistance
• Health fair coordination
• Incentives/penalty program recommendations
• Preferred vendor partnerships and referrals
• Quarterly e-newsletters
• Compliance issues guidance

Charles Bruder

President & CEO
Maximizing Workforce Health

Healthy Employees = Increased Profitability
 PEOPLE – Employee satisfaction is the #1 metric used to assess the impact of benefit design changes and programs implemented to support healthy behaviors.
 PRODUCTIVITY – Healthy employees miss fewer days of work and are more productive at work.
 PROFITABILITY -- Utilization of prevention and wellness strategies leads to lower utilization of the most costly health services.

A strategic approach to managing your company’s investment in health benefits and programs is essential in these days of rising healthcare costs.
Benefits
People are motivated by the health benefits they receive from your company and those benefits can be leveraged to motivate healthy behavior choices that can increase the value of your workforce.
Health
A healthy workforce costs your company less. Healthy employees are more productive and incur fewer health complications that cost your company in lost work days and higher claims costs.
Wellness
Preventive health strategies keep your employees well – physically, mentally, emotionally and don’t require exorbitant financial investments.
Building a culture of health within your company can be an effective and measurable business strategy.

In a five year span, twothirds of the rise in healthcare spending was due to the rise in treating chronic diseases.*
- Many cases could be prevented.
- Most could be better managed.
2/3
* Non-institutionalized U.S. population http://www.fightchronicdisease.org/pdfs/2009_PFCDAlmanac.pdf
% of US healthcare dollars spent in 2007 on treating patients with one or more chronic diseases
75
%
General
Population
96
%
Medicare
83
%
Medicaid

Prevention vs. Chronic Disease Reverse the “Flow”
“The Natural Flow of Health Risks … is Toward High Risk in the Absence of Programs
Targeted at Maintaining the Population at Low Risk” – Dee Edington, PhD
General Wellness
Presence of Risk
Factors for Disease
Established
Disease
Disease – with
Complications
$ $$ $$$
 Costs follow risk – the greater the number of risk factors, the higher the cost
$$$$
 A culture of health that promotes healthy behaviors may prevent or slow progression of disease and keep employees as healthy and low cost as possible – to the left side of the risk continuum
Edington DW. N C Med J. 2006;67(6):425 –427; Mahoney JJ. J Manag Care Pharm. 2008;14 (6 Suppl B):3–8; National Business Group on Health. Issue Brief. March 2006.
Washington, DC; 2006.

Percentage of Healthcare Costs Attributable to
Employees in Different Health Categories*
35% with established conditions
50% of the population is well or has risk factors
10% of cost
15% of cost
75% of cost
 Most health care strategies focus on the 5% in the
“sickest” category
 While this may yield shortterm savings, to provide quality, cost-effective care, the employer needs to manage the entire population
5% with complications
* Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services.
Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008;14(6 Suppl B):3 –8. (Pitney Bowes Case Study)

15%

Health Risks:
Behaviors, Conditions, Events
Behaviors:
• Smoking
• Poor nutrition: <5 servings of vegetables/day
• Lack of exercise: <60 minutes/day 5x/week
• Inconsistent compliance preventive health measures
/ screenings/ annual physicals and medications.
Uncontrolled Conditions:
• High blood pressure
• High blood glucose (sugar)
• Obesity : BMI>30
• Undiagnosed cancer
• Unmanaged Stress/Anxiety/Depression
Uncontrollables:
• Age
• Gender
• Family History
• Genetics
Events:
• Heart Attack
• Stroke
• Cancer Diagnosis

Normal
Overweight
Obese

Health Risk:
Behaviors, Conditions, Events
• Eyeball
• National/regional benchmark data
• Employee Surveys
• Health Risk Assessments
• Biometric Screening data
• Medical and Pharmacy
Claims data
Financial Risk:
Total Cost of Care
• Premiums* o Medical Claims o Pharmacy Claims
• Disability – illness or injury
• Workers compensation
• Lost productivity due to illness or injury
* Degree of impact increases from community-rated to experience-rated to self-funded.
Self-funded employers would look directly at medical and pharmacy claims vs. premiums.

5% of Employees/Dependents Can Account for 75% of Your
Healthcare Cost
35% with established conditions
The 15 most expensive health conditions account for 44 percent of total healthcare expenses
50% of the population is well or has risk factors
10% of cost
15% of cost
75% of cost
5% with complications
Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders
People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition
* Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services.
Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008;14(6 Suppl B):3 –8. (Pitney Bowes Case Study)

“Can we mitigate the trend?”
35% with established conditions
The 15 most expensive health conditions account for 44 percent of total healthcare expenses
50% of the population is well or has risk factors
10% of cost
15% of cost
75% of cost
5% with complications
Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders
People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition
* Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services.
Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008;14(6 Suppl B):3 –8. (Pitney Bowes Case Study)

Can we prevent migration from risk to chronic disease?
35% with established conditions
The 15 most expensive health conditions account for 44 percent of total healthcare expenses
50% of the population is well or has risk factors
10% of cost
15% of cost
75% of cost 5% with complications
Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders
People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition
* Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services.
Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008;14(6 Suppl B):3 –8. (Pitney Bowes Case Study)

Can we shrink the cost of healthcare and grow the size and strength of our workforce?
35% with established conditions
The 15 most expensive health conditions account for 44 percent of total healthcare expenses
50% of the population is well or has risk factors
10% of cost
15% of cost
75% of cost
Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders
5% with complications
People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition
* Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services.
Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008;14(6 Suppl B):3
–8. (Pitney Bowes Case Study)

Productivity: Measurable production per employee or group per time period
X# of cars washed per day
X# of phone calls handled per hour
LOSSES
• Absenteeism
• Presenteeism
• Time spent distracted by family/personal responsibilities / stress
GAINS
• Days of physical presence at work
• Hours mentally present at work
• Bursts of creativity that result in meaningful outcomes
• Brand Stewardship

(Total # of employees * prevalence) * (average annual salary * % avg productivity lost) = Annual $ lost productivity due to that condition
Example: 200 employees with a 17.5% prevalence of flu, an average annual pay of
$50,000, losing 4.7% productivity due to flu (equivalent of 7 days out of work and 7 days at half presenteeism = $70,000/year

J&J‘s leaders estimate that wellness programs have cumulatively saved the company
$250 million on healthcare costs over the past decade, from 2002 to 2008, the return was $2.71 for every dollar spent.¹
• 46% of employees participating in on-site smoking cessation program quit; 48% smoked less – L-3
Communications
• Classes and fitness training offered to prevent back injuries resulted in increased employee morale, reduced worker’s comp claims, medical costs and sick days related to back injuries producing a net cost benefit ratio of 1 to 1.79 – County in California
• Participants in their “Stay Alive & Well” program significantly lowered cholesterol levels, blood pressure and weight and experienced 21% lower lifestyle-related claim costs than non-participants. Resulting savings: $127.89 per participant with a benefit to cost ratio of 1.68 to 1 over two years. – Reynolds
Electrical & Engineering Company, Las Vegas
• 22% fewer admissions to a hospital, 29% shorter hospital stays, and 42% lower expenses per admission –
Superior Coffee and Foods, Illinois
• Employees whose lifestyles included two to four health risks such as smoking, little exercise, overweight — were 75% higher than those of low-risk employees. High-risk employees who improved their health habits through the company’s health promotion program and became low risk cut their average medical claims in half, lowering their medical insurance costs by an average of $618 per year. – Steelcase
¹Harvard Business Review, December 2010, W. Braun, What’s the Hard Return on Employee Wellness
Programs?
Reference: The Cost Benefit of Worksite Wellness, www.welcoa.org/Worksite_cost_benefit.html

• Capture CEO Support
• Designate a Company Wellness Leader
• Conduct an Employee Health Interest Survey
• Provide an Opportunity for Health Screening
• Administer an Annual Physical Activity Campaign
• Hold a Healthy Eating In-service/Lunch 'n Learn
• Establish an In-house Wellness Library
• Disseminate a Quarterly Health Newsletter
• Implement Healthy Policies and Procedures
• Support Community Health Efforts
• Engage a Broker or Consultant to Design an
Comprehensive Strategy
¹Wellnss for Small Business, Welcoa, http://www.welcoa.org/wellworkplace/index.php?category=22

 Companies (must) offer health benefits in order to compete for talent in the local marketplace
 Healthcare cost affects companies’ bottom line
 Health risk drives healthcare utilization and cost
 Health behaviors drive health risk
 Health status affects productivity, both physical and mental/creative, and productivity affects your bottom line
 Employees will practice smarter health behaviors if properly motivated
 A culture of health at work has significant impact on and value to employees and their families

Benefits Health Wellness
Plan for Success
1. Assess: Baseline Risk and Wellness Needs
2. Develop or Purchase: High Quality Wellness Services
3. Communicate: Your Wellness Program and Culture Change
4. Measure: The Success of Your Culture Shift
Success takes time: 3 year vision
1. Assess goals annually
2.
Stay “on message” in promoting healthy lifestyles to employees
3. Build and leverage buy in from the top of the organization

Wellness As a Business Strategy
SMART Health Partners’ Role
 General Assessment and Program Design
 Baseline
 Prioritization
 Goal Development
 Strategic Plan
 Implementation
 Budgeting
 Cost Neutral Resources
 Vendor Management
 Engagement
 Data Collection
 Measurement of Results
 Translation of Value
 “Marketing” of Results
Nora Tsivgas
President & CEO
SMART Health Partners, LLC
16 Mt. Bethel Drive, Suite 238
Warren, NJ 07059 nora.tsivgas@smarthealthnow.com
201.321.3532 http://www.smarthealthnow.com

• Hall’s Warehouse Corp. founded in 1966
Mission Statement
“To provide superior logistical services in a manner that meets or exceeds the requirements of Hall’s clients while enhancing our competitive position in the market place”
• Hall’s is comprised of three enterprises
– Hall’s Warehouse Corp.
– Hall’s Fast Motor Freight
– Hall’s Logistics Group Inc.

• Operate over 1,651,000 square feet of dry, refrigerated and frozen storage
• 5 facility locations encompassing 7 warehouse operations
▪ Kentile Campus, South Plainfield, NJ (Headquarters)
Hall’s Fast Motor Freight Inc.
▪ Oak Tree facility, South Plainfield, NJ
▪ Edison facility, Edison, NJ
▪ Bridgewater facility, Bridgewater, NJ
▪ Piscataway 120 & 140 facilities, Piscataway, NJ

• Hall’s Fast Motor Freight
Asset Based 75 unit regional carrier
• Hall’s Logistics Corp.
(Strategic Carrier Partnership)
• Service retail and food service customers and manufacturers in the north east market
• We cross-dock and transport over 25mm lbs per month for our largest consolidation client

1) Concern with the direction of healthcare costs
- Average increase of healthcare costs 10% since 2004
2) Compliance, Safety, Accountability (CSA)
▪ Close monitoring and evaluating the safety and compliance records of motor carriers and their drivers
▪ Taking rapid action against those with apparent safety problems, to get them to improve
3) Other avenues ineffective
4) Firm belief in having “feet on the ground” in order for lasting behavior change to occur

Personalized &
Customized
100% Voluntary
100% Confidential

Lose Weight Exercise More Stop Smoking Reduce Stress
Eat Better Manage Aches
& Pains
Research Topics Answer General
Health Questions

Proactive Education
Blood
Pressure
Screenings
Body Composition
Testing
Lunch & Learns
Programs or Competitions
• Weight Loss
• Smoking Cessation
• Nutrition
• Exercise Programs

January – Health Risk Assessments
▪ 72% participation
▪ Overall wellness score was 60
▪ Top 4 areas of concern: Nutrition, Exercise, Weight, Stress
May – The Biggest Loser
(3 month weight loss program)
▪ 90 employees participate
▪ 260 pounds of body weight lost
December – Fitness Center Program
▪ Partnered with local health club
▪ Discounted rates offered to employees and family members
▪ Over 80 employees have participated in program

January – Health Risk Assessments
▪ 85% participation
▪ Overall wellness score was 67
▪ Large improvements seen in Blood Pressure, Exercise, Smoking, and Stress.
March – Compete to Quit
(3 month Tobacco Cessation program)
▪ New Jersey Tobacco Control Worksite Program
▪ 28 participants and 11 employees quit smoking
July – Tobacco Free Workplace Policy
▪ All tobacco products prohibited throughout all Hall’s locations
▪ Tobacco cessation resources were available 6 months prior to policy implementation date

January – Take Shape for Life
(Nutritional intervention program)
▪ Weekly weigh-ins
▪ Before pictures and circumference measurements
▪ Bi-weekly onsite classes
February – Slim Down or Pay Up
(3 month weight loss program)
▪ 40 employees participated
▪ 33 employees completed program (3 weigh-ins, 1 per month)
▪ 530 pounds of body weight lost collectively
December – Hall’s Health & Wellness Program
▪ Create brand, logo, and vision statement
▪ Introduce new internal wellness newsletter (biannual)

January – Health Risk Assessments
(third round)
▪ Incentives for completion of HRA and Biometric Measures
▪ Planning to offer onsite blood testing (cholesterol, blood sugar etc.)
March – Tobacco Cessation program
(second)
▪ Alongside Healthyroads Quit & Fit program (AETNA)
▪ Prior to implementation of tobacco surcharge
July
– Tobacco Surcharge
▪ Monthly increase to the health insurance premiums of tobacco users
Additional plans for 2012
▪ ROI
▪ Pedometer walking program
▪ Family Health Fair
▪ Rx savings information (generic, mail-order)

Before Current
Body Weight Lost -
84 pounds
Reduction in Body
Fat Percentage -
21%
Blood Pressure
Was: 152/98
Now: 104/72
• No prescribed medications
• Meets DOT health requirements

Before Current
Body Weight Lost -
130 pounds
Reduction in Body
Fat Percentage -
23%
• Discontinued use of prescribed high blood pressure medication.
• Recently completed first 5K run (33 mins)

Thank you for coming!