Corporate Wellness Adds to the Bottom Line

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Corporate Wellness Adds to
the Bottom Line
Creating a Productive and Healthy Workforce
The material provided herein is for informational purposes
only and is not intended as legal advice or counsel.
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Wellness Programs
In The Beginning…
Charles Bruder
Corporate Wellness
Adds To
The Bottom Line!!
November 2, 2011
Why Wellness?
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
Recent “Proof” Points That
Wellness Works
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)
WHY WELLNESS PROGRAMS?
•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
Employee Productivity
WORKSITE WELLNESS PROGRAMS
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
Main
Features
Primary
Focus
Quality of
WorkLife
Fun activity focus
No risk reduction
No high risk focus
All voluntary
Site-based only
No personalization
Minimal incentives
No spouses served
No evaluation
Morale-Oriented
Traditional
Approach
Mostly health focus
Some risk reduction
Little high risk focus
All voluntary
Site-based only
Weak personalization
Modest incentives
Few spouses served
Weak evaluation
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
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
Health and
Productivity
Managemen
t
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
WELLNESS PROGRAMS
Sample Incentive Program Design:
Category
2011
Wellness Goals
2012
Wellness Goals
2013
Wellness Goals
Participation in HRA
Complete
Complete
Complete
Tobacco/Nicotine:
Affidavit: Tobacco Free
-orCompletion of Smoking
Cessation Program
Negative Test Result
-orCompletion of Smoking
Cessation Program
Negative Test Result
-orCompletion of Smoking
Cessation Program
Physical Activity
Completion of
Shape Up the Nation
Walking Challenge
Completion of
Shape Up the Nation
Physical Activity Challenge
Completion of
Shape Up the Nation
Physical Activity Challenge
Blood Pressure:
Participate
<135/90
<120/80
Glucose:
Participate
< 110
< 100
Cholesterol:
Participate
<4.0(Cardiac Ratio)
<4.0(Cardiac Ratio)
Body Mass Index:
Participate
<30.0
<25.0
Benefit Advisory Coaching:
Participate
Complete
Complete
Impact
Up to 20% Reduction
in Premium Contribution
Up to 20% Reduction
in Premium Contribution
Up to 20% Reduction
in Premium Contribution
Incent Participants to Drive High
Engagement & Reward Healthy Choices

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
Wellness Programs,
Compliance Issues and
Potential Hidden Costs
(or how a good idea can go bad)
Charles Bruder
WELLNESS AS A BUSINESS
STRATEGY
Nora Tsivgas
President & CEO
SMART Health Partners, LLC
Maximizing Workforce Health
How Is Wellness a Business Strategy?
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.
Wellness as a Business Strategy
A strategic approach to managing your company’s investment in health benefits
and programs is essential in these days of rising healthcare costs.
Benefits
Health
Wellness
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.
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.
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.
The Call to Action is Hard to Ignore
% of US healthcare dollars
spent in 2007 on treating
patients with one or more
chronic diseases
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
75%
96%
83%
General
Population
Medicare
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.
5% of Employees Can Account for 75% of Cost
Percentage of Healthcare Costs Attributable to
Employees in Different Health Categories*
35% with established
conditions
15%
of cost
10%
of cost
50% of the
population is well
or has risk factors
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%
Identifying Health Risk in the Organization
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
Events:
•
•
•
Heart Attack
Stroke
Cancer Diagnosis
Uncontrollables:
•
•
•
•
Age
Gender
Family History
Genetics
What is Obese?
Normal
Overweight
Obese
Identifying Health Risk in the Organization
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.
Percentage of Healthcare Costs Attributable to
Employees in Different Health Categories*
5% of Employees/Dependents Can Account for 75% of Your
Healthcare Cost
The 15 most expensive health
conditions account for 44
percent of total healthcare
expenses
35% with established
conditions
15%
of cost
Top 5: heart disease, cancer,
trauma, mental disorders and
pulmonary disorders
10%
of cost
50% of the
population is well
or has risk factors
75%
of cost
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)
Percentage of Healthcare Costs Attributable to
Employees in Different Health Categories*
“Can we mitigate the trend?”
The 15 most expensive health
conditions account for 44
percent of total healthcare
expenses
35% with established
conditions
15%
of cost
Top 5: heart disease, cancer,
trauma, mental disorders and
pulmonary disorders
10%
of cost
50% of the
population is well
or has risk factors
75%
of
cost
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)
Percentage of Healthcare Costs Attributable to
Employees in Different Health Categories*
Can we prevent migration from risk to chronic disease?
The 15 most expensive health
conditions account for 44
percent of total healthcare
expenses
35% with established
conditions
15%
of cost
Top 5: heart disease, cancer,
trauma, mental disorders and
pulmonary disorders
10%
of cost
50% of the
population is well
or has risk factors
75%
of
cost
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)
Percentage of Healthcare Costs Attributable to
Employees in Different Health Categories*
Can we shrink the cost of healthcare and grow the size and strength of our workforce?
The 15 most expensive health
conditions account for 44
percent of total healthcare
expenses
35% with established
conditions
15%
of cost
Top 5: heart disease, cancer,
trauma, mental disorders and
pulmonary disorders
10%
of cost
50% of the
population is well
or has risk factors
75%
of
cost
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)
How Does Productivity Affect Profitability
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
Lost Productivity Has a Measurable Impact
(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
Worksite health promotion programs can yield a
$3 to $6 return on investment for every dollar
spent over a 2- to 5-year period
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 costbenefit 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
Where to Begin
•
•
•
•
•
•
•
•
•
•
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
Some Business Philosophies Underlying A
Successful Wellness Strategy
 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
Conclusion: Wellness IS a Business Strategy
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
[email protected]
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
I’m a Resource for employees!
Personalized &
Customized
100% Voluntary
100% Confidential
Ways I Can Help?
Lose Weight
Exercise More
Stop Smoking
Reduce Stress
Eat Better
Manage Aches
& Pains
Research Topics
Answer General
Health Questions
Other components of our program
Proactive Education
Body Composition
Testing
Programs or Competitions
Blood
Pressure
Screenings
Lunch & Learns
•
•
•
•
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)
Question & Answer Session
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