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Does a Wellness program for your employees actually affect your bottom line? YES! See the details here!

Does a Wellness program for your employees actually affect your bottom line? YES! See the details here!


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  • 1. Employee Wellness and Your Bottom Line Managing Health Care Costs Presented to: ABC Corporation Presented by: The Gifford Health Institute Corporate Health Care Cost Containment The Gifford Health Institute
  • 2. Agenda • Rationale for Worksite Health Promotion Programs – Why Wellness? – Why the Worksite? – What’s the Goal? • Published Research on WHP Programs – High Risk Employees Cost More – WHP Programs Have an Impact – Comprehensive Programs Have Positive ROI • Bottom Line Corporate Health Care Cost Containment The Gifford Health Institute
  • 3. Rationale for Worksite Health Promotion Programs Corporate Health Care Cost Containment The Gifford Health Institute
  • 4. Rationale For WHP Programs Why Wellness? Health Spending in US • Topped $1 trillion in 1996 ($1,035.1 billion) • Doubles every 10 years 1960 $26.9 billion 1970 $73.2 billion 1980 $247.3 billion (tripled) 1990 $699.1 billion 2000 $1.3 trillion • Forecast for 2010 is $3.07 trillion Corporate Health Care Cost Containment The Gifford Health Institute
  • 5. Rationale For WHP Programs Why Wellness? Increasing Costs • Health plans raising premiums • US Business share of health expenditures is 25% • Approximately 50% of a company’s profits are spent on healthcare benefits • Productivity costs estimated at twice direct costs Corporate Health Care Cost Containment The Gifford Health Institute
  • 6. Rationale For WHP Programs Why Wellness? Lifestyle Accounts for 50% of Deaths 10% 20% Lifestyle Environment 50% Biology Health Services 20% Source: CDC (1980) Corporate Health Care Cost Containment The Gifford Health Institute
  • 7. Rationale For WHP Programs Premature Death: Fact or Fiction? Perceptions Perceptions Reality Reality 1. Cancer 30% 1. Tobacco Use 38% 1. Cancer 30% 1. Tobacco Use 38% 2. Heart Disease 29% 2. Obesity/Inactivity 28% 2. Heart Disease 29% 2. Obesity/Inactivity 28% 3. Auto Accidents 28% 3. Alcohol Abuse 9% 3. Auto Accidents 28% 3. Alcohol Abuse 9% 4. Tobacco Use 25% 4. Nonsexual Infectious 8% 4. Tobacco Use 25% 4. Nonsexual Infectious 8% 5. Alcohol Abuse 18% 5. Toxic Agents 6% 5. Alcohol Abuse 18% 5. Toxic Agents 6% 6. Drug Abuse 17% 6. Firearms 3% 6. Drug Abuse 17% 6. Firearms 3% 7. Firearms 15% 7. Sexual Behavior 3% 7. Firearms 15% 7. Sexual Behavior 3% 8. Obesity/Inactivity 9% 8. Auto Accidents 2% 8. Obesity/Inactivity 9% 8. Auto Accidents 2% 9. AIDS 8% 9. Illicit Drug Use 2% 9. AIDS 8% 9. Illicit Drug Use Source: Partnership for Prevention. Based on 2% Source: Partnership for Prevention. Survey of 1,000 research by McGinnis & Foege published in the adults in March 2000. Percentage who described Journal of the American Medical Association, each as the leading cause of premature death. November 10, 1993. Corporate Health Care Cost Containment The Gifford Health Institute
  • 8. Rationale For WHP Programs Why the Worksite? • Captive Audience • Consistent Environment • Social Support • Organizational Support • Employers Will Fund Corporate Health Care Cost Containment The Gifford Health Institute
  • 9. Rationale For WHP Programs What’s the Goal? • It’s Good for Business • Employee Job Satisfaction • Recruitment & Retention • Enhance Competitiveness • Decrease Absenteeism • Decrease Workers Comp & Disability • Manage Healthcare Costs Corporate Health Care Cost Containment The Gifford Health Institute
  • 10. Published Research on Worksite Health Promotion Corporate Health Care Cost Containment The Gifford Health Institute
  • 11. Published Research on WHP What the Research Says 1. High Risk Employees Cost More – Higher Costs – Less Productive 2. WHP Programs Have an Impact – Health Risks – Medical Claims – Absenteeism – Disability 3. Comprehensive Programs Have Positive ROI Corporate Health Care Cost Containment The Gifford Health Institute
  • 12. Published Research: High Risk Employees Cost More Corporate Health Care Cost Containment The Gifford Health Institute
  • 13. Published Research on WHP High Risk Employees Cost More Impact on Individual Health Care Costs: 100% High versus Lower-Risk Employees Individuals at high risk for Individuals at high risk for 75% 70.2% depression have 70.2% higher depression have 70.2% higher costs than those at lower risk costs than those at lower risk 46.3% 50% Percent 34.8% 21.4% 19.7% 25% 14.5% 11.7% 10.4% 0% Depression Glucose Exercise Weight Tobacco- Tobacco Stress Pressure Blood Past -25% -50% Source: Goetzel et al. (1998) Corporate Health Care Cost Containment The Gifford Health Institute
  • 14. Published Research on WHP High Risks Impact Organizational Health Care Costs Annual Impact of High Risks on Organizational Health Care Costs Percent of Expenditures 10% •• High stress generates 7.9% of High stress generates 7.9% of 7.9% annual medical expenditures annual medical expenditures 8% •• $428 per employee annually (1996 $428 per employee annually (1996 5.6% dollars) dollars) 6% 4.1% •• 24.9% of health care costs 24.9% of health care costs 4% 3.3% 2.5% 1.7% 1.5% 2% 0.5% 0% Stress Exercise Glucose Pressure Tobacco Depression Tobacco- Weight Blood Past Source: Anderson et al. (2000) Corporate Health Care Cost Containment The Gifford Health Institute
  • 15. Published Research on WHP Costs Follow Risks Changes in Cost Associated with Risk Average Annual Costs* $1,500 Risk Change $1,250 Lo-Lo Lo-Hi $1,000 Hi-Lo $750 Hi-Hi $500 1985-87 1988-90 Time Source: Edington et al. (1997) *Claims costs adjusted to 1996 dollars. Corporate Health Care Cost Containment The Gifford Health Institute
  • 16. Published Research on WHP High Risk Employees are Less Productive Worker Productivity Index 100% Productivity Level 80% 89% % Not 79% Productive 60% 67% % Productive 60% 40% 20% 0% Overall Digestive Mental Hlth Musc/skel Source: Burton et al. (1999) Corporate Health Care Cost Containment The Gifford Health Institute
  • 17. Published Research: WHP Programs Have an Impact Corporate Health Care Cost Containment The Gifford Health Institute
  • 18. WHP Programs Have an Impact on: Health Risks Targeted Programs Reduce Risks Average Number of Risks 7.0 Participants 6.5 6.24 6.36 Nonparticipants 6.0 Net Risk Reduction is .85 Net Risk Reduction is .85 5.5 5.90 5.0 5.17 4.5 Baseline Follow-Up Source: Gold et al. (2000) Corporate Health Care Cost Containment The Gifford Health Institute
  • 19. WHP Programs Have an Impact on: Health Risks Targeted Programs Reduce Risks 50% Participants Percent Reduced Risks 40% 44% 46% 45% Nonparticipants 41% 38% 30% 28% 27% 20% 25% 23% 25% 16% 18% 10% 14% 14% 0% * l * * * * * ck ero ing ise ing ss ht Ba l es t Ea t er c ok St re Wei g ho Ex Sm C Source: Gold et al. (2000) * Significant difference Corporate Health Care Cost Containment The Gifford Health Institute
  • 20. WHP Programs Have an Impact on: per Employee and Retiree Medical Claims $3,000 Average Claims Paid Nonparticipants $2,500 Participants $2,000 $1,500 Nonparticipants’ expenses increased Nonparticipants’ expenses increased $1,000 27.7% more than participants. 27.7% more than participants. $500 Possible Savings = $437/person Possible Savings = $437/person $0 Baseline Study Year Source: Fries et al. (1994) Corporate Health Care Cost Containment The Gifford Health Institute
  • 21. WHP Programs Have an Impact on: Absenteeism 5.00 4.32 Mean Days Absent 4.05 4.00 2.87 Participants 3.00 Nonparticipants 2.00 2.50 2.58 2.06 1.00 Intervention 0.00 1984 1985* 1986* Source: Wood et al. (1989) * Significant difference Corporate Health Care Cost Containment The Gifford Health Institute
  • 22. WHP Programs Have an Impact on: Short-Term Disability Short-Term Disability Savings versus Non-Participants Average STD Days Lost Nonparticipants 45.0 HRA/Reimbursement 38.1 40.0 36.7 33.2 35.0 Estimated Difference = Estimated Difference = $1350 per participant $1350 per participant 30.0 29.4 25.0 27.8 Intervention 24.7 20.0 1996 Baseline 1997* 1998* Source: Serxner et al. (2001) * Significant difference Corporate Health Care Cost Containment The Gifford Health Institute
  • 23. Published Research: Comprehensive Programs Have Positive ROI Corporate Health Care Cost Containment The Gifford Health Institute
  • 24. Comprehensive Programs Have Positive ROI Short-Term Long-Term Demand $2-$5 Management 1st Year Health $3-$8 Promotion 3-5 Years Corporate Health Care Cost Containment The Gifford Health Institute
  • 25. Comprehensive Programs Have Positive ROI Savings per Dollar Invested $8.22 $10 $8 $4.87 $6 $3.35 $4 $2 $0 Health Care Absenteeism Combined Costs Source: Aldana (1998) Corporate Health Care Cost Containment The Gifford Health Institute
  • 26. Bottom Line: “What the Research Tells Us” Corporate Health Care Cost Containment The Gifford Health Institute
  • 27. Bottom Line Principles of Effective Program Design • Behaviorally staged • Focus on maintenance and reinforcement • Program beyond risk or disease specific • Tailored to health and safety risk • Incentives for participation Source: Serxner (in press) Corporate Health Care Cost Containment The Gifford Health Institute
  • 28. Bottom Line Principles of Effective Program Design • Repeated contacts • Varied formats • Personalization • Low cost & portable • Easy to administer • Emphasis on health and productivity Source: Serxner (in press) Corporate Health Care Cost Containment The Gifford Health Institute
  • 29. Bottom Line Principles of Effective Program Design • Multiple distribution channels • Built in program evaluation • Long-term orientation • Integrated with Safety, Occupational Health, EAP, and Training • Visible management support Source: Serxner (in press) Corporate Health Care Cost Containment The Gifford Health Institute
  • 30. Bottom Line Millions Can Be Saved Projecting Medical Care Cost Increases Using Four Scenarios of Lifestyle Risk Rates $9.96 $10 $8.85 $7.89 (in Millions*) $8 $7.74 Million $7.74 Million Saved/Year Saved/Year Cost $6 $4 $2.22 $2 $0 No program w/ Program Program Program current risk holds risks reduces reduces trends constant risks 0.1%/yr risks 1%/yr Source: Leutzinger et al. (AJHP 2000) *1998 Dollars Corporate Health Care Cost Containment The Gifford Health Institute
  • 31. Bottom Line Wellness is a Healthy Investment • Lower Health Care Costs • Lower Absenteeism • Additional Benefits – Higher Productivity – Lower Turnover – Improved Employee Satisfaction/Morale – Improved Employee Health/Quality of Life – Improved Recruitment – Improved Corporate Image Corporate Health Care Cost Containment The Gifford Health Institute
  • 32. References Aldana SG. Financial impact of worksite health promotion and methodological quality of the evidence. Art of Health Promotion 1998; 2(1):1-8. Anderson DR, Whitmer RW, Goetzel RZ, Ozminkowski RJ, Wasserman J, Serxner SA. The relationship between modifiable health risks and group-level health care expenditures. American Journal of Health Promotion 2000; September/October: 45-52. Burton WN, Conti DJ, Chen CY, Schultz AB, Edington DW. The role of health risk factors and disease on worker productivity. Journal of Occupational and Environmental Medicine 1999; 41(10): 863-877. Edington DW, Yen LT, Witting P. The financial impact of changes in personal health practices. Journal of Occupational and Environmental Medicine 1997; 39(11): 1037-1047. Fries JF, Harrington H, Edwards R, Kent LA, Richardson N. Randomized Controlled Trial of Cost Reductions from a Health Education Program: The California Public Employees’ Retirement System (PERS) Study. American Journal of Health Promotion 1994; 8(3): 216-223. Goetzel RZ, Juday TR, Ozminkowski RJ. A systematic review of return-on-investment studies of corporate health and productivity management initiatives. AWHP’s Worksite Health 1999 (Summer); 12-21. Gold DB, Anderson DA, Serxner, S. Impact of a telephone-based intervention on the reduction of health risks. American Journal of Health Promotion 2000; Nov/Dec: 97-106. Corporate Health Care Cost Containment The Gifford Health Institute
  • 33. References Leutzinger JA, Ozminkowski RJ, Dunn RL, Goetzel RZ, Richling DE, Stewart M, Whitmer RW. Projecting future medical care cots using four scenarios of lifestyle risk rates. American Journal of Health Promotion 2000; 15(1): 35-44. Ozminkowski RJ, Dunn RL, Goetzel RZ, Canior RI, Murnane J, Harrison M. A return on investment evaluation of the Citibank, N.A., health management program. American Journal of Health Promotion 1999; 14: 31-43. Pelletier KR. A review and analysis of the clinical and cost-effectiveness studies of comprehensive health promotion and disease management programs at the worksite: 1995-1998 update (IV). American Journal of Health Promotion 1999; 13:333-345. Serxner SA. Practical Considerations for Design and Evaluation of Health Promotion Programs in the Workplace. Disease Management and Health Outcomes (in press). Serxner SA, Gold DB, Anderson DR, & Williams, D. The impact of a worksite health promotion program on short-term disability usage. Journal of Occupational and Environmental Medicine 2001; 43(1): 25-29. US Department of Health and Human Services (1980) Ten leading causes of death in the United States. Atlanta: Center for Disease Control, July. Wood EA, Olmstead GW, Craig JL. An evaluation of lifestyle risk factors and absenteeism after two years in a worksite health promotion programs. American Journal of Health Promotion 1989; 4(2): 128-113. Corporate Health Care Cost Containment The Gifford Health Institute