I’m Earl Hanson, founder and majority partner of TwoMedicine Health & Financial Fitness, a Preventive Health Strategies Firm based in Bozeman, MT with offices in Billings, MT and Denver, CO. Our company is in the field of educating and empowering employees, providing targeted intervention, and evaluating worksite health promotion programs to help employers and their employees understand the interconnectedness between health and finances. TwoMedicine’s mission is based on the understanding that health and financial fitness are interconnected, and that physical, mental, and financial fitness have a complementary and interrelated impact on well-being.
Everyone meaning organizations and individuals
The December 2005 Certified Financial Planning Board report stated, “Americans, by and large, do not manage their financial lives as well as they could. Most Americans could benefit from financial planning. Yet few Americans understand what that is. Many of those who are familiar with financial planning as a term think of it as something only the wealthy need.” TwoMedicine agrees that most Americans could benefit from financial planning, few understand what it is, and that those who are familiar with the term not only think of it as something that only the wealthy need, but they think of it also as something that only the wealthy can afford. We ALL need financial planning, and in many cases, those that need it the most are not getting it and it is affecting much more than their pocketbook.
So Whats going on right now in America The subject of financial distress is hitting the mainstream and is being recognized as a very important issue at the workplace.
TwoMedicine is usually spending time educating its clients on the decisions we make about our health and how they affect our finances and the finances of the organizations we work for. But as Thomas Garman says, “Unfortunately…
There are many compelling statistics now from credible studies, and I’m going to show you the summary of just a few.
I want to take the time to pass some statistics in front of you.
A recent press release issued by E. Thomas Garman, President of the Personal Finance Employee Education Foundation, Inc., Fellow and Professor Emeritus, Virginia Tech University, headlined, “ EMPLOYERS WASTE $750 TO $2,000 ANNUALLY ON EACH EMPLOYEE’S POOR MONEY MANAGEMENT BEHAVIORS ” It went on to say that “Poor employee financial literacy costs employers at least $750 in cash—for each employee—every year,” says Dr. E. Thomas Garman, president, Personal Finance Employee Education Foundation, Inc., and professor emeritus and fellow at Virginia Tech University where he directed the university’s National Institute for Personal Finance Employee Education. Employers can expect $450 in positive job outcomes and $300 in lower health care costs for each employee who improves his or her financial behaviors and financial well-being. Employers offering flexible benefits accounts might realize additional savings of $1,274 for improving employee financial literacy. Financially troubled employees are absent more than others and they waste more time at work dealing with personal financial problems. Typically, at least two-thirds of employees deal with financial matters at work. The return comes from less absenteeism and less work time wasted dealing with financial concerns. Research says as employee financial well-being rises these factors definitely change for the better for many employees: concerns and stress about money matters, personal finance/work conflict, health, work life, pay satisfaction, job performance rating, and work hours spent dealing with personal financial concerns, presenteeism, and contributions to retirement savings.”…
So Thomas Garman simply states the facts. Our Director of Preventive Health, Pete Shatwell, has identified in the populations with which he’s worked, that excessive stress, (originating from all sources), is one of the greatest barriers to engaging in healthy behavior. “If you want to start eating right and are overly stressed, it won’t happen, if you want to start exercising and are overly stressed, it won’t happen, if you want to quit smoking and are overly stressed, it won’t happen. Financial struggles can cause significant stressors thereby leading to a diminished state of well-being.”
As we see in this diagram, a small percentage of individuals (those at high risk) make up a very large and disproportionate amount of the costs. The same is true for financial fitness and we are trying to keep low risk people low, and move high risk people to low.
As mentioned in this quote from Dr. Farmer, education is the most critical part of any intervention. Financial Fitness is no different. Part of this education process for our clients has been to clearly define and demonstrate the affects that poor health have on the individual’s finances, but also the finances of the organization. Drawing out this relationship for employees and then providing them with effective and strategically chosen self-care tools helps these individuals avoid unnecessary health expenses which saves the employer money on the health plan. Helping organizations save dollars that can be put right back into the employees pockets through additional benefits, raises, or interesting incentives.
You can access the Mayo Clinic Health Information from the MyTwoMed portal. You can click on the link to Mayo Clinic Health Information or the Mayo Clinic Health Risk Assessment button. You’ll also notice – show with laser pointer- the financial fitness section. It is in its infancy of development, and will have drill dowm technology.
Here is a sample of the Mayo Clinic HRA. It takes about 15 minutes to complete, and you can return at any time by hitting the save and return button. What is unique about the TwoMedicine - Mayo Clinic HRA? (special slide)
When you complete the Mayo Clinic HRA, you immediately receive a Personal Health Report with important health information and links to programs and resources based on your results. You can access this report at any time from my Health Spot on the home page, or you may print a copy as well.
Everyone benefits. In governmental organizations, taxpayers. In private or public corporations, shareholders.
Let’s start out the discussion by asking some questions.
Health & Financial Fitness Financial Fitness & Health <ul><li>Earl W. Hanson, CFP ® , MBA </li></ul>
Introduction <ul><li>Financial Planning is Healthy For Everyone (organizations & individuals) </li></ul><ul><li>Healthy Behavior is Financially Beneficial for Everyone (organizations & individuals) </li></ul><ul><li>Collaboration of CFP ® Certificants and Preventive Health Strategists </li></ul>
Financial Planning <ul><li>“ Americans, by and large, do not manage their financial lives as well as they could. Most Americans could benefit from financial planning. Yet few Americans understand what that is. Many of those who are familiar with financial planning as a term think of it as something only the wealthy need.” </li></ul><ul><li>-CFP Board </li></ul>
Money worries hinder job performance By Stephanie Armour, USA TODAY, October 5, 2005, B1 “ With gas prices rising, health costs soaring and consumer confidence taking a dive, many employees are struggling with financial woes that threaten job productivity.”
“ Unfortunately, the partnership between health and wealth doesn't end here; it's a vicious cycle that can spin the other way as well. If you let yourself get in financial trouble you're likely to endure headaches, stomachaches, stress, a lack of sleep and fluctuations in weight.’ -Thomas Garman, professor emeritus at Virginia Tech and author of a study on the relationship between financial well-being and the physical health of debt-strapped consumers.
<ul><li>“ Research is increasingly confirming the view that financial distress plays a role in causing and aggravating different health disorders.” </li></ul><ul><li>– Article: Negative Health Effects of Financial Stress. O’Neill, Sorhaindo, Xiao, Garman </li></ul>Compelling Statistics
<ul><li>“ Financial distress is often exhibited by worrying. Distress about economic matters is a good predictor of overall well-being and high financial distress significantly reduces psychological well-being.” </li></ul><ul><li>- (Blumstein & Schwartz, 1983; Grasmick, 1992; Pittman & Lloyd, 1988; Ross & Huber, 1985) </li></ul>Compelling Statistics
Compelling Statistics <ul><li>A recent study on the relationship between finances and health found that more than 4 in 10 (42.4%) of the respondents indicated that their health was affected in some way by their financial problems. The four most frequently reported health effects associated with financial distress were stress (46%), worry, nerves, and anxiety (12%), depression (10%), and insomnia and sleep problems (9%). </li></ul><ul><li>- O’Neill, Sorhaindo, Xiao, and Garman (2005) </li></ul>
<ul><li>“ EMPLOYERS WASTE $750 TO $2,000 ANNUALLY ON EACH EMPLOYEE’S POOR MONEY MANAGEMENT BEHAVIORS ” </li></ul><ul><li>“ Employee financial worries are not a straw man—it’s a real problem for employers.” </li></ul><ul><li>Source: Article: Funds and Employers lead Australian Financial Literacy Efforts because of Bottom-Line Argument. Author: E.T. Garman </li></ul>Potential Savings
The Affects on Health <ul><li>"Two in five people who have financial stresses, they tell us - absolutely positively - that their health has been negatively impacted because of financial problems…" </li></ul><ul><li>Source: Thomas Garman, professor emeritus at Virginia Tech and author of a study on the relationship between financial well-being and the physical health of debt-strapped consumers. </li></ul>
Health Risk and Health Related Costs <ul><li>Health Related Costs Defined: </li></ul><ul><ul><li>Medical Care (Plan) Costs </li></ul></ul><ul><ul><li>Workers Comp/Disability Costs </li></ul></ul><ul><ul><li>Absenteeism Costs </li></ul></ul><ul><ul><li>Presenteeism Costs </li></ul></ul>
R. Goetzel, Relationship between modifiable health risks and health care expenditures, Journal of Occupational and Environmental Medicine, 1998
Health and Financial Outcomes <ul><li>An analysis of 51 studies of worksite health promotion programs </li></ul>Source: Larry Chapman, Proof Positive: An Analysis of the Cost-Effectiveness of Wellness, 2005 1:5.50 Cost/Benefit Ratio 20 -33.5% Disability Management, Workers’ Comp Costs 7 -28.7% Health Costs 24 -27.8% Sick Leave 22 Results Study Parameter No.
Health Risk and Health Related Costs Low Risk Population Risk High Risk Low Risk High Risk Population Cost
Education, education, education… <ul><li>“ If I had a limited amount of money in my budget, I would focus my dollars towards education. It will lead to the greatest return on investment of all of our actions.” </li></ul><ul><li>J. Christopher Farmer, M.D., Critical Care Medicine, Associate Director for Education, Program in Translational Immunovirology and Biodefense, Mayo Clinic. Speaking about preparations for a potential Avian Flu Pandemic </li></ul>
Interventions in Health <ul><li>Health Risk Assessment </li></ul><ul><li>24 Hr (800) Nurse Line </li></ul><ul><li>Lifestyle Coaching </li></ul><ul><li>Guide to Self Care </li></ul><ul><li>Monthly Online Health Management Programs </li></ul><ul><li>Weekly Newsletters </li></ul>
Online Information <ul><li>Preventive Health </li></ul><ul><li>Link to the HRA </li></ul><ul><li>myHealthNews </li></ul>
Mayo Clinic Health Risk Assessment <ul><li>Assess your medical and lifestyle information </li></ul><ul><li>Topics include: </li></ul><ul><li>Exercise </li></ul><ul><li>Emotional Health </li></ul><ul><li>Immunizations </li></ul><ul><li>Safety </li></ul><ul><li>Cancer Screenings </li></ul>
Financial Fitness Custom Questions on the Annual HRA <ul><li>8 questions measuring financial distress </li></ul><ul><li>4 questions measuring need and focus of future intervention </li></ul>
Personal Health Report <ul><li>Links you to programs and resources based on your results </li></ul>
Association for Financial Counseling and Planning Education Annual Conference in November 2006. <ul><li>TwoMedicine will present the financial fitness and financial stressor data collected to that point in time, from the customized Health Risk Assessment discussed earlier, which is being delivered through Mayo Clinic Health Management Resources. </li></ul>
Financial Fitness Intervention by the CFP ® Practitioner <ul><li>TwoMedicine believes the CFP ® Practitioner can help to break this vicious cycle of poor financial and physical health by assisting individuals in: </li></ul><ul><li>Assessing their own financial situation </li></ul><ul><li>Identifying basic areas for improvement </li></ul><ul><li>Offering tools and interventions to address these areas of concern at the worksite and in collaboration with Preventive Health Strategists </li></ul>
Workers Want More than Retirement Education at Their Workplace: A Report of Research Findings So-hyun Joo and E. Thomas Garman <ul><li>The findings of a study by Joo (1998) demonstrate that workers are interested in workplace financial education on a lot of personal finance topics, rather than narrowly focused retirement education. </li></ul>
In Summary <ul><li>Quality Financial Fitness Strategies and Preventive Health Strategies positively impact the Financial Fitness of individuals and organizations, and are the right thing for employers to offer as stewards of employee well-being. </li></ul>
Discussion <ul><li>1. When you are working on a financial plan for a person in their 30’s or 40’s, and that person wants to retire at age 55 or 60, how do you predict the costs of health care and health insurance? How do you suggest that your customers prepare for this uncertainty? </li></ul>
Discussion <ul><li>2.Many financial services practices target wealthier individuals. In your practice, do you have financial planning delivery tools to reach the masses, or at least a broadly defined middle class? </li></ul>
Discussion <ul><li>3.Do you ever suggest to clients that their future Financial Fitness may impact their health, and their costs of health? </li></ul>
Discussion <ul><li>4.Do you have any public policy issues or changes you would like to see addressed? </li></ul>
<ul><li>Earl W. Hanson, Founder & President </li></ul><ul><li>[email_address] </li></ul><ul><li>Pete Shatwell, Director of Preventive Health Strategies </li></ul><ul><li>email@example.com </li></ul><ul><li>Kyle Hanson, Director of Marketing and Communications </li></ul><ul><li>[email_address] </li></ul>Contact Us