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Corporate Wellness

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  • 1. Wellness Initiatives- Employers are also in the “Health Business” September 11, 2009 8:15 AM Arvid R. “Dick” Tillmar – Health Advocate
  • 2. Session Agenda Why we’re here: - Wellness Initiatives – Employers are in the “Health Business” - Describe the latest changes in health care reform related to wellness - Explain how the employer can make changes that influence their bottom line and have a positive ROI. 2
  • 3. The biggest threats facing the American workforce today are obesity, tobacco use, and stress. Together, these lifestyle factors contribute to lost productivity and absenteeism, among other problems, but a wellness program can work to combat all three 3
  • 4. Benefits of Worksite Wellness Programs Companies receive many benefits after implementing a worksite wellness program in addition to reducing costs. They include increases in employee morale, improved employee health, reduction in workers compensation claims, reductions in absenteeism, and increases in productivity. Source: National Business Group on Health, 2005
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  • 6. Milestones in Contemporary America Hostess introduces Twinkies, 1953 Ray Kroc franchises the McDonald Brothers, 1955 And then introduces “supersizing,” 1993 6
  • 7. Individual Behavior Awareness/education Motivation Tools, strategies Policy and environment 7 7
  • 8. Individual 8 8
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  • 13. 48 Teaspoons Sugar 52 oz 64 oz 44 oz 32 oz 16 oz 13 13
  • 14. It’s All About Behavior Change 14
  • 15. Individual Family 15 15
  • 16. 16 16
  • 17. Individual Family Worksite 17 17
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  • 19. Individual Family Worksite Community 19 19
  • 20. 20 20
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  • 22. 22 22
  • 23. Individual Family Worksite Community Nation/ world 23 23
  • 24. 24 24
  • 25. Constraining Medical Costs Behavior & Lifestyle: Weight Gain ’86-’06 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 No Country Can Fund All the Consequences: Hypertension Type 2 Diabetes Osteoarthritis Stroke Coronary Heart Gallbladder Sleep Apnea Respiratory Issues Some Cancers Obesity Trends Among U.S. Adults (BMI>30%) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30% Centers for Disease Control & Prevention, 2006 Behavioral Risk Factors Surveillance System 25
  • 26. Diabetes Trends Among Adults in the U.S., BRFSS 1990 No Data <4% 4%-6% 6%-8% 8%-10% >10% 26
  • 27. Diabetes Trends Among Adults in the U.S., BRFSS 1991-92 No Data <4% 4%-6% 6%-8% 8%-10% >10% 27
  • 28. Diabetes Trends Among Adults in the U.S., BRFSS 1993-94 No Data <4% 4%-6% 6%-8% 8%-10% >10% 28
  • 29. Diabetes Trends Among Adults in the U.S., BRFSS 1995 - 96 No Data <4% 4%-6% 6%-8% 8%-10% >10% 29
  • 30. Diabetes Trends Among Adults in the U.S., BRFSS 1997 No Data <4% 4%-6% 6%-8% 8%-10% >10% 30
  • 31. Diabetes Trends Among Adults in the U.S., BRFSS 1998 No Data <4% 4%-6% 6%-8% 8%-10% >10% 31
  • 32. Diabetes Trends Among Adults in the U.S., BRFSS 1999 No Data <4% 4%-6% 6%-8% 8%-10% >10% 32
  • 33. Diabetes Trends Among Adults in the U.S., BRFSS 2000 No Data <4% 4%-6% 6%-8% 8%-10% >10% 33
  • 34. Diabetes Trends Among Adults in the U.S., BRFSS 2001 No Data <4% 4%-6% 6%-8% 8%-10% >10% 34
  • 35. A Weighty Toll on Employers Obesity costs U.S. companies $13 billion annually3 These workers have 36% higher medical costs than fit employees4 35
  • 36. The High Cost of Smoking A smoker costs the employer $3856/yr in added healthcare costs and lost productivity43 The overall prevalence of tobacco use is about 25% of the population, which can be generalized to any workplace population Calculating the cost of smoking: – Assume a workplace with 100 employees – Assume 25 employees use tobacco • Result = $96,400/yr in business borne costs associated with smoking – Because of this high cost, it is estimated more than 6,000 companies now refuse to hire smokers • Alaska Airlines requires a nicotine test before hiring people • Kalamazoo Valley Community College stopped hiring smokers for full-time positions • Union Pacific won’t hire smokers 36
  • 37. The Cost of Poor Health Lost productivity related to absence & presenteeism compared to Medical Costs medical & pharmacy costs Presenteeism 25% Lost Productivity 34% STD/LTD/WC 5% Absenteeism Lost Productivity 36% IBI Research Insights, May 2007 - Single employer example 37
  • 38. The Top 10 Most Costly Health Conditions Chronic disease has $1 TRILLION impact on U.S. lost productivity each year. Goetzl, R; JOEM 45(1) 5-14 2003 38
  • 39. Expense Drivers Health Care System 10% Environment 20% Genetics 20% Lifestyle 50% 39
  • 40. The Preventable Causes of Death in Wisconsin Tobacco: 8,100 +/- deaths per year in Wisconsin Poor diet: Physical inactivity: 6,900 +/- deaths per year in Wisconsin Microbial agents: 1,700 +/- deaths per year in Wisconsin Alcohol: 1,600 +/- deaths per year in Wisconsin Toxic agents: 1,000 +/- deaths per year in Wisconsin Medical errors: 1,300 +/- deaths per year in Wisconsin Motor Vehicles: 800 +/- deaths per year in Wisconsin Firearms: 400 +/- deaths per year in Wisconsin Sexual behavior: 400 +/- deaths per year in Wisconsin Uninsurance: 300 +/- deaths per year in Wisconsin Illicit drug use: 300 +/- deaths per year in Wisconsin – TOTAL: 22,800 40
  • 41. Six Unhealthy Truths Tell the Story of the Rise of Chronic Disease and It’s Impact on Health and Health Care Truth #1: Chronic Diseases are the #1 cause of death and disability in the U.S. Truth #2: Chronic diseases account for 75% of the nation’s health care spending. Truth #3: About two-thirds of the rise in health care spending is due to the rise in the prevalence of treated chronic disease. Truth #4: The doubling of obesity between 1987 and today accounts for nearly 30% of the rise in health care spending. Truth #5: The vast majority of cases of chronic disease could be better prevented or managed. Truth #6: Many Americans (five in six) are unaware of the extent to which chronic disease harms their health – and their wallets. www.fightchronicdisease.org 41
  • 42. Impact of Health Risk Factors on Productivity 30% Risk Factors considered in 25.9% study include: tobacco use, 25% BMI <18.5 or Presenteeism >24.9; poor diet, physical Absenteeism M e a n L o st P r o d u c t iv it y inactivity, lack 20% of emotional fulfillment, high stress, high 15% blood pressure, high cholesterol, alcohol use, 10% overdue preventive 6.3% visits, and diabetes 5% 0.0% 0% 0 risks 1 risk 2 risks 3 risks 4 risks 5 risks 6 risks 7 risks 8 risks Boles M, Pelletier B, Lynch W. The Relationship Between Health Risks and Work Productivity. JOEM, 2004; 46(7):737-745 42
  • 43. Imagine If Your Customers Could Shave 25% Off Rising Health Care Costs 25% savings off of Rising Health Care Costs $10,000 h e a lth c a r e c o s t p e r A n n u a l e m p lo y e r $7,379 $7,832 $8,000 $6,348 $6,918 e m p lo y e e $5,758 $1,958 $6,000 $4,604 $5,162 $1,587 $1,730 $1,845 $4,320 $1,440 $4,000 $1,080 $1,151 $1,291 $2,000 $0 1999 2000 2001 2002 2003 2004 2005 2006 Year 43
  • 44. Wellness Programs: Definition, Legal Implications & Essential Elements 44
  • 45. Corporate Wellness Programs Defined Assess the health risks of an employee population Include customized and individualized programs and interventions to address the health and wellness needs of workers Track the participation, use and effectiveness of the program to provide quantitative feedback to employers Use quantitative results to evaluate the impact of wellness initiatives 45
  • 46. Detailed List of Program Components The employer’s commitment to improve worker health and manage health plans, sick leave, workers’ compensation, disability and productivity costs Awareness – An annual Health Assessment is the key in driving awareness and beginning participation in the program – Education – Content is packaged in engaging, easy to understand tools to make learning fun and tailored to adult learning styles – Action – A variety of activities help members practice and ultimately adopt healthy behaviors and earn points towards incentives – Support – Ongoing communication and progress tracking are key to long-term employee engagement Telephonic or face-to-face lifestyle coaching for those with risks Incentives to motivate participation and reward improved outcomes 46
  • 47. Detailed List of Program Components Range of resources to help individuals change behaviors to improve health Structured opportunities to practice new behaviors and habits Integration of wellness throughout organization Organizational support for wellness; address environmental and cultural barriers Annual evaluation to refine program and improve it’s effectiveness 47
  • 48. Research Says: Assessments Help Moderate Health Care Costs Multiple studies link health assessments with cost moderation8, 9, 10 University of Michigan research: As assessment scores increase, health care costs decrease11 GM wellness program: Assessments linked with reduction of more than 185,000 specific health risks among GM workers12 48
  • 49. Making Sure Your Client’s Program is Compliant What rules regulate wellness programs? HIPAA Nondiscrimination Rule HIPAA Privacy and Security Rules Americans With Disabilities Act (ADA) Age Discrimination in Employment Act (ADEA) COBRA Federal and State tax laws State lifestyle and nondiscrimination laws 49
  • 50. HIPAA Nondiscrimination Rules Prohibit an employer from charging different premiums or contributions based on an employee’s health factors (health status, medical condition, claims, disability) Prohibit different coinsurance, deductibles and co-payments based on an employee’s health factors unless done pursuant to a wellness program that meets the requirements set forth in the Rule… – …However, a wellness program based on participation rather than satisfaction of a standard, result or outcome, does not violate HIPAA and is not subject to the requirements in the Rule – …For example, a blood screening program that is not based on outcomes: waiving copays for well-baby visits or prenatal care 50
  • 51. Efficacy & Case Studies 51
  • 52. Numerous Studies Document Strong ROI A multitude of studies show ROI averages of $3 for every $1 invested14 One recent study had the return as high as 10 to 115 Companies must be patient. “Worksites typically don’t realize returns until about three years into the program. If an organization is willing to wait two or three years, it will be capable of achieving this magnitude (3 to 1) of ROI.”16 A review of 32 studies found claims costs were reduced by 27.8%, physician visits by 16.5%, hospital admissions by 62.5%, disability costs by 34.4% and incidence of injury by 24.7%17 52
  • 53. Wellness Works, According to ROI Studies From a review of 73 published studies of worksite wellness programs18 – Average $3.50-to-$1 savings-to-cost ratio in reduced absenteeism and health care costs From a meta-review of 42 published studies of worksite wellness programs19 – Average 28% reduction in sick leave absenteeism – Average 26% reduction in health care costs – Average 30% reduction in workers’ compensation and disability management claims costs – Average $5.93-to-$1 savings-to-cost ratio A comprehensive health management program at Citibank20 – $4.56-$4.73-to-$1 savings-to-cost ration in reduced total health care costs 53
  • 54. Business Case and Implementation 54
  • 55. Defining Health Risks & Risk Levels Health Risk Measure High Risk Criteria Alcohol > 14 drinks per week Blood Pressure Systolic >139 mmHG/Diastolic >89 mmHG Body Weight BMI =/>27.5 Cholesterol >239 mg/dl Existing Medical Problem Heart, Cancer, Diabetes, Stroke HDL <335 mg/dl Illness Days >5 days last yr Life Satisfaction Partly or not satisfied Perception of Health Fair or Poor Physical Activity <1 time per week Safety Belt Usage Using safety belts <100% of time Smoking Current smoker Stress High Overall Risk Levels Low Risk 0 to 2 high risks Medium Risk 3 to 4 high risks High Risk 5 or more high risks 55
  • 56. ($) H $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $0 ig 35 h -4 R 4 isk 45 $4,530 -5 4 55 $5,813 -6 4 Health Risk $7,123 M ed iu m 35 -4 R 4 isk $2,667 45 -5 4 55 $3,364 -6 4 $4,718 N on - Pa r tic 35 ip -4 an 4 Age Group t4 $2,110 5- 54 55 $2,912 -6 4 $3,894 Linking higher Costs With Higher Lo w 35 -4 R 4 isk $1,523 45 -5 4 55 $2,081 -6 4 $2,941 56
  • 57. Get Well or Pay Not To Consumers may be able to improve their health and bottom line by participating in company sponsored wellness programs. More employers are offering cash, discounts and even lower health insurance premiums to entice workers to participate in a variety of programs. Starting next year, employees could have further incentives to get healthy as more companies add penalties to insurance premiums for workers who don’t partake. “It’s an opportunity to get cash for doing what’s right for you. Despite cutbacks amid the recession, 58% of large U.S. companies now offer lifestyle-improvement programs, up from 43% in 2007, according to a Watson Wyatt Study. And 56% provide health coaches, compared with 44% in 2007. Health-risk appraisals are offered at 80% of companies, up from 72% in 2007. 57
  • 58. Discounts and Freebies Employees may be able to get $200 to $300 for participating in health-risk appraisals, smoking-cessation, weight management and preventive care classes. Other offerings include heavily discounted weight loss programs and free or discounted gym memberships. At some companies, employees who participate are rewarded with gift cards or lower insurance premiums. 58
  • 59. Wellness Education/Communication Most survey respondents offered at least one type of wellness education and communication program component. Program Component Percentage of Respondents Online Communications 93% Print Communications 87% Audio/Visual 27% Self-Care Guide 27% Pre-Natal Program 67% In tomorrows’ Advisor, we’ll cover survey responses on HRAs, disease management, and smoking cessation, and we’ll take a look at a unique guide that will help you in setting up and administering your wellness program. 59
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  • 66. Question and Answers 67
  • 67. Thank you! Arvid R. “Dick” Tillmar Health Advocate Diversified Insurance Services 100 N. Corporate Drive Brookfield, WI 53045 (262) 439-4700 68