Marilyn Guthrie (REI) at Consumer Centric Health, Models for Change '11

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REI's Total Health Improvement Strategy.
114 stores by end of Q4 2010 and over 9,500 employees

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  • We remain a consumer cooperative today 2.5 million active members Mail order, online and physical store sales – integrated approach RSPU – order online and ship to store, return online order to store
  • Turnover is 45% at the part-time store level (much of it is planned) Turnover among retail managers is 9% Turnover at HQ is at 5% Working at REI is a “perfect storm”, the marriage between vocation and avocation for many employees A number of employees work PT at REI and hold down FT professional jobs elsewhere – lawyers, accountants Big challenge: racial diversity in the outdoor retailing industry
  • So when we did a SWOT analysis, we found a lot of strengths: broad cultural support, demographics on the flip side, our employees are not that savvy when it comes to using health care our opportunity is to leverage the fact that over 50% of our health care spend represents avoidable costs our spend is low compared to our peer group, but is rising above market
  • Turnover is 45% at the part-time store level (much of it is planned) Turnover among retail managers is 9% Turnover at HQ is at 5% Working at REI is a “perfect storm”, the marriage between vocation and avocation for many employees A number of employees work PT at REI and hold down FT professional jobs elsewhere – lawyers, accountants Big challenge: racial diversity in the outdoor retailing industry
  • We want employees to get/stay healthy and active but when they are injured or sick we want to make it easy for the to take time away and not feel their financial security is threatened When they do need to take a medical leave, better management will result in shorter duration Cost follows risk so improving health risk will ultimately lower our costs and trend
  • Marilyn Guthrie (REI) at Consumer Centric Health, Models for Change '11

    1. 1. Consumer-Centric Health Models for Change ‘11
    2. 2. Total Health Improvement Strategy Consumer Centric Health October 13, 2011
    3. 3. The REI Story <ul><li>We are a multi-channel retailer of gear & apparel for outdoor recreational activities </li></ul><ul><li>We remain a Seattle-based consumer cooperative </li></ul><ul><li>$20 one-time membership fee, but not required </li></ul><ul><li>Focus on customer satisfaction </li></ul><ul><li>We give a 10% patronage dividend each year to our members </li></ul><ul><li>114 stores by end of Q4 2010 </li></ul><ul><li>Over 9,500 employees </li></ul><ul><li>Named one of “100 Best Companies to Work For” by Fortune Magazine 14 years in a row </li></ul>
    4. 4. About Our Employees <ul><li>Young, healthy employees – average age 37 for benefit eligible </li></ul><ul><li>PT employees make up 2/3 of work force – average age 26 </li></ul><ul><li>Retirees with second career </li></ul><ul><li>PT employees are atypical – have other jobs </li></ul><ul><li>54% male </li></ul><ul><li>Growing families </li></ul>
    5. 5. Health & Absence Management <ul><li>Strengths: </li></ul><ul><ul><li>Well-being and balance are core values </li></ul></ul><ul><ul><li>Cultural support for healthy lifestyle </li></ul></ul><ul><ul><li>Young, active and healthy workforce </li></ul></ul><ul><ul><li>Generous time away from work for illness/injury </li></ul></ul><ul><ul><li>Employee engagement is important at REI </li></ul></ul><ul><li>Weaknesses: </li></ul><ul><ul><li>Employees are not savvy healthcare consumers </li></ul></ul><ul><ul><li>Lack of data and strategic plan to manage workforce health </li></ul></ul><ul><ul><li>No formal ergonomics or return-to-work program </li></ul></ul><ul><ul><li>Inconsistent management of medical leaves of absence </li></ul></ul><ul><li>Opportunities: </li></ul><ul><ul><li>Key health care issues represent avoidable costs </li></ul></ul><ul><ul><li>Focus on consumer behavior </li></ul></ul><ul><ul><li>Rewards for behavior change should have “motive force” </li></ul></ul><ul><ul><li>Better management of disabilities can reduce time loss </li></ul></ul><ul><li>Threats: </li></ul><ul><ul><li>Current downward trend in use of preventive care services </li></ul></ul><ul><ul><li>Increasing rates of leading indicators for chronic disease </li></ul></ul><ul><ul><li>REI’s health care trend has been low, but is currently rising above market </li></ul></ul><ul><ul><li>Compliance with federal/state leave mandates is challenging </li></ul></ul>
    6. 6. Our Benefits Strategy
    7. 7. Rich plans with little employee cost-sharing Consumer-directed plan design promotes cost and quality transparency Plan Design / Consumerism Coverage for value to foster compliance with recommended treatment No structured strategy; generous cost share – 80%/20% Contribution Strategy Employees who actively manage their health will pay less Targeted percentage cost share aimed at above market – 78%/22% Health Care Decisions Passive, no relationship with a primary care provider Actively engaged in shared decision-making w/provider and managing health Health concierge to foster informed healthcare choices Consumer Engagement Current vs. Desired Future State Q2 2010 = REI pre-2009 = REI today = REI in 2-3 years
    8. 8. Wellness Approach Informal grass roots activities Program covers broad spectrum of well-being with rewards for good behavior Silo programs address limited aspects of health risks/conditions Demographic data only, rely on lagging indicators (claims) Workforce Health Metrics Complete dashboard of all key leading performance metrics and share with leadership Detailed, integrated data set (medical, health and disability) to design focused intervention Monitor benefits budget; measure administrative performance Monitor health risks to predict cost drivers, design broad interventions Enhance incentive (~$250) for self assessment tied to contribution Healthy Lifestyle credit given for seat belt use (mandated), physical activity Multiple incentives offered that address entire population (time off, discounts, 401K contribution, etc.) Incentives Expanded set of self-reported behaviors for Healthy Lifestyle credit Employee Wellness Current vs. Desired Future State Q2 2010 Q1 2010 Focus on personal self awareness of overall risk = REI pre-2009 = REI today = REI in 2-3 years
    9. 9. Leadership engaged in setting strategy and engaging employees Promoting healthy lifestyles not on the radar screen; little awareness of the impact on business Leadership visibility supports benefits objectives and promotes a culture of health Leadership Engagement around Health Leadership aware of health and wellness strategy and cost impact on the business Minimal communication about value of benefits Education and Communication Employee benefits portal allows personalized communication Use of multi-media communication and education tailored to audience Aware of strategy and programs, limited onsite programs Leaders model desired behavior Local leaders accountable for some key metrics; positive recognition for Wellness Champions Management Support Leaders vocally support but do not model behaviors Organizational Support Current vs. Desired Future State Informed decision support with plan coverage and cost comparison tools = REI pre-2009 = REI today = REI in 2-3 years
    10. 10. Benefits to Fit Your Life
    11. 11. Flex Benefits <ul><li>Meaningful choice </li></ul><ul><li>Branded to reinforce REI self insured </li></ul><ul><li>Reflects REI culture </li></ul><ul><li>Fun, interactive </li></ul>
    12. 12. <ul><li>Get Rewarded at Key Milestones </li></ul><ul><ul><li>Trailhead – 1,000 points </li></ul></ul><ul><ul><li>$250 premium contribution flex credit </li></ul></ul><ul><ul><li>Must complete awareness activities </li></ul></ul><ul><ul><li>Treeline – 5,000 points </li></ul></ul><ul><ul><li>Additional discount </li></ul></ul><ul><ul><li>Pinnacle – 10,000 points </li></ul></ul><ul><ul><li>Additional perks (wellness day off, prizes, etc.) </li></ul></ul>
    13. 13. <ul><li>Take Action and Earn Points </li></ul><ul><ul><li>Complete well-being assessment </li></ul></ul><ul><ul><li>Develop personal health map </li></ul></ul><ul><ul><li>Contact a wellness coach for lifestyle change </li></ul></ul><ul><ul><li>Take part in “wellness challenges” </li></ul></ul><ul><ul><li>Participate in stewardship activities </li></ul></ul>
    14. 14. <ul><li>Simple Steps to Health </li></ul><ul><ul><li>Update your profile with email preferences </li></ul></ul><ul><ul><li>Contact a wellness coach </li></ul></ul><ul><ul><li>Track activity via mobile device </li></ul></ul><ul><ul><li>Corporate and peer-to-peer challenges” </li></ul></ul>
    15. 15. REI Health Guide <ul><li>A health concierge to provide guidance for navigating your care or life event </li></ul><ul><li>Central gateway to health and work/life support resources: </li></ul><ul><ul><li>24-hour Nurse Advice Line for acute and work-related injuries </li></ul></ul><ul><ul><li>Work/Life and Employee Assistance Program </li></ul></ul><ul><ul><li>Condition Management Programs to help you self manage </li></ul></ul><ul><ul><li>Pharmacy Benefit and </li></ul></ul><ul><ul><li>Behavioral Health Management </li></ul></ul>
    16. 16. Measures of Success <ul><ul><li>Employee experience: </li></ul></ul><ul><ul><li>Customer satisfaction metrics </li></ul></ul><ul><ul><li>Employee engagement scores </li></ul></ul><ul><ul><li>Improved productivity: </li></ul></ul><ul><ul><li>Shorter duration of medical leaves </li></ul></ul><ul><ul><li>Reduction in time loss from workers compensation </li></ul></ul><ul><ul><li>Improvement in health: </li></ul></ul><ul><ul><li>Increasing rates of preventive care services </li></ul></ul><ul><ul><li>Improvement in health risk (leading indicators for chronic disease) </li></ul></ul><ul><ul><li>Reduction in medical and disability costs: </li></ul></ul><ul><ul><li>Lower incidence of workers compensation, disability cases </li></ul></ul><ul><ul><li>Improvement in health care trend (lower rate of growth) </li></ul></ul>
    17. 17. Health Risk Profile
    18. 18. Optimize Productivity
    19. 19. Optimize Well-being
    20. 20. Healthcare Expense Control
    21. 21. Return on Investment <ul><li>Enhances well-being and productivity </li></ul><ul><li>Facilitates workforce planning </li></ul><ul><li>Optimizes the employee experience </li></ul><ul><li>Reinforces REI’s organizational and cultural values </li></ul><ul><li>Increases employee engagement & commitment </li></ul>

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