What's the Hard Return of Wellness


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What's the Hard Return of Wellness

  1. 1. What’s the Hard Return ofEmployee Wellness Programs? William B. Baun, EPD, CWP, FAWHPUniversity of Texas MD Anderson Cancer Center
  2. 2. What is Worksite Wellness?Wellness – a lifelong journey and Worksite Wellness – an organizedan active process of making program designed to assist employeeschoices and commitments to be and their family in behavior change thathealthy and well. reduces health risks, improves quality of life and maximizes personal potential and impacts the bottom-line.
  3. 3. Successful Wellness ProgramClear definition of success – based on managements expectations Participation • Behavior change Impact Bottom-Line • Culture of health Direct Health Impact • Improvement in health status • Reduction of Indirect Outcomes healthcare utilization • Absenteeism • Reduction of • Productivity emergency visits • Turnover • Job Satisfaction • Morale • Cohesiveness
  4. 4. Logic Model for Worksite Lifestyle CostsLifestyle Risk Factors Direct Health Impact•Physical activity •Medical problems•Stress •Health status•Smoking•Nutrition•Seat Belts•Multiple Health Risks Indirect Outcome •Health care utilizationClinical Risk Factors •Health care cost•Obesity •Absenteeism•Blood pressure •Employee productivity•Cholesterol •Job/life satisfaction•Blood sugar •Other•Musculoskeletal *Anderson, D.R. (AJHP, 2004)
  5. 5. Questions most of us are asking…..• Is there a “business case” to be made for worksite wellness?• What is the evidence and is it compelling?• Can we develop an ROI argument?
  6. 6. The State of Working America• USA has highest per person healthcare cost of industrialized world and ranked 37th of 91 countries, $1 out of $7 spent on medical goods or services• 1% of population account for 30% of costs and 5% account for 70%• Employers health benefits cover 3/5 nonelderly• Healthcare spending by 2015 predicted at $4T, 20%GDP, $12,320 • Large geographical difference in• Median age employee 40.7 ‘08 health spending and >$ not = to > life expectancy• 2016, 55+ = 22% workforce • Presenteeism 18-60% of total• 2006, 65-74, 22.8% employed health related costs• 35% deaths attributed to poor diet, • Productivity losses related to smoking, physical inactivity personal / family health $1,685 per employee Healthy Workplace 2010 & Beyond PFP 2009
  7. 7. Chronic Disease in America• More than 133 million Americans, Chronic disease accounts for 70% of all 45% of population have one or deaths and estimated 83% of total healthcare costs or 5x individuals more chronic diseases without chronic disease• 23% have 1 chronic condition Top 5 Causes of Death 1980 2005• 12% have 2 chronic conditions 1 Heart Disease Heart Disease 2 Cancer Cancer• 6% have 3 chronic conditions Stroke Hypertension Stroke 3 Unintentional Chronic• 4% have 4 chronic conditions injury respiratory disease 4 Chronic Unintentional• 4% have 5+ chronic conditions obstructive injury pulmonary diseaseJohns Hopkins University (2006) Partnership for Solutions: Chronic Conditions (2004) 7
  8. 8. Costs Increase With Risk & Age Costs $10,095$12,000 $9,221$10,000 $6,664 $7,268 $8,000 $4,130 $5,445 $6,000 $3,432 $3,601 $4,000 $2,741 $4,319 5+ Risks $2,025 $3,366 $2,000 3-4 Risks $1,247 $1,515 $1,920Age 0-2 Risks $0 <35 35-44 45-54 55-64 65+StayWell 2006 (N = 43,687)
  9. 9. Iceberg Phenomenon Direct vs. Indirect Costs Direct Medical Costs • Medical • Pharmaceutical Visible CostsIndirect Costs• Presenteeism• Short Term Disability Non-Visible• Long Term Disability Costs• Absenteeism• Workers Compensation Indirect Costs represents 2-3 times Direct Medical Costs
  10. 10. Total Value of HealthHigh Indirect Costs Direct Costs: Medical & Pharmacy Workers’ Compensation STD Absenteeism Presenteeism LTD Time Away from WorkEdington & Burton (2003)
  11. 11. Questions most of us are asking…..• Is there a “business case” to be made for worksite wellness?• What is the evidence and is it compelling?• Can we develop an ROI argument?
  12. 12. Modifiable Risk Status Change• Goetzel Relationship Modifiable Health Risk Factors (2009) potential for medical & productivity savings• Goetzel Systematic Review (2008) modifiable risk factors account for 25% total healthcare expenditure, employees with 7 (tobacco, no physical activity, high: stress, blood pressure, CHO, blood sugar, body weight cost 228% more• Baker Dow Obesity Mgt (2008) over 1 year 7 of 10 risk factors change total projected savings of $311,755• Burton (2006) 1.9% productivity lost at an annual costs of $950, “churn” of 33% adding a risk factor• Yen (2006) excess risk accounts for 25% of medical claims, non-participant 1.99 times higher, moderate risk 2.22 and high risk 3.97 times higher• Body Mass Index Increases (2006) for each BMI unit increase medical & pharma costs increase by $119 – adjusted for age / gender• Dow (2005) small reduction in risk = big cost savings, estimate1% risk point each year cost saving of $49.5 million, breakeven ROI would call for a reduction of only .17% point per year• Swedish American Health System (2005) reduction of chronic disease risk factors (nutrition / physical activity) after 6 weeks and improvement after 6 month follow up• GM (2003) change in low, med, high numbers over 3 HRA’s, short term & long-term improvement in BP, stress, seat belt use, physical activity, life satisfaction, smoking, alcohol• Yen (2003) each additional point on wellness score cost $56, $88 per year of age, $3,574 for major existing disease
  13. 13. Medical Care Costs• Trogdon (2009) Workplace obesity interventions result in a reduction of $90 for every 5% of body weight• Naydeck (2008) Highmark wellness program four year cost savings $1,335,524 showing programming lowers rate of healthcare costs• Baker (2008) over 1 year, 7 of 10 health risks decreased for a total $ savings of $311,755, 59% attributed to reduced healthcare expenditures• Dall DOD Health Risks Costs (2007) tobacco use $564m, obesity $1.1b, alcohol $425m / non-medical excess of $965m• Gibson (2006) IBD expressed in Crohn’s disease & Ulcerative colitis cost between $18,963-$15,020• Wang (2006) each BMI unit medical costs went up $119.70 and pharmaceutical cost $82.60• Musich (2004) BMI medical costs go up, reduce risk levels reduces costs• Musich (2004) 5 years for former smokers without chronic conditions to reach non-smoker levels, 10 years for those with chronic conditions• Wright (2004) high risk = costs 10 – 21% higher• Goetzel (2004) high BP $392, CVD $392, depression $348, arthritis $327
  14. 14. Absenteeism• Baicker (2010) meta analysis of literature shows every wellness $ spend reduces absenteeism by $2.73• Rodbard (2009) 15,132 ~ greatest impairment of work and daily activities among obese individuals• Kuoppala (2008) evidence that health promotion decreases sickness absence / range .1 – 1.57• Bachman (2007) health promotion interventions provide cost savings from decreased absenteeism rates• Halpern (2007) impact of a smoking cessation program resulted in a total saving in year 4 and included reduced absenteeism• Burton (2004) 10.6% reported missing 7.7 hours over previous 2 weeks to care for sick dependent, care giving associated with increase of health risk• Aldana (2001) obesity 1.5 – 1.9 times higher, stress 14% of all absenteeism caused by stress, multiple risk factors 15 – 23% of absenteeism associated• Serxner (2001) 4 risk factors 1.75 times more likely to have higher absenteeism than low risk
  15. 15. Disability Costs and Days•Burton / Financial Service (2007) antidepressantmedication adherence, low compliance resulted inalmost 40% increase in chance of STD•Finkelstein CDC (2007) odds of sustaining aninjury overweight 15% to 48% obese•GlaxoSmithKline (2003) savings of $217 STD,$545 LTD, average of $613, estimated savings of$5.5 million•Schultz (2002) each disability cost $200, averagesavings per year $623,040 or a 2.3 to 1 cost ratio•Serxner (2001) non-participants had 23%increase in days lost, participants 6% increase,projected costs savings over 2 years $1,371,600
  16. 16. Productivity• Goetzel (2009) factor analysis identified relationship between increase in health risks and > presenteeism• Schultz (2009) the cost of presenteeism is much larger that the costs of direct healthcare• Loeppke (2009) strong link between health and productivity / integrating productivity and health data leads to development of effective programming• Burton (2006) arthritis, 7 – 10% loss of productivity, proper medication / treatment only 2.5% loss• Musich Australian Population (2006) high stress, back pain, life dissatisfaction lead to significant absenteeism & presenteeism• Burton (2005) each health risk adds 2.4% excess productivity reduction, medium risk 6.2% reduction, high risk 12.2% reduction, life dissatisfaction = 4.5% reduction, stress 4.1% reduction, job dissatisfaction 3.1% reduction• Ozminkowski (2004) losses from presenteeism much greater than absenteeism 5 – 7% of average salary• Allen (2003) allergies, no significant changes, but next generation programs better communications between programs and community physician groups and longer time frame to communicate• Allen / Bunn International Truck and Engine (2003) productivity instruments valid
  17. 17. Recruitment & Retention• O’Brien (2010) By creating a generally healthier work environment, data suggests that these programs will also have a positive effect on recruitment and retention.• Fortune and Working Mothers magazines’ Best Companies to Work For - work/life balance and wellness programs as important in becoming an employer of choice: 1) access to lactation rooms 2) access to gym or fitness resource• Abstract, Canadian Life, AJHP (1993)• Tenneco / Baun (1992)
  18. 18. Questions most of us are asking…..• Is there a “business case” to be made for worksite wellness?• What is the evidence and is it compelling?• Can we develop an ROI argument?
  19. 19. What is ROI?Return on investment (tangible financial benefits / tangible costs)Where does it fit in Program Evaluation?Categories of Worksite Program EvaluationBasicProcess – qualitative & quantitative look at programming processImpact – overall effectiveness indicating immediate effectsOutcome – stated long-term objective & goals metProject EffectivenessClaims analysis Chenoweth (2002) EvaluatingRisk factor costs appraisal Worksite Health PromotionFinancial AnalysisForecasting / cost avoidance benefitsCost effectivenessReturn on investment (tangible financial benefits / tangible costs)Cost benefit analysis (tangible & intangible benefits / tangible & intangible costs
  20. 20. Meta Analysis or Review Studies• Schaafsma (2010) 37 studies looking at back pain / analysis found severe back pain improvements gained through physical activity programming• Conn (2009) These findings document that some workplace physical activity interventions can improve both health and important worksite outcomes• Goetzel (2008) ROI $1.40 - $3.14, 80’s – 90’s study review• Ichihashi Oral Wellness (2007) 2-4 visits $1.46 ROI• Koffmann (2007) wellness programming $3 - $6 return over a 3 – 5 year period• Chapman (2005) 56 studies meta evaluation, 500,000 individuals, evidence is strong for reductions in absenteeism, medical care costs, disability, workers compensation, 2/3 of studies single variables• Pelletier (2005) series of 6 reviews of clinical and cost-effective impact studies, 122 articles 2000 – 2004• Aldana (2001) looked at absenteeism, increase with obesity, stress, CHO, multiple risk factors, 15 – 23% of absence due to risk factors that HP programming can affect
  21. 21. Goetzel (1999) What’s the ROI?A Systematic Review of ROI StudiesROI studies of worksite  ROI estimates in these nine wellness programs: studies ranged from $1.40 - $4.90 in savings per dollar – Canada and North spent on these programs. American Life – Chevron Corporation  Median ROI was $3 in – City of Mesa, Arizona benefits per dollar spent on – General Mills program. – General Motors – Johnson & Johnson  Sample sizes ranged from – Pacific Bell 500 - 50,000 subjects in – Procter and Gamble these studies. – Tenneco Goetzel (2008)
  22. 22. Aldana (2001) Financial Impact of Health PromotionA Comprehensive Review196 Peer reviewed studies pared down to 72 through scoring criteriaScoring Criteria: – A (experimental design) – B (quasi-experimental – well controlled) – C (pre-experimental, well-designed, cohort, case-controlled) – D (trend, correlational, regression designs) – E (expert opinion, descriptive studies, case studies)Health promotion program impact on health care costs:  32 evaluation studies examined – Grades: A (4), B (11), other (17)  Average duration of intervention: 3.25 years  Positive impact: 28 studies  No impact: 4 studies (none with randomized designs)  Average ROI: 3.48 to 1.00 (7 studies) Goetzel (2008)
  23. 23. Chapman (2007) Proof PositiveAn Analysis of the Cost Effectiveness of Worksite Wellness C/B Ratio 20 18 16 Traditional 14 Newer Programs 12 10 Outliers 8 6 4 2 0 #1 #2 #3 #4 #5 #6 #7 #8 #9 #10 #11 #12 #13 #14 #15 #16 #17 #18 #19 #20 #21 #22 Study Number Chapman (2007)
  24. 24. Towers Perrin High Performance Companies Best Practice Worksite Program Success: Health benefit objectives, employee engagement, satisfaction, attraction & retention FA = Access to health expert to 70 help manage illness, chronic 60 conditions 50 FB = Health improvement programs 40 High 30 Low FC = Health risk assessments 20 FD = Self-care / disease 10 management programs 0 FE = Customized care / disease FA FB FC FD FE management programs Towers Perrin Health Care Cost24 Survey 2008
  25. 25. Towers Perrin High Performance CompaniesCreating Cultures of Health 80 QA = Motivating employees to 70 manage their health care 60 purchases responsibly 50 High QB = Supporting employees’ 40 Low capability to make sound 30 health care decisions 20 10 QC = Focusing on employee 0 health management QA QB QC Towers Perrin Health Care Cost Survey 200825
  26. 26. Who Must be Impacted? FamiliesPeers / Buddies Individuals Communities Teams Organizations
  27. 27. Who are these Individuals? Supervisors •Employee progress •Employee productivity Middle Managers •Support employees in their wellness commitments •Bridging roleSenior Managers •Knowledge transfer •Build a supportive•Vision wellness culture•Strategic priorities•Set stage for supportive Employees / Familieswellness culture •Self responsibility •Wellness commitment •Be Supportive to others
  28. 28. Behavior Change Core FactorsImpacting Opportunity 40% Self confidence Individual Action Behavior Skill 25% Support Change & Behavioral efficacy Self efficacyCreating a Motivation readiness 30% KnowledgeCulture of Awareness 5% Health Modified from O’Donnell (2010) WELCOA
  29. 29. What is a Culture of Health?WorkSetCreating a Culture of Health“In a culture of health,employee well-being andorganizational success areinextricably linked. It alignsleadership, benefits, policies,incentives, programs andenvironmental supports toreduce barriers to activeengagement and sustainabilityof healthy lifestyles across thehealthcare continuum.” http://www.centervbhm.com/lb/workset.html 29
  30. 30. What is Corporate Climate?“Strongly linked to Shared Vision - Emerges when employees have acorporate culture, but not as chance to integrate their personal goals and approaches with team or organization’s goaldeep or as stable. Woventhroughout the culture of anorganization and helps Positive Outlook – Drives individuals to look forcreate the general feelings opportunities rather than obstacles – strengths rather than weaknessesand atmosphere. The yeastin culture change!” Sense of Community – Present when employees feel they belong and can trust one another. Sense of Judd Allen belonging, includes awareness that others care and Cultural Psychologist that we have a responsibility to care for ourselves and others 30
  31. 31. Both corporate climate andculture have significantinfluence on shaping ofhealth behaviors andpractices! 31
  32. 32. Promising Practices Integrating HPM into companiesoperation Addressing individual, environmental,policy & cultural factors Targeting continuum of health careissues Tailoring to population needs Attaining high participation Evaluation programs based on cleardefinition of success Director, Institute for Health & Productivity Communicating successful outcomes Studies, Cornellto key stakeholders UniversityGoetzel (2007) JOEM
  33. 33. Harvard Business Review December Publication√ 10 Organizations / Variety of Industries & Sizes√ Wellness Programs Achieved Measurable Results Biltmore (hospitality and tourism) Chevron (energy) Comporium (communications) H-E-B (grocery retail) Healthwise (health information publishing) Johnson & Johnson (healthcare products manufacturing) Lowe’s (home-improvement retail) MD Anderson Cancer Center (health care) Nelnet (education planning and finance) SAS Institute (software)http://hbr.org/2010/12/whats-the-hard-return-on-employee-wellness-programs/ar/1
  34. 34. Qualitative Study • Individual interviews with many CEO’s , CFO’s, and COO’s • Interviews with individuals partnered with wellness (safety, employee health, human resources, benefits, vendors, etc.) • Focus groups with wellness participants • Focus groups with non-wellness participantsWhat works?What doesn’t work?What is the impact of wellness on the organization?
  35. 35. Six Essential Pillars Foundation of Successful Programs• Multilevel Leadership• Alignment• Scope, Relevance, and Quality• Accessibility• Partnerships• Communications
  36. 36. Multilevel LeadershipCulture of health takes passionate, persistent, & persuasive leadership • C-suite – “walks the talk”, policies & mandates, shows an interest in employees wellness behaviors – “how’s your wellness” • Middle Managers – shaping mini-wellness cultures • Wellness Program Managers – expert who develops, coordinates a comprehensive program connected to company culture and strategies • Wellness Champions – volunteer wellness ambassadors serving as on-the-ground encouragement, education & mentoring
  37. 37. Wellness Champs Take Away: Foundational to successful programs!• Act as a liaison between the wellness program and departmental employees• Be a contact person for their department• Post wellness or marketing information on their bulletin boards in high traffic areas• Volunteer to perform minor administrative task, such as program material distribution or collection• Volunteer to help with mass marketing efforts• Volunteer to help during specific programming events
  38. 38. Alignment Wellness - natural extension of a firm’s identity & aspirations• Planning and Patience – look for way topermeate the culture with wellness,emphasize early communications & clearexplanations, develop a long-termcomprehensive strategy• Carrots not Sticks – positive incentivespromote trust & provide employees choices• Complement to Business Practices –wellness programming must make businesssense // sustaining a healthy, talented,satisfied labor pool is a matter of corporateresponsibility & business necessity
  39. 39. Scope, Relevance, and Quality Employee wellness needs vary tremendously • More than Cholesterol – think beyond diet & exercise, stress & depression major sources of lost productivity • Individualization – online health risk assessment combined with biometric data • Signature Program – high profile, high quality initiative fosters employee pride & involvement • Fun – never forget the pleasurable principles in wellness initiatives • High Standards – health related services are personal, employees won’t use substandard services, “no one will come for free and lousy”
  40. 40. Targeting Continuum of Healthcare Issues 33% - 59% of Next Years Cost GroupHealthy Employees Employees Employees EmployeesEmployees w/ Health with Acute with Chronic on Disabilityw/o Health Risks Illness/injury Disease Traumatic InjuryRisks Obesity Doctor visits Diabetes CancerLow risk Stress ER Visits Heart diseaseOptimal Health High blood cancer pressure etc.
  41. 41. Stretching Limits of a Traditional Program Mix Program Mix Program Lines Awareness Stress Behavioral Change Aging Well Tobacco Environmental Support Parenting Physical Activity Nutrition and Weight Art of Calm Management PreventionWorking Mothers Rooms
  42. 42. National Wellness Institute HolisticWellness ModelWellness is a lifelong journey, an active process of making Occupational Spiritual daily healthy lifestyle choices and commitments.
  43. 43. Accessibility Convenience matters• True On-Site Integration – carefullyconsider your wellness model & howbest to integrate it across yourcompany culture• Going Mobile – high tech tools(virtual wellness programs & onlineresources) not only deliver thewellness message & provideindividuals tracking tools & individualreports, but also complement the hightouch programs that unite individualsin a culture of health National Wellness Institute Six Dimensions of Wellness
  44. 44. Core Delivery ChannelsProgram delivery should be organized to fit your business environment and program goals! Individuals Customized Div/ Dept Interventions Cultural and Environmental Focus
  45. 45. 21st Century – Program Delivery ChallengeHigh Tech High TouchMultiple touch points / wellness opportunities to meet the wide interest / needs, learning styles, readiness and knowledge / skill base of participants
  46. 46. Partnerships• Internal Partnerships – help wellnessgain credibility• External Partnerships – enable staff tobenefit from vendor competencies &infrastructure without the extrainvestment• Leveraging Resources – internal &external partnerships help grow &maintain comprehensive programs
  47. 47. An Institutional Attack on Obesity • Wide range of physical activity options • Walk, run & bike clubs • “Speed up metabolism” class • Buddy up Challenge • Colorful Choice Challenge• Wellness dietitian Culture / Climate Focus• Individual coach / counseling opportunities • Recognition of Rock Steady• Multiple Weight Watcher locations departments• Power Plate daily dining option • Foods that Prevent Cancer• Healthy Choice vending machines • ‘Just4U’ point of purchase dining• Reasonable costs of water, fruit, service system vegetables • Bike Barns• Supermarket Tours • (2) 20,000 sq. ft. Fitness Centers• “Rock Steady” program
  48. 48. Communications Must overcome individual apathy and personal health sensitivity factors• Tailor Messages - to fit theintended audience, hone effectivepractices overtime• Media Diversity – use a varietyof different communication toolsto reach the audience• Embedded Wellness Clues –wellness needs to become a “viralthing” spreading throughout theworkplace
  49. 49. Marketing…. That Positions Your Program Mass marketing – a marketing mix that aims at everyone Program Position Target marketing – concentrated strategy “targeted” on specific employee groups for certain programs, interventions, products or services through a targeted marketing mix Tailored Marketing Messages – tailored messages will reach deeper and “stick” better
  50. 50. Word of Mouth – WOM Wellness Champ Strategy • Employees who have a passion for wellness and is “well connected” • Serve as a direct link between program and employees • Help diversify marketing networks • Works through the development of contact spheres • Focused on delivering sound bites of information about the program thatMost Program Under Utilized builds program participation “Grown Not Built”
  51. 51. Best Practice Lessons…..• Successful programs are focused on behavior change and building a culture of health• Multilevel leadership provides the passion, persistence, and persuasiveness to build & maintain a culture of health• Wellness programs should be a natural extension of companies identity and aspirations• Fit is crucial for wellness needs and interest vary tremendously across geographic, demographic, and different cultures• Internal and external partnerships help leverage resources to grow and maintain comprehensive programs• Effective incentives need to fit the work culture• Communication strategies that make wellness a “viral thing” spread throughout the workplace• Individual and aggregate data empowers “for what gets measured gets done”
  52. 52. Your corporate climate andculture have significantinfluence on shaping ofhealth behaviors andpractices of youremployees! 52
  53. 53. Three Concepts that DriveBehavior Change and Healthy Culture Sustain behavior change through appropriateEngage employees in program design / deliverya wellness partnership Individuals Teams Organizations Communities Design / deliver programs that facilitate employee Accountability for better health & wellness practices