Corporate Wellness

Wellness Initiatives-Employers are also in the “Health Business”

September 11, 2009

8:15 AM

Arvid R. “Dick” Tillmar – Health Advocate

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.

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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

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Source: National Business Group on Health, 2005

Benefits of Worksite Wellness ProgramsCompanies 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.

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Milestones in Contemporary America

Hostess introducesTwinkies, 1953

Ray Kroc franchises theMcDonald Brothers, 1955

And then introduces“supersizing,” 1993

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Individual Behavior

Awareness/education

Motivation

Tools, strategies

Policy and environment

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8

Individual

8

13

48 Teaspoons Sugar

16 oz 32 oz 44 oz 52 oz 64 oz

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It’s All About Behavior Change

Presenter

Presentation Notes

God almighty it’s hard. Papa: Seat Belt, Cigars, Fructose, Spit ball of bread Trans Fat Sleep ½ NY strip Fewer calories

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Individual Family

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Individual Family Worksite

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Individual Family Worksite Community

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Individual Family Worksite Community Nation/world

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Constraining Medical Costs

Centers for Disease Control & Prevention, 2006 Behavioral Risk Factors Surveillance System

Behavior & Lifestyle: Weight Gain ’86-’06

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

No Country Can Fund All

the Consequences:

HypertensionType 2 Diabetes

OsteoarthritisStroke

Coronary HeartGallbladder

Sleep ApneaRespiratory

IssuesSome Cancers

Obesity Trends Among U.S. Adults (BMI>30%)

1985198619871988198919901991199219931994199519961997199819992000200120022003200420052006

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No Data <4% 4%-6% 6%-8% 8%-10% >10%

Diabetes Trends Among Adults in the U.S.,BRFSS 1990

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Diabetes Trends Among Adults in the U.S.,BRFSS 1991-92

No Data <4% 4%-6% 6%-8% 8%-10% >10%

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Diabetes Trends Among Adults in the U.S.,BRFSS 1993-94

No Data <4% 4%-6% 6%-8% 8%-10% >10%

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Diabetes Trends Among Adults in the U.S.,BRFSS 1995 - 96

No Data <4% 4%-6% 6%-8% 8%-10% >10%

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No Data <4% 4%-6% 6%-8% 8%-10% >10%

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No Data <4% 4%-6% 6%-8% 8%-10% >10%

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No Data <4% 4%-6% 6%-8% 8%-10% >10%

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No Data <4% 4%-6% 6%-8% 8%-10% >10%

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No Data <4% 4%-6% 6%-8% 8%-10% >10%

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A Weighty Toll on Employers

Obesity costs U.S. companies $13 billion annually3

These workers have 36% higher medical costs than fit employees4

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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 populationCalculating 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

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Lost productivity related to absence & presenteeism compared to medical & pharmacy costs

IBI Research Insights, May 2007 - Single employer example

Medical Costs 25%

Absenteeism Lost Productivity

36%

Presenteeism Lost Productivity

34%STD/LTD/WC

5%

The Cost of Poor Health

Presenter

Presentation Notes

38Goetzl, R; JOEM 45(1) 5-14 2003

The Top 10 Most Costly Health Conditions

Chronic disease has $1 TRILLION impact on U.S. lost productivity each year.

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Expense Drivers

Health Care System 10%

Environment 20%

Genetics 20%

Lifestyle 50%

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The Preventable Causes of Death in Wisconsin

Tobacco: 8,100 +/- deaths per year in WisconsinPoor diet: Physical inactivity: 6,900 +/- deaths per year in WisconsinMicrobial agents: 1,700 +/- deaths per year in WisconsinAlcohol: 1,600 +/- deaths per year in WisconsinToxic agents: 1,000 +/- deaths per year in WisconsinMedical errors: 1,300 +/- deaths per year in WisconsinMotor Vehicles: 800 +/- deaths per year in WisconsinFirearms: 400 +/- deaths per year in WisconsinSexual behavior: 400 +/- deaths per year in WisconsinUninsurance: 300 +/- deaths per year in WisconsinIllicit drug use: 300 +/- deaths per year in Wisconsin

– TOTAL: 22,800

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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

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Risk Factors considered in study include: tobacco use, BMI <18.5 or >24.9; poor diet, physical inactivity, lack of emotional fulfillment, high stress, high blood pressure, high cholesterol, alcohol use, overdue preventive visits, and diabetes

25.9%

6.3%

0.0%

0%

5%

10%

15%

20%

25%

30%

0 risks 1 risk 2 risks 3 risks 4 risks 5 risks 6 risks 7 risks 8 risks

Mea

n Lo

st P

rodu

ctiv

ityPresenteeismAbsenteeism

Boles M, Pelletier B, Lynch W. The Relationship Between Health Risks and Work Productivity. JOEM, 2004; 46(7):737-745

Impact of Health Risk Factors on Productivity

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Imagine If Your Customers Could Shave 25% Off Rising Health Care Costs

25% savings off of Rising Health Care Costs

$1,080 $1,151 $1,291 $1,440$1,587 $1,730 $1,845 $1,958

$7,832$7,379$6,918$6,348$5,758$5,162$4,604$4,320

$0

$2,000$4,000

$6,000$8,000

$10,000

1999 2000 2001 2002 2003 2004 2005 2006

Year

Ann

ual e

mpl

oyer

he

alth

car

e co

st p

er

empl

oyee

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Wellness Programs: Definition, Legal

Implications & Essential Elements

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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

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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

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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

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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

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Making Sure Your Client’s Program is CompliantWhat 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

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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

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Efficacy & Case Studies

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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

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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

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Business Case and Implementation

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Defining Health Risks & Risk LevelsHealth 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

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Linking higher Costs With Higher Health Risk

$4,5

30

$7,1

23

$2,6

67

$3,3

64 $4,7

18

$2,1

10 $2,9

12 $3,8

94

$1,5

23

$2,0

81 $2,9

41

$5,8

13

$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000

35-44

High R

isk 45

-54

55-64

35-44

Medium

Risk

45-54

55-64

35-44

Non-P

articip

ant 4

5-54

55-64

35-44

Low R

isk 45

-5455

-64

Age Group

($)

Get Well or Pay Not ToConsumers 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.

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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.

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Wellness Education/CommunicationMost survey respondents offered at least one type of wellness education and communication program component.

Program Component Percentage of RespondentsOnline Communications 93%Print Communications 87%Audio/Visual 27%Self-Care Guide 27%Pre-Natal Program 67%

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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.

Question and Answers

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Thank you!

Arvid R. “Dick” Tillmar

Health Advocate

Diversified Insurance Services

100 N. Corporate Drive

Brookfield, WI 53045

(262) 439-4700

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Corporate Wellness

Documents

Transcript of Corporate Wellness