How to Justify Workplace Health and Wellness Programs: It s All About Value on Investment. Case Closed.

Transcription

1 How to Justify Workplace Health and Wellness Programs: It s All About Value on Investment. Case Closed. Ronald Leopold, MD, MBA, MPH Health Risks. Medical Costs. Workforce Productivity. HOW TO JUSTIFY WORKPLACE HEALTH AND WELLNESS PROGRAMS: IT S ALL ABOUT VALUE ON INVESTMENT. CASE CLOSED. Ronald S. Leopold, MD, MBA, MPH Willis North America Practice Leader, Health Outcomes 1

2 What is the business value of a healthy working population? 3 Costs, Contributions, Earnings and Inflation: SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), ; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, (April to April). Accessed on October 22, 2013, available at Willis Health and Productivity Outcomes 4 2

3 Health Care costs in the United States have become a leading concern for the Chief Financial Officer. Lower Costs. 5 U.S. Health Care Costs Drop to Lowest Rate in 15 years Department of Labor, Bureau of Labor Statistics SOURCE: The New Health Care Imperative: Driving Performance, Connecting Value. National Business Group on Health (NBGH), Towers Watson, Willis Health and Productivity Outcomes 6 3

4 Relative Importance of Health Strategies By Country / Region Priority Africa Asia Australia Canada Europe Latin America Improving workforce morale/engagement Reducing employee absences due to sickness Improving workplace safety Improving worker productivity / presenteeism United States Maintaining work ability Furthering organizational mission / values Reducing health care or insurance premium costs SOURCE: Working Well: A Global: Survey of Health Promotion; Workplace Wellness and Productivity Strategies. Buck Consultants, Willis Health and Productivity Outcomes 7 Lower Costs Earn More 8 4

5 The Link Between Workforce Health and the Bottom Line Journal of Occupational and Environmental Medicine, Sept 2013 Willis Health and Productivity Outcomes 9 Health & Productivity: In Proportions Poor health costs employers $576 billion a year Note: Aggregate Estimates Using IBI Full Cost Estimator. Source: Integrated Benefits Institute, 2012 Willis Health and Productivity Outcomes 10 5

6 Health & Productivity: Medical and Pharmacy Spend Medical costs represent only 40% of the entire picture for employers 20% 40% Wage Replacement Medical and Pharmacy Lost Produc vity 40% Note: Aggregate Estimates Using IBI Full Cost Estimator. Source: Integrated Benefits Institute, 2012 Willis Health and Productivity Outcomes 11 Distribution of Medical Costs Across Population 5% of Population 58% of Costs 25% of Population 35% of Costs 70% Population 7% of Costs Willis Health and Productivity Outcomes 12 6

7 Shifts In Risks And Costs Over Time A cohort of 27,999 employees Year 3 Year 2 Year 1 Well Individuals; Medical Cost $3,822 Ill Individuals; Medical Cost $7,728 18,347 9,452 0% 100% SOURCE: Zero Trends. Dee Edington Willis Health and Productivity Outcomes 13 Shifts In Risks And Costs Over Time A cohort of 27,999 employees Year 3 Year 2 Well Individuals $3,691 Ill $7,051 Well $5,675 Ill Individuals $8,801 15,537 2,810 3,167 6,285 Year 1 Well Individuals; Medical Cost $3,822 Ill Individuals; Medical Cost $7,728 18,347 9,452 0% 100% SOURCE: Zero Trends. Dee Edington Willis Health and Productivity Outcomes 14 7

8 Shifts In Risks And Costs Over Time A cohort of 27,999 employees Year 3 Well Individuals $3,704 Ill $6,893 Well $6,728 13,795 1,742 1,504 1,306 2,036 1,131 1,466 4,819 Ill $9,078 Well $4,899 Ill $6,812 Well $6,564 Ill Individuals $9,555 Year 2 Well Individuals $3,691 Ill $7,051 Well $5,675 Ill Individuals $8,801 15,537 2,810 3,167 6,285 Year 1 Well Individuals; Medical Cost $3,822 Ill Individuals; Medical Cost $7,728 18,347 9,452 0% 100% SOURCE: Zero Trends. Dee Edington Willis Health and Productivity Outcomes 15 Health & Productivity: Perspective 20% of the business impact is lost time Time Costs Wage Replacement Short Term Disability Long Term Disability Family Medical Leave Workers Compensation Sick Days State Leaves Note: Aggregate Estimates Using IBI Full Cost Estimator. Source: Integrated Benefits Institute, 2012 Willis Health and Productivity Outcomes 16 8

9 Health Cost Estimates (per 1000 FTEs) Annual Costs for Individuals With Each Condition Note: Average total cost per 1000 FTEs Source: Loeppke, R., JOEM, 2009 Willis Health and Productivity Outcomes 17 Health Cost Estimates (per 1000 FTEs) Annual Costs for Individuals With Each Condition Note: Average total cost per 1000 FTEs Source: Loeppke, R., JOEM, 2009 Willis Health and Productivity Outcomes 18 9

10 Distribution of Medical Costs Across Population 5% of Population 58% of Costs Long Term Disability, Short Term Disability, Family Medical Leave 25% of Population 35% of Costs Workers Compensation, Short Term Disability, Family Medical Leave 70% Population 7% of Costs Sick Days and Presenteeism Willis Health and Productivity Outcomes 19 Health & Productivity: Perspective 40% of the business impact is operational OPERATIONAL COSTS: Presenteeism Working slow Lower quality Customer dissatisfaction 20% 40% 40% Wage Replacement Medical and Pharmacy Lost Produc vity Absenteeism Overtime Temporary staffing Replacement training Workload shifts Note: Aggregate Estimates Using IBI Full Cost Estimator. Source: Integrated Benefits Institute, 2012 Willis Health and Productivity Outcomes 20 10

11 Self-Reported Absenteeism and Presenteeism Lost Workdays Per 100 FTEs Source: Kessler s HPQ: Adjusted to Workforce, Willis Health and Productivity Outcomes 21 Operational Costs: Presenteeism A cable television technician working slower because he is out of breath from an asthma flare-up. An office manager with depression who is not interacting well with her team. A client care representative with medication side-effects who loses focus on customer satisfaction. A skilled tradesman struggling with a pulled back after cleaning the garage, who requires more frequent breaks. Willis Health and Productivity Outcomes 22 11

12 Operational Costs: Absenteeism The foreman of a critical operation is out and another associate has to be pulled from other work to fill in. He s not as good. Three line workers are out with the flu, the company will need to hire temporary staffing to get the work done on time. A legal and compliance expert is out on maternity leave. Her replacement will need considerable training. Two account managers are out on short term disability. Their workload will have to be load balanced with the remaining three AMs. Willis Health and Productivity Outcomes 23 A healthier workforce should be a leading concern for the Chief Operating Officer. Earn more

13 It s not just about cost reduction ROI. (Lower Costs) WELLNESS HEADLINE 2015 Think Value on Investment (VOI). (Earn More) CASE CLOSED. 25 National Business Group on Health Components of a Value on Investment (VOI) Model Health Care Costs Workforce Health and Safety Disability Costs Workers Comp Costs Absenteeism Productivity and Performance Presenteeism Performance Turnover Employer of Choice Recruitment Workforce Engagement Willis Health and Productivity Outcomes 26 13

14 NBGH DASHBOARD A Holistic VOI Approach Willis Health and Productivity Outcomes 27 Changing Health Behaviors, Improving Access To Care and Targeting Identified Risk 28 14

15 The Three Key Business Concerns Addressing what matters to employers HEALTH RISKS Unaddressed health risks in a population raises medical costs and impacts worker productivity. MEDICAL COSTS Understanding where there is higher risk or excess medical spend is key to identifying solutions that lower medical costs. LOST PRODUCTIVITY Increasing health risks and higher rates of chronic conditions drive greater absenteeism and presenteeism. Willis Health and Productivity Outcomes 29 The Three Key Health Management Strategies Willis Health Outcomes Approach Changing Health Behaviors Targeting Identified Risk Improving Access to Care Wellness Solutions Incentive Programs Disease Management Case Management Assistance with Access Enhancing Access Willis Health and Productivity Outcomes 30 15

16 Understanding Employer Goals and Realities What do you want to accomplish? What are your priorities? What is feasible? What is your average turnover? What have you already done in health and wellness? Are your medical claims data available? What is your plan design? What is your appetite for change? What do your workers do? How are your people geographically distributed? What are your workforce demographics? How have your benefits changed in the last three years? How important is building a true culture of wellness? How urgent an issue is lowering medical costs? How are your people at seeking medical care? What s your biggest business concern? Where do you see your company five years from now? What is senior management s take on medical costs? What is senior management s take on wellness? Willis Health and Productivity Outcomes 31 Building A Health Behavior Strategy Customizing a Wellness and Incentive Solution Set Changing Health Behaviors BASIC Employer-Developed Programs Carrier Communications Employee Health Education Biometric Screenings Health Risk Assessments Health and Wellness Fairs Self-care guides Newsletters Prevention awareness Incentives for sign up Incentives for participation Preventive screening rewards MODERATE Carrier Programs Customized Employer Communications Employee Wellness Portal Healthy Vending / Cafeteria Activity Tracking Device Behavior Change Programs Company Wide Challenges Tobacco Cessation Wellness Committee Onsite immunizations Incentives for behavior changes Reward for utilization PROGRESSIVE Third Party Vendors Third-Party Communications Culture of Health Onsite Weight Management Onsite Fitness Center Onsite Health Coaching Social Media, Mobile Apps Wellness Center / Office Branded Wellness Program Age / gender preventive care Incentives for health outcomes CEO Challenge Willis Health and Productivity Outcomes 32 16

17 Building An Access And Risk Strategy Customizing an Access and Risk Solution Set TARGETING IDENTIFIED RISK IMPROVING ACCESS TO CARE Targeting Identified Risk Disease-specific Online Resources Carrier-based Case Management Patient Advocacy Program Carrier Network Resources Carrier Patient Advocacy Member Assistance Services Improving Access to Care Carrier Disease Management Online Provider Network Info Telephonic Condition Coaching Patient Advocacy Solutions Disease-specific Solutions Third-party Nurse Help Line Catastrophic Case Management Physician Consultation Services Physician Second Opinion Carrier Transparency Solution Third Party Disease Management Visiting Nurse Face-to-face Disease Management Onsite Health Clinic Centers Of Excellence Telehealth / Telemedicine Vendor RN Home Visit Program Transparency Vendor Willis Health and Productivity Outcomes 33 Understanding the Vendor Marketplace Selecting a Third Party Health and Wellness Partner Willis Health and Productivity Outcomes 34 17

18 What Does Your Data Reveal? Risk Stratification. What conditions are driving medical costs What is your company spending on asthma? Cancer? Back Pain? Heart Disease? For what conditions are you seeing excess ER visits? Excess hospitalization? Risk Stratification. Gaps in Care. Willis Health and Productivity Outcomes 35 Strategic and Operations Plan Putting Recommendations into action Willis Health and Productivity Outcomes 36 18

19 Getting Better Health Outcomes Matching employer business goals and realities to the best solutions ACTION Solutions Implementation STRATEGY Recommendations EVALUATION Client Data and Experience DISCOVERY Gap Assessment Willis Health and Productivity Outcomes 37 What is the value of a healthier working population to your business? 38 19

20 Ronald S. Leopold, MD, MBA, MPH National Practice Leader, Health Outcomes Willis 39 20