Health Management: Creating & Managing a Successful Wellness Program Presented by Erick Hathorn, Health Management Practice Leader 1
Today s Agenda Why Wellness Today s Reality Healthcare is Changing Case Studies Keys to Success Gallagher Health Management 2
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Every 100 Employees 68 are overweight or obese 21 smoke 31 use alcohol excessively 20 don t wear seatbelts 24 don t exercise 25 have cardiovascular disease 12 are asthmatic 10 are diabetic 26 have high blood pressure 30 have high cholesterol 4 suffer from stress 4
The Facts Heart Disease Costs Employers $18,618 PEPY $5,617 Healthcare Plan $6,052 Sick Leave $4,845 STD $981 Workers Comp. $945 Unpaid Leave $178 LTD Smoking Costs Employers $5,318 PEPY $2,295 Excess Medical Expense $2,175 Smoke breaks $465 Absenteeism $206 Death $176 Workers Comp. Diabetes Costs Employers $11,744 PEPY More 5
Cost Reality Robert Wood Johnson Foundation Cost of Chronic Risks 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Zero One Two Three Four Five Number of Chronic Diseases
Obesity is an Epidemic 68% of the American population is either overweight or obese Obese Employees are 4x more likely to be absent from work Obese Employees pay 77% more in RX 36% more at Physicians 45% more for hospital stays OUCH! 7
Obesity Trends* Among U.S. Adults 1990, 1999, 2009 1990 1999 2009 No Data <10% 10% 14% 15% 19% 20% 24% 25% 29% 30% 8
High Claims & Body Weight Average Claims By Weight Status 9
High Claims & Inactivity 10
11 Today s Reality
Healthcare is the second largest business expense to most organizations 87% of corporate leaders listed rising healthcare costs as their #1 concern 12
Industry Misconceptions Wellness Wellness is not screening your employees, it is helping them make better health decisions Engagement Engagement is the value proposition between the company and employee Return On Investment There is no such thing as a like company. There are over 50 different variables to consider. Budget Wellness programs are expensive The Biggest Loser, Weight Watchers, 10,000 Steps 13
Why Healthcare Costs Continue To Rise Administrative Inflation Technology Sedentary Society 14
Healthcare is becoming a question of Sustainability 10% Trend 15
The Total Impact of Health 25% of Cost 75% of Cost $3,376 PEPY $10,128 PEPY 16 Medical Health Costs Medical Care Pharmacy Productivity Costs Presenteeism Absenteeism LTD STD Overtime Turnover Temp Staffing Administrative Replacement Retention
Keep the Healthy, Healthy Claims Continuum Chronic Disease 50% of claims cost --- 20% Disease Management 75% Healthy Chronic Condition Contributing Factors: Aging Population Obesity Inactivity Stress Smoking
Healthcare is Changing 18
The Evolution of Health Management 1930 s Risk Management 1970 s Disease Management 1990 s Wellness 2010 s Enterprise Health Management 19
How the Industry has Managed Rising Healthcare Costs Increased Employee Contributions Decreased Benefits Switched Carriers 20
A Shift in Thinking From Disease & Cost, to Health & Investment Benefit Plan Design & Incentives Wellness Disease Management Communications Care Management Onsite Medical Employee Engagement Rx Behavioral Health Health Advocacy Absenteeism & Presenteeism Culture & Environment Behavioral & Clinical Coaching 21
Zero Trend Healthcare Breaking Down Barriers & Driving Engagement 1st Incentives Lead to participation 2nd Participation Leads to Employee Engagement 3rd Engagement Leads to a Cultural Shift 4th A Cultural Shift Plus Empowered Employees Leads to Trend Reductions Wellness is not finding out what s wrong; its fixing what s wrong. 22
23 Case Studies
Case Study: Large Organization Purpose To optimize medical services and the health and productivity of this worldwide organization. Provide sustainable and effective services to improve the health of their employees while helping to control health care costs. Promote and sustain a global culture of health. Target Population 46,000 US based employees Goals Make their employees the healthiest in the world 24
Case Study: Large Organization Results A long-term study of the impact of program in the US found a large reduction in medical care expenditures per employee per year. Overall, corporate Wellness Program has saved the company more than $38 million over a 5-year period. Success Company provided financial incentives to employees who participate in the program and take advantage of its various offerings in the US (up to $500 in benefit credits). A message of prevention permeated across all major health & benefit programs, increasing each program s success and avoiding duplication of services. A concentration on changing individual behavioral, instead of solely focusing on the treatment of symptoms. 25
Case Study: Mid-Sized Organization Problem Like many companies, this manufacturer experienced several years of double-digit increases in healthcare claims costs. The company knew that they were no longer able to shift any more costs to their employees. Executives also knew that they couldn t sustain these annual increases without seriously jeopardizing their profit margins. Target Population 419 eligible participants in 12 states 26
Case Study: Mid-Sized Organization Results 21% reduction in per employee per year claims costs over a three year period per employee per year claims costs dropped from $5,795 at the program s inception to $4,559. Company had a total weight loss of 1,606 pounds 28% reduction in high blood pressure in the first year 45% in the second year Averaged 55,200 steps per week 27
Case Study: Mid-Sized Organization Success Company-provided a $50 PEPM financial incentive to employees who participated in the program. Company used carrot approach and baked the costs into the rates. Company had over 75% participation Participation based not attainment based Biometrics that integrate into a Health Risk Assessment Quarterly health coaching calls inbound by appointment only Weekly weigh-ins Weekly engagement in one of the following programs Diabetes Prevention Tobacco Cessation Steps Weight Challenge High Cholesterol Stress Management High Blood Pressure General Fitness Nutrition 28
Case Study: Small Organization Problem Company would like to implement a wellness program but it has no budget Target Population 148 employees on plan at 1 location Goals Create a wellness budget Results Company was able to create a $13,000 wellness budget Company had over 75% of employees participate in biometrics, health risk assessment & a coaching call All of the services were offered by the carrier at no charge 29
Case Study: Small Organization Success Company-provided a $50 PEPM financial incentive to employees who participated in the program. Company used the stick approach and added the cost of non-participation to the rates Company had over 75% participation Medical Coverage Monthly ee Premium Non Participation Rate Employee Only $00.00 $50.00 Employee + Child $100.00 $150.00 Employee + Spouse $150.00 $250,00 Family $300.00 $400.00 Company had a January 1 renewal Program was rolled out to employees in October Employees had 90 days to complete basic biometrics, a health risk assessment and a coaching call Employees that did not participate were assessed a $50 PEPM fee which created a $13,000 wellness budget for the current year
Case Study: Tobacco Surcharge Problem Company wanted to reduce the number of smokers by implementing a tobacco policy Target Population 800 employees on plan at 5 locations Goals Goal was to implement a tobacco surcharge Results Year 1, Tobacco declaration created $57,600 surcharge 12% Year 2, Cotinine screening created $136,800 surcharge 19% 31
Case Study: Tobacco Surcharge Success Company-provided a $50 PEPM financial incentive to employees who did not smoke in year 1. Company used the carrot approach and baked the cost of non-participation into the rates Medical Coverage Monthly ee Premium Non tobacco premium Employee Only $100.00 $50.00 Employee + Child $200.00 $150.00 Employee + Spouse $350.00 $250,00 Family $500.00 $400.00 Company had 12% of population qualify as a tobacco user in year 1 Company had 19% of population qualify as a tobacco user in year 2 employee incentive for taking the screening was a richer plan The cost of the cotinine screening was an additional $15 per employee
33 Keys to Success
Establish Appropriate Goals Return on Investment Healthier employees Productivity Engage employees in their benefit plan Cultural shift Marketplace competition
ROI Must Haves Executive level buy-in Aligned Company & Health Goals Culture of Health Environment of Health Champions Incentives to drive participation Employee Engagement Robust behavioral change programs Technology
Health Management starts with a Communication Strategy Exclusive Prepared By
The Science of Engagement Stages of Behavior Change Pre-contemplation Contemplation Communication Focus Capturing participant attention Relating to the participant and his/her needs Communications Activities and Resources Ongoing promotion of Healthy Enterprise components through postcards, newsletters, annual enrollment communications, Web site features, etc. Promotion of program incentives to drive initial entry into program (e.g., via health risk assessment) Health risk assessment follow-up communications with clearly identified next steps and actions Promote preventive care benefits Preparation Education Connecting the participant with information regarding programs that target his/her condition or lifestyle-specific needs Action Support Connecting the participant to lifestyle coaching or disease management resources Explanation of how the benefits program supports participant s health needs Maintenance Engagement and sponsorship Recognition and promotion of participant success stories (via testimonial) Check-in communication with the participant at regular intervals 37
Incentives Lead to Engagement Social Networking Gaming Premium Differentials Plan Design Deductible Differentials Gifts Cultural Shift Free Medications PTO
Healthcare Reform & Legislation 20% Employee Premium Differential for Attainment 2014 30% Employee Premium Differential for Attainment 39
Biometric Screenings & Health Risk Assessments Must be integrated together Goal Participation, Benchmarking Employee barrier Accessibility, Evasiveness Best practices Onsite, In Home Health, Lab Venipuncture, finger prick Tied to plan not premiums
Preventive screenings 50% Shortage of PCP in 2014 Goal Establish Relationship with PCP Early Detection Employee Barrier Time Company Barrier PCP coding Tracking Expense Best practice Cancer related exams
Tobacco Free Workplace Develop written policy Communication strategy Letter from the CEO Who, what, when & where Help Consequences Year 1, Tobacco declaration Year 2, Cotinine screening
Wellness Strategy Weight Management Physical Activity Tobacco Cessation Stress Management
Disease Management Model has to change The right care at the right time Accessibility
Technology Platform Personal Health records EMR consolidation Incentive tracking Disease Management Integration Wellness Library Coaching platform Claims plus wellness ROI Benchmarking
Coaching Onsite Telephonic Clinical Behavioral
Gallagher Health Management 47
Readiness For Change Evaluation Inventory
Building A Case For Wellness
Market Scans Master Profile Carrier Drill Down
Multi-Year Plan
Thank You! 52