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Corporate Wellness Adds to the Bottom Line Creating a Productive and Healthy Workforce The material provided herein is for informational purposes only and is not intended as legal advice or counsel.
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Wellness Programs In The Beginning… Charles Bruder
Corporate Wellness Adds To The Bottom Line!! November 2, 2011
Why Wellness? q. Health Care Costs: Costs projected to jump 9% in 2011 (Price. Waterhouse Coopers, June 2010) q. Most Illnesses Can Be Avoided: Preventable illnesses make up approximately 70% of the entire burden of illness and associated costs in the United States (WELCOA, Six Reasons for Worksite Wellness) q. Expanding Work Week: Typical American now works 47 hours a week, 164 more hours than only 20 years ago. (Julien Schor, Harvard Economics professor) q. Increased Stress Levels: 78% of Americans describe their jobs as stressful and the vast majority indicate stress levels have worsened over past ten years. (WELCOA, Six Reasons for Worksite Wellness)
WHY WELLNESS PROGRAMS? RISING COST OF HEALTH CARE
Recent “Proof” Points That Wellness Works q. High Adoption Rates: More than 81% of America’s business with 50 or more employees have some form of health promotion program (WELCOA) q. Lower Health Care Costs: Wellness programs reduce health care costs for companies by about 26% and cut sick leave by an average of 28% (American Journal of Health Promotion, 2010) q. Effective Recruitment/Retention: 22 of Fortune magazine’s “ 100 Best Companies to Work For” – businesses that enjoy national recognition for desirable benefit packages, plan to add a total of 87, 750 jobs this year. (Fortune magazine Top 100 Companies to Work For, February 23, 2010)
WHY WELLNESS PROGRAMS? • Reduce employee healthcare costs • Increase employee productivity • Reduce absenteeism • Reduce disability and workers’ compensation costs • Promote healthier, more satisfied workforce • Improve corporate profitability
WELLNESS PROGRAMS Employee Productivity
WORKSITE WELLNESS PROGRAMS
WELLNESS PROGRAMS How Do Your Employees Stack Up? Statistically, for every 100 employees in your company: • 5 have diagnosed diabetes • 10 have undiagnosed diabetes • 12 are heavy drinkers • 15 are bothered by excess stress • 23 have total cholesterol (>240) • 27 have no regular exercise • 29 have elevated blood pressure • 33 use tobacco products • 46 have high overall coronary risk • 60 are outside recommended weight range Source: Center for Disease Control
WELLNESS PROGRAMS Plan Design Options Program Model Main Features Primary Focus Quality of Work. Life Fun activity focus No risk reduction No high risk focus All voluntary Site-based only No personalization Minimal incentives No spouses served No evaluation Morale-Oriented Traditional Approach Mostly health focus Some risk reduction Little high risk focus All voluntary Site-based only Weak personalization Modest incentives Few spouses served Weak evaluation Activity-Oriented Health and Productivity Management Add productivity Strong risk reduction Strong high risk focus Some reqd activity Site and virtual both Strongly personal Major incentives Many spouses served Rigorous evaluation Results-Oriented
WELLNESS PROGRAMS The Quality of Work. Life Model Quality of Work. Life A good “fit” with: • Smaller worksite • ROI low priority • New to wellness • Not sure about EE reaction • Limited follow-through capability • Weak corporate direction
WELLNESS PROGRAMS The Quality of Work. Life Model Primary Wellness Targets ü Fun events ü Stress relief ü Nutrition ü Community service ü General wellness information ü General health information Participation: 15% to 35% Approximate Cost/EE/Yr: <$45 Likely ROI: <1: 1. 0 Quality of Work. Life Typical Activities q Health fair q Lunch and learn sessions q Wellness “event” q Community sponsorship q Chair massage option q Free fruit q Wellness materials in HR q Health cartoons circulated q Nutritious pot lucks q Movie events q Company games q Celebrity event
WELLNESS PROGRAMS The Traditional Model Traditional Approach A good “fit” with: • Medium size or larger worksite • ROI moderate priority • 2 -10 years of wellness • Employee reaction a concern • Some follow-through capability • Follows corporate direction
WELLNESS PROGRAMS The Traditional Model Primary Wellness Targets Everything from the QWL Model plus… ü OWS ü Cholesterol ü Blood pressure ü Tobacco use ü Obesity ü Medical self-care ü Physical activity Participation: 28% to 58% Approximate Cost/EE/Yr: $46 -$150 Likely ROI: 1: 1. 5 to 1: 3. 0 Traditiona l Approach Typical Activities Everything from the QWL Model plus… q Health risk assessment (HRA) q Biometric testing option q Fitness club memberships/facility q Weight management program q Smoking cessation program q Web-based health information q Healthy cafeteria/vending options q Self-care book q Preventive medical benefit coverage q Wellness newsletter q Short term incentive program
WELLNESS PROGRAMS The HPM Model Health and Productivity Management A good “fit” with: • Larger work force • ROI very high priority • Very mature wellness • Prepared to educate employees • Strong follow-through capability • Strong virtual corporate program and site-driven
WELLNESS PROGRAMS The HPM Model Health and Primary Wellness Targets Everything from the TA Model plus… ü Productivity ü Injuries (All) ü HC utilization issues ü Presenteeism ü Resiliency ü Integrated programming ü Health consumerism Participation: 65% to 95% Approximate Cost/EE/Yr: $250 -$450 Likely ROI: 1: 2. 5 to 1: 6. 5 Productivit y Manageme nt Typical Activities Everything from the TA Model plus… q HRA (incented and used for targeting with 80% minimum) q Risk stratification and incented interventions q Telephonic coaching q Medical self-care and consumer workshop q Injury prevention q Benefit linked incentive q Wellness achievement incentives q Resiliency initiative for productivity q Spouses also served q Integrated programming (Level I & II) q Uses HPM framework q Onsite Clinic
WELLNESS PROGRAMS Return on Investment
WELLNESS PROGRAMS Sample Incentive Program Design: Category 2011 Wellness Goals 2012 Wellness Goals 2013 Wellness Goals Participation in HRA Complete Tobacco/Nicotine: Affidavit: Tobacco Free -or. Completion of Smoking Cessation Program Negative Test Result -or. Completion of Smoking Cessation Program Physical Activity Completion of Shape Up the Nation Walking Challenge Completion of Shape Up the Nation Physical Activity Challenge Blood Pressure: Participate <135/90 <120/80 Glucose: Participate < 110 < 100 Cholesterol: Participate <4. 0(Cardiac Ratio) Body Mass Index: Participate <30. 0 <25. 0 Benefit Advisory Coaching: Participate Complete Impact Up to 20% Reduction in Premium Contribution
Incent Participants to Drive High Engagement & Reward Healthy Choices § Incentive can range from small tokens to 20% premium reduction § Gradual progression from activity to results based § Must have a “Wellness Champion” on the management team § Consider a “turnkey platform” § Employee portal drives engagement § Questions…. .
WELLNESS PROGRAMS How Benefit Sources & Solutions Can Help • Certified Wellness Planning Coordinators • Wellness program design assistance • Health fair coordination • Incentives/penalty program recommendations • Preferred vendor partnerships and referrals • Quarterly e-newsletters • Compliance issues guidance
Wellness Programs, Compliance Issues and Potential Hidden Costs (or how a good idea can go bad) Charles Bruder
WELLNESS AS A BUSINESS STRATEGY Nora Tsivgas President & CEO SMART Health Partners, LLC Maximizing Workforce Health
How Is Wellness a Business Strategy? Healthy Employees = Increased Profitability PEOPLE – Employee satisfaction is the #1 metric used to assess the impact of benefit design changes and programs implemented to support healthy behaviors. PRODUCTIVITY – Healthy employees miss fewer days of work and are more productive at work. PROFITABILITY -- Utilization of prevention and wellness strategies leads to lower utilization of the most costly health services.
Wellness as a Business Strategy A strategic approach to managing your company’s investment in health benefits and programs is essential in these days of rising healthcare costs. Benefits Health Wellness People are motivated by the health benefits they receive from your company and those benefits can be leveraged to motivate healthy behavior choices that can increase the value of your workforce. A healthy workforce costs your company less. Healthy employees are more productive and incur fewer health complications that cost your company in lost work days and higher claims costs. Preventive health strategies keep your employees well – physically, mentally, emotionally and don’t require exorbitant financial investments. Building a culture of health within your company can be an effective and measurable business strategy.
The Call to Action is Hard to Ignore % of US healthcare dollars spent in 2007 on treating patients with one or more chronic diseases In a five year span, twothirds of the rise in healthcare spending was due to the rise in treating chronic diseases. * - Many cases could be prevented. - Most could be better managed. 2/3 * Non-institutionalized U. S. population http: //www. fightchronicdisease. org/pdfs/2009_PFCDAlmanac. pdf 75% 96% 83% General Population Medicare Medicaid
Prevention vs. Chronic Disease - Reverse the “Flow” “The Natural Flow of Health Risks…is Toward High Risk in the Absence of Programs Targeted at Maintaining the Population at Low Risk” – Dee Edington, Ph. D General Wellness $ Presence of Risk Factors for Disease $$ Established Disease – with Complications $$$$ ® Costs follow risk – the greater the number of risk factors, the higher the cost ® A culture of health that promotes healthy behaviors may prevent or slow progression of disease and keep employees as healthy and low cost as possible – to the left side of the risk continuum Edington DW. N C Med J. 2006; 67(6): 425– 427; Mahoney JJ. J Manag Care Pharm. 2008; 14 (6 Suppl B): 3– 8; National Business Group on Health. Issue Brief. March 2006. Washington, DC; 2006.
5% of Employees Can Account for 75% of Cost Percentage of Healthcare Costs Attributable to Employees in Different Health Categories* 35% with established conditions 15% of cost 50% of the population is well or has risk factors 10% of cost 75% of cost ® Most health care strategies focus on the 5% in the “sickest” category ® While this may yield shortterm savings, to provide quality, cost-effective care, the employer needs to manage the entire population 5% with complications * Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services. Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008; 14(6 Suppl B): 3– 8. (Pitney Bowes Case Study)
Identifying Health Risk in the Organization Health Risks: Behaviors, Conditions, Events Behaviors: • Smoking • Poor nutrition: <5 servings of vegetables/day • Lack of exercise: <60 minutes/day 5 x/week • Inconsistent compliance preventive health measures / screenings/ annual physicals and medications. Uncontrolled Conditions: • High blood pressure • High blood glucose (sugar) • Obesity : BMI>30 • Undiagnosed cancer • Unmanaged Stress/Anxiety/Depression Events: • • • Heart Attack Stroke Cancer Diagnosis Uncontrollables: • • Age Gender Family History Genetics
What is Obese? Normal Overweight Obese
Identifying Health Risk in the Organization Health Risk: Behaviors, Conditions, Events • • • Eyeball National/regional benchmark data Employee Surveys Health Risk Assessments Biometric Screening data Medical and Pharmacy Claims data Financial Risk: Total Cost of Care • Premiums* o Medical Claims o Pharmacy Claims • Disability – illness or injury • Workers compensation • Lost productivity due to illness or injury * Degree of impact increases from community-rated to experience-rated to self-funded. Self -funded employers would look directly at medical and pharmacy claims vs. premiums.
Percentage of Healthcare Costs Attributable to Employees in Different Health Categories* 5% of Employees/Dependents Can Account for 75% of Your Healthcare Cost The 15 most expensive health conditions account for 44 percent of total healthcare expenses 35% with established conditions 15% of cost 50% of the population is well or has risk factors Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders 10% of cost 75% of cost 5% with complications People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition * Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services. Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008; 14(6 Suppl B): 3– 8. (Pitney Bowes Case Study)
Percentage of Healthcare Costs Attributable to Employees in Different Health Categories* “Can we mitigate the trend? ” The 15 most expensive health conditions account for 44 percent of total healthcare expenses 35% with established conditions 15% of cost 50% of the population is well or has risk factors Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders 10% of cost 75% of cost 5% with complications People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition * Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services. Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008; 14(6 Suppl B): 3– 8. (Pitney Bowes Case Study)
Percentage of Healthcare Costs Attributable to Employees in Different Health Categories* Can we prevent migration from risk to chronic disease? The 15 most expensive health conditions account for 44 percent of total healthcare expenses 35% with established conditions 15% of cost 50% of the population is well or has risk factors Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders 10% of cost 75% of cost 5% with complications People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition * Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services. Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008; 14(6 Suppl B): 3– 8. (Pitney Bowes Case Study)
Percentage of Healthcare Costs Attributable to Employees in Different Health Categories* Can we shrink the cost of healthcare and grow the size and strength of our workforce? The 15 most expensive health conditions account for 44 percent of total healthcare expenses 35% with established conditions 15% of cost 50% of the population is well or has risk factors Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders 10% of cost 75% of cost 5% with complications People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition * Total of risk groups = 90% of the employee population; 10% of employees were nonusers of health services. Source: Adapted from Mahoney JJ. J Manag Care Pharm. 2008; 14(6 Suppl B): 3– 8. (Pitney Bowes Case Study)
How Does Productivity Affect Profitability Productivity: Measurable production per employee or group per time period X# of cars washed per day X# of phone calls handled per hour LOSSES • Absenteeism • Presenteeism • Time spent distracted by family/personal responsibilities / stress • • GAINS Days of physical presence at work Hours mentally present at work Bursts of creativity that result in meaningful outcomes Brand Stewardship
Lost Productivity Has a Measurable Impact (Total # of employees * prevalence) * (average annual salary * % avg productivity lost) = Annual $ lost productivity due to that condition Example: 200 employees with a 17. 5% prevalence of flu, an average annual pay of $50, 000, losing 4. 7% productivity due to flu (equivalent of 7 days out of work and 7 days at half presenteeism = $70, 000/year
Worksite health promotion programs can yield a $3 to $6 return on investment for every dollar spent over a 2 - to 5 -year period J&J‘s leaders estimate that wellness programs have cumulatively saved the company $250 million on healthcare costs over the past decade, from 2002 to 2008, the return was $2. 71 for every dollar spent. ¹ 46% of employees participating in on-site smoking cessation program quit; 48% smoked less – L-3 Communications • Classes and fitness training offered to prevent back injuries resulted in increased employee morale, reduced worker’s comp claims, medical costs and sick days related to back injuries producing a net costbenefit ratio of 1 to 1. 79 – County in California • Participants in their “Stay Alive & Well” program significantly lowered cholesterol levels, blood pressure and weight and experienced 21% lower lifestyle-related claim costs than non-participants. Resulting savings: $127. 89 per participant with a benefit to cost ratio of 1. 68 to 1 over two years. – Reynolds Electrical & Engineering Company, Las Vegas • 22% fewer admissions to a hospital, 29% shorter hospital stays, and 42% lower expenses per admission – Superior Coffee and Foods, Illinois • Employees whose lifestyles included two to four health risks such as smoking, little exercise, overweight— were 75% higher than those of low-risk employees. High-risk employees who improved their health habits through the company’s health promotion program and became low risk cut their average medical claims in half, lowering their medical insurance costs by an average of $618 per year. – Steelcase ¹Harvard Business Review, December 2010, W. Braun, What’s the Hard Return on Employee Wellness Programs? Reference: The Cost Benefit of Worksite Wellness, www. welcoa. org/Worksite_cost_benefit. html •
Where to Begin • • • Capture CEO Support Designate a Company Wellness Leader Conduct an Employee Health Interest Survey Provide an Opportunity for Health Screening Administer an Annual Physical Activity Campaign Hold a Healthy Eating In-service/Lunch 'n Learn Establish an In-house Wellness Library Disseminate a Quarterly Health Newsletter Implement Healthy Policies and Procedures Support Community Health Efforts • Engage a Broker or Consultant to Design an Comprehensive Strategy ¹Wellnss for Small Business, Welcoa, http: //www. welcoa. org/wellworkplace/index. php? category=22
Some Business Philosophies Underlying A Successful Wellness Strategy q Companies (must) offer health benefits in order to compete for talent in the local marketplace q Healthcare cost affects companies’ bottom line q Health risk drives healthcare utilization and cost q Health behaviors drive health risk q Health status affects productivity, both physical and mental/creative, and productivity affects your bottom line q Employees will practice smarter health behaviors if properly motivated q A culture of health at work has significant impact on and value to employees and their families
Conclusion: Wellness IS a Business Strategy Benefits Health Wellness Plan for Success 1. Assess: Baseline Risk and Wellness Needs 2. Develop or Purchase: High Quality Wellness Services 3. Communicate: Your Wellness Program and Culture Change 4. Measure: The Success of Your Culture Shift Success takes time: 3 year vision 1. Assess goals annually 2. Stay “on message” in promoting healthy lifestyles to employees 3. Build and leverage buy in from the top of the organization
Wellness As a Business Strategy SMART Health Partners’ Role v General Assessment and Program Design ü Baseline ü Prioritization ü Goal Development ü Strategic Plan v Implementation ü Budgeting ü Cost Neutral Resources ü Vendor Management ü Engagement ü Data Collection v Measurement of Results ü Translation of Value ü “Marketing” of Results Nora Tsivgas President & CEO SMART Health Partners, LLC 16 Mt. Bethel Drive, Suite 238 Warren, NJ 07059 nora. [email protected] com 201. 321. 3532 http: //www. smarthealthnow. com
Corporate History • Hall’s Warehouse Corp. founded in 1966 Mission Statement “To provide superior logistical services in a manner that meets or exceeds the requirements of Hall’s clients while enhancing our competitive position in the market place” • Hall’s is comprised of three enterprises – Hall’s Warehouse Corp. – Hall’s Fast Motor Freight – Hall’s Logistics Group Inc.
Company Overview • Operate over 1, 651, 000 square feet of dry, refrigerated and frozen storage • 5 facility locations encompassing 7 warehouse operations ▪ Kentile Campus, South Plainfield, NJ (Headquarters) - Hall’s Fast Motor Freight Inc. ▪ Oak Tree facility, South Plainfield, NJ ▪ Edison facility, Edison, NJ ▪ Bridgewater facility, Bridgewater, NJ ▪ Piscataway 120 & 140 facilities, Piscataway, NJ
Company Overview • Hall’s Fast Motor Freight Asset Based 75 unit regional carrier • Hall’s Logistics Corp. (Strategic Carrier Partnership) • Service retail and food service customers and manufacturers in the north east market • We cross-dock and transport over 25 mm lbs per month for our largest consolidation client “We Treat Your Business As If It Were Ours”
Why a Wellness Program? 1) Concern with the direction of healthcare costs - Average increase of healthcare costs 10% since 2004 2) Compliance, Safety, Accountability (CSA) ▪ Close monitoring and evaluating the safety and compliance records of motor carriers and their drivers ▪ Taking rapid action against those with apparent safety problems, to get them to improve 3) Other avenues ineffective 4) Firm belief in having “feet on the ground” in order for lasting behavior change to occur
I’m a Resource for employees! Personalized & Customized 100% Voluntary 100% Confidential
Ways I Can Help?
Other components of our program Programs or Competitions Lunch & Learns • • Weight Loss Smoking Cessation Nutrition Exercise Programs
Timeline of Events 2009 January – Health Risk Assessments ▪ 72% participation ▪ Overall wellness score was 60 ▪ Top 4 areas of concern: Nutrition, Exercise, Weight, Stress May – The Biggest Loser (3 month weight loss program) ▪ 90 employees participate ▪ 260 pounds of body weight lost December – Fitness Center Program ▪ Partnered with local health club ▪ Discounted rates offered to employees and family members ▪ Over 80 employees have participated in program
Timeline of Events 2010 January – Health Risk Assessments ▪ 85% participation ▪ Overall wellness score was 67 ▪ Large improvements seen in Blood Pressure, Exercise, Smoking, and Stress. March – Compete to Quit (3 month Tobacco Cessation program) ▪ New Jersey Tobacco Control Worksite Program ▪ 28 participants and 11 employees quit smoking July – Tobacco Free Workplace Policy ▪ All tobacco products prohibited throughout all Hall’s locations ▪ Tobacco cessation resources were available 6 months prior to policy implementation date
Timeline of Events 2011 January – Take Shape for Life (Nutritional intervention program) ▪ Weekly weigh-ins ▪ Before pictures and circumference measurements ▪ Bi-weekly onsite classes February – Slim Down or Pay Up (3 month weight loss program) ▪ 40 employees participated ▪ 33 employees completed program (3 weigh-ins, 1 per month) ▪ 530 pounds of body weight lost collectively December – Hall’s Health & Wellness Program ▪ Create brand, logo, and vision statement ▪ Introduce new internal wellness newsletter (biannual)
Upcoming Events 2012 January – Health Risk Assessments (third round) ▪ Incentives for completion of HRA and Biometric Measures ▪ Planning to offer onsite blood testing (cholesterol, blood sugar etc. ) March – Tobacco Cessation program (second) ▪ Alongside Healthyroads Quit & Fit program (AETNA) ▪ Prior to implementation of tobacco surcharge July – Tobacco Surcharge ▪ Monthly increase to the health insurance premiums of tobacco users Additional plans for 2012 ▪ ROI ▪ Pedometer walking program ▪ Family Health Fair ▪ Rx savings information (generic, mail-order)
Before Current Body Weight Lost 84 pounds Reduction in Body Fat Percentage 21% Blood Pressure Was: 152/98 Now: 104/72 • No prescribed medications • Meets DOT health requirements
Before Current Body Weight Lost 130 pounds Reduction in Body Fat Percentage 23% • Discontinued use of prescribed high blood pressure medication. • Recently completed first 5 K run (33 mins)
Question & Answer Session Thank you for coming!