Corporate Wellness Corporate Wellness Adds to the Bottom Adds to the Bottom

LineLineCreating a Productive and Healthy Creating a Productive and Healthy

WorkforceWorkforce

The material provided herein is for informational purposes only and is not intended as legal advice or

counsel.

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Wellness ProgramsWellness ProgramsIn The Beginning…In The Beginning…

Charles Bruder

November 2, 2011

Corporate Wellness

Adds To

The Bottom Line!!

Why Wellness?

Health Care Costs: Costs projected to jump 9% in 2011 (PriceWaterhouse Coopers, June 2010)

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)

Expanding Work Week: Typical American now works 47 hours a week, 164 more hours than only 20 years ago. (Julien Schor, Harvard Economics professor)

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

High Adoption Rates: More than 81% of America’s business with 50 or more employees have some form of health promotion program (WELCOA)

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)

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)

Recent “Proof” Points That Wellness Works

•Reduce employee healthcare costs

•Increase employee productivity

•Reduce absenteeism

•Reduce disability and workers’ compensation costs

•Promote healthier, more satisfied workforce

•Improve corporate profitability

WHY WELLNESS PROGRAMS?

WELLNESS PROGRAMSEmployee Productivity

WORKSITE WELLNESS PROGRAMS

WELLNESS PROGRAMSHow 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 PROGRAMSPlan Design Options

Program Model Quality of

WorkLife

Main Features

Primary Focus

Fun activity focusNo risk reductionNo high risk focusAll voluntarySite-based onlyNo personalizationMinimal incentivesNo spouses servedNo evaluation

Morale-Oriented

Traditional Approach

Health and Productivity Management

Mostly health focusSome risk reductionLittle high risk focusAll voluntarySite-based onlyWeak personalizationModest incentivesFew spouses servedWeak evaluation

Activity-Oriented

Add productivityStrong risk reductionStrong high risk focusSome reqd activitySite and virtual bothStrongly personalMajor incentivesMany spouses servedRigorous evaluation

Results-Oriented

WELLNESS PROGRAMSThe Quality of WorkLife Model

Quality of WorkLife

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 PROGRAMSThe Quality of WorkLife Model

Primary Wellness Targets Fun events Stress relief Nutrition Community service General wellness information General health information

Participation: 15% to 35%Approximate Cost/EE/Yr: <$45Likely ROI: <1:1.0

Quality of WorkLife Typical Activities

Health fairLunch and learn sessionsWellness “event”Community sponsorshipChair massage optionFree fruitWellness materials in HRHealth cartoons circulatedNutritious pot lucksMovie eventsCompany gamesCelebrity event

WELLNESS PROGRAMSThe 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 PROGRAMSThe Traditional Model

Primary Wellness TargetsEverything from the QWL Model

plus… OWS Cholesterol Blood pressure Tobacco use Obesity Medical self-care Physical activity

Participation: 28% to 58%Approximate Cost/EE/Yr: $46-

$150Likely ROI: 1:1.5 to 1:3.0

Traditional

Approach

Typical ActivitiesEverything from the QWL Model plus… Health risk assessment (HRA) Biometric testing option Fitness club memberships/facility Weight management program Smoking cessation program Web-based health information Healthy cafeteria/vending options Self-care book Preventive medical benefit coverage Wellness newsletter Short term incentive program

WELLNESS PROGRAMSThe 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 PROGRAMSThe HPM Model

Primary Wellness TargetsEverything from the TA Model plus… Productivity Injuries (All) HC utilization issues Presenteeism Resiliency Integrated programming Health consumerism

Participation: 65% to 95%Approximate Cost/EE/Yr: $250-$450Likely ROI: 1:2.5 to 1:6.5

Health and Productivit

y Manageme

nt

Typical ActivitiesEverything from the TA Model plus… HRA (incented and used for targeting

with 80% minimum) Risk stratification and incented

interventions Telephonic coaching Medical self-care and consumer

workshop Injury prevention Benefit linked incentive Wellness achievement incentives Resiliency initiative for productivity Spouses also served Integrated programming (Level I & II) Uses HPM framework Onsite Clinic

WELLNESS PROGRAMSReturn on Investment

WELLNESS PROGRAMS

Category2011

Wellness Goals2012

Wellness Goals2013

Wellness Goals

Participation in HRA Complete Complete Complete

Tobacco/Nicotine:

Affidavit: Tobacco Free -or-

Completion of Smoking Cessation Program

Negative Test Result-or-

Completion of Smoking Cessation Program

Negative Test Result-or-

Completion of Smoking Cessation Program

Physical ActivityCompletion of

Shape Up the Nation Walking Challenge

Completion of Shape Up the Nation

Physical Activity 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) <4.0(Cardiac Ratio)

Body Mass Index: Participate <30.0 <25.0

Benefit Advisory Coaching: Participate Complete Complete

ImpactUp to 20% Reduction

in Premium ContributionUp to 20% Reduction

in Premium ContributionUp to 20% Reduction

in Premium Contribution

Sample Incentive Program Design:

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 PROGRAMSHow 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, Wellness Programs, Compliance Issues and Compliance Issues and Potential Hidden CostsPotential Hidden Costs(or how a good idea can go (or how a good idea can go

bad)bad)Charles Bruder

SMART Health Partners, LLCMaximizing Workforce Health

WELLNESS AS A BUSINESS STRATEGY

Nora TsivgasPresident & CEO

How Is Wellness a Business Strategy?

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.

Healthy Employees = Increased Profitability

Wellness as a Business Strategy

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.

A strategic approach to managing your company’s investment in health benefits and programs is essential in these days of rising healthcare costs.

BenefitsBenefits HealthHealth WellnessWellness

The Call to Action is Hard to Ignore

75%

% of US healthcare dollars spent in 2007 on treating patients with one or more

chronic diseases

* Non-institutionalized U.S. population

http://www.fightchronicdisease.org/pdfs/2009_PFCDAlmanac.pdf

GeneralPopulation

96% Medicare

83% Medicaid

In a five year span, two-thirds 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

Prevention vs. Chronic Disease - Reverse the “Flow”

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

Disease – with Complications

Established DiseaseGeneral Wellness

$

Presence of Risk Factors for Disease

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.

$$ $$$ $$$$

“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, PhD

50% of the population is well or has risk factors

5% with complications

35% with establishedconditions Most health care strategies

focus on the 5% in the “sickest” category

While this may yield short-term savings, to provide quality, cost-effective care, the employer needs to manage the entire population

10% of cost

15%of cost

75%of cost

5% of Employees Can Account for 75% of CostPercentage of Healthcare Costs Attributable to

Employees in Different Health Categories*

* 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)

15%

Health Risks: Behaviors, Conditions, Events

Uncontrollables:•Age•Gender•Family History•Genetics

Identifying Health Risk in the Organization

Behaviors:• Smoking• Poor nutrition: <5 servings of vegetables/day• Lack of exercise: <60 minutes/day 5x/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

What is Obese?Overweight ObeseNormal

Identifying Health Risk in the Organization

• Eyeball• National/regional

benchmark data• Employee Surveys• Health Risk Assessments• Biometric Screening data• Medical and Pharmacy

Claims data

• Premiums*o Medical Claimso Pharmacy Claims

• Disability – illness or injury• Workers compensation• Lost productivity due to

illness or injury

Health Risk:Behaviors, Conditions, Events

Financial Risk: Total Cost of Care

* 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.

50% of the population is well or has risk factors

5% with complications

35% with establishedconditions

The 15 most expensive health conditions account for 44 percent of total healthcare expenses

Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders

People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition

10% of cost

15%of cost

75%of cost

Percentage of Healthcare Costs Attributable to Employees in Different Health Categories*

5% of Employees/Dependents Can Account for 75% of Your Healthcare Cost

* 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)

50% of the population is well or has risk factors

5% with complications

35% with establishedconditions

The 15 most expensive health conditions account for 44 percent of total healthcare expenses

Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders

People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition

75%of cost

Percentage of Healthcare Costs Attributable to Employees in Different Health Categories*

“Can we mitigate the trend?”

* 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)

10% of cost

15%of cost

50% of the population is well or has risk factors

5% with complications

35% with establishedconditions

The 15 most expensive health conditions account for 44 percent of total healthcare expenses

Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders

People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition

75%of cost

Percentage of Healthcare Costs Attributable to Employees in Different Health Categories*

Can we prevent migration from risk to chronic disease?

* 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)

10% of cost

15%of cost

50% of the population is well or has risk factors

5% with complications

35% with establishedconditions

The 15 most expensive health conditions account for 44 percent of total healthcare expenses

Top 5: heart disease, cancer, trauma, mental disorders and pulmonary disorders

People with multiple chronic conditions cost up to seven times as much as people with only one chronic condition

75%of cost

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?

* 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)

10% of cost

15%of cost

How Does Productivity Affect Profitability

GAINS•Days of physical presence at work •Hours mentally present at work•Bursts of creativity that result in meaningful outcomes•Brand Stewardship

LOSSES•Absenteeism•Presenteeism•Time spent distracted by family/personal responsibilities / stress

Productivity: Measurable production per employee or group per time period

X# of cars washed per dayX# of phone calls handled per hour

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

• 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 cost-benefit 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

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

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

¹Wellnss for Small Business, Welcoa, http://www.welcoa.org/wellworkplace/index.php?category=22

• Engage a Broker or Consultant to Design an Comprehensive Strategy

Some Business Philosophies Underlying A Successful Wellness Strategy

Companies (must) offer health benefits in order to compete for talent in the local

marketplace

Healthcare cost affects companies’ bottom line

Health risk drives healthcare utilization and cost

Health behaviors drive health risk

Health status affects productivity, both physical and mental/creative, and

productivity affects your bottom line

Employees will practice smarter health behaviors if properly motivated

A culture of health at work has significant impact on and value to employees and

their families

Conclusion: Wellness IS a Business Strategy

1. Assess goals annually2. Stay “on message” in promoting healthy lifestyles to employees3. Build and leverage buy in from the top of the organization

Plan for Success

Success takes time: 3 year vision

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

BenefitsBenefits HealthHealth WellnessWellness

Nora Tsivgas President & CEO

SMART Health Partners, LLC16 Mt. Bethel Drive, Suite 238Warren, NJ 07059nora.tsivgas@smarthealthnow.com201.321.3532 http://www.smarthealthnow.com

Wellness As a Business StrategySMART Health Partners’ Role

General Assessment and Program Design Baseline Prioritization Goal Development Strategic Plan

Implementation Budgeting Cost Neutral Resources Vendor Management Engagement Data Collection

Measurement of Results Translation of Value “Marketing” of Results

• Hall’s is comprised of three enterprises

– Hall’s Warehouse Corp.

– Hall’s Fast Motor Freight

– Hall’s Logistics Group Inc.

• Hall’s Warehouse Corp. founded in 1966

“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”

Mission Statement

▪ 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

• Operate over 1,651,000 square feet of dry, refrigerated and frozen storage

• 5 facility locations encompassing 7 warehouse operations

• Service retail and food service customers and manufacturers in the north east market

• We cross-dock and transport over 25mm lbs per month for our largest consolidation client

• Hall’s Fast Motor FreightAsset Based 75 unit regional carrier

• Hall’s Logistics Corp.(Strategic Carrier Partnership)

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

Personalized &

Customized

100% Voluntary

100% Voluntary

100% Confidential

100% Confidential

Ways I Can Help?

Other components of our program

Lunch & Learns

Programs or Competitions

• Weight Loss• Smoking

Cessation• Nutrition• Exercise

Programs

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

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

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)

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 ▪ Family Health Fair

▪ Pedometer walking program ▪ Rx savings information (generic, mail-order)

Before CurrentBody 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 5K

run (33 mins)

Question & Answer Session

Thank you for coming!