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Why Employers are Missing the Mark with Wellness Matthew L. Snook, Principal 813.207.6310 [email protected]

Snook - Why Employers Are Missing the Mark with Wellness

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Page 1: Snook - Why Employers Are Missing the Mark with Wellness

Why Employers are Missing the Mark with Wellness

Matthew L. Snook, Principal813.207.6310

[email protected]

Page 2: Snook - Why Employers Are Missing the Mark with Wellness

1© 2010 Mercer, all rights reserved

Discussion Topics

Background – the problems to address

Why wellness?

What is “wellness?”

So what’s the problem?

How to do it differently

Page 3: Snook - Why Employers Are Missing the Mark with Wellness

Background – the problems to address

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3© 2010 Mercer, all rights reserved

Health status driven by behaviors

Determinants of Health Status

20%

10%

50%

20%

Access Genetics Environment Behavior

Source: Institute for the Future, Centers for Disease Control and Prevention

Page 5: Snook - Why Employers Are Missing the Mark with Wellness

4© 2010 Mercer, all rights reserved

Evolution of a health plan participant…

Source: The Economist

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5© 2010 Mercer, all rights reserved

…and the health status impact of those behaviors

10.044.664.55 2.5917.199.94 8.51 5.22Osteoarthritis

64.5348.95 34.1623.47 63.1647.95 38.7723.26 High Blood Pressure

13.9716.01 9.60 8.84 19.2212.5611.136.87 Coronary Heart Disease

10.6510.104.932.0319.897.24 7.12 2.38Type 2 Diabetes

Prevalence Ratio (%) – MenPrevalence Ratio (%) – WomenMedicalCondition

> 4030 to 3925 to 2918 to 24> 4030 to 3925 to 2918 to 24

Body Mass IndexBody Mass Index

Prevalence of Medical Conditions by Body Mass Index (BMI)

Source: NHANES III, 1988 - 1994.

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So why wellness anyway?

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7© 2010 Mercer, all rights reserved

Why Wellness Internally/Externally?What we’ve heard…

It’s the “right thing to do”

Improve recruitment

Create a “culture of health”

Reduce workers’compensation costs

Reduce health care costs

Be an “employer of choice”

Minimize turnover/improve retention

Improve morale

Improve community perception

Generate revenue/referrals

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8© 2010 Mercer, all rights reserved

Questions to ask yourself…

Why are you engaged in wellness and do you want to be engaged inwellness?

What business issues are you trying to address?

How will you know if you are successful?

Have you been successful?– If yes, how do you know? – Do you have the data/information to support success?

What program model best matches your desired outcomes?

Page 10: Snook - Why Employers Are Missing the Mark with Wellness

What is “wellness?”

Page 11: Snook - Why Employers Are Missing the Mark with Wellness

10© 2010 Mercer, all rights reserved

Population Health BreakdownNumerous groups to address

Healthy At Risk Chronic Conditions

Catastrophic Conditions

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11© 2010 Mercer, all rights reserved

Managing population health is a BIG job!Traditional thinking regarding program categories

The Spectrum of “Population Health

Management”

Wellness Disease Prevention

Disease Management

Case Management

Focus on general health maintenance

and improvement

of whole population

Focus on prevention,

usually addressing

specific health risks

Focus on health

improvement for those with

specific conditions

Focus on management

of large/ catastrophic

claimants

Page 13: Snook - Why Employers Are Missing the Mark with Wellness

So what’s the problem?

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13© 2010 Mercer, all rights reserved

Claims DistributionSmall percent of the population drives the cost

53%

10%

25%

35%

19%

50%

5%

3%

% of Employees % of Claims

Population Costs

Source: Mercer Proprietary Data

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14© 2010 Mercer, all rights reserved

Managing Across the Health ContinuumWhere does the CFO want your focus?

Healthy At Risk Chronic Conditions

Catastrophic Conditions

15% of members = 75% to 85% of cost

85% of members = 15% to 25% of cost

Page 16: Snook - Why Employers Are Missing the Mark with Wellness

15© 2010 Mercer, all rights reserved

Managing Across the Health ContinuumWhere does the CFO want your focus?

Healthy At Risk

85% of members = 15% to 25% of cost

Conclusion: If your “wellness” program is focusing primarily or solely on general health maintenance and improvement for your whole population, rather than the specific individuals and issues driving your claims costs, positive and significant ROI may never be achieved.

Page 17: Snook - Why Employers Are Missing the Mark with Wellness

16© 2010 Mercer, all rights reserved

“Return on investment for wellness initiatives is uncertain, particularly for one-size-fits-all programs purchased from vendors with little

direct employer involvement.”

Programs that consist of nothing but a health risk assessment and web-based “let’s shape up!” tools, with no personalized follow-up such as health coaching, are the most likely to fail.

The health message needs to come from the top, and senior leaders need to “communicate clearly and honestly with employees about shared goals and responsibilities of health and wellness.”

Programs to help workers stop smoking or lose weight aren’t likely to produce lasting results unless there are broader changes to the work environment– such as an end to the plate of muffins at meetings and remodeled, more appealing stairwells.

Any investment in wellness programs will likely take “several years” to pay off, if it ever does.

Study by Center for Studying Health System Change

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17© 2010 Mercer, all rights reserved

Another problem…The more complex, the less prevalent

Complexity

Pre

vale

nce

HRA

Completion

Wellness/Behavior

Modification

Program

CompletionCare Management

Program

Completion

Treatment

Protocol

Compliance

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18© 2010 Mercer, all rights reserved

While measurement of the medical claims impact directly attributable to even the most effective health management interventions can be very, very difficult, measurement of the more likely areas of impact…

Decreased absenteeism

Improved presenteeism/workplace productivity

…can be even harder

One other issue

Page 20: Snook - Why Employers Are Missing the Mark with Wellness

How to do it differently…

Page 21: Snook - Why Employers Are Missing the Mark with Wellness

© 2010 Mercer, all rights reserved

Total Health Management (THM)

Total Health Management includes all of the actions an employer can take to engage and support employees in making good choices to avoid all of the costs and consequences of poor health.

Design• Programs designed to facilitate greater engagement, compliance and sustained

utilization of higher quality providers and treatment options Stakeholder Engagement• Hold all parties accountable – organization leaders, employees, dependents and

vendors – to achieve success through continued improvementProgram Integration• Bring all data, systems and programs under one real-time, comprehensive participant

focused umbrella

Definition:

Three essential building blocks:

20

Page 22: Snook - Why Employers Are Missing the Mark with Wellness

21© 2010 Mercer, all rights reserved

THM creates a holistic view of illness and productivity

The Total Cost of Illness

Indirect cost of absence = 2.5% of payroll

Direct non-occupational absence cost = 3.5% of payroll

Health care benefits cost = 17% of payroll

Total expense = 23% of payroll

+

* Assumptions:• 5,000 employees• $48,000 average salary

Sources: Mercer’s National Survey of Employer-Sponsored Health Plans; Mercer’s Survey of Health, Productivity and Absence Management Programs

$55M Health & absence costs

$240M Payroll*

Goals of a holistic view:

■ Understand what’s driving current health & disability costs, absenteeism, productivity losses

■ Identify magnitude of future expenses - “ticking time bombs” who may or may not appear in claims data – but who will have a significant future expense

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22© 2010 Mercer, all rights reserved

The Art & Science of THM

Science – what you implement– Make sure the programs are effective and science-based– Make sure the programs address your specific needs

Art – how you implement it– Wellness is tied to the business, leadership is on board and corporate policies

and practices support a healthy culture– Program policies and procedures are documented and an accountable

infrastructure is in place– Program variety is offered and participation options are varied– Effective mass and targeted communications are used (and relentless) to

keep the message in front of people and valued incentives are selected– Program status information is collected and reported to key stakeholders– Continual input and feedback is obtained from various key stakeholder groups

More Science – measuring results

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23© 2010 Mercer, all rights reserved

The cultural shift required for effective THM

A paradigm shift needs to occur that transcends

From: To:

Employees feeling a responsibility for maintaining good health, and preventing disease and illness.

Employees feeling an entitlement to coverage when they are sick

Budgets including funding for programs that change outcomes and reward results

Dollars being spent only on sick employees

Leaders modeling best-practice behaviors

Leaders following talking points

Page 25: Snook - Why Employers Are Missing the Mark with Wellness

24© 2010 Mercer, all rights reserved

Getting Started Analyze data

2%

3%5%

10%11%

13%

14%21%

23%

24%25%

32%39%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

High Blood Glucose

High Alcohol UseReported Depression

Current Tobacco User

Safety BeltPerception of Health

High CholesterolHigh Blood Pressure

Former Tobacco User

Life SatisfactionInactive

High Stress

High Body Mass Index

* Actual client data.

Health Risk Distribution

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25© 2010 Mercer, all rights reserved

And Why That Matters…

XXXX8. High Blood Pressure

XXX10. High Cholesterol

XXX9. Reported Depression

XXXX7. High Blood Glucose

XXXXXX6. High Alcohol Use

XXXXXXX2. High Stress

XXXXXXXX1. Current Tobacco User

Cirrhosis

X

X

Injuries/ Accidents

X

X

Low Back Pain

X

X

X

High-risk Pregnancy

X

COPD

X13. Perception of Health

12. Safety Belt use

X11. Life Satisfaction

XXXX5. Inactivity

XXXX4. Former Tobacco User

XXXX3. High Body Mass Index

StrokeGastro-

Intestinal Disease

DiabetesDepressionCardiovasc. DiseasesCancerAsthma

The Correlation of Health Risks and Disease

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26© 2010 Mercer, all rights reserved

HERO Best Practice Scorecard© (v.3)Free employer tool to assess THM practices

20012945Total Score

11536: Measurement and Evaluation

6741105: Engagement Methods

5637204: Programs

221253: Program Level Management

332622: Leadership Engagement

11851: Strategic Planning

Total Points PossibleNational AverageCompany ABCSection

Link to HERO Scorecard: http://mercer.inquisiteasp.com/cgi-bin/qwebcorporate.dll?idx=NPPY5J

Benchmark current THM practices against “best practice standards” –the lower the HERO score, the higher the savings opportunity

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27© 2010 Mercer, all rights reserved

Plan Design and IncentivesIssues and Considerations

Behavior Change is critical to achieving optimal outcomes and better management of health costs

Plan design and incentives are key to achieving specific changes in behavior

Principal areas of focus are:– Being Aware of Health Status – Health Assessment and Screenings– Preventing Illnesses – Immunizations and Maintenance of Healthy Lifestyles– Reducing Risks – Mitigating or Eliminating Unhealthy Behaviors– Accessing Right Care – Access and Use the Right Care, at the Right Time, from the

Right Providers– Complying with Treatment Regimens – Follow Through with What is Prescribed

Evidence/value-based design that focuses on creating total value is a guiding principle for strategy and program design

Approaches to Plan Design and Incentives can range from Mild to Moderate to Aggressive

Plan design and incentives must be supported by strong marketing campaign

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28© 2010 Mercer, all rights reserved

Plan Design and IncentivesEvolution

Plan Design and Incentives

Year #3

2013

Year #2

2012

Year #1

2011

Year #5

2015

Year #4

2014

Key Behaviors

Complying with Treatment Regimens– Follow Through with What is Prescribed

Accessing Right Care – Access and Use the Right Care, at the Right Time, from the Right Providers

Reducing Risks – Mitigating or Eliminating Unhealthy Behaviors

Preventing Illnesses – Immunizations and Maintenance of Healthy Lifestyles

Being Aware of Health Status –Health Assessment and Screenings

Goal is to ultimately develop an Evolving Long Term Approach

that more strongly reinforces appropriate behavior over time

Goal is to ultimately develop an Evolving Long Term Approach

that more strongly reinforces appropriate behavior over time

Page 30: Snook - Why Employers Are Missing the Mark with Wellness

29© 2010 Mercer, all rights reserved

Broad Program DesignComponents across the health care continuum

Other Programs: Health advocacy (e.g., navigational, clinical and claims advocacy)Treatment decision supportHealth advisorWellness Champions Support Program

NICU & Maternity case management

Gaps in carePopulation Based CampaignPopulation Based Campaign

Care CoordinationSupplemental programsLifestyle Management (online)Immunizations & Screenings

Patient AdvocacyCore programs (CAD, COPD, Diabetes, Asthma,

CHF)

Lifestyle Management (telephonic)

Health portal

Resource ManagementPatient Identification (claims + HRA)

Patient Identification (claims + HRA)

Onsite seminars, worksite initiatives

High Cost Case ManagementDisease Management

Health Risk Management and Disease PreventionHealth Promotion

Acute Conditions (e.g., maternity, disability, self-diagnosed conditions, strains, sprains, colds)• Nurseline, self-care skills, employee assistance program, on-line resource, safety at home and work

Catastrophic ConditionsChronic ConditionsAt-RiskHealthy

Page 31: Snook - Why Employers Are Missing the Mark with Wellness

30© 2010 Mercer, all rights reserved

Structuring incentives to meet desired results

Moderate return;

Short- to mid-term paybackModerateReturn to Work – Returning to work early

from disability absences

High return;

Short-term paybackHighComplying with Treatments – Adhering to

treatment plans, medications

Moderate

Moderate

Low

Low

Impact Financial ROIKey Behaviors

High return;

Short-term payback

Accessing Right Care – Making good decisions about getting care at the right time, from the right providers

Moderate to high return;

Mid- to long-term paybackReducing Risks – Improving unhealthy behaviors

High return;

Short- and long-term paybackPreventing Illnesses – Preventive care, immunizations, healthy lifestyles

LowBeing Aware of Health Status – Health assessment, screenings

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31© 2010 Mercer, all rights reserved

CRITICAL issues we have no time to discussIncentive design and communications

Incentive design is challenging– Many, many designs and approaches– Reward good behaviors– Discourage bad behaviors– Carrot vs. stick?– Are you providing reward for folks already doing the “right things?” Should

you be?

Communications – May be the most critical aspect of THM other than the interventions

themselves– Must be ongoing, consistent, pervasive, multi-faceted, multi-lingual, and

relentless!

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