GHI Wellness ROI Presentation

CorporateCorporateHealth Care Health Care Cost ContainmentCost Containment

The Gifford Health Institute

Presented to:Presented to:ABC CorporationABC Corporation

Presented by:Presented by:TheThe Gifford Health InstituteGifford Health Institute

Employee Wellness and YourEmployee Wellness and YourBottom LineBottom Line

Managing Health Care CostsManaging Health Care Costs



• Rationale for Worksite Health Promotion Programs

– Why Wellness?– Why the Worksite?– What’s the Goal?

• Published Research on WHP Programs

– High Risk Employees Cost More– WHP Programs Have an Impact– Comprehensive Programs Have Positive ROI

• Bottom Line

AgendaAgenda



Rationale for Worksite HealthRationale for Worksite HealthPromotion ProgramsPromotion Programs



Rationale For WHP ProgramsRationale For WHP ProgramsWhy Wellness?Why Wellness?

Health Spending in US

• Topped $1 trillion in 1996 ($1,035.1 billion)

• Doubles every 10 years

1960 $26.9 billion

1970 $73.2 billion

1980 $247.3 billion (tripled)

1990 $699.1 billion

2000 $1.3 trillion

• Forecast for 2010 is $3.07 trillion




Increasing Costs

• Health plans raising premiums

• US Business share of health expenditures is 25%

• Approximately 50% of a company’s profits are spent on healthcare benefits

• Productivity costs estimated at twice direct costs



50%

20%

20%

10%

LifestyleEnvironmentBiologyHealth Services

Lifestyle Accounts for 50% of Deaths

Source: CDC (1980)




Perceptions

1. Cancer 30%

2. Heart Disease 29%

3. Auto Accidents 28%

4. Tobacco Use 25%

5. Alcohol Abuse 18%

6. Drug Abuse 17%

7. Firearms 15%

8. Obesity/Inactivity 9%

9. AIDS 8%

Perceptions

1. Cancer 30%

2. Heart Disease 29%


4. Tobacco Use 25%

5. Alcohol Abuse 18%

6. Drug Abuse 17%

7. Firearms 15%


9. AIDS 8%

Reality

1. Tobacco Use 38%


3. Alcohol Abuse 9%

4. Nonsexual Infectious 8%

5. Toxic Agents 6%

6. Firearms 3%

7. Sexual Behavior 3%


9. Illicit Drug Use 2%

Reality

1. Tobacco Use 38%


3. Alcohol Abuse 9%

4. Nonsexual Infectious 8%

5. Toxic Agents 6%

6. Firearms 3%

7. Sexual Behavior 3%


9. Illicit Drug Use 2%

Rationale For WHP ProgramsRationale For WHP ProgramsPremature Death: Fact or Fiction?Premature Death: Fact or Fiction?

Source: Partnership for Prevention. Survey of 1,000 adults in March 2000. Percentage who described each as the leading cause of premature death.

Source: Partnership for Prevention. Based on research by McGinnis & Foege published in the Journal of the American Medical Association, November 10, 1993.



Rationale For WHP ProgramsRationale For WHP ProgramsWhy the Worksite?Why the Worksite?

• Captive Audience

• Consistent Environment

• Social Support

• Organizational Support

• Employers Will Fund



Rationale For WHP ProgramsRationale For WHP ProgramsWhatWhat’’s the Goal?s the Goal?

• It’s Good for Business

• Employee Job Satisfaction

• Recruitment & Retention

• Enhance Competitiveness

• Decrease Absenteeism

• Decrease Workers Comp & Disability

• Manage Healthcare Costs



Published Research onPublished Research onWorksite Health PromotionWorksite Health Promotion



Published Research on WHPPublished Research on WHPWhat the Research SaysWhat the Research Says

1. High Risk Employees Cost More– Higher Costs– Less Productive

2. WHP Programs Have an Impact

– Health Risks– Medical Claims– Absenteeism– Disability

3. Comprehensive Programs Have Positive ROI



Published Research:Published Research:High Risk Employees Cost MoreHigh Risk Employees Cost More



Published Research on WHPPublished Research on WHPHigh Risk Employees Cost MoreHigh Risk Employees Cost More

Impact on Individual Health Care Costs:High versus Lower-Risk Employees

70.2%

46.3%

34.8%

21.4% 19.7%14.5% 11.7% 10.4%

-50%

-25%

0%

25%

50%

75%

100%D

ep

res

sio

n

Str

es

s

Glu

co

se

We

igh

t

To

ba

cc

o-

Pa

st

To

ba

cc

o

Blo

od

Pre

ss

ure

Ex

erc

ise

Pe

rce

nt

Individuals at high risk for depression have 70.2% higher costs than those at lower risk

Individuals at high risk for depression have 70.2% higher costs than those at lower risk

Source: Goetzel et al. (1998)



Published Research on WHPPublished Research on WHPHigh Risks Impact Organizational Health Care Costs High Risks Impact Organizational Health Care Costs

7.9%

5.6%

4.1%3.3%

2.5%1.7% 1.5%

0.5%

0%

2%

4%

6%

8%

10%S

tress

To

bacco

-P

ast

Weig

ht

Exerc

ise

To

bacco

Glu

co

se

Dep

ressio

n

Blo

od

Pre

ssu

rePerc

en

t o

f E

xp

en

dit

ure

s

• High stress generates 7.9% of annual medical expenditures

• $428 per employee annually (1996 dollars)

• 24.9% of health care costs

• High stress generates 7.9% of annual medical expenditures

• $428 per employee annually (1996 dollars)

• 24.9% of health care costs

Annual Impact of High Risks on Organizational Health Care Costs

Source: Anderson et al. (2000)



Published Research on WHPPublished Research on WHPCosts Follow RisksCosts Follow Risks

$500

$750

$1,000

$1,250

$1,500

1985-87 1988-90

Lo-Lo

Lo-Hi

Hi-Lo

Hi-Hi

*Claims costs adjusted to 1996 dollars.

Risk Change

Changes in Cost Associated with Risk

Source: Edington et al. (1997)

Ave

rag

e A

nn

ual

Co

sts*

Time



Published Research on WHPPublished Research on WHPHigh Risk Employees are Less ProductiveHigh Risk Employees are Less Productive

89%

60%67%

79%

0%

20%

40%

60%

80%

100%

Overall Digestive Mental Hlth Musc/skel

% NotProductive% Productive

Worker Productivity Index

Source: Burton et al. (1999)

Pro

du

ctiv

ity

Lev

elP

rod

uct

ivit

y L

evel



Published Research:Published Research:WHP Programs Have an ImpactWHP Programs Have an Impact



WHP Programs Have an Impact on:WHP Programs Have an Impact on:Health RisksHealth Risks

5.17

5.90

6.366.24

4.5

5.0

5.5

6.0

6.5

7.0

Baseline Follow-Up

Participants

Nonparticipants

Targeted Programs Reduce Risks

Net Risk Reduction is .85Net Risk Reduction is .85

Source: Gold et al. (2000)

Ave

rag

e N

um

ber

of

Ris

ks



WHP Programs Have an Impact on:WHP Programs Have an Impact on:Health RisksHealth Risks

0%

10%

20%

30%

40%

50%

Back*

Cholesterol

Eating*

Exercise*

Smoking*

Stress*

Weight*

Participants

Nonparticipants

* Significant difference

Targeted Programs Reduce Risks

Per

cen

t R

edu

ced

Ris

ksP

erce

nt

Red

uce

d R

isks 44%

25%

14%16%

46%

28%

45%

27%

41%

18%

38%

23% 25%

14%

Source: Gold et al. (2000)



WHP Programs Have an Impact onWHP Programs Have an Impact on::

Medical ClaimsMedical Claims

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000Nonparticipants

Participants

Ave

rag

e C

laim

s P

aid

p

er E

mp

loye

e an

d R

etir

ee

Baseline Study Year

Source: Fries et al. (1994)

Nonparticipants’ expenses increased 27.7% more than participants.

Possible Savings = $437/person

Nonparticipants’ expenses increased 27.7% more than participants.

Possible Savings = $437/person



WHP Programs Have an Impact on:WHP Programs Have an Impact on:AbsenteeismAbsenteeism

2.582.502.06

2.87

4.324.05

0.00

1.00

2.00

3.00

4.00

5.00

1984 1985* 1986*

Participants

Nonparticipants


Intervention

Source: Wood et al. (1989)

Mea

n D

ays

Ab

sen

tM

ean

Da

ys A

bse

nt



WHP Programs Have an Impact on:WHP Programs Have an Impact on:ShortShort--Term DisabilityTerm Disability

33.2

36.738.1

24.7

29.427.8

20.0

25.0

30.0

35.0

40.0

45.0Nonparticipants

HRA/Reimbursement

Short-Term Disability Savings versus Non-Participants

Ave

rag

e S

TD

Da

ys L

ost


1996 Baseline1996 Baseline 1997*1997* 1998*1998*

Estimated Difference = $1350 per participant

Estimated Difference = $1350 per participant

Source: Serxner et al. (2001)

Intervention



Published Research:Published Research:Comprehensive Programs HaveComprehensive Programs Have

Positive ROIPositive ROI



Comprehensive Programs Have Comprehensive Programs Have Positive ROIPositive ROI

HealthPromotion

Short-Term Long-Term

$3-$83-5 Years

$2-$51st Year

DemandManagement



Comprehensive Programs Have Comprehensive Programs Have Positive ROIPositive ROI

$0

$2

$4

$6

$8

$10

Health CareCosts

Absenteeism Combined

$3.35$3.35

$4.87$4.87

$8.22$8.22

Source: Aldana (1998)

Savings per Dollar Invested



Bottom Line:Bottom Line:““What the Research Tells UsWhat the Research Tells Us””



• Behaviorally staged

• Focus on maintenance and reinforcement

• Program beyond risk or disease specific

• Tailored to health and safety risk

• Incentives for participation

Bottom LineBottom LinePrinciples of Effective Program DesignPrinciples of Effective Program Design

Source: Serxner (in press)



• Repeated contacts

• Varied formats

• Personalization

• Low cost & portable

• Easy to administer

• Emphasis on health and productivity





• Multiple distribution channels

• Built in program evaluation

• Long-term orientation

• Integrated with Safety, Occupational Health, EAP, and Training

• Visible management support





Bottom LineBottom LineMillions Can Be SavedMillions Can Be Saved

$0

$2

$4

$6

$8

$10

Projecting Medical Care Cost Increases Using Four Scenarios of Lifestyle Risk Rates

Source: Leutzinger et al. (AJHP 2000) *1998 Dollars

Program holds risks

constant

Program reduces

risks 0.1%/yr

Program reduces

risks 1%/yr

No program w/ current risk

trends

Co

st(i

n M

illio

ns*

)

$9.96$8.85

$7.89

$2.22

$7.74 Million Saved/Year

$7.74 Million Saved/Year



• Lower Health Care Costs

• Lower Absenteeism

• Additional Benefits

– Higher Productivity– Lower Turnover– Improved Employee Satisfaction/Morale– Improved Employee Health/Quality of Life– Improved Recruitment– Improved Corporate Image

Bottom LineBottom LineWellness is a Healthy InvestmentWellness is a Healthy Investment



Aldana SG. Financial impact of worksite health promotion and methodological quality of the evidence. Art of Health Promotion 1998; 2(1):1-8.

Anderson DR, Whitmer RW, Goetzel RZ, Ozminkowski RJ, Wasserman J, Serxner SA. The relationship between modifiable health risks and group-level health care expenditures. American Journal of Health Promotion 2000; September/October: 45-52.

Burton WN, Conti DJ, Chen CY, Schultz AB, Edington DW. The role of health risk factors and disease on worker productivity. Journal of Occupational and Environmental Medicine 1999; 41(10): 863-877.

Edington DW, Yen LT, Witting P. The financial impact of changes in personal health practices. Journal of Occupational and Environmental Medicine 1997; 39(11): 1037-1047.

Fries JF, Harrington H, Edwards R, Kent LA, Richardson N. Randomized Controlled Trial of Cost Reductions from a Health Education Program: The California Public Employees’Retirement System (PERS) Study. American Journal of Health Promotion 1994; 8(3): 216-223.

Goetzel RZ, Juday TR, Ozminkowski RJ. A systematic review of return-on-investment studies of corporate health and productivity management initiatives. AWHP’s Worksite Health 1999 (Summer); 12-21.

Gold DB, Anderson DA, Serxner, S. Impact of a telephone-based intervention on the reduction of health risks. American Journal of Health Promotion 2000; Nov/Dec: 97-106.

ReferencesReferences



Leutzinger JA, Ozminkowski RJ, Dunn RL, Goetzel RZ, Richling DE, Stewart M, WhitmerRW. Projecting future medical care cots using four scenarios of lifestyle risk rates. American Journal of Health Promotion 2000; 15(1): 35-44.

Ozminkowski RJ, Dunn RL, Goetzel RZ, Canior RI, Murnane J, Harrison M. A return on investment evaluation of the Citibank, N.A., health management program. American Journal of Health Promotion 1999; 14: 31-43.

Pelletier KR. A review and analysis of the clinical and cost-effectiveness studies of comprehensive health promotion and disease management programs at the worksite: 1995-1998 update (IV). American Journal of Health Promotion 1999; 13:333-345.

Serxner SA. Practical Considerations for Design and Evaluation of Health Promotion Programs in the Workplace. Disease Management and Health Outcomes (in press).

Serxner SA, Gold DB, Anderson DR, & Williams, D. The impact of a worksite health promotion program on short-term disability usage. Journal of Occupational and Environmental Medicine 2001; 43(1): 25-29.

US Department of Health and Human Services (1980) Ten leading causes of death in the United States. Atlanta: Center for Disease Control, July.

Wood EA, Olmstead GW, Craig JL. An evaluation of lifestyle risk factors and absenteeism after two years in a worksite health promotion programs. American Journal of Health Promotion 1989; 4(2): 128-113.

ReferencesReferences

Documents

GHI Wellness ROI Presentation