Wellness Initiatives- Employers are also in the “Health Business”
September 11, 2009
8:15 AM
Arvid R. “Dick” Tillmar – Health Advocate
Session Agenda
Why we’re here:
- Wellness Initiatives
– Employers are in the “Health Business”
- Describe the latest changes in health care reform related to wellness
- Explain how the employer can make changes that influence their bottom line and have a positive ROI.
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The biggest threats facing the American workforce today are obesity, tobacco use, and
stress. Together, these lifestyle factors contribute to lost productivity and absenteeism, among other problems, but a wellness program
can work to combat all three
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Source: National Business Group on Health, 2005
Benefits of Worksite Wellness ProgramsCompanies receive many benefits after implementing a worksite wellness program in addition to reducing costs. They include increases in employee morale, improved employee health, reduction in workers compensation claims, reductions in absenteeism, and increases in productivity.
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Milestones in Contemporary America
Hostess introducesTwinkies, 1953
Ray Kroc franchises theMcDonald Brothers, 1955
And then introduces“supersizing,” 1993
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Individual Behavior
Awareness/education
Motivation
Tools, strategies
Policy and environment
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Individual
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99
1010
1111
1212
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48 Teaspoons Sugar
16 oz32 oz
44 oz 52 oz 64 oz
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It’s All About
Behavior Change
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Individual Family
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1616
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Individual Family Worksite
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Individual Family Worksite Community
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2020
2121
2222
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Individual Family Worksite Community Nation/world
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2424
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Constraining Medical Costs
Centers for Disease Control & Prevention, 2006 Behavioral Risk Factors Surveillance System
Behavior & Lifestyle: Weight Gain ’86-’06
No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%
No Country Can Fund All
the Consequences:
HypertensionType 2 Diabetes Osteoarthritis
Stroke Coronary Heart
GallbladderSleep ApneaRespiratory
Issues
Some Cancers
Obesity Trends Among U.S. Adults (BMI>30%)
1985198619871988198919901991199219931994199519961997199819992000200120022003200420052006
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No Data <4% 4%-6% 6%-8% 8%-10% >10%
Diabetes Trends Among Adults in the U.S.,BRFSS 1990
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Diabetes Trends Among Adults in the U.S.,BRFSS 1991-92
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 1993-94
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 1995 - 96
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 1997
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 1998
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 1999
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 2000
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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Diabetes Trends Among Adults in the U.S.,BRFSS 2001
No Data <4% 4%-6% 6%-8% 8%-10% >10%
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A Weighty Toll on Employers
Obesity costs U.S. companies $13 billion annually3
These workers have 36% higher medical costs than fit employees4
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The High Cost of Smoking
A smoker costs the employer $3856/yr in added healthcare costs and lost productivity43
The overall prevalence of tobacco use is about 25% of the population, which can be generalized to any workplace population
Calculating the cost of smoking:
– Assume a workplace with 100 employees– Assume 25 employees use tobacco
• Result = $96,400/yr in business borne costs associated with smoking
– Because of this high cost, it is estimated more than 6,000 companies now refuse to hire smokers
• Alaska Airlines requires a nicotine test before hiring people
• Kalamazoo Valley Community College stopped hiring smokers for full-time positions
• Union Pacific won’t hire smokers
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Lost productivity related to absence & presenteeism compared to medical & pharmacy costs
IBI Research Insights, May 2007 - Single employer example
Medical Costs
25%
Absenteeism Lost Productivity
36%
Presenteeism Lost Productivity
34%STD/LTD/WC
5%
The Cost of Poor Health
38Goetzl, R; JOEM 45(1) 5-14 2003
The Top 10 Most Costly Health Conditions
Chronic disease has $1 TRILLION impact on U.S. lost productivity each year.
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Expense Drivers
Health Care System 10%
Environment 20%
Genetics 20%
Lifestyle 50%
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The Preventable Causes of Death in Wisconsin
Tobacco: 8,100 +/- deaths per year in Wisconsin
Poor diet: Physical inactivity: 6,900 +/- deaths per year in Wisconsin
Microbial agents: 1,700 +/- deaths per year in Wisconsin
Alcohol: 1,600 +/- deaths per year in Wisconsin
Toxic agents: 1,000 +/- deaths per year in Wisconsin
Medical errors: 1,300 +/- deaths per year in Wisconsin
Motor Vehicles: 800 +/- deaths per year in Wisconsin
Firearms: 400 +/- deaths per year in Wisconsin
Sexual behavior: 400 +/- deaths per year in Wisconsin
Uninsurance: 300 +/- deaths per year in Wisconsin
Illicit drug use: 300 +/- deaths per year in Wisconsin
– TOTAL: 22,800
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Six Unhealthy Truths Tell the Story of the Rise of Chronic Disease and It’s Impact on Health and Health Care Truth #1: Chronic Diseases are the #1 cause of death and disability in
the U.S.
Truth #2: Chronic diseases account for 75% of the nation’s health care spending.
Truth #3: About two-thirds of the rise in health care spending is due to the rise in the prevalence of treated chronic disease.
Truth #4: The doubling of obesity between 1987 and today accounts for nearly 30% of the rise in health care spending.
Truth #5: The vast majority of cases of chronic disease could be better prevented or managed.
Truth #6: Many Americans (five in six) are unaware of the extent to which chronic disease harms their health – and their wallets.
www.fightchronicdisease.org
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Risk Factors considered in study include: tobacco use, BMI <18.5 or >24.9; poor diet, physical inactivity, lack of emotional fulfillment, high stress, high blood pressure, high cholesterol, alcohol use, overdue preventive visits, and diabetes
25.9%
6.3%
0.0%
0%
5%
10%
15%
20%
25%
30%
0 risks 1 risk 2 risks 3 risks 4 risks 5 risks 6 risks 7 risks 8 risks
Mea
n Lo
st P
rodu
ctiv
ity
Presenteeism
Absenteeism
Boles M, Pelletier B, Lynch W. The Relationship Between Health Risks and Work Productivity. JOEM, 2004; 46(7):737-745
Impact of Health Risk Factors on Productivity
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Imagine If Your Customers Could Shave 25% Off Rising Health Care Costs
25% savings off of Rising Health Care Costs
$1,080 $1,151 $1,291 $1,440$1,587 $1,730 $1,845 $1,958
$7,832$7,379$6,918$6,348$5,758$5,162$4,604$4,320
$0
$2,000
$4,000
$6,000
$8,000
$10,000
1999 2000 2001 2002 2003 2004 2005 2006
Year
Annu
al e
mpl
oyer
he
alth
car
e co
st p
er
empl
oyee
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Wellness Programs: Definition, Legal
Implications & Essential Elements
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Corporate Wellness Programs Defined
Assess the health risks of an employee population
Include customized and individualized programs and interventions to address the health and wellness needs of workers
Track the participation, use and effectiveness of the program to provide quantitative feedback to employers
Use quantitative results to evaluate the impact of wellness initiatives
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Detailed List of Program Components
The employer’s commitment to improve worker health and manage health plans, sick leave, workers’ compensation, disability and productivity costs
Awareness – An annual Health Assessment is the key in driving awareness and beginning participation in the program
– Education – Content is packaged in engaging, easy to understand tools to make learning fun and tailored to adult learning styles
– Action – A variety of activities help members practice and ultimately adopt healthy behaviors and earn points towards incentives
– Support – Ongoing communication and progress tracking are key to long-term employee engagement
Telephonic or face-to-face lifestyle coaching for those with risks
Incentives to motivate participation and reward improved outcomes
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Detailed List of Program Components
Range of resources to help individuals change behaviors to improve health
Structured opportunities to practice new behaviors and habits
Integration of wellness throughout organization
Organizational support for wellness; address environmental and cultural barriers
Annual evaluation to refine program and improve it’s effectiveness
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Research Says: Assessments Help Moderate Health Care Costs
Multiple studies link health assessments with cost moderation8, 9, 10
University of Michigan research: As assessment scores increase, health care costs decrease11
GM wellness program: Assessments linked with reduction of more than 185,000 specific health risks among GM workers12
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Making Sure Your Client’s Program is Compliant
What rules regulate wellness programs?
HIPAA Nondiscrimination Rule
HIPAA Privacy and Security Rules
Americans With Disabilities Act (ADA)
Age Discrimination in Employment Act (ADEA)
COBRA
Federal and State tax laws
State lifestyle and nondiscrimination laws
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HIPAA Nondiscrimination Rules
Prohibit an employer from charging different premiums or contributions based on an employee’s health factors (health status, medical condition, claims, disability)
Prohibit different coinsurance, deductibles and co-payments based on an employee’s health factors unless done pursuant to a wellness program that meets the requirements set forth in the Rule…
– …However, a wellness program based on participation rather than satisfaction of a standard, result or outcome, does not violate HIPAA and is not subject to the requirements in the Rule
– …For example, a blood screening program that is not based on outcomes: waiving copays for well-baby visits or prenatal care
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Efficacy & Case Studies
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Numerous Studies Document Strong ROI
A multitude of studies show ROI averages of $3 for every $1 invested14
One recent study had the return as high as 10 to 115
Companies must be patient. “Worksites typically don’t realize returns until about three years into the program. If an organization is willing to wait two or three years, it will be capable of achieving this magnitude (3 to 1) of ROI.”16
A review of 32 studies found claims costs were reduced by 27.8%, physician visits by 16.5%, hospital admissions by 62.5%, disability costs by 34.4% and incidence of injury by 24.7%17
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Wellness Works, According to ROI Studies
From a review of 73 published studies of worksite wellness programs18
– Average $3.50-to-$1 savings-to-cost ratio in reduced absenteeism and health care costs
From a meta-review of 42 published studies of worksite wellness programs19
– Average 28% reduction in sick leave absenteeism– Average 26% reduction in health care costs– Average 30% reduction in workers’ compensation and disability
management claims costs– Average $5.93-to-$1 savings-to-cost ratio
A comprehensive health management program at Citibank20
– $4.56-$4.73-to-$1 savings-to-cost ration in reduced total health care costs
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Business Case and Implementation
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Defining Health Risks & Risk LevelsHealth Risk Measure High Risk Criteria
Alcohol > 14 drinks per week
Blood Pressure Systolic >139 mmHG/Diastolic >89 mmHG
Body Weight BMI =/>27.5
Cholesterol >239 mg/dl
Existing Medical Problem Heart, Cancer, Diabetes, Stroke
HDL <335 mg/dl
Illness Days >5 days last yr
Life Satisfaction Partly or not satisfied
Perception of Health Fair or Poor
Physical Activity <1 time per week
Safety Belt Usage Using safety belts <100% of time
Smoking Current smoker
Stress High
Overall Risk Levels
Low Risk 0 to 2 high risks
Medium Risk 3 to 4 high risks
High Risk 5 or more high risks
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Linking higher Costs With Higher Health Risk
$4,5
30
$7,1
23
$2,6
67
$3,3
64 $4,7
18
$2,1
10
$2,9
12 $3,8
94
$1,5
23
$2,0
81 $2,9
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$5,8
13
$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000
35-4
4
High R
isk 4
5-54
55-6
4
35-4
4
Med
ium
Risk
45-
54
55-6
4
35-4
4
Non-P
artic
ipant
45-
54
55-6
4
35-4
4
Low
Risk
45-
54
55-6
4
Age Group
($)
Get Well or Pay Not To
Consumers may be able to improve their health and bottom line by participating in company sponsored wellness programs.
More employers are offering cash, discounts and even lower health insurance premiums to entice workers to participate in a variety of programs.
Starting next year, employees could have further incentives to get healthy as more companies add penalties to insurance premiums for workers who don’t partake.
“It’s an opportunity to get cash for doing what’s right for you.
Despite cutbacks amid the recession, 58% of large U.S. companies now offer lifestyle-improvement programs, up from 43% in 2007, according to a Watson Wyatt Study. And 56% provide health coaches, compared with 44% in 2007. Health-risk appraisals are offered at 80% of companies, up from 72% in 2007.
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Discounts and Freebies
Employees may be able to get $200 to $300 for participating in health-risk appraisals, smoking-cessation, weight management and preventive care
classes.
Other offerings include heavily discounted weight loss programs and free or discounted gym memberships. At some companies, employees who participate are rewarded with gift cards or lower insurance premiums.
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Wellness Education/CommunicationMost survey respondents offered at least one type of wellness education and communication program component.
Program Component Percentage of Respondents
Online Communications 93%
Print Communications 87%
Audio/Visual 27%
Self-Care Guide 27%
Pre-Natal Program 67%
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In tomorrows’ Advisor, we’ll cover survey responses on HRAs, disease management, and smoking cessation, and we’ll take a look at a unique guide that will help you in setting up and administering your wellness program.
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Question and Answers
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Thank you!
Arvid R. “Dick” Tillmar
Health Advocate
Diversified Insurance Services
100 N. Corporate Drive
Brookfield, WI 53045
(262) 439-4700
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