Supermarket Industry Employee Absenteeism Reports - PowerPoint by ked12544

VIEWS: 87 PAGES: 35

More Info
									Developing Wellness for the
  Mid-Sized Employer…
   A CFO’s Perspective
    GlobalFit’s Fourth Annual
       Wellness Summit
         May 13, 2010
                  The ACW
•   History
•   Mission
•   Membership
•   Events
•   www.acwell.org

    Special thanks to WellNow, BHS, and other
     ACW members for their input!
                       Your Speaker
• Bill Lacy – President & CFO, Association
  for Corporate Wellness
  – Over 25 years CEO, CFO, and other executive positions (Fortune 500, middle market,
    and start-up)
  – EVP CFO-Finance and Admin, Business Health Services; CFO-Planet Fitness PA
  – President, ACW; founder Entre Advisors, LLC & GreatLife Wellness Centers, LLC
  – Entered corporate wellness industry 2003
  – Facilitated or lead over 100 of corporate wellness speaking engagements and panels
  – MBA, Drexel University
              Corporate Wellness
• Reduce health care costs
• Boost productivity
• Corporate Wellness Components
  –   Reduce health care claims
  –   Absenteeism
  –   Productivity - presenteeism
  –   Worker Comp Claims / Work Site Injury / Ergonomics
  –   ST&LT Disability
  –   Mental Health
  –   Financial / Legal
  –   Other
         Today’s Objectives
1. HCR corporate wellness highlights
2. Four corporate wellness models
3. CFOs perspective
    Health Reformation Highlights
•   Ten year roll-out
•   Wellness impacts
•   Boost incentives
•   New agencies / new regulations
•   Greater need for sound Corporate
    Wellness strategies
      Health Care Reformation
• Increases incentives for employers to offer workers from
  20% (current) to as much as 50% off their premiums for
  participating in such programs (effective 2014)

• Requires chain restaurants and vending machines to
  disclose nutritional information

• Provides additional resources for children, pregnant
  women and people trying to quit smoking (Lazarus, Los
  Angeles Times, 3/26)

      Source: http://www.californiahealthline.org/articles/2010/3/26/health-reform-law-
        steps-up-focus-on-prevention-wellness.aspx
       Health Care Reformation
• Establishes a National Prevention, Health Promotion and
  Public Health Council to coordinate federal efforts to
  promote healthy living

• Eliminates copayments for Medicare and Medicaid
  beneficiaries receiving preventive services

• Increases reimbursement rates for physicians who offer
  certain preventive services

• Provides grants to small business for establishing
  wellness programs
   – Source:
     http://www.californiahealthline.org/articles/2010/3/26/health-reform-
     law-steps-up-focus-on-prevention-wellness.aspx
        HCR – Grant Program
• $200 billion, five-year program to provide
  grants to certain small employers (fewer than
  100 employees) for comprehensive
  workplace wellness programs(*)

   (*) small employers that did not have a wellness
    program when the law was enacted

  Source:
    http://www.shrm.org/Publications/HRNews/Pages/WellnessRefor
    mBoast.aspx
      Health Care Reformation
• In 2010: Employer-provided adoption assistance benefits
  under the IRC Section 137 are increased to $13,170

      • Source: http://www.towerswatson.com/assets/pdf/1424/TW-
        HC%20Reform%20Bulltn-BillPassed_3-22-10.pdf

• In 2011: New group health plans must provide preventive
  care without cost sharing


• In 2014: Employer government reporting begins on
  employee health coverage
HCR: Running Afoul of the Excise Tax?

•   The health reform law is likely to give a short-term boost to the use of financial
    incentives in wellness plans, says Corporate Synergies CEO Thom Mangan. But
    employers should beware of triggering the 40 percent excise tax on high value
    or "Cadillac" plans that takes effect in 2018, for plans valued annually at more
    than $10,200 for individuals and $27,500 for families. Employers spending on
    wellness programs would add to their health plan's value, pushing them closer
    to that trigger.

•   "Those who are not early adopters in using wellness initiatives to curb the cost
    of their health insurance will end up being hurt if they try to launch a program in
    2018 or later," Mangan notes, because "the cost curve does not come down for
    two to three years once you've implemented a wellness program."

•   The excise tax will become a disincentive for employers to add to the cost of
    their health benefits and, as a result, health care reform could have a reverse
    effect on employers’ efforts to promote wellness and healthy behaviors, in
    Mangan's view.

     Source: http://www.shrm.org/Publications/HRNews/Pages/WellnessReformBoast.aspx
HCR: Running Afoul of the Excise Tax?
• "We're strongly encouraging companies to step up their
  wellness efforts today to better control their future health
  spending, making it more likely they'll avoid the tax," Mangan
  advises.

• In a March 2010 letter to Congress, the Society for Human
  Resource Management urged lawmakers not to count the
  value of supplemental benefits such as wellness plans toward
  the excise tax threshold.


   Source:
     http://www.shrm.org/Publications/HRNews/Pages/WellnessRefor
     mBoast.aspx
     Corporate Wellness Models
1.   General
2.   Data-Driven
3.   “Safeway”
4.   Hybrid
   CFO/Company’s Culture & Model
             Type
Model Type    How           Degree of       How Wellness   How Much
              Analytical?   Immediate       Orientated     Budget?
                            Savings / ROI


General       Low           Limited Need    Low            Low-Medium




Data-Driven   High          Moderate        High           High
                            Need



Safeway       Moderate      Immediate       Moderate       Minimal
                            Need
                 Basic Model
• Description:
  – Wide variety of offerings
• Costs:
  – Per event or intervention
• Results:
  – Difficult to track
  – Limited ROI
           Data Driven Model
• Description:
  – Input, Analysis of Biometric and/or Claims
    Experience
• Costs:
  – High initial investment: Software, data
    analysis, interventions, tracking ($12 - $14 /
    PEPM)
• Results:
  – Strong predictive modeling capabilities
  – Future ROI
        Data Driven Model
                            Changes to
                               Policy
                            Plan Design
                              Vendor              Plan
                             Contracts         Updates &
Claims Data                                    Refinement


                             Employee
                Multiple      Health
                Stream       Programs
   HRA/
 Biometrics     Analysis
                                               Tracking &
                                                Outcomes
                                                 Reports
                             Administration
                               Incentives
Focus Groups                Cultural Changes
Long Term Return on Investment (ROI)
         Data Driven Model




       32 studies   14 studies
          Data Driven Model
• Strong Reporting!
• Examples:
  1. Medical conditions contributing to highest
     number of claims
  2. Leading single health risk indicators
  3. RX claims analysis
  4. Health risk profile vs. national average
  5. Unmanaged medical spend
                        MEDICAL CODITIONS CONTRIBUTING TO
                            HIGHEST NUMBER OF CLAIMS


                     LEADING CONDITIONS REPRESENTING HIGHEST % of MEDICAL CLAIMS
                    Condition               2006-1    2006-2    2007-1    2007-2    2008-1    2008-2
Arthritis                                    14.95%    17.57%    24.23%    17.01%    16.19%    20.39%
Asthma                                       10.75%    14.87%    14.39%    12.88%     9.48%    12.70%
Back Pain                                    27.16%    34.45%    34.88%    33.86%    31.60%    32.09%
Chronic Heart Failure                         9.80%    12.58%     4.90%     8.85%     4.06%     9.98%
Chronic Obstructive Pulmonary Disease         7.40%    13.38%     9.22%    10.42%     6.10%    13.02%
Coronary Artery Disease                      32.19%    24.23%    16.67%    19.12%    18.11%    18.27%
Depression                                   21.86%    23.16%    23.76%    29.67%    32.49%    24.61%
Diabetes Mellitus                            27.91%    16.99%    12.70%    12.52%    10.25%    10.75%
GERD                                         16.51%    15.80%    16.16%    18.15%    22.41%    19.64%
Hypertension                                 34.68%    41.71%    37.43%    36.34%    40.13%    41.21%
Lupus                                         8.08%     8.31%     9.69%     8.05%     8.46%     9.38%
                LEADING SINGLE HEALTH RISK INDICATORS


   BASED ON 572 HRA Takers, $295.15* population average PMPM and 2,630* insured


                                                           % High
                            # High Risk High Risk PMPM                  PA      County National
                                                            Risk
   High Risk Factor         HRA Takers > Average PMPM                  Rate      Rate   Rate
                                                          HRA Takers

      Physical Inactivity          198       $   308.95        34.6%    70.2%    70.2%     71.7%
          Obesity (BMI)            132       $   361.75        23.1%    28.4%      NR      26.7%

   Waist Circumference             147       $   356.79        25.7%      NR       NR        NR
         Underweight                 7       $ 1,123.52         1.2%      NR       NR        NR
     Health Perception
                (Poor)              12       $ 384.98           2.1%     4.2%     3.1%      3.8%
Health Perception (Fair)            55       $ 373.00           9.6%    12.1%    10.8%     10.6%
                         TOP TWENTY PRESCRIPTIONS BY EXPENSE: ON FORMULARY (2008)
           Description                   Primary Treatment Purpose             Claimants    RxOn        RxOff
NEXIUM CAPSULES DELAYED RELEASE    GERD                                              102 $156,968.07        $0.00
APOKYN FOR INJECTION               Parkinson’s Disease                                < 5 $124,155.15       $0.00
NORDITROPIN CARTRIDGE INJECTION    Growth hormone deficiency                          < 5 $60,017.29        $0.00
HUMATROPEN CARTRIDGE KIT           Diabetes                                           < 5 $42,973.63        $0.00
LIPITOR TABLETS                    Elevated Cholesterol                               48 $41,668.55         $0.00
LIPITOR TABLETS (Different NDC)    Elevated Cholesterol                               36 $41,249.75         $0.00
SINGULAIR TABLETS                  Asthma                                             63 $41,146.92         $0.00
Azithromycin                       Bacterial Infections                               < 5 $36,733.79        $0.00
COPAXONE                           Multiple Sclerosis                                 < 5 $30,385.34        $0.00
VALTREX CAPLETS                    Cold Sores                                         33 $30,299.21         $0.00
ADVAIR DISKUS INHALATION POWDER    Asthma                                             36 $24,588.50         $0.00
ATRIPLA TABLETS                    HIV                                                < 5 $23,778.74        $0.00
PLAVIX TABLETS                     Myocardial Infarction, Cardiac Conditions          18 $23,716.94         $0.00
ZETIA TABLETS                      Elevated Cholesterol                               25 $23,200.32         $0.00
YAZ TABLETS                        Oral Contraception                                 53 $23,176.72         $0.00
ASACOL TABLETS DELAYED RELEASE     Colitis                                              6 $22,508.43        $0.00
VALTREX CAPLETS (different NDC)    Cold Sores                                         37 $22,020.70         $0.00
LOVAZA CAPSULES                    Elevated Triglycerides                             20 $21,428.07         $0.00
HUMIRA PEN KIT                     Arthritis                                          <5 $21,254.98         $0.00
NIASPAN TABLETS                    Elevated Cholesterol                               10 $17,342.18         $0.00
                     Health Status and Risk Factor Profile:
                     Comparisons with National Averages
                                                            Number of     Percentage*     National
Clinical Measures with Yes/No Values
                                                            individuals       (%)       Average** (%)
Diagnosed (self-reported) diseases
        Coronary Heart Disease                                   8            1.6            5.1
        Stroke                                                   4            0.8            1.9
        Other Cardiovascular Diseases                            2            0.4            7.0
        Heart Failure                                            2            0.4            1.7
        Diabetes                                                 8            1.6            5.9
On antihypertensive medication                                  70           13.8           16.1
On lipid-lowering medication                                    88           17.3            8.0
Physical exercise level
        Low                                                    207           40.7           19.7
        Moderate                                               179           35.2           44.4
        High                                                   122           24.0           35.9
Current smoker                                                  62           12.2           28.2
Overweight (BMI 25.0-29.9 kg/m2)                               196           38.6           32.2
Obese (BMI>=30 kg/m2)                                          125           24.6           31.7
High waist measurement (male>40 inches, female>35 inches)      135           26.6           48.5
Prehypertension (>=120/80 and <140/90 mmHg)                    196           38.6           38.1
Hypertension (>=140/90 mmHg)                                    72           14.2           17.6
Metabolic syndrome***                                          105           20.7           27.6
Total cholesterol>=200 mg/dL                                   173           34.1           51.7
HDL<40 mg/dL                                                    89           17.5           23.0
LDL>=130 mg/dL                                                 112           22.0           42.4
LDL>=ATP III-suggested goal                                     74           14.6           29.8
Triglyceride>=150 mg/dL                                        137           27.0           30.5
Undiagnosed diabetes (glucose>=126 mg/dL)                       21            4.1            1.6
Prediabetes (100<=glucose<126 mg/dL)                           143           28.1           17.7
                                      OUTCOMES:
                                Management By Spend Levels
                                       Percentage Managed by Medical Spend

 Benefit   Medical Spend                                                                  Un-Managed        % Un-Managed
  Year        Level        Claimants        Managed       % Managed    GT-Medical Paid    Medical Spend     Medical Spend
2006       >0 <10K                2470           297           12.0%   $   3,171,287.57   $ 2,576,919.33             81.3%
           >10K <25K                   95         24           25.3%   $   1,445,916.49   $ 1,039,812.77             71.9%
           >25K <50K                   21             7        33.3%   $     684,597.01   $    457,464.42            66.8%
           >50K <75K                    5             0         0.0%   $     311,530.89   $    311,530.89           100.0%
           >75K                        12             2        16.7%   $   2,217,711.20   $ 2,054,033.17             92.6%


2007       >0 <10K                2195           311           14.2%   $   3,016,351.03   $ 2,339,834.50             77.6%
           >10K <25K               102            25           24.5%   $   1,512,136.63   $ 1,138,961.32             75.3%
           >25K <50K                   16             5        31.3%   $     481,874.61   $    329,618.39            68.4%
           >50K <75K                    8             5        62.5%   $     501,913.89   $    201,238.47            40.1%
           >75K                        10             4        40.0%   $   1,517,035.51   $ 1,062,039.43             70.0%


2008       >0 <10K                2142           342           16.0%   $   3,064,841.89   $ 2,357,333.54             76.9%
           >10K <25K                   99         30           30.3%   $   1,504,210.38   $ 1,089,835.87             72.5%
           >25K <50K                   22             7        31.8%   $     743,840.45   $    517,180.18            69.5%
           >50K <75K                    3             2        66.7%   $     166,780.51   $    53,514.88             32.1%
           >75K                        10             4        40.0%   $   1,773,380.57   $ 1,227,000.87             69.2%
            Safeway Model
• Description
• Results
• Benefits:
  – Wellness Program cost neutral
  – Provides greater employee accountability
  – Immediate ROI
  – Works with any size firm
   Safeway Model – Overview
• History
• Why Does It Work?
  – Based upon Auto Insurance Model
  – Good drivers pay less; Healthy employees pay less
• How can my company save
  money…immediately?
  – Wellness program subsidized by unhealthy
    employees
    Safeway Model – Overview
• Self insured
• Strong executive support
• 3rd largest supermarket chain in N.A.
• Publicly traded (NYSE:SWY)…$40+
  Billion in revenue…over 1,400 stores
• Total health care costs = $1billion (about
  2.5% of revenues)
      Safeway Model – Overview
• 70% of Health Care Costs behavior related
• 74% of Health Care Costs due to the following
  four diseases:
  –   Cardiovascular (80% preventable)
  –   Cancer (60% preventable)
  –   Diabetes (80% preventable)
  –   Obesity (90% preventable)
• 78% of employees surveyed rated plan good or
  excellent; 76% asked for more incentives
    Safeway Model – Overview
• Automobile insurance model
   – Personal responsibility
   – Bad driving behaviors = higher premiums
• $780 ind ($1,560 family) insurance rebates if employee
  passes four measures.
   – Greater weighting to Smoking & Obesity and less to BP & Cholesterol
• Tested every 12 months
   – if employee fails (or made appropriate progress employee can
     qualify for rebate (full year) if passes test the next time
     Safeway Model – Results
• Cost contained since 2005
• Total workforce = approx. 233,000 workers
  – 25,000 employees participate on a voluntary basis
    (75% of Safeway’s non-union workforce)…only 11%
    of total workforce...significant savings could still be
    realized!
• Company plans to phase in its 200,000 union
  workforce over next six years
  Safeway Model – Challenges
• (Radical) Change to company culture
• Administration
• Requires third party
    Safeway Model – Case Study
• 781 employees
• Average health insurance premium = $8,600
• Average incentive = $1,720
• Year one = full incentive for participation
  (Biometric based HRA)
• Year two and beyond = compliance with
  Biometric tests
• 1% claims reduction year one; 5% years two
  and three.
 Safeway Case Study - Results
• Year One:
  –   70% Participation
  –   $98,460 Wellness Program ($180 / PEPY…robust)
  –   $402,516 cost reduction
  –   $39,872 claims reduction (1% of total claims)
• Year One ROI = 4.49
• No absenteeism, no presenteeism included
 Safeway Case Study - Results
• Year Two:
  –   70% Participation; 20% did not pass tests
  –   $98,460 Wellness Program ($180 / PEPY…robust)
  –   $590,701 cost reduction
  –   $199,361 claims reduction (5% of total claims)
• Year Two ROI = 8.02
• No absenteeism, presenteeism included
                                Recap
Model Type    How           Degree of   How          How Much      ROI
              Analytical?   Immediate   Wellness     Budget?       (2 yrs)
                            Savings /   Orientated
                            ROI
General       Low           Limited     Low          $0 - $1,000   Undefined
                            Need                     PEPY



Data-Driven   High          Moderate    High         $144 - $168   3.48
                            Need                     PEPY



Safeway       Moderate      High Need   Moderate     $0 – Save $$ 8.02

								
To top