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									MERCER                                Consulting. Outsourcing. Investments.

1--::]-   MARSH MERCER KROLL
~         GUY CARPENTER OLIVERWYMAN




                                                            www.mercer.com
II Table of contents
     Section I     Why Wellness, Prevention and Disease Management?
     Section II    Wellness Services
     Section III   Return on Investment
     Section IV    Designing an Effective Program
     Section V     Incentives
     Section VI    Disease Management




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.   II Why organizations       engage in wellness

        . It's the right thing to do
        . Improve recruitment
        . Create a culture of health

        . Reduce Workers' Compensation costs
        . Reduce lost work time

        . Improve productivity
        . Reduce health care costs

        . Be an employer of choice

        . Minimize turnover/Improve retention
        . Improve morale


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'II   Lifestyle behaviors
      Snapshot of American lifestyles
       . Smoking
          - 23% of the adult population use tobacco
          - Add another $40 to health care cost for every pack of cigarettes
       . Physical Activity
          - Only 20%-25% of adults get 30 minutes of physical activity on most
            days (attributed to lower health risks and prevalence of chronic disease)
            -    15%       of all of the health care costs we pay in the US are due to
            sedentary lifestyles
       . Obesity
          - About 67% of the population is either obese or overweight
          - About 12% of total health care costs are obesity related
          - For an employer, it costs $1,200 more to treat the obese person than it
            does the person who maintains a healthy weight
       . Nutrition
            - Out of the top 10 causes of deaths in the US, diet is directly related to
              the top three - heart disease, cancer and stroke, not to mention
              diabetes. These four make up 70% of total deaths.
      Source: Matria's Business Case for Health and Productivity

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    II    Combined health risk, costs and savings
          Snapshot of American lifestyles

          . Physical inactivity and obesity, could cost an employer as much as 27% of
            their total health care claims
                   - Not eating a heart healthy diet causes a rise of 35%-40% of total health
                     care costs
                   - Adding tobacco use increases to 65%-70% of total health care
                     expenditures within your organization
          . If an employer dropped the number of physical inactive employees from
              78% to 75%
                   - Based on Dee Edington's data, the employer will save $1 ,500-$3,500
                     for each person that reduces one of their risk factors
                   - With 100 employees, a three percent increase in physical activity, on a
                     monetary dollar-for-dollar basis, you would see a $9,000 reduction in
                     excessive claims for that one change.

         Source: Matria's Business Case for Health and Productivity


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II   Continuation of care management
     Maintaining, improving and managing population health
     First step: understanding the "make-up" of your group

                                                                             Chronic                                       Catastrophic
                                                                            Conditions                 t~                   Conditions

                                                  Acute Conditions
                       Programs: Nurseline,self-care skills,on-line resource, safety


                                                                            Chronic Disease
                                                                             Management

                                                                          Patient Identification
                                                                            and enrollment



                                                                            Care Coordination


                             Stress/Mental Health
                                                                           Practice Guidelines
                                 Management


                                                                           Address Comorbid
                                                                              Conditions




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III   Continuation of care Management
      Maintaining,improving and managing populationhealth
                                         This group should be your
                                                                          t?   target with wellness strategies!
                                                        At Risk                           Chronic                                          Catastrophic               I
                                                                                         Conditions
                 - ~~ell-J
                                                                                                                       :.
                                                                                                                                            Conditions                I
        [           -   __de-                                                                                                                     .- .               J
                                                                                                                                                                      I




                                                                     Acute Conditions
                                    ~,'~       ~~:": ~urse"ne,
                                                           ,"If''~=~ki~n:'in_e_~e:ou'ce,:a~ety work
                                                                                      at home and                                -                              .~   - '-',
                Health Promotion                      Health Risk
                                                      Management

                                                       Health Risk                      Patient Identification
            I      ~w.reness               I           Assessment                         and enrollment                                   Navigational Support


                                                    Targeted Behavior                    Care Coordination
            [s~eningS                      J           Modification                                                                          Patient Advocacy


                 ImmUhizations                     Stress/Mental Health
                                                                                        Practice Guidelines                                  Care Coordination
                                                      Management

                Healthy Lifestyle                                                       Address Comorbid
                  PrQmotion                         Health Campaigns                                                                        Address Comorbid
                                                                                           Conditions                                          Conditions




      Mercer                                                                                9 :\wp\group\2 009\wash33\presentation   \wellness stra tegies- 2.ppt
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II   Wellness as a solution

     Any "wellness program"should supportthese initiatives
     .   Promote an individual awareness of
         personal health risks and conditions
     .   Stress prevention and early detection                                        r:-fl
     .   Focus on the appropriate populations                                  1)}  ,... "         »
                                                                                                         r
                                                                                             Q,   ,.'

                                                                                                        r
     .   Be a key component of a total care                                 "-   J l~rJ
         management strategy




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II   Six reasons why health promotion makes good sense

     . Although we spend more dollars on health care than any other
       industrialized nation, our citizens are not the world's healthiest.

     . Much of the illness in the US is preventable.
     . health care costs are an issue of significant concern.

     . The worksite is an ideal setting to address health and well-being.
     . Recent research validates that health promotion programs can
       improve health, save money and even produce return on investment.




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Typical medical plan



                        ~   of Population.   Use of Health Care $5                        I




         70%

         60%

         50%

         400/0                    37%


         30%

         20%

         100/0

          0%

                 Well           Acute              Chronic




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II   The problem
     Need to act now

     . Costs are still rising, even with managed care and cost shifting
     . Aging workforce - each year a person ages adds 2.5%-3.0% in
       medical costs, while also driving disability incidence
     . Pressures to control cost and enhance productivity are increasingly
       important factors in both public and private sectors

     . Increasing lifestyle and psychosocial driven health costs (e.g., obesity,
       stress, risk behaviors)
     . Piecemeal solutions generally just shift costs, promote narrow
       expense control




     Mercer                                        g:\wp\group\2009\wash33\presentation\wellness strategies- 2.ppt
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The problem
Need to act now (continued)

. People with chronic diseases often account for 500/0 of costs - 70
   million people have a chronic disease

. In most employer groups
                                    of
   - 20°10of the members incur 80°10 the health care costs
           to   of                                    to    of
     - 3°1o 5°1o the members are responsible for 50°10 60°10 the
       costs
     - Those with risk factors, (e.g., smoking, obesity, inactivity) can cost
         10°10   to 70°10 more than those not at risk
. To make matters worse
     - On average, 50°10 of people with a chronic disease do not comply
         with their treatment plan resulting in disease progression and
         increased use of health care resources
     - Poor compliance with prescribed medical treatment is estimated to
       cost between $100 billion and $150 billion annually in the US

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III Demand:         what drives health care resource consumption?




                        50%
                        40%
                        30%
                        20%
                        10%
                         0%
                                   Accessto
                                                       Genetics        Environment Behavior
                                     Care

             Determinants              10%                20%             20%                   50%


             Source: IFTF, Center for Disease Control and Prevention



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:   II "Wellness" -    what is it?

          . "Wellness"means differentthings to differentorganizations and
            different people!
          . Nike's "wellness" program is going to be differentthan a typical County
            program.
          . The definition of "wellness" to someone who is physically active is
            different than someone who has a more sedentary lifestyle.
          . A good "wellness program" should encourage individuals to engage in
            better habits or maintain already good habits. The goal shouldn't be to
            make a "couch potato" a marathon runner.
          . Wellness is an attitude as well as a set of actions.




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i   II   Wellness services
         Components of typical wellness programs

           . Health risk assessments (HRAs)
              - Comprehensive questionnaire completed by the member which
                provides individualized feedback to the member and aggregate
                feedback to the employer about the most pressing health issues.
           . Wellness health coaching/counselors
              - Health professionals provide one on one counseling, assist with the
                development of a personalized wellness plans, and provide
                suggestions for appropriate referrals to a wide range of preventive
                health services.
           . Health screenings/lab tests
              - Screenings provide early detection of conditions such as breast, colon,
                skin and prostate cancer, high blood pressure, diabetes, and
                osteoporosis.
           . Health fairs
              - Effective way to provide valuable health information to a large number
                of employees in a convenient one stop shop format. Fairs may include
                exhibits, mini workshops, demonstrations, screenings and more.
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II   Wellness services
     Components of typical wellness programs (continued)
     . Health education seminars
          - Onsite educational lectures that are made available to employees
            during work time (i.e., lunchtime lectures)
     . Self-care employee wellness books/kits
          - Typically kits are mailed to employees' homes and provide valuable
            and accessible health information that can be reviewed by the
            entire family
     . On-line resource libraries
          - Resource libraries may include health articles, drug interaction
            tools, procedure/treatment comparison tools and more
     . Alternative care discounts
          - Employees receive discounts at chiropractors, massage therapists,
            acupuncturists, etc. who are contracted within the vendor's network


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Wellness services
Components of typical wellness programs (continued)

 . Fitness programs
     - Discount programs that allow employees to exercise at their own
       level and track individual progress

 . Smoking cessation programs
     - Assistance programs that help employees avoid the many pitfalls
       involved when trying to quit smoking
 . Ergonomic assessments
     - Assessments identify and analyze the physical demands required
       to perform a job and determine the risk factors or hazards that have
       potential to cause an injury to an employee performing the job
 . Maternity care programs
     -   Pre and postnatal care is provided through both nurse case
         managers as well as educational books and other resources


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Return per dollar invested for seven well known companies who
implemented wellness programs

         $7.00

         $6.00

         $5.00

         $4.00

         $3.00

         $2.00

         $1.00

         $0.00
                 UnumLife   PepsiCo   Motorola GeneralMills Equitable         Kennecott               Coors
                                                              Life

                                                                        1992, IRSA, the Association of QualityClubs

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i   II Initial considerations
         .   Nature of your workforce:
             - Stability (turnover)
             - Health status (use experience and utilizationdata)
             - Employee location (centralized, widespread)
             - White collar/blue collar/combination
         .   Resources
             - Financial

             - Internal staff availability




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Seven steps to drive the process of building a wellness program


. Capturing senior level support (Board of Commissioners, etc.)

. Creating a cohesive wellness team (include employee associations
  early in the process so they have "ownership")

. Collecting data to drive health efforts

. Crafting an operating plan
. Choosing appropriate interventions
. Creating a supportive environment
. Consistently evaluating outcomes


                                                                Wellness Councils of America




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Improving health           -   a three year plan

 . Year one - set the stage
    - Health risk assessment
            - Screenings
            - Target top 10% with individualized counseling
            - Target next 20% with educational mailings
 . Year two - building healthy lifestyle changes
    - Screenings
            - Health and fitness activities (walking programs)
            - Theme based quarterly activities (stress management, self-care,
              nutrition, etc.)
            - Continuation of high risk intervention

 . Year three - maintaining healthy momentum
            - Follow-up health risk assessment
            - Continuation of activities outlined above
                                                                              Adopted from BCBS of MA
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Estimated percent of employees at risk
In a manufacturing and a financial services company

                                    Manufacturing                         Financial Services
         Common Risks                Company                              Company
         Alcohol                             4.7%                         2.00/0
         Blood pressure                     36.00/0                       21.7%
         Body weight (BMI)                  52.9%                         34.3%
         Cholesterol, total                 17.6%                         13.6%
         Cholesterol, HDL                   19.9%                         6.2%
         Illness days                       12.20/0                       11.3%
         Life satisfaction                  14.8%                         21.80/0
         Major diseases                     14.1 %                        5.8%
         Perception   of health             11.8%                         12.60/0
         Physical activity                  16.50/0                       24.60/0
         Smokers, current                   17.3%                         12.1 %
         Smokers, former                    33.5%                         23.1 %
         Safety belt                        11.3%                         11.8%
         Stress                             23.4%                         32.6%
         Risk Levels
         Low risk (0-2)                     58.1%                         59.7%
         Medium risk (3-4)                  27.6%                         26.6%
         High risk (>4)                     14.1%                         13.7%

Mercer                                                 g:\wp\group\2009\wash33\presentation
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                                  Dee Edington, University of Michigan Health Management Resource center-
    '.   /
                                                                                                                        "




Estimated percent of employees with a disease
In a manufacturing and a financial services company

             Common                     Manufacturing                       Financial Services
             Medical Problems            Company                            Company
             Heart problems                     6.20/0                     2.2°/0
             Diabetes                           6.0°/0                     1.70/0
             Emphysema/bronchitis               2.2°/0                     1.40/0
             Back pain                         37.8°/0                     30.90/0
             Asthma                             4.90/0                     7.7°/0
             Seasonal allergies                28.3°/0                      36.1 %
             Cancer                             1.1 %                       0.8°10
             History of stroke                  0.7°10                     0.1%
             Arthritis                         21.80/0                     9.1 %




                                    Dee Edington, Universityof MichiganHealth Management Resource Center


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How ready are employees to make change?
(Tran theoretical model and stages of change)




                              Developed by Dr. James O. Prochaska, University of Rhode Island

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.   II Effective wellness programs for all stages
         . Less than 20% of the population with health risks is in the action stage.
                Yet 90% of health promotion programs are developed with that 20% in
                mind.                 HealthPromotionPractice,July 2002

         . A successful wellness strategy will offer programs that impact people
           at all levels and guide employees though the various stages in the
           model.

         . Make sure to select a Health Risk Assessment that evaluates the
           stages of change and your employees' readiness to change.
         . Make certain that a budget is allocated to cover all areas of a wellness
           program.




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Calendar of health awareness activities

. January
   - Memo from management
         - Website registration campaign (Carrier mailing. Raffle of registrants
           to win prizes worth $500.)

. February
   - Health risk assessment campaign (Utilize carrier HRA tool. Raffle of
     participants to win prizes worth $2,000. All participants receive $5
     per month credit on medical plan payroll deduction - $9,000, 30%
     participation, $60 per year)
. March
         - Health fair ($8,000)
            0   Cholesterol screening (40% participation, $25 per test)
            0   Blood pressure screening (50% participation, $4 per test)
            0   Body fat test (30% participation, $12 per test)

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II Calendar of health awareness           activities

    . April
          - EAP - Brown bag lunch. Mental health/substance abuse (Free -
            EAP vendor)
          - Massage therapist visits (Free - medical carrier)
    . May
          - Walk for wellness (three month program which provides small
            rewards for mileage walked. T-shirts, water bottles, hats. 300
            participants, $3,000)
    . June
          - Email: Healthy backs (Free)
          - Workplace ergonomic assessments (Free - Workers'
            Compensation carrier)




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II   Calendar of health awareness activities

     . July
              -   Email: skin cancer prevention(Free)
              -   Skin cancer screening ($2,700. 30% participation,$18 per test)

     . August
              -   Email:reminderof on-linehealthresources,gym/WeightWatchers
                  discounts(Free)
     . September
              -   Email: Allergies (Free)




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II Calendar of health awareness           activities
    . October
            - Breast cancer awareness month (Free. UtilizeAmerican Cancer
              Society materials.)
    . November
            - Flushot clinic ($5,250. 70% participation, $15 per test)
            - Email: Avoiding holiday weight gain (Free)
    . December
            - Eating healthy (Free - EAP vendor)
        - Email: Prevention/treatment of heartburn and acid reflux (Free)


                          Total wellness and prevention expense:
                          $25,200, $4.20 per employee per month



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II   Incentive impact
     Incentives drive participation

     . How many people need to be engaged, at what intensity, to
       create the desired impact?
       - Within first year, 35-50% of population should be engaged at
          some level

        - Within first two years, 45-60% should be engaged
        - Within first three years, 60-75% should be engaged




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Ideas for incentives
Incentives don't have to be cost prohibitive

. Monetary rewards*
     -                                     a
         Offeran employee$25 for completing wellnessprogram.
. Insurance premium discounts
     -   Offer reductions in monthly contributions for participating in
         wellness initiatives.

. Gift certificates*
     - Hand out gift certificatesfor fitness stores or local restaurantsas
       door prizes to employees who participatein a health fair.
* Must include as taxable income.




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Ideas for incentives
Incentivesdon't have to be cost prohibitive(continued)
. Hold a raffle
        -   Hold a drawingfor movietickets,sportingevents,or otherlocal
            entertainment at the completionof a wellness seminar.
. District customized incentives
        -   Offer incentivessuch as a canvas bag with the districtlogo to each
            employee that reaches his or her goal.
. Achievement awards
        - Provide employees with a certificate of completion congratulating
          the employee for achieving a health related goal.
. Wall of fame/local media attention




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Ideas for incentives
Incentives don't have to be cost prohibitive (continued)

. Donation to a charity organization in that person's name
. Contribution to a FSA or HSA

. Special parking space or other recognition
. Health club subsidy or payment

. Two-part incentives
   - Offer part of the incentive to the employee for signing up to
     participate in a program and offer the other part of the incentive
     when he or she completes the program.




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III   Disease management process
      . Identification - The carrier identifies members to participate in the
        disease management programs.

      . Assessment - Members are referred to case managers who determine
        the appropriate level of intervention and care.
      . Intervention - The case manager will contact the member via mailing
          or phone. The level of intervention is based on the risk stratification
          level of the member (high, moderate or low).
           - Educational reminders
           - Nurse/case manager mediated phone calls
           - Assistance with self care, monitoring medications, accessing the
             appropriate services, treatment plan compliance, obtaining the
             necessary equipment or supplies, etc.
           - Member newsletters
           - Work books for monitoring progress and treatment regiments

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I   II   Action steps
         Disease management

         . Determine your current carriers capabilities
            - Types of programs

                    -   Depth of programs
                    -   How members are identifiedand contacted

         . Determine how many of your employees and dependents currently
           participate in programs

         . Develop a strategy to communicate and promote disease
           management programs

         . Hold your carrier accountable for increasing participation in disease
           management programs

         . Identify additional community based resources and communicate to
           employees and dependents



         Mercer                                            g :\wp\g roup\2009\wash33\presentation   \wellness strategies - 2. ppt
Action steps
Disease management (continued)

. We will talk in more depth about disease management programs and
  strategies at our "Controlling Health Care Costs" discussion on Friday
  morning!




   We hope this information has been helpful and encourage you to
                     embrace a culture of wellness!




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II   Questions?

     . Mercer Health & Benefits
          -   Renee Balsiger, Principal
              503 273 2802
          -   Mike Berry,Principal
              503 273 2820




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