Wellness-and-EAP-4-12-11 by cuiliqing


									         GFOA of Missouri
      2011 Spring Conference

Wellness and EAP Offerings that Drive Down
   Costs & Create a Culture of Wellness

                  Presented by:
          Scott James & Sharon Morfeld
                    J.W. Terrill
                  April 12, 2011
  Welcome and Introductions

  The Economic Environment & Health Care

  Demonstrating Return-On-Investment (ROI)
  Employee Assistance Program (EAP) Offerings

  A Results Oriented Wellness Program
    7 Benchmarks of Success
Medical/Rx Trend
Factors that Influence Trend

 Cost-shifting
 Technology and research
 Consumer demands
 Defensive medicine/malpractice
 Federal and State mandates
 Prescription drug costs (watch out for
  Specialty Rxs!)
 Inefficiency and fraud
Certainly We’re Not to Blame, Are We?

   Consumers
   Consultants
   Health Care Providers
   Insurance Companies
   Lawyers
   Politicians
Short-Term “Solutions”

 Managed care – network discounts
 Traditional cost-shifting
      Increase deductibles*, coinsurance,
       copays, etc.
      Increase employee contributions
 Decrease administrative expenses
 Routine marketing efforts
 Cooperative purchasing (lot of experience and strong proponent, but does
  not reduce trend line in and of itself)
 Self Insurance (strong proponent but does not reduce trend line)

*to the extent that the higher deductibles encourage consumerism, this can produce a longer-term solution
Long-Term “Solutions”

 Patient Protection & Affordable Care Act

Long-Term “Solutions”

 Consumerism   $10,500


 Wellness       $9,750

                                                                    5% Trend + 5% Plan Design
                                                                    5% Trend

                 $8,625                                             5% Plan Design Change -
                                                                    10% Trend
                 $8,250                                             No Changes - 10% Trend



                          2010   2011   2012   2013   2014   2015
Well, Do You?
Health Care Expenditures in Billions

              2002          2004         2006   2008   2010   2012   2014   2016

Source: Wellness Council of America, 2008.
Determinants of Health

Source: Institute for the Future, Centers for Disease Control and Prevention
Percentage of Chronic Diseases that are
                        100%                               82%
                         90%             71%      70%
                                       Colon    Stroke    Heart    Diabetes
                                       Cancer            Disease
Source: The Culprit & The Cure, 2005
 Annual Costs of Unhealthy Lifestyles
 (Billions – 2008 Dollars)

Source: Making the Case for Workplace Wellness Programs; WELCOA 2011
 Weight & Health Care Costs
                                            Weight & Health Care Costs

  Healthy Weight                     $2,916

    Over Weight                             $3,130

  Obese BMI 30+                                                $3,671

        BMI 35+                                                                 $4,170

        BMI 40+                                                                                           $4,919

              $2,000           $2,500            $3,000           $3,500           $4,000            $4,500        $5,000   $5,500

Source: National Institute of Health and the National Center for Health Statistics, 2008 (per person costs)
Obesity Percentage
Obesity Percentage
America is Producing Too Much Disease…
                           More than 67% of
                           Americans are overweight or
                                                          Is the Real
                              65 million Americans have
                            hypertension, a number that
                              grows by almost 2% a year

               1 of every 3 U.S. children born
               after 2000 will develop
               diabetes by age 50

                                                             By 2015 annual per capital health care
                                                             expenditures will exceed $15,000

              60% of employee absences are related
               to psychological issues and job stress

Source: CIGNA Healthcare
Do Wellness Programs Improve Health?

  If you knew which of your employees was going to have a
  major costly illness in the next 2 years what would you
  do differently?
Do Wellness Programs Improve Productivity?

            Healthier                                  Better                  Gains for The
             Person                                   Employee                   Organization
                                                                          1.   Health Status
                                                                          2.   Life Expectancy
                                                                          3.   Disease Care Costs
                                                                          4.   Health Care Costs
             Lifestyle                              Environmental         5.   Productivity
                                                                                - Absence
             Choices                           1.   Leadership Vision
                                                                                  - Disability
                                               2.   Policies/Procedures
                                                                                  - Presenteeism
                                               3.   Benefit Plans
                                                                                  - Worker’s Comp.
                                               4.   Health Plans
                                                                                  - Quality Multiplier
                                               5.   Job Design
 Health Management                                                        6.   Recruitment and Retention
                                               6.   Incentives
                                                                          7.   Company Visibility
      Program                                                             8.   Social Responsibility
Source: 1981, 1995, 2000, 2006 D.W. Edington
Demonstrating ROI

 RECOGNIZE health care costs are out of control

 BELIEVE costs will bury American business & employees

 UNDERSTAND there are strategies to manage costs

 REALIZE health management is a sustainable strategy

 EXPECT comprehensive wellness programs to save money & improve
RECOGNIZE Health Care Costs are Out of Control
                               If Food were Health Care….
      1 dozen eggs                                        $80.20
      1 pound apples                                      $12.23
      1 pound sugar                                       $13.70
      1 roll toilet paper                                 $24.20
      1 dozen oranges                                     $107.90
      1 pound butter                                      $102.07
      1 pound bananas                                     $16.04
      1 pound bacon                                       $122.48
      1 pound beef shoulder                               $43.57
      1 pound of coffee                                   $64.17
   10 item total                                           $586.56
Source: American Institute for Preventive Medicine, 2007
RECOGNIZE Health Care Costs are Out of Control
                             The Cost of Care in the U.S.

         Average prescription costs, on average $70
         Hospital room is about $1,700 per day
         Routine adult admission to an ER is $700
         Hospital birth is $8,000
         Cardiac stress test is $1,900
         Heart attack will cost $45,000
         Cancer treatment will cost $375,000

Source: Andrew Weil, Why Our Health Matters
RECOGNIZE Health Care Costs are Out of Control
                               Would you Believe…
 140 Million illegible prescriptions are written every
     1.5 Trillion insurance claims are filed each year!
       With a 30% error rate
       15% are lost
       25% are paper based
     The average primary care physician has 2,500 to
      4,000 patients
       Works 5-7 days a week
       Often sees patients in hospitals from 9-5 on weekends
       Takes emergency calls 24 hours per day
Source: John Hammergren, Skin In The Game
BELIEVE Costs Will Bury American Business & Employees
    An estimated 237 million of the 310 million Americans are enrolled in a
     health care plan – employers provide coverage for 68% of this insured
    The employer portion of the annual premium in 2008 for an employer-
     sponsored health plan covering a family of four averaged $12,500 –
     this is about as much as an entire year’s pay for a person working at
     minimum wage
    Aside from payroll, health care coverage is a company’s largest
    68% of surveyed people who filed for bankruptcy had health insurance
     – had an average out of pocket medical debt of $12,000
    1.5 million families lose their homes to foreclosure every year due
     partly to medical bills
    1 out of 5 Americans has so much medical debt, he/she is paying it
     over time
Source: Laurence Kotikoff, The Healthcare Fix; Andrew Weil, Why Our Health Matters
UNDERSTAND There are a Variety of Strategies at our
Disposal to Manage These Costs

   “No company will be successful in the global marketplace
   without healthy and productive people. If we don’t do it,
   someone else in the world will and our competitive advantage
   and our way of life will be lost.”
                                                         Dee Edington, Ph.D
                                Director, Health Management Research Center
                                                       University of Michigan
REALIZE Health Management Is A Sustainable Strategy
       Health Risks Drive Health Costs…

       30 – 60% of an employer’s health plan costs could be potentially
        modified or avoided altogether
       21 – 58% of medical claims are associated with risk factors,
        including :
              Obesity
              Elevated cholesterol
              High blood pressure
              Tobacco use
              Alcohol and other drug use
              Stress
              Depression

Source: Dr. David Anderson, Staywell
EXPECT Comprehensive Wellness Programs to Save
Money & Improve Health
  Fact: As we Age, the Natural Progression is to Move
              From Low Risk to High Risk
 Much of the cost increase is tied more closely to “lifestyle age” than
    to chronological age.
 The health care costs of the average low-risk seniors aged 65-74 are
    similar to the average costs of high-risk 19-34 year olds.
 The looming problem of the aging baby boomers is not so much their
    aging per se as it is they tend to migrate from lower risk to
    higher risk status as they age.
 Only a small fraction of wellness programs employ a comprehensive
    best practice approach to demonstrate ROI.
Source: Dr. David Anderson, Staywell
Demonstrating ROI

 Reviews of workplace wellness ROI

 Review of comprehensive workplace wellness programs

 Why comprehensive wellness programs produce results
   Reviews of Workplace Wellness ROI
      $3 – 6 ROI for each $1 invested 2-3 years after implementation
         In 2001: 73 published studies found employers saved an
          average of $3.50 for every $1 spend on workplace wellness

             In 2003: 42 studies found worksite wellness lead to more than
              25% reduction in absenteeism, health care costs and workers
              compensation claims costs

Source: NEBAF “5 Wellness Programs – Are They Worth Their Weight?” 2010
Reviews of Workplace Wellness ROI
 American Journal of Health Promotion – Financial Impact of Health
 Promotion Programs published in 2001
  Do individuals or populations with high health risks have worse
    financial outcomes than individuals or populations with low health
  Do health promotion and fitness programs improve financial
     196 studies emerged and were pared down to 72
          Average cost savings per $1 spent on wellness in 2001:
              $3.48 in health care
              $5.82 in absenteeism
              $4.30 combined
Reviews of Workplace Wellness ROI
Proof Positive: An Analysis of the Cost Effectiveness of Workplace
Wellness by Larry Chapman in 2006
 Do comprehensive workplace wellness programs and disease
    management interventions reduce risks and generate ROI?
     Minimum of at least 3 major risks addressed in the study
     Carefully designed studies consistently show a benefit to cost
        ratio between $2.15 and $5.64 in a 12 to 24 month period
         Conclusions:
              Incentives are essential
              Interventions are becoming standard
              The more intensive the intervention, the more
                 beneficial the results
              The longer the study, the better the return
Reviews of Workplace Wellness ROI
 A Review and Analysis of the Clinical and Cost Effectiveness Studies of
 Comprehensive Health Promotion and Disease Management Programs
 at the Worksite: 2004 – 2008 by Kenneth R. Pelletier, PhD, MD
  Do comprehensive workplace wellness programs and disease
      management interventions reduce risks and generate ROI?
       16 new studies emerged bringing the total to 153 reviewed
         by Pelletier since ’91
          Conclusions:
                Evidence very strong for average reductions in sick
                 leave, health plan costs, worker’s compensation and
                 disability of more than 25%
                Reviews clearly indicate that comprehensive
                 interventions do evidence both clinical and cost
Review of Comprehensive Workplace Wellness
  “Comprehensive worksite programs are those that provide
  ongoing, integrated programs of health promotion and
  disease management that integrates specific components
  into a coherent, ongoing program, which is consistent
  with corporate objectives and includes program evaluation
  of clinical and/or cost outcomes.”

                                        Kenneth R. Pelletier, PhD, MD
Review of Comprehensive Workplace Wellness
 90% of worksites surveyed reported offering at least 1
      wellness activity

 Only 6.9% of worksite offered comprehensive programs

 The Healthy People 2020 national objective calls for 75%

Source: 2004 National Worksite Wellness Survey
Current Wellness Programs Offered

Source: OptumHealth Wellness in the Workplace: An OptumHealth Research Study 2010
Review of Comprehensive Workplace Wellness
 How are comprehensive programs defined?
  Comprehensive program design
  Management support
  Integrated incentives
  Comprehensive communications
  Dedicated on-site staff
  Multiple intervention strategies
  Health awareness programs
  Biometric health screenings
  Vendor integration
Why Comprehensive Wellness Programs
Produce Results
What are the results of best practices?
 Participation rates in health assessments were 1.44 times
 Participation rates in health coaching were 1.41 times
 Program completion rates in overall programming were
  1.71 times higher
 Risk reduction rates were 2.35 times higher
“Wellness programs are something we do with and
for employees, not something we do to them.”

                                             David Hunnicutt, PhD
                          President – Wellness Councils of America
Demonstrating ROI

 The Wellness ROI Model

 Demonstrating ROI on Wellness programs

 Forecasting ROI
The Wellness ROI Model
       What are the health risks we want to reduce?
   High blood pressure             Smoking
   High BMI                        Illness days
   High cholesterol                Low job satisfaction
   High risk alcohol/drug use      Low life satisfaction
   Excess stress                   Poor perception of health
   Physical inactivity
The Wellness ROI Model
    What are the associated increased costs impacted?

   Health care costs
   Absenteeism
   Presenteeism
   Short-Term Disability
   Long-Term Disability
Demonstrating ROI on Wellness Programs

Steps Include:
1.   PHA and Health Screening
2.   Quantify costs of poor health and lost productivity
3.   Segment the employees into risk categories
4.   Select targets and offer appropriate interventions
5.   Re-examine the risk profile
6.   Quantify the changes and costs in the risk profile
Forecasting ROI

Cost Calculators
 CDC Obesity Cost Calculator
      http://www.cdc.gov/leanworks/costcalculator/index.html

 WellSteps for Obesity, Smoking, Absenteeism &
    http://www.wellsteps.com/roi/resources_tools_roi_cal_health.php
Demonstrating ROI
                                  Programs* to impact ROI….
1.    Mandate seat belt usage
2.    Conduct ergonomic assessments
3.    Provide flu shots
4.    Push preventive screenings
5.    Medical self-care
6.    Offer opportunities for physical activity
7.    Go smoke free
8.    Well baby care
9.    Combat depression
10.    Alcohol and substance abuse
11.   Require health screening and HRA’s
12.   Implement a consumer directed health plan
*Increasing in implementation difficulty
Demonstrating ROI for EAP Offerings
#9 - Depression
    In 2005, suboptimal care for depression accounted for 8.4 million sick
        days and $1.4 billion in lost productivity costs
    By the year 2015, depressive disorders will be the primary disorder
        contributing to significant years lost to disability & will become the 2nd
        largest killer after heart disease
#10 - Alcohol and Substance Abuse
    In 2007, of the 20 million adults classified, approximately 12 million or
        60% were employed full time

  Key Strategies
        Implement drug-free workplace & other written substance abuse
         polices; make this part of the job contract
        Offer health benefits that provide comprehensive coverage including
         aftercare and counseling
A Results Oriented Wellness Program
7 Benchmarks of Success

1.   Capture senior level support
2.   Create cohesive teams
3.   Collect data
4.   Craft an operating plan
5.   Choose appropriate interventions
6.   Create a supportive environment
7.   Carefully evaluate outcomes
What’s the Offer you Can’t Refuse?

       Consider these ROI Statistics
ROI Statistics
 Preventable diseases like heart disease, cancer, stroke cause 70% of the
  deaths in America and are responsible for 75% of health care spending
  (Wellness Councils of America)
 Nearly 66% of the increase in health care spending can be attributed to
  increasingly unhealthy lifestyle behaviors; most prominent being obesity
  (Wellness Councils of America)
 The gradual adoption of a CDHP model by an employer with 1,000
  employees, incurring about $8,000 per employee annually, can save up
  to $1,000,000 over a four year period (Forrester Research Study)
 Dupont reduced absenteeism of its corporate fitness program
  participants by 47.5% over six years (Health Behavior)
 The Canadian Life Assurance Company found turnover among fitness
  program participants was 32.4% lower over a seven year period
  compared to non-participants (Canadian Journal of Public Health)
 BCBS of Indiana found its corporate fitness program had a 250% ROI
ROI Statistics (cont.)
 Travelers Corporation reported its health promotion yielded a 19%
  reduction in sick leave use over four years with a $3.40 return for every
  dollar spent (Wellness Councils of America)
 Superior Coffee and Foods reported that their wellness program for their
  1,200 employees showed 22% fewer hospital admissions, 29% shorter
  hospital stays, 42% lower expenses per admission and 40% lower LTD
  costs (Wellness Councils of America)
 For every dollar spent on wellness, companies save $3.48 on health care
  and $5.82 on absenteeism (Wellness Councils of America)
 Johnson & Johnson leaders estimate that their wellness programs ROI is
  $2.71 for every dollar spent (Harvard Business Review)
 Reduced absenteeism and reduced costs related to chronic disease and
  disability due to smoking cessation programs produce immediate cost
  savings (Wellness Councils of America)
 UNUM reported a return of $1.81 for every dollar spent on their smoking
  cessation program (Wellness Councils of America)
If you agree with this statement….

“A system that waits for disease and illness to occur can never be
optimally effective. The logical strategy is to maintain people at the
lowest or most appropriate level of health care use possible.”

                                                              Dee Edington, Ph.D
                                     Director, Health Management Research Center
                                                            University of Michigan
…then you’re ready to drive change.
Wake Up!
  Scott James
    Vice President – Public Entities & Academic Institutions

  Sharon Morfeld
    Senior Account Manager, Certified Wellness Advisor -
    Public Entities & Academic Institutions

  J.W. Terrill

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