Wellness Program

Good HealthGood for EmployeesGood for Business

Americans are Leading Unhealthy Lives

• Only 30% of U.S. adults engage in regular leisure time physical activity

• “Fried chicken” was the fastest growing food category

• 21% of U.S. adults smoke

• 30% of U.S. adults age 20 and over are considered obese

• 18.2 million people (6.3%) in the U.S. are diabetic, with another 41 million people who are “pre-diabetic”

The Effect on Employers

• Our unhealthy lifestyles result in two major problems for employers:

– Escalating health and disability claims costs

– Lost employee productivity

Why Wellness? Why Now?

UNHEALTHY BEHAVIOR

Physical inactivity, poor eating habits, tobacco use, unmanaged stress

HEALTH RISKSObesity, high blood pressure, elevated cholesterol and blood sugar

CHRONIC DISEASEDiabetes, heart disease, hypertension, stroke

HEALTH CARE COSTS

Costs Follow Risks

Healthcare Costs

14% Retention (overhead)

86% Claims

14%

86% Addressing the

Driver“CLAIMS”

Types of Wellness Programs

• Wellness programs fall under two general categories:– Disease Management programs, which

target the 22% of the population who drive 85% of medical claims, often because of chronic illness

– Lifestyle Coaching programs, which target the rest of the population (78%)– Keeps the healthy population healthy– Encourages those at high risk to take

action so they adopt healthier lifestyles in an effort to improve quality of life, reduce claims, and prevent them from moving to the chronically ill population

– Creates a culture of wellness at the workplace

* Leopold, Ronald. Work and Health in the Era of the Aging Workforce, Metropolitan Life Insurance Company

Disease Management

• Between 50-60% of patients are non-compliant with their physicians’ prescribed treatments

• Goal of Disease Management Programs – Increase compliance and decrease relapses in

behavior of employees with chronic illness

– This results in healthier, more productive employees

– Healthcare costs are lowered for employees with chronic conditions that are well-managed and therefore require fewer episodes of acute care (i.e., ER visits, hospital readmissions)

Lifestyle Coaching

• Lifestyle Coaching programs can help employees become more proactive in developing healthy lifestyles and address preventable risk factors before they lead to chronic illness

• Multiple studies have shown that between 50-70% of all diseases are associated with modifiable risk factors and could be prevented

• Most common lifestyle programs which address the two greatest risk factors for preventable disease are:

• smoking cessation

• weight control

Lifestyle Coaching: Smoking Cessation

• The Centers for Disease Control estimates that companies spend $3,856 per smoker per year in direct medical costs and lost productivity

• Smokers generate 31% higher claim costs than non-smokers

Sources: National Business Group on Health Center, Center for Prevention and Health Services

Lifestyle Coaching: Weight Control

• Average absence for a worker who files an obesity-related Short Term Disability claim is 45 days

• Obese individuals have a 30-50% greater risk of developing chronic medical conditions than those who smoke or drink

• Obesity is an independent risk factor for over 30 chronic conditions

• Almost 80% of obese individuals have diabetes, hypertension, CAD., gallbladder disease, high cholesterol, and / or osteoarthritisSources: Leopold, Ronald, Reigning in the Cost of Obesity, Business and

Health; Partnership for Prevention Healthy Workforce 2010

Lifestyle Coaching Program Savings

• Employers who have implemented prevention programs for cardiovascular disease (including smoking cessation and blood pressure and cholesterol monitoring) have seen an average:

– 28% reduction in sick leave

– 26% reduction in health care costs

– 30% reduction in workers’ compensation and disability costs

Source: National Business Group on Health Center, Center for Prevention and Health Services

How To Get Started: Wellness Process

Management Support

Wellness Committee

Program Goals

Incentive Strategy

Resources

Wellness Themes

Employer Sponsored Events

Communications

Participation

Year End Results with Leadership

Management Support

Senior Level Support is Critical!

Control Purse Strings

Allows Time to Support Wellness

Program

Creates Acceptance of Wellness into

the Company’s Culture.

Wellness Committee

Wellness Committee Oversees Program.

Select 4-5 people who are excited about

program

Cross Section of employees – not just

health/fitness conscious people

Enough power to effectively run

program

Program Goals

Identify 3 or 4 Goals.

Possible Goals:

Reduce Health Risks

Better Manage Health Care Costs

Improve Morale

Improve Productivity

Create Culture of Wellness

Incentive Strategy

Soft Tactics Days Off Movie Tickets Gift Cards Water Bottles Peer

Recognitions

Getting Employees to Participate

Hard Tactics (Greatest Outcomes)

Premium Credits / Surcharge

HRA Contributions

Necessary for Participation End of Year Reward: Focus on Long-term Goals

Resources

Blue Cross Blue Shield of RI

Internal Resources

Community Programs: Local Hospitals with

Free Programs

Wellness Company Engagement

Wellness Themes

Feedback from

Employees – Surveys

Wellness Committee Suggestions

Senior Management

Typical Themes

Physical Health

Emotional and Mental Health

Physical Activity

Nutrition

Employer Sponsored Events

Group Challenges

Community Events

Communications

Create Wellness Program Name: Wellness

Committee or Employee Suggestions!

Direct Messages from Management Emails

Positive Mention at Meetings

Posters in Visible Areas

Flyers

Company Newsletters

Participation

Create Tracking Forms

On-line Tracking Systems

Identifies who is Participating in Wellness Program for Rewards.

Year End Results with Leadership

Evaluating Outcomes with Leadership Participation

Reduction in Health Risks

Change in Utilization Patterns

Change in Health Care Costs

0

1

2

3

4

5

6

7

Coors

B of A

Kennecott

Equitable

General Mills

Travelers

Motorola

Pepsi

Dupont

Source: Mercer – May 2006

Dollars Saved for Every $1 Invested

Return On Investments

Average HRA/PHA Participation RatesType of Incentive Percent ParticipationNo Incentive 22%$25 Gift Card 41%$50 Gift Card 45%$150 Gift Card 67%$250 Gift Card 32%$75 Premium Reduction 75%$150 Premium Reduction 60%$250 Premium Reduction 52%$350 Premium Reduction 81%$500 Premium Reduction 85%

Source: PricewaterhouseCoopers’ Health and Wellness Touchstone, 2008Health Risk Assessment participation rate based on incentive

The Importance of Effective Incentives:

Case Study#1

• In year one, smoking decreased by 44% overall. This change was the catalyst in increasing the group’s PHA score by 2 points in the first year, resulting in more than a $148,000 prospective medical claims savings in year one.

Requirement Associate Spouse IncentivePersonal Health Assessment X X 10% premium increase in

2013 if non-compliant.Obtain biometric screening X XParticipate in tobacco cessation program if smoker X X

Case Study #2

• This design resulted in a 96% compliance in the wellness activities needed for the “wellness” benefit design.

• Healthcare expenses increased by less than half the national trend since 2005. 2009 average cost per employee was $7,765 (benchmark for the industry was $8,423.

Requirement IncentivePersonal Health Assessment

Eligibility to opt into a “wellness” benefit design with lower deductibles and employee co-share.Obtain annual physical

Complete at least 1 additional wellness activity

Case Study #3

• Year 1 yielded a 281% increase in PHA participation, and an 86% increase in Wellness Clinic participation.

• Utilizing the PHA, we have been able to assess a 5% increase in physical activity levels in this group, resulting in a potential one-year savings in excess of $13,000.

Requirement Incentive

Personal Health Assessment $50

Obtain annual physical or participate in onsite biometric screening $25

25 hours of wellness programming/ use of exercise log $25

Case Study #4

Requirement Associate Spouse IncentivePersonal Health Assessment X X 10% premium increase the

following year if non-compliant. Also, for being compliant there

was a $100/$200 cash reimbursement at the end of

the year.

Obtain annual physical X XObtain annual dental cleaning X X

Participate in 10 hours of onsite wellness programming in the calendar year X

• Overall compliance was 87% in year one, and 91% in year two.

• Annual well visits increased and more employees self-reported conditions such as high blood pressure and cholesterol in year one. By year two, those conditions made significant improvements.

• The outcomes showed that this program helped detect & manage chronic conditions in earlier stages. Also, healthcare trends have been lower than the comparable benchmark group.

Blue Cross & Blue Shield of Rhode Island Employee Wellness Program

Case Study

BCBSRI

• BCBSRI employs 1040 full-time employees

• Located in Providence Rhode Island

• Background:– 2008 Health Care Costs were on the rise– Utilization of preventative services was low– Increased competition entering Rhode Island Market– Initiated Wellness Incentive Program for BCBSRI employees to:

• Address rising costs through promoting wellness and prevention• Lead by example• Establish a model to sell in the market

• Senior Leadership committed to the program

• Launched January 1, 2009

The evolution of incentives

2009 Incentive and Compliance based Structure

Level Points Incentive (Carrot)

1 250 $25 reward

2 350 $50 reward

3 450 $75 reward

4 550 $100 reward

5 675 $125 reward

Offering Category ParticipantsPHA Required (Compliance) Employees

Wellness Programming Elective (Incentives) Employees

Rewards will be in the form of Visa money cards.Raffles : 5 PTO days

The evolution of incentives

2010 Incentive and Compliance based Structure

Offering Category ParticipantsWellness Pledge Required (Compliance) Employees/Spouse

PHA Required (Compliance) Employees/Spouse

Physician’s Visit Required (Compliance) Employees/Spouse

Dental Visit Required (Compliance) Employees/Spouse

Wellness Clinic (biometrics) Required (Compliance) Employees

Carrot

$100 Visa Card Individual Plan

$200 Visa Card Family Plan

Stick

10% increase in insurance premium contribution

The evolution of incentives

2011 Incentive and Compliance based Structure

Offering Category Participants

PHA Required (Compliance) Employees/Spouse

Physician’s Visit Required (Compliance) Employees/Spouse

Dental Visit Required (Compliance) Employees/Spouse

Carrot

Raffle for free parking spot for 1 year

Raffle for free fitness center membership for 1 year

Raffle for Wii Fit gaming consoles (2 available)

Raffle for $500 VISA Gift Card (2 available)

Stick

5% increase in insurance premium contribution

The evolution of incentives

2012 - The future

Offering Category Participants

PHA Required (Compliance) Employees/Spouse

Physician’s Visit Required (Compliance) Employees/Spouse

Dental Visit Required (Compliance) Employees/SpouseObtain a BMI Screening (less than 30), or take

action to lower your BMIElective (Incentives) Employees

Health & Wellness Programming

Elective (Incentives) Employees

BCBSRI Fitness Center 25 Workouts/Quarter Elective (Incentives) Employees

The evolution of incentives

2012 - The future

Carrot

100 points= $100 HSA Contribution/ $100 Cash Incentive

BMI <30 or take action to lower your BMI = $100 HSA / $100 Cash Incentive

BCBSRI Fitness Center 25 X per Quarter= Free Fitness Center Membership

Stick

10% increase in insurance premium contribution

Incentives and Performance Management

Performance Ranking

2011 Average PHA Score Incentive Completion

Top 78.30 82.9%

Middle 78.17 79.8%

Bottom 77.42 72.2%

• Top performers have: Better PHA scores Better incentive program compliance Lower medical claims costs

• Wellness programming and incentives appeal to talent you aim to retain and incent

Lessons Learned

• Start with a basic incentive model to ease employees into the program

• Best to have an integrated PHA and Incentive Tracking System that will grow with you as your program moves toward outcomes

• Need a strong Communication and Promotional Strategy and multiple channels of communication:

Utilize Health Interest Surveys to gauge interest in different program topics and communication modalities.  This allows tailoring of programs to the unique needs of your organization.

Lessons Learned

• Foster enhanced senior management and middle management support

Hold supervisor meetings with middle management to explain how participation in the program can actually improve productivity

• Shift accountability to employees

The message: “We are all in this together”

• Enhance and tweak the incentive packagesto foster maximum participation and potential behavior change

Be sure to check with your legal team prior to implementing an

incentive plan to ensure it complies with all state and federal laws

Recommendations

• In year one, start with no more than 3-4 requirements for compliance (i.e. an annual physical, completed PHA, and one other activity).

• A reasonable alternative must be provided to those employees who have legitimate medical or personal factors that make it impossible for them to participate in health improvement programs (this does coincide with HIPAA’s reasonable alternative nondiscrimination provision). HWI can provide a sample wavier form.

• Be sure to consult with your organizations legal counsel before implementation.

• Employees should be given enough lead time both before and after the implementation of a program in order to plan how they will approach the task of changing their behavior. Lead time will vary based on the specific strategy.

• Clear & concise communication is important to set the tone and expectations of the program.– Memo from CEO “the why”– Frequently asked questions– Incentive design & requirements

Favorite Quote

Take care of the people, and the return on investment will take care of itself.

-- Dr. Dee Edington, University of Michigan, Health Management Research Center

Thank You

Questions?