Moving from Managing Cost to Building a Culture of Health

1. Moving from Managing Cost to Building a Culture of Health Caroline Blouin, Head, Global Pensions & Benefits, RBC Financial Group Wendy Poirier, Managing Principal, Health & Welfare, Towers Perrin

2. Defining the challenge – and the opportunity The fundamental quandary How can employers address rising health care costs while still meeting workforce effectiveness goals?

3. Defining the challenge – and the opportunity How to align employer and employee interests?

4. Defining the challenge – and the opportunity • Increasing population health risks loom large for employers today – and pose significant future threats • Incidence of diseases such as cancer, obesity, and high blood pressure have increased by 25 to 70% over the last five years in Canada • Workforce trends will only exacerbate these health risks • An aging population consumes greater health services • Worker shortages increase pressure and stress on employees • At current trend rates, health care costs could grow as high as 8% of wages in the next 10 to 15 years

5. 10% 20% 50% 20% Defining the challenge – and the opportunity Determinants of Health1 1 Source: IFTF, Centers for Disease Control and Prevention, Health and Health Care, 2010, The Forecast, The Challenge.

6. Defining the challenge – and the opportunity • Employers are moving beyond cost management to creating a “culture of health” • This approach shifts the focus of benefit management onto: • Employees: • To be accountable for lifestyle and health care decisions • To minimize their risk factors which can lead to ill health and disability • Choose appropriate medical products and services and use them wisely • Employers: • To provide support mechanisms such as real-time information, effective providers and aligned plan design options/incentives • To demonstrate "caring" about employee health and well-being Creates a “win-win” for employees and employers in establishing and maintaining a healthy and productive workforce

7. Polling Questions • Do you have a formal process for monitoring key elements of the health programs you offer? • Does your senior management team demonstrate an attitude of caring about employee wellbeing? • Do you actively engage employees in becoming better health care consumers?

8. Overall goal: A healthy organization with efficient benefit programs, acceptable benefit costs and a productive, engaged workforce Metrics/Desired Outcomes Financial Performance The cost and value of programs are better than competitive benchmarks and meet corporate objectives Consumerism/Engagement Employees use and understand benefits, tools and resources and are ready for new solutions Workforce Health Programs are based on the company’s cost and risk drivers and help influence health outcomes and resource consumption Strategic Levers Change Management • Leadership support • Ongoing communication • Wellness culture focus • Decision support tools • Employee accountability Delivery • Aligned strategies • Superior customer service • Innovative solutions • Effective claims management • Ongoing review Strategy and Governance • Well-articulated • Defined metrics • Ongoing measurement • Links to business • Links to total rewards • Executive sponsorship • Clear lines of accountability Design • Cost transparency • Meaningful choice • Aligned contributions • Targeted incentives Financial Management • Optimal funding and risk level • Appropriate pricing • Favorable renewal terms • Annual financial and budget review • Annual benchmarking Building a Culture of Health

9. Building a Culture of Health: a framework to establish goals and measure performance in three critical areas Financial Performance Develop awareness of the cost and value of programs and benchmark against other employers or corporate objectives Look at how employees consume benefits and health care services, measure how well they understand existing tools and resources, gauge how they see the impact of their own actions and how ready they are to change behaviour Consumerism Workforce Health Identify your key cost and risk drivers in order to design customized programs that help influence health outcomes

10. The strategic levers: Which elements are driving current performance … and where to target change Strategy and Governance The guiding principles and objectives of corporate health and wellness programs, along with a specific plan to achieve objectives and supporting metrics The program design plan provisions and financial strategy, addressing appropriate choice, transparency, accountability and employer/employee risk and cost sharing and incentives Design Delivery Delivery systems are key to successful deployment of health strategies - both external delivery through vendor partners and internal delivery through coordinated, aligned resources Financial Management The financial mechanics, including goals for cost, trend and efficiency, as well as funding and accounting practices Change Management Key element to any successful initiative: demonstrated commitment to health and well-being, evidenced through leadership support, communication and environment

11. Building a Culture of Health: A Starting Point • Make health a top priority • Operationalize management’s interest in employee wellbeing • Understand employee needs and desires and identify the main workforce health issues • Demographics, drug utilization, absence/productivity statistics, engagement levels • Deliver consistent programs – and messages – across the health management continuum from prevention to managing ill health • Equip employees to make the right choices • Provide access to information and tools that allow them to make better health care choices – proactively and at the point of care • Deliver on the program promises • Identify health “ambassadors” and cascade health initiatives from management to employees • Build a vendor accountability model to monitor and influence vendor performance through performance standards • Engage senior leadership in health care solutions • Be progressive, plan and take action on a sustained basis

12. September 2007 Moving from Managing Costs to Building a Culture of Health Wellness at RBC Caroline Blouin, FSA, FCIA Head of Global Pensions & Benefits

13. The Business CaseBenefit Spend in Canada $185-million Health Plans • Supplemental Medical • Prescription Drugs • Dental Disability-related costs $100-million

14. The Business CaseForecastedBenefit Spend in Canada $ (000) Years

15. Step 1:What is Wellness? RBC promotes and supports a healthy and safe work environment and encourages employees to lead a healthy lifestyle.

16. Step 2:Assessing Risk and Readiness • Confidential • On-line • Employee Value • Personalized wellness profile • $50 credit to HSA • RBC Value • Aggregate results • Risk • Readiness to change

17. Polling Question Which risk factor would you anticipate to be highest for your organization? • Nutrition • Smoking • Physical activity • Overweight (BMI) • Alcohol • Stress Which risk factor would you anticipate to have the highest readiness for change? • Nutrition • Smoking • Physical activity • Overweight (BMI) • Alcohol • Stress

18. Wellness AssessmentRisk Factors %

19. Wellness AssessmentReadiness to Change %

20. Engagement Awareness Incentives Wellness… the RBC Story

21. Awareness On-line Wellness Resource • Health-related Information • Nutrition • Exercise • Stress Management • Featured Employees • Wellness Videos • Information and tips from RBC Health Professionals • RBC Healthy Workplace • Employee Assistance Program • Work/Life Initiatives Living Well Intranet Site

22. Awareness Taking Action • Electronic bulletin • Event-driven • Direct links

23. Polling Question What types of initiatives, do you believe would have the greatest impact? • On-site fitness facility • Fitness membership subsidy • Wellness/Personal Spending Accounts • Health and wellness campaigns

24. Engagement Partnership with the RBC Olympians

25. Have you walked your 10,000 steps? Living Well – Eating for Life! Basics of healthy diet Why fad diets don’t work How small changes to your diet can have a big impact on your health Engagement

26. Financial Incentives Two ways to earn up to $80 in wellness credits: • Wellness Assessment = $20 • Healthy Living Pledges = $60 • To be physically active for a minimum of three times per week, for at least 20 minutes each time • To eat at least one serving of fruits or vegetables at each meal • To visit a health care practitioner for a general health assessment this year

27. Financial Incentives • 10,881 employees completed the Wellness Assessment • 28,332 employees actively re-enrolled in the RBC FlexBenefits program this year • Compared to 16,295 who enrolled in 2006 • 97% committed to all three Healthy Living Pledges

28. What Are Employees Saying? “This month, many of us enrolled in the Flex Benefits plan and took notice of the discounts offered for making a commitment to eating better, exercising, and taking that annual trip to the doctor. I raised the issue with my manager that we should take action to make sure everyone remembers their promises in the ensuing months. With his help, I started a weekly program of Health and Wellness which is incorporated into our Friday morning meetings. It’s our hope that our efforts will translate to a more focused and energetic work day for everyone!” ~ Kathy Finstad, Senior Account Manager

29. What Are Employees Saying? “Our branch has created an internal fun group called "The Belly Busters" who are meeting weekly to discuss our eating and wellness regime. We are helping each other lose weight and in the first week, 9 people shed a total of 12 lbs. To encourage everyone to eat breakfast, we decided we would pool our funds and buy a blender for the branch kitchen. The sales force offered to award us a blender if we exceeded certain targets for referrals. And so the rallying began and we exceeded our weekly goal by 3! Since then, our "Belly Busters” group are enjoying breakfast daily, and now the rest of the team, are jumping on board.” ~Wendy McCartney, Branch Manager

30. Engagement Awareness Incentives Looking ahead

31. Questions & Answers

32. Polling Question • How interested are you in providing additional stress-reducing financial benefits to your employees at no cost to the company? • very interested • somewhat interested • not sure • not interested • Are you in agreement that facilitating financial security, in addition to company-wide health initiatives, may result in lower employee stress and health costs? • agree • somewhat agree • not sure • disagree

33. For more information, contact: Sponsored by: RBC Insurance Wendy Poirier wendy.poirier@towersperrin.com Caroline Blouin caroline.blouin@rbc.com