Wellness Program Good Health Good for Employees Good for Business

1. Wellness Program Good Health Good for Employees Good for Business

2. 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”

3. The Effect on Employers • Our unhealthy lifestyles result in two major problems for employers: • Escalating health and disability claims costs • Lost employee productivity

4. Why Wellness? Why Now? Costs Follow Risks

5. Healthcare Costs 14% 14% Retention (overhead) 86% Claims 86% Addressing the Driver “CLAIMS”

6. 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

7. 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)

8. 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

9. 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

10. 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 osteoarthritis Sources: Leopold, Ronald, Reigning in the Cost of Obesity, Business and Health; Partnership for Prevention Healthy Workforce 2010

11. 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

12. 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

13. 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.

14. 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

15. 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

16. Incentive Strategy Soft Tactics • Days Off • Movie Tickets • Gift Cards • Water Bottles • Peer Recognitions Getting Employees to Participate • Necessary for Participation • End of Year Reward: Focus on Long-term Goals • Hard Tactics (Greatest Outcomes) • Premium Credits / Surcharge • HRA Contributions

17. Resources • Blue Cross Blue Shield of RI • Internal Resources • Community Programs: Local Hospitals with Free Programs • Wellness Company Engagement

18. Wellness Themes • Feedback from • Employees – Surveys • Wellness Committee Suggestions • Senior Management • Typical Themes • Physical Health • Emotional and Mental Health • Physical Activity • Nutrition

19. Employer Sponsored Events • Group Challenges • Community Events

20. 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

21. Participation • Create Tracking Forms • On-line Tracking Systems Identifies who is Participating in Wellness Program for Rewards.

22. Year End Results with Leadership • Evaluating Outcomes with Leadership • Participation • Reduction in Health Risks • Change in Utilization Patterns • Change in Health Care Costs

23. Return On Investments Dollars Saved for Every $1Invested Source: Mercer – May 2006

24. Average HRA/PHA Participation Rates The Importance of Effective Incentives: Source: PricewaterhouseCoopers’ Health and Wellness Touchstone, 2008 Health Risk Assessment participation rate based on incentive

25. 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.

26. 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.

27. 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.

28. Case Study #4 • 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.

29. Blue Cross & Blue Shield of Rhode Island Employee Wellness Program Case Study

30. 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

31. The evolution of incentives 2009 Incentive and Compliance based Structure Rewards will be in the form of Visa money cards. Raffles : 5 PTO days

32. The evolution of incentives 2010 Incentive and Compliance based Structure

33. The evolution of incentives 2011 Incentive and Compliance based Structure

34. The evolution of incentives 2012 - The future

35. The evolution of incentives 2012 - The future

36. Incentives and Performance Management • 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

37. 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.

38. 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 packages to 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

39. 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

40. 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

41. Thank You Questions?