Work, Health, and Productivity: The Johnson & Johnson Story

1. Work, Health, and Productivity: The Johnson & Johnson Story Fikry Isaac, MD Vice President Global Health Services and Chief Medical Officer, Wellness & Prevention Inc.

2. Company Overview Global Leader inHealth Care More than 250 Operating Companies In 60 Countries Selling Products in More Than 175 Countries 125,000 EmployeesWorldwide

3. “It’s an investment, not a cost”–Alex Gorsky, Johnson & Johnson CEO “It's an investment, not a cost. Spending money before people get sick, to help keep them well, makes sense.” “It starts with personal accountability for our health. I hope all our employees recognize that and take advantage of the programs we offer for them to get and stay healthy.” “You can look at the outcomes from our Johnson & Johnson health and wellness programs for proof. In the US, where we've sponsored health and wellness programs for over 20 years, we have lower rates of tobacco use and cardiovascular disease, for example, than the workforce in general.”

4. Culture of Health within Johnson & Johnson - Our Journey Fix The Health Care Crisis One Employee at a Time 1886 visionary 2013 one health 1978 big goals 1995 integration 2004 global launch 2007 harmonization 2008 new business 2015 healthy future “I’m talking about prevention, specifically in the workplace. …Johnson & Johnson has been making substantial, systematic, and effective investments in prevention for more than 30 years. We dedicate resources to prevention because, like any successful investment we’ve made, it yields steady returns.”Bill Weldon, Former Chief Executive Officer, Johnson & Johnson Harvard Business Review

5. Benefits of a Culture of Health • Transform Employee Health from an accelerating burden to a competitive advantage • Reduce the burden of chronic disease and instill prevention & wellness behaviors in work places as well as communities • Allows for partnership with policy makers to improve labor productivity ,economic competitiveness, and ultimately reduce healthcare spending

6. Global Health Services Integrating Protection, Prevention & Performance Protection Keep people safe: Compliance, Assurance & Quality Care Prevention Keep the well well and manage the ill/injured: Innovation in Intervention Performance Leading in business by leading in health: Health is a key business imperative

7. Health Strategy- Five Pillars Leadership & Commitment Enterprise Programs Policy & Procedures Measurements & Outcomes Engagement & Participation Have you Implemented effective communication strategies? How can you Continue to evaluate results and end user satisfaction? Does management lead by example ? Does management establish organizational health goals? Has the organization achieved company-wide health goals? What is the level of accountability for these goals? How effective is the health strategic plan? What are participation and retention rates? What is the level of deployment and integration of key policies?

8. Leadership & Commitment Leadership - Top Down Goal Setting Established by senior leadership 125 years ago…until today • 90% of employees have access to “culture of health” 1 programs • 80% of employees have completed a health risk profile and know their key health indicators • 80% of measured population health risk will be characterized as low health risk

9. Integrated Holistic Program Delivery Enterprise Programs Integrate service delivery with innovative solutions that focus on prevention, behavior modification, and linkage to benefit design

10. Enterprise Programs A Multimodality Approach Providing tools, resources and environment support Allows a choice of value-added services that meet people where they are in their health continuum

11. Standardized Approach Policy & Procedures • Globally harmonized procedures • Tobacco-free sites • Wellness programs, occupational health programs, employee assistance programs • HIV/AIDS • Others • Standardized procedures (“toolkits”) that support program implementation worldwide

12. Policy & Procedures Sustaining our Standards Management Action and Assessment Review System (MAARS) Annual self assessment of EHS programs against J&J standards (GHS included) Every 3 year external “joint” assessment Results part of Supply Chain dashboard

13. Engagement & Participation Tracking Utilization Using electronic medical records Q1 US and PR Utilization 23,280 Individual Health Encounters 357 Health Programs & Events with 10,117 Participants 101,801 Fitness Center Visits • 6,622 Medical Surveillance Evaluations • 88% of Occupational Injuries & Illnesses treated “in-house” (No Workers Compensation Claim Costs) • Case Management Metrics*: • Recordable cases avoided due to case management: 20 (Valued at $255,780) • Restricted work day cases avoided due to case management: 19 (Valued at $287,071) • Lost work day cases avoided due to case management: 17 (Valued at $843,047)

14. Accessible via Johnson & Johnson intranet Reporting by all operating companies annually In-depth validation of stated culture of health and program elements including population risk data Reporting by all operating companies annually Reports can be broken down by region (seen here) or Enterprise Sector Location Measurements & Outcomes Measure Outcomes Not Effort Global Health Assessment Tool example SAMPLE SCORECARD 2011 Worldwide Reporting- 424 locations (100%)

15. Measurements & Outcomes OngoingMeasurement Occupational Health Index Quarterly/Annual metric used to evaluate clinical service delivery Measures: Compliance, Quality, Satisfaction and Efficiency • Each element rated to give Green-Amber-Red and scored (3 – 2 – 1) • Overall score calculated from the 10 elements

16. Engagement & Participation Measurement tools- next generation Measurements & Outcomes Health and Performance Index (HaPI) The index combines health, productivity, well-being and culture of health and program sustainability measures. Scoring can provide a scorecard, and benchmark against other companies. Correlations to business value and financial Business Value / Financial Linkages

17. Measurements & Outcomes Population Health Risks(U.S. Outcomes) • Overall reduction in health risks over time • Health risks lower compared to benchmark 2011/2012High Risk Data: J&J Lower Compared To US And comparable employers

18. Measurements & Outcomes Centralized Health Management - Impact 2002 Journal of Occupational & Environmental Medicine This study estimated the longer-term impact of the Johnson & Johnson Health & Wellness Program on medical care utilization and expenditures. Employees were followed for up to 5 years before and 4 years after Program implementation. Results indicated a large reduction in medical care expenditures (approximately $224.66 per employee per year) over the 4-year Program period. These benefits came from reduced inpatient use, fewer mental health visits, and fewer outpatient visits compared with the baseline period. (J Occup Environ Med. 2002;44:21–29) Utilization Type Healthcare Expenditures in Dollars

19. Measurements & Outcomes Long Term Outcomes External validation of program success & opportunities “Company employees benefited from meaningful reductions in rates of obesity, high blood pressure, high cholesterol, tobacco use, physical inactivity and poor nutrition. Average annual per employee savings were $565 in 2009 dollars, producing a return on investment equal to a range of $1.88-$3.92 saved for every dollar spent on the program.”

20. Johnson & Johnson health risk trends significantly better than US and other industries Company employees benefited from meaningful reductions in rates of obesity, high blood pressure, high cholesterol, tobacco use, physical inactivity and poor nutrition. Johnson & Johnson’s Health & Wellness program had a projected return on investment (ROI) of $1.88-$3.92 for every $1.00 spent Average annual per employee savings were $565 in 2009 dollars, Benchmarking against similar industry shows an average rate of growth in medical and pharmaceutical costs that is 3.7% lower Lower increases in ER and Inpatient admissions and higher increases in doctor visits and prescription drug fills compared to other large companies US Medical Program ranks in top 1/3 compared against other Peer Companies Measurements & Outcomes Overall Long Term Program Impact 2002-2008 Health Outcomes and Cost J&J Study – Health Affairs, March 2011

21. Success springs from a culture of health, which is built into the fabric of the business Senior leadership support - commit to the long-term Set standards, short & long term goals and measure outcomes Phased approaches, pilots and cultural adaptability are critical to successful implementation Integrated service delivery with a focus on prevention, protection, and performance yields positive health, wellbeing and economic results Summary

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