Created by: Krames Health & Safety Education StayWell Health Management

1. Managing Wellness Managing Your Business Created by:Krames Health & Safety EducationStayWell Health Management

2. Agenda • Rationale for Worksite Health Promotion Programs • Why Wellness? • Why the Worksite? • What’s the Goal? • Published Research on WHP Programs • High Risk Employees Cost More • WHP Programs Have an Impact • Comprehensive Programs Have Positive ROI • Bottom Line

3. Rationale for Worksite Health Promotion Programs

4. Rationale For WHP ProgramsWhy Wellness? Health Spending in US • Topped $1 trillion in 1996 ($1,035.1 billion) • Doubles every 10 years 1960 $26.9 billion 1970 $73.2 billion 1980 $247.3 billion (tripled) 1990 $699.1 billion 2000 $1.3 trillion • Forecast for 2010 is $3.07 trillion

5. Rationale For WHP ProgramsWhy Wellness? Increasing Costs • Health plans raising premiums • US Business share of health expenditures is 25% • Approximately 50% of a company’s profits are spent on healthcare benefits • Productivity costs estimated at twice direct costs

6. Lifestyle Accounts for 50% of Deaths Source: CDC (1980) Rationale For WHP ProgramsWhy Wellness?

7. Perceptions 1. Cancer 30% 2. Heart Disease 29% 3. Auto Accidents 28% 4. Tobacco Use 25% 5. Alcohol Abuse 18% 6. Drug Abuse 17% 7. Firearms 15% 8. Obesity/Inactivity 9% 9. AIDS 8% Reality 1. Tobacco Use 38% 2. Obesity/Inactivity 28% 3. Alcohol Abuse 9% 4. Nonsexual Infectious 8% 5. Toxic Agents 6% 6. Firearms 3% 7. Sexual Behavior 3% 8. Auto Accidents 2% 9. Illicit Drug Use 2% Rationale For WHP ProgramsPremature Death: Fact or Fiction? Source: Partnership for Prevention. Based on research by McGinnis & Foege published in the Journal of the American Medical Association, November 10, 1993. Source: Partnership for Prevention. Survey of 1,000 adults in March 2000. Percentage who described each as the leading cause of premature death.

8. Rationale For WHP ProgramsWhy the Worksite? • Captive Audience • Consistent Environment • Social Support • Organizational Support • Employers Will Fund

9. Rationale For WHP ProgramsWhat’s the Goal? • It’s Good for Business • Employee Job Satisfaction • Recruitment & Retention • Enhance Competitiveness • Decrease Absenteeism • Decrease Workers Comp & Disability • Manage Healthcare Costs

10. Published Research on Worksite Health Promotion

11. Published Research on WHPWhat the Research Says 1. High Risk Employees Cost More • Higher Costs • Less Productive 2. WHP Programs Have an Impact • Health Risks • Medical Claims • Absenteeism • Disability 3. Comprehensive Programs Have Positive ROI

12. Published Research: High Risk Employees Cost More

13. Impact on Individual Health Care Costs: High versus Lower-Risk Employees Individuals at high risk for depression have 70.2% higher costs than those at lower risk Source: Goetzel et al. (1998) Published Research on WHPHigh Risk Employees Cost More

14. Published Research on WHPHigh Risks Impact Organizational Health Care Costs Annual Impact of High Risks on Organizational Health Care Costs • High stress generates 7.9% of annual medical expenditures • $428 per employee annually (1996 dollars) • 24.9% of health care costs Source: Anderson et al. (2000)

15. Changes in Cost Associated with Risk Risk Change Average Annual Costs* Time *Claims costs adjusted to 1996 dollars. Source: Edington et al. (1997) Published Research on WHPCosts Follow Risks

16. Worker Productivity Index Productivity Level Source: Burton et al. (1999) Published Research on WHPHigh Risk Employees are Less Productive

17. Published Research: WHP Programs Have an Impact

18. WHP Programs Have an Impact on:Health Risks Targeted Programs Reduce Risks Average Number of Risks Net Risk Reduction is .85 Source: Gold et al. (2000)

19. Targeted Programs Reduce Risks 46% 45% 44% 41% 38% Percent Reduced Risks 28% 27% 25% 25% 23% 18% 16% 14% 14% Source: Gold et al. (2000) * Significant difference WHP Programs Have an Impact on:Health Risks

20. WHP Programs Have an Impact on:Medical Claims Average Claims Paid per Employee and Retiree Nonparticipants’ expenses increased 27.7% more than participants. Possible Savings = $437/person Baseline Study Year Source: Fries et al. (1994)

21. WHP Programs Have an Impact on:Absenteeism Mean Days Absent Intervention Source: Wood et al. (1989) * Significant difference

22. WHP Programs Have an Impact on:Short-Term Disability Intervention Short-Term Disability Savings versus Non-Participants Average STD Days Lost Estimated Difference = $1350 per participant 1996 Baseline 1997* 1998* Source: Serxner et al. (2001) * Significant difference

23. Published Research: Comprehensive Programs Have Positive ROI

24. Comprehensive Programs Have Positive ROI Short-Term Long-Term Demand Management Health Promotion $3-$8 3-5 Years $2-$5 1st Year

25. Comprehensive Programs Have Positive ROI Savings per Dollar Invested $8.22 $4.87 $3.35 Source: Aldana (1998)

26. Bottom Line: “What the Research Tells Us”

27. Bottom LinePrinciples of Effective Program Design • Behaviorally staged • Focus on maintenance and reinforcement • Program beyond risk or disease specific • Tailored to health and safety risk • Incentives for participation Source: Serxner (in press)

28. Bottom LinePrinciples of Effective Program Design • Repeated contacts • Varied formats • Personalization • Low cost & portable • Easy to administer • Emphasis on health and productivity Source: Serxner (in press)

29. Bottom LinePrinciples of Effective Program Design • Multiple distribution channels • Built in program evaluation • Long-term orientation • Integrated with Safety, Occupational Health, EAP, and Training • Visible management support Source: Serxner (in press)

30. Bottom LineMillions Can Be Saved Projecting Medical Care Cost Increases Using Four Scenarios of Lifestyle Risk Rates $9.96 $8.85 $7.89 $7.74 Million Saved/Year Cost (in Millions*) $2.22 No program w/ current risk trends Program holds risks constant Program reduces risks 0.1%/yr Program reduces risks 1%/yr Source: Leutzinger et al. (AJHP 2000) *1998 Dollars

31. Bottom LineWellness is a Healthy Investment • Lower Health Care Costs • Lower Absenteeism • Additional Benefits • Higher Productivity • Lower Turnover • Improved Employee Satisfaction/Morale • Improved Employee Health/Quality of Life • Improved Recruitment • Improved Corporate Image

32. References Aldana SG. Financial impact of worksite health promotion and methodological quality of the evidence. Art of Health Promotion 1998; 2(1):1-8. Anderson DR, Whitmer RW, Goetzel RZ, Ozminkowski RJ, Wasserman J, Serxner SA. The relationship between modifiable health risks and group-level health care expenditures. American Journal of Health Promotion 2000; September/October: 45-52. Burton WN, Conti DJ, Chen CY, Schultz AB, Edington DW. The role of health risk factors and disease on worker productivity. Journal of Occupational and Environmental Medicine 1999; 41(10): 863-877. Edington DW, Yen LT, Witting P. The financial impact of changes in personal health practices. Journal of Occupational and Environmental Medicine 1997; 39(11): 1037-1047. Fries JF, Harrington H, Edwards R, Kent LA, Richardson N. Randomized Controlled Trial of Cost Reductions from a Health Education Program: The California Public Employees’ Retirement System (PERS) Study. American Journal of Health Promotion 1994; 8(3): 216-223. Goetzel RZ, Juday TR, Ozminkowski RJ. A systematic review of return-on-investment studies of corporate health and productivity management initiatives. AWHP’s Worksite Health 1999 (Summer); 12-21. Gold DB, Anderson DA, Serxner, S. Impact of a telephone-based intervention on the reduction of health risks. American Journal of Health Promotion 2000; Nov/Dec: 97-106.

33. References Leutzinger JA, Ozminkowski RJ, Dunn RL, Goetzel RZ, Richling DE, Stewart M, Whitmer RW. Projecting future medical care cots using four scenarios of lifestyle risk rates. American Journal of Health Promotion 2000; 15(1): 35-44. Ozminkowski RJ, Dunn RL, Goetzel RZ, Canior RI, Murnane J, Harrison M. A return on investment evaluation of the Citibank, N.A., health management program. American Journal of Health Promotion 1999; 14: 31-43. Pelletier KR. A review and analysis of the clinical and cost-effectiveness studies of comprehensive health promotion and disease management programs at the worksite: 1995-1998 update (IV). American Journal of Health Promotion 1999; 13:333-345. Serxner SA. Practical Considerations for Design and Evaluation of Health Promotion Programs in the Workplace. Disease Management and Health Outcomes (in press). Serxner SA, Gold DB, Anderson DR, & Williams, D. The impact of a worksite health promotion program on short-term disability usage. Journal of Occupational and Environmental Medicine 2001; 43(1): 25-29. US Department of Health and Human Services (1980) Ten leading causes of death in the United States. Atlanta: Center for Disease Control, July. Wood EA, Olmstead GW, Craig JL. An evaluation of lifestyle risk factors and absenteeism after two years in a worksite health promotion programs. American Journal of Health Promotion 1989; 4(2): 128-113.