St. John’s, Newfoundland, Canada June 28-29, 2005

1. CIA Annual MeetingSession 3203 Value of Wellness Improving Health, Addressing Costs St. John’s, Newfoundland, Canada June 28-29, 2005 Nico Pronk, Ph.D., MA, FACSM, FAWHP HealthPartnersHealth Behavior Group HealthPartnersCenter for Health Promotion HealthPartnersResearch Foundation Minneapolis, Minnesota

2. Outline • Disease costs, prevention saves • Medical care expenditures and • Disease status • Modifiable health factors • Productivity and health risks • Changing health risks and associated costs • Using health assessments to identify opportunities for cost management • Incentives and participation • Conclusions

3. Why invest in prevention? Disease cost, prevention saves

4. Claims Cost Distribution 20% of people generate 80% of costs High Risk Early Symptoms Active Disease Healthy/low Risk At-Risk That means, 80% of people generate only 20% of the costs Disease costs, prevention saves.

5. The approach is to… …improve the health and well being of members (employees, patients)… …so that, function is improved… … and quality of life improves… …and health care cost and utilization reduces …and disability is controlled …and productivity is enhanced

6. Furthermore… If you maintain the health and well being of currently healthy members (employees, patients)… …quality of life stays high …health care cost and utilization stays low …disability is prevented …productivity stays high …excess costs are avoided.

7. So, why is it so hard to prove the value of prevention?

8. The Logic Flow • Disease is preventable; • Modifiable health risk factors occur prior to disease onset; • Many modifiable health risks are associated with increased health care costs; • Modifiable health risks can be improved; • Improvements in health risks can lead to reductions in health costs; • Improvements in health risks can lead toimprovements in productivity; • Well-designed and well-implemented programs can save more money than they cost (positive ROI)

9. The Evidence A large proportion of diseases and disorders is preventable. Modifiable health risk factors are precursors to a large number of diseases and disorders and to premature death (Healthy People 2000, 2010, Amler & Dull, 1987, Breslow, 1993, McGinnis & Foege, 1993). Many modifiable health risks are associated with increased health care costs within a relatively short time window (Milliman & Robinson, 1987, Yen et al., 1992, Goetzel, et al, 1998, Anderson et al., 2000, Bertera, 1991, Pronk, 1999). Modifiable health risks can be improved through workplace sponsored health promotion and disease prevention programs (Wilson et al., 1996, Heaney & Goetzel, 1997, Pelletier, 1999). Improvements in the health risk profile of a population can lead to reductions in health costs (Martinson, et al., 2003,Edington et al., 2001, Goetzel et al., 1999). Worksite health promotion and disease prevention programs save companies money in health care expenditures and produce a positive ROI (Johnson & Johnson 2002,Citibank 1999-2000, Procter and Gamble 1998, Chevron 1998, California Public Retirement System 1994, Bank of America 1993, Dupont 1990).

10. Medical CareExpenditures

11. MEAN CUMULATIVE 3-YEAR MEDICAL CHARGES FOR DIABETES PATIENTS BY CO-MORBIDITIES AND GLYCEMIC CONTROL $ DM = Diabetes HTN = Hypertension HD = Heart Disease Source: Gilmer, et al. Diab. Care, 1997; 20:1847-1853

12. Lifestyle-related, Modifiable Risk Factors and Costs • Mean annual health care charges for low-risk and high-risk individuals by gender and race (adjusted for chronic disease) • Low-risk: • BMI=25 kg/m2 • Never smoker • Physical activity at 3 d/wk • High-risk: • BMI=27.5 kg/m2 • Current smoker • Sedentary (0 d/wk) • Overall mean charges = $4,201 • Absolute difference in charges ranges between $1,500 and $2,500 • Relative risk difference equals 49% $ Source: Pronk, et al. JAMA 1999;282:2235-2239

13. 100 70.2 75 46.3 50 34.8 Percent 21.4 19.7 25 14.5 11.7 10.4 -0.8 -3.0 -9.3 0 Eating Stress Weight Alcohol Glucose Tobacco Exercise -25 Depression Cholesterol Tobacco-Past Blood pressure -50 Incremental Impact of 10 Modifiable Risk Factors on Medical Expenditures Percent Difference in Medical Expenditures:High-Risk versus Lower-Risk Employees Independent effects after adjustment Source: Goetzel RZ, et al, Journal of Occupational and Environmental Medicine 40 (10) (1998): 843–854.

14. Per Capita Cost of High-Risk Status $175 $136 $150 $125 $97 $100 $70 $75 $56 Dollars Per Employee $44 $50 $29 $26 $25 $8 -$2 -$3 -$33 $- $(25) Stress Weight Alcohol Glucose Exercise Tobacco Pressure Blood Tobacco- Past Depression Cholesterol $(50) Eating $(75) Population Risk and Cost Impact • High stress generates annual per capita cost of $136 (1996 dollars) • $428 per capita for assessed areas • 24.9% of health care costs Source: Anderson, D.R., et. al, American Journal of Health Promotion, 15:1, 45-52, September/October, 2000. Health care expenditures - 1996 dollars. Independent effects after adjustment

15. Productivity and Work Performance

16. Optimal, best possible performance, fully present Fully absent, no work or duties performed Worst possible performance, fully present 100 75 50 25 0 -25 -50 -75 -100 100 75 50 25 0 -25 -50 -75 -100 Performance Quality Units (%) Hours-on-Task (%) Work Performance Scale Source: Pronk, NP. ACSM’s Health & Fitness Journal 2003;7(3):31-33

17. Impact of obesity on work limitations is akin to 20 years of aging Productivity and Health Risks Obesity and Work Limitations • Obesity impact on work limitations • NHANES III and NHANES 1999-2000 data • Obese workers, regardless of gender, are more likely than normal weight workers to report being limited in the amount or type of work they can do because of physical, mental or emotional problems (6.9% vs. 3.0%, respectively) Source: Hertz, et al. JOEM 2004; 46:1196-1203.

18. Chronic Conditions and Work Performance • Annual excess absenteeism, presenteeism, and critical incidents studied in: • Reservation agents • Customer service representatives • Executives • Railroad engineers • Assessment tool: • WHO Health and Work Performance Questionnaire (WHO HPQ) (www.hpq.org) Source: Wang, et al., JOEM, 2003; 45(12):1303-1311.

19. Work Performance and Physical Activity, Cardiorespiratory Fitness, and Obesity Dep. Var. β p Effect on PROD PA moderate Quality 0.0574 0.0017 Improvement Work rate 0.0517 0.0047 Improvement PA vigorous Work rate 0.0538 0.0039 Improvement Cardiorespiratory Quantity 0.0118 0.0454 Improvement Fitness Extra effort 0.2098 0.0299 Improvement BMI obese Getting along -0.239 0.0156 Decrement BMI morbid Work loss days 1.0155 0.032 Decrement Source: Pronk, et al., JOEM, 2004; 46(1): 19-25.

20. Does a Change in Health Risk Result in a Change in Cost?

21. Change in Health Risk and Change in Cost • Improving health risks contains escalating medical costs and improves productivity (esp. STD costs) • Largest reduction in costs experienced in those moving from high-risk to low-risk • Total 2-year costs for groups was follows: • H-H = $6,942 • H-L = $3,919 • L-H = $3,897 • L-L = $2,477 • Those who remain at low risk maintain the best cost and productivity profile • Note: Risk assessed by HRA; linked to medical and STD costs for the years 1998-1999 compared to 2000-2001 $ Source: Edington and Musich. HPM 2004;3(1):12-15.

22. Change in Physical Activity, Change in Costs • Prospective cohort study (N=2,393 adults, age 50 and older) • Predicting changes in health care charges between two 1-year periods (Sept ’94 to Aug ’95 and Sept ’96 to Aug ’97) due to increased physical activity • Statistical adjustment for age, gender, co-morbidity, smoking, BMI Considering a more rigorous study design using an actual underlying cause of mortality, i.e., physical activity Source: Martinson, et al. Preventive Medicine 2003;37:319-326.

23. Change in PA, Change in Costs • Increased PA among older adults is associated with lower annual health care charges within 2 years (1994-1995 to 1996-1997) as compared to continuously inactive controls • Among those who increase PA from 0-1 to 3+ days per week, decline in costs is as much as ~$2,200 • Such cost savings easily justify investments in PA programs Source: Martinson, et al. Preventive Medicine 2003;37:319-326.

24. Literature Review on Financial Impact Steven G. Aldana, Ph.D. American Journal of Health Promotion, May/June, 2001, 15:5. Focus: • Peer reviewed journals (English Language) – 196 studies pared down to 72 studies meeting inclusion criteria for review Scoring Criteria: • A (experimental design) • B (quasi-experimental – well controlled) • C (pre-experimental, well-designed, cohort, case-controlled) • D (trend, correlational, regression designs) • E (expert opinion, descriptive studies, case studies) Health promotion program impact on health care costs: • 32 evaluation studies examined – Grades: A (4), B (11), other (17) • Average duration of intervention: 3.25 years • Positive impact: 28 studies • No impact: 4 studies (none with randomized designs) • Average ROI: 3.48 to 1.00 (7 studies)

25. Using Health Assessments to identify health behavior change opportunities in order to better manage costs

26. Background • 9,981 employees were invited to complete the HA in early 2004 • 5,113 (51.2%) completed the HA • Selected risk-related variables were associated with paid medical care expenditures • Analyses were limited to employees who were members for 9-12 months of enrollment in 2003 (n=3,937) • Gender ratio of HA responders: 83% female, 17% male • Non-responders were, on average, 7 years older than responders • Compared to a multi-employer comparison group, HP HA responders have significantly higher rates of asthma, depression, diabetes, periodontal disease, back pain, and gestational diabetes (based on self-report) * Based on HealthPartners diagnosed disease registry, 2004 data. All values significant at p<0.05.

27. HA Total Health Potential Score and Paid Medical Care Costs • Total Health Potential Score is out of a possible 1,000 points • n = 3,937 • Paid expenditures tend to decrease as the Total Health Potential Score increases • Averages for the lowest Total Health Potential Score categories are significantly higher than the means for the highest Total Health Potential Score categories (p<0.05) $ %

28. HA Modifiable Health Potential Score and Paid Medical Care Costs • Modifiable Health Potential Score is out of a possible 520 points for men or 505 points for women • n = 3,937 • Paid expenditures tend to decrease as the Modifiable Health Potential Score increases • Averages for the lowest Modifiable Health Potential Score categories are significantly higher than the averages for the highest Modifiable Potential Score categories (p<0.05) $ %

29. Paid Medical Care Costs for Those with HA-based Report of Heart Disease Compared to Those Who are at High-Risk for Heart Disease and Those Who are at Low-Risk for Heart Disease • n = 3,937 • Average expenditures are significantly different from each other (p<0.0001) $ %

30. Paid Medical Care Costs Comparison by Body Mass Index Category • n = 3,937 • Members with BMI between 18 and <25 are in the normal BMI range • Average expenditures for those with BMI of 30 and over is significantly higher than all other categories (p<0.05) $ %

31. Paid Medical Care Costs Comparison by Level of Physical Activity • n = 3,937 • Average expenditures decrease with increasing levels of physical activity • Average expenditures for those who are sedentary is significantly higher than all other categories (p<0.05) $ %

32. Paid Medical Care Costs comparison by Perceived Health Status (n=3,937) For all graphs, comparison groups are significantly different from each other: Perceived health = p<0.0001 Physical health = p<0.0001 Emotional health = p<0.001

33. Use of Prescription Medications 4600 5000 100 4000 80 3000 60 Paid Dollars 2016 65 2000 40 % of Respondents 1000 35 20 0 0 Yes No Paid Medical Care Costs comparison by Medication Use (n=3,937) Use of Non-Prescription Medications 5000 100 4247 4000 80 3139 3000 60 Paid Dollars 49 2000 40 % of Respondents 51 1000 20 0 0 Yes No Polypharmacy (7+ Medications) For all graphs, comparison groups are significantly different from each other: All = p<0.0001 10000 100 7662 95 8000 80 6000 60 Paid Dollars 3469 4000 40 % of Respondents 2000 20 5 0 0 Yes No

34. Do Incentives Drive Participation?

35. What Does the Literature Tell Us? Source: Serxner, et al. The Art of Health Promotion Newsletter. 2004; March/April.

36. The effect of intensity of recruitment effort on response disposition • Harvard Medical School, Department of Health Care Policy • HealthPartners, Center for Health Promotion and Research Foundation • Group Health Cooperative, Center for Health Studies • Kaiser Permanente, Denver • American Airlines, Dallas

37. Results-HRA Response Disposition The effect of intensity of recruitment effort on response disposition Overall cumulative response rate was 26.4% % IVR interview with one or two mailings Telephone interview with no incentive or $20 incentive Source: Wang, et al. Medical Care, 2002;40:752-760

38. Impact of Incentives and Marketing/ Communication on HA Completion • Data reflects: • Incentives/Marketing and communication • 78 companies in 3rd/4th Q 2003 • Total of 22,838 HA invitees • 77.1% of the variance in HA completion is explained by type of incentive and marketing and communication • Incentives • Low = e.g., merchandise awards, drawing, small gift, etc. • Medium = $25 gift certificate, prize drawings, etc. • Strong = e.g., mandatory, premium reduction, co-pay reduction, etc. • Marketing and communication • Low = e.g., very limited messaging, short timeline • Medium = “soft” messaging, no strategic communication plan • Strong = e.g., appropriate messaging, communication plan and timeline 100 92 2 Trend R = 0.771 90 80 64.5 70 61.5 60 Percentage completion 50 43.3 40 30 15.1 20 7.3 10 0 Low/Low Strong/Low Low/Strong Strong/Strong Strong/Medium Medium/Strong Medium/Medium

39. Conclusions • Modifiable health risk factors are associated with health care expenditures and productivity • Health assessments (HA) can be used to measure modifiable health risks • HA can be used to project associations between health risks and costs • Incentives work

40. Thank you Nico Pronk, PhD Vice President, Center for Health Promotion Executive Leader, Health Behavior Group Research Investigator, HealthPartners Research Foundation HealthPartners, Inc. 8100 34th Ave. S., MS21111H P.O. Box 1309 Minneapolis, MN 55440-1309 Telephone: 952-967-6729 Fax: 952-967-6710 Email: nico.p.pronk@healthpartners.com Contact Information