The Health, Economic, and Legal Implications of Successful Worksite Wellness Programs

Presented by:Don R. Powell, Ph.D.President and CEO

American Institute for Preventive Medicine

Total Employee/Employer Health Care Costs: 2002 - 2007

Source: Towers Perrin 2007 Health Care Cost Survey

2002 Total Cost = $5,386 2007 Total Cost = $8,748

$1,896

$6,852

Employee

Employer

$1,044

$4,342

Employee

Employer

Health Insurance Premiums vs Other Indicators

Source: Kaiser Family Foundation, 2005

If Food Were Health Care

If food prices had risen at medical inflation rates since the 1930’s:1 dozen eggs $ 80.201 pound apples $ 12.231 pound sugar $ 13.701 roll toilet tissue $ 24.201 dozen oranges $107.901 pound butter $102.071 pound bananas $ 16.041 pound bacon $122.481 pound beef shoulder $ 43.571 pound of coffee $ 64.17

10 item total $586.56

Source: American Institute for Preventive Medicine, 2007

How Companies Are Responding to Increased Health Care Costs

% of companies

Increased participant cost

Participant pay more for prescription drugs

Switched providers

Source: Society for Human Resource Management, 2006

Increased copays

Increased deductibles

Offer wellness program

66%59% 56% 55%

31%

62%

Issues Most Affecting Employee/Member Productivity

Stress Personal/ Family

Chronic medical conditions

Unscheduled absences

Presenteeism Lifestyle medical conditions

Source: Watson Wyatt, 2005

57%58%59%

72%

49% 49%

0

10

20

30

40

50

60

70

80

10 Most Purchased Products in Grocery Stores

1. Marlboro cigarettes2. Coke Classic3. Pepsi4. Kraft cheese5. Diet Coke

6. Tide7. Campbell’s soup8. Folger’s coffee9. Winston cigarettes

10. Tropicana

The Cost of Unhealthy Behavior

Steelcase1 Dupont2 Chrysler3

Smoking $285 $960 $342

Weight $222 $401 $410

Exercise $488 N.A. $ 96

Alcohol $597 $389 NA

Seatbelts $196 $272 $226

Hypertension $327 $343 $ 94

Cholesterol $189 $370 $118

Sources: 1. American Journal of Health Promotion, 19912. American Journal of Health Promotion, 19933. Milliman & Robertson, 1995

High Risk Employees Cost More

70.2%

46.3%

34.8%

21.4% 19.7%14.5% 11.7% 10.4%

-50%

-25%

0%

25%

50%

75%

100%

Dep

ress

ion

Stre

ss

Glu

cose

Wei

ght

Toba

cco-

Past

Toba

cco

Blo

odPr

essu

re

Exer

cise

Perc

ent

Source: Journal of Occupational and Environmental Medicine, Oct. 1998

Association of Risk Levels with Several Corporate Cost Measures

Outcome Measure Low Risk (N-671)

Medium Risk (N=504)

High Risk (N=396)

Short term disability $120 $216 $333

Worker’s compensation

$228 $244 $496

Absence $245 $341 $527

Medical & pharmacy $1,158 $1,487 $3,696

Total $1,751 $2,288 $5,052

Source: Wright, Beard, Edington, JOEM 44(12): 1126-1134, 2002

Health Risks & Health Care Costs

$2,516

$3,253

$4,043

$0

$1,500

$3,000

$4,500

Low Risk Moderate Risk High Risk

Ave

rage

Med

ical

Cos

ts -

2003

(0-2 Risks) (3-5 Risks) (6+ Risks)

N = 1,706

Source: Fairview Alive Program Evaluation (StayWell, 2004)

Savings Per Employee (2001 – 2003)

$41

$282

$54$101$36

$107

$17

$75

$45

$0

$100

$200

$300

$400

$500

2001 2002 2003

Medical Absenteeism Workers' Comp

Source: Fairview Alive Program Evaluation (StayWell, 2004)

Review of Published Studies on Worksite Wellness (ROI)

$0

$1

$2

$3

$4

$5

$6

28 Studies1 42 Studies3 56 Studies418 Studies2

Medical Costs

Medical Costs, Absenteeism, & Workers Comp

Medical Costs & Absenteeism

1. Source: Aldana, SG, Financial impact of health promotion programs: a comprehensive review of the literature, American Journal of Health Promotion, 2001, volume 15:5: pages 296-320.

2. Source: Aldana, SG, Financial impact of health promotion programs: a comprehensive review of the literature, American Journal of Health Promotion, 2001, volume 15:5: pages 296-320.

3. Source: Chapman, LS, Meta-evaluation of worksite health promotion economic return studies, Art of Health Promotion, 2003, 6:6, pages 1-16.

4. Source: Chapman, LS, Meta-evaluation of worksite health promotion economic return studies: 2005 Update Art of Health Promotion, 2005, p. 1-16.

Absenteeism

Prevalence of Worksite Wellness Programs

Source: SHRM 2006 Benefits Survey Reports

Resources & Information

Health Screening Program

Smoking Cessation

Health Newsletter

Fitness Center Subsidy

Weight Loss

Onsite Fitness Center

Stress Management

Risk Factors for Every 100 Employees/Members

25 have cardiovascular disease12 are asthmatic6 are diabetic26 have high blood pressure30 have high cholesterol38 are overweight21 smoke31 use alcohol excessively20 don’t wear seatbelts24 don’t exercise44 suffer from stress

Source: Department of Health and Human Services

Wellness Wizard®

Determine your employee’s health risks, costs, and savings

1. Make the Program Multi-Component

Assessment activitiesCommunication materialsSelf-help materials/programsHealth CoachingGroup programs

2. Teach Demand Management

Medical self-careWise consumerism

Physician Office Visits Annually

Total - to non federally employed, office based physicians

964 million Approximately 3.3 visits/person

Source: National Ambulatory Medical Care Survey-2007

Unnecessary Visits25% or 241 million

Source: Dunnell, K. and Cartwright, C. Medicine Takers, Prescribers and Hoarders

Average cost - $121/visitSource: American Medical Association, 2001

Emergency Room Visits Annually

Total 115 million37.8 visits/100 persons

Source: National Ambulatory Medical Care Survey - 2005

Unnecessary Visits55% or 63 million

Source: National Ambulatory Medical Care Survey - 2005

Average cost - $586/visitSource: New England Journal of Medicine, 1996

HealthyLife® Self-Care Studies

“Health at Home® was the reason I went to see my doctor and it saved my life.”

Jeff BilbreySales Specialist, Lowe’sBloomfield Hills, Michigan

“Health at Home®

was a real lifesaver. It helped me to know my husband, Jay, was having a heart attack.”

Marijo Parsons Pharmacy SupervisorAurora Medical CenterMilwaukee, WI

Self-Care Program ROI Analysis

Cost of self-care guidesComparison to annual health expendituresUtilization & cost assumptionsProjected cost savings

3. Present Psychosocial Issues

Self-esteemAnger managementDepression managementLaughter workshops

4. Address High Risk Employees

Address Low Risk Employees

Keep healthy people healthyLow risk employees won’t remain low risk10 – 20% will move to high risk in 1 year

Source: University of Michigan Health Management Research Center

5. Manage the Health Care Continuum

Prevent Low Risk from Becoming High Risk

Help High Risk Become Lower Risk

55%

WellnessManagement

HealthyNo Disease

25%

RiskManagement

HypertensionObesity

DemandManagement

Doctor VisitsER Visits

15%

DiseaseManagement

DiabetesAsthma

5%

CatastrophicIllness

ManagementCancer

Head Injuries

No / Low Cost Wellness Programs

Weight controlPhysical fitnessSmoking cessationStress managementNutritionTotal Health

6. Use High Tech as an Adjunct to High Touch

No data to support cost savingsOnly 50% of U.S. population has internet accessOnly 25% goes online for health informationSome intranets can only be accessed at workMay not reach dependentsTime consumingMany people still prefer printEmployees thank you for books

7. Maximize Employee Participation

Multi-component methodsSaturation effect Incentives

8. Involve Employee’s Family

70% of health care costsWomen make 80% of health care decisions

9. Know Legal Restrictions

Americans with Disabilities Act (ADA)Health Insurance Portability and Accountability Act (HIPAA)

10. Evaluate Your Program

Risk Factors

Absenteeism

Productivity/ Presenteeism

Employee Satisfaction

Financial

Wellness Program

Participation

Thank you for your attention.

Questions?Phone: 800-345-2476, extension 221

Fax: 248-539-1808

E-mail: dpowell@HealthyLife.com

Web Site: www.HealthyLife.com