Making a Business Case for Wellness Diane Andrea, RD, LD Wellness Consultant
Overview of Presentation 1 Cost of unhealthy behaviors 2 Return on Investment 3 Biggest bang for your wellness buck
What is Workplace Wellness? An organized, employer-sponsored program that is designed to support employees (and, sometimes, their families) as they adopt and sustain behaviors that reduce health risks, improve quality of life, enhance personal effectiveness, and benefit the organization s bottom line. Harvard Business Review
Average Total Health Care Costs Per Employee $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 actual 1993 1997 2001 2005 2008 2010 2012 2014 2015 2017 Centers for Medicare and Medicaid Services
Average Total Health Care Costs Per Employee $14,000 $12,000 $14,000 $10,000 $10,982 $8,000 $6,000 $4,000 $2,000 $0 actual projected 1993 1997 2001 2005 2008 2010 2012 2014 2016 2018 Centers for Medicare and Medicaid Services
Biggest Challenges to Maintaining Affordable Benefit Coverage Poor employee understanding of plan Escalating cost of specialty drugs Underuse of preventive services High-cost catastrophic cases Employees poor health habits 0% 10% 20% 30% 40% 50% 60% 70%
Percent of Chronic Diseases That Are Caused by Poor Lifestyle 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 91% 82% 71% 70% Cancers Stroke Heart Disease Diabetes Sources: Stampfer, 2000; Platz, 2000; Hu, 2001
What Does Your Organization Look Like? 25 have cardiovascular disease 12 are asthmatic 6 are diabetic 26 have high blood pressure 30 have high cholesterol 38 are overweight 21 smoke 31 use alcohol excessively 20 don t wear seat belts 24 don t exercise 44 suffer from stress
Increased Costs Healthcare costs for smokers $5,816 Healthcare costs for obese $1,400 Healthcare costs for diabetes $6,600
Excess Claims for Each Additional Health Risk $12,000 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 $2,400 $4,000 $5,000 $6,500 $7,800 $9,000 $10,500 0 1 2 3 4 5 6 7+ $11,900 Source: Dee Edington, Health Management Research Center
Average 1997-1999 Medical Care Costs $10,500 $9,000 $7,500 $6,000 $4,500 $3,000 $1,500 $0 10,095 9,221 6,664 7,268 3,432 4,130 5,445 3,601 2,025 2,741 $3,366 $4,319 $1,247 $1,515 $1,920 <35 35-44 45-54 55-64 65+ 5+ risks 0-2 risks Source: StayWell Health Management N=43,687
Percent with Worker s Comp Claims 14% 12% 10% 8% 6% 4% 2% 0% 12% 9% 6% 0-2 risks 3-5 risks 5+ risks Source: StayWell Health Management N=23,916
Percent with Short Term Disability Claims 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 18% 12% 9% 0-2 risks 3-5 risks 5+ risks Source: StayWell Health Management N=23,916
Days Absent 10.0 9.0 9.0 8.5 8.0 7.6 7.0 6.0 0-2 risks 3-5 risks 5+ risks Source: StayWell Health Management N=941
Absenteeism Normal weight w/o chronic conditions 4 days a year Obese or overweight w/o chronic conditions 4.3 days a year Obese or overweight with 1 2 chronic health conditions 13 days a year Obese or overweight with 3+ chronic health conditions 42 days a year
Impact of Poor Health on Employer Costs Absenteeism 6% Worker s Comp 9% Health Care Cost 25% Presenteeism 60% Edington, Burton. A Practical Approach to Occupational and Environmental Medicine 140-152. 2003.
Health Conditions Contributing to Lost Productivity Depression Anxiety Migraines Respiratory illnesses Arthritis Diabetes Back and neck pain
Approximate Percentage of Annual Workload Lost by Risk Condition Risk Condition Absenteeism Presenteeism Total % Diabetes 4.94% 18.26% 23.2% Depression 2.61% 14.51% 17.12% Alcohol abuse 5.00% 4.78% 9.78% Overweight/obese 1.40% 8.30% 9.70% High cholesterol 3.14% 4.91% 8.05% Cigarette smoking 2.84% 4.78% 7.62% High stress 3.08% 4.45% 7.53% Arthritis 2.36% 4.90% 7.26% High blood pressure 0.37% 5.70% 6.07% Asthma 4.80% 1.20% 6.00%
Well-Being Life evaluation Emotional health Physical health Healthy behaviors Work environment Basic access Healthcare Outcomes Medical and Rx spend ER visits Hospitalizations Bed days Productivity Outcomes Absenteeism STD Presenteeism Job performance Retention Outcomes Intention to stay Voluntary turnover Involuntary turnover Population Health Management 2013
Results Health Care Outcomes: Medical and Rx spend $2,038 low score $1,181 high score Productivity: Unscheduled absences 3.96 days low score 1.79 days high score Productivity: Presenteeism (self score) 32.75% low score 9.81% high score Retention: Intention to stay (0-100) 65.08 low score 83.39 high score
Employees Find Value Participated in one or more wellness program 66% say benefits are very valuable Non-participant 51% say benefits are valuable
Return on Investment (ROI) $6.00 $5.82 $5.00 $4.00 $3.00 $2.00 $1.00 $3.48 $1.00 $1.00 cost savings $0.00 Health Care Costs Absenteeism
Return on Investment in Various Programs Health risk assessments $6.04 Fitness programs $4.90 Wellness coaching $4.90 Smoking cessation $3.50 Flu shots $2.10 Obesity management $1.17
RAND Study Findings Smoking Cessation Physical Activity Fruit and Vegetable Consumption Body Weight Changes
More Studies Johnson & Johnson Smoking decreased by 1/3 Physical inactivity decreased by ½ Blood pressure decreased by ½ MD Anderson Cancer Center Lost work days declined 80% Worker s compensation premiums declined 50% HBR December 2010
Risk is Not Static High Risk Moderate Risk Low Risk 2% - 4%
Annual Savings High Risk Moderate Risk $153 Low Risk $350
15 Chronic Diseases Diabetes Coronary Artery Disease Hypertension Back Pain Obesity Cancer Kidney Disease Asthma Arthritis Allergies Sinusitis Depression Congestive Heart Failure Lung Disease (COPD) High Cholesterol
8 Risks and Behaviors Poor diet Excessive alcohol Physical inactivity Insufficient sleep Smoking Poor standard of care Poor stress management Lack of health screening
Percent of Employers Offering Specific Interventions Nutrition/weight intervention 79% Smoking - 77% Fitness 72% Alcohol/Drug abuse 52% Stress management 52% Health education 36% Other 5%
Focus on Poor Diet Obese 46% increase in inpatient costs 27% more physician visits and outpatient costs 80% increased spending on Rx Programs Annual physical HRA On-site screenings On-site Weight Watchers Health coaching
Top Tactics to Drive Results Offer incentives or disincentives to motivate sustained health care behavior change (61%) Promote a culture of health in the workplace (48%) Implement a company-wide wellness policy and guiding principles (48%) Move to rewarding improved health results or outcomes (44%) Promote other consumer-driven plan strategies (31%)
Top Tactics in Future Use of internal and external social networks to promote health (49%) Managers performance goals tied to wellness success (47%) Summit meetings with all health-related vendors (44%) Tracking or reporting health risks and wellness statistics by business unit or location (39%) Domestic wellness policy and guiding principles (38%)
Top Focus Areas of Employer s Health Care Strategy in 2013 Develop a workplace culture where employees are accountable and supported for their health and well-being - 40% Stay up to date and comply with PPACA 34% Educate employees to be more informed consumers of health care 33% Adopt/expand the use of financial incentives to encourage healthy behaviors 32% Develop/expand healthy lifestyle activities 24%
Resources
Cost Analysis Wellsteps.com ROI calculator Welcoa.org EconoHealthROI www.welcoa.org/store/econohealthroi/econohealth
Cost Calculators Alcohol www.alcoholcostcalculator.org/roi Obesity www.cdc.gov/leanworks/costcalculator
Cost Calculators Depression www.depressioncalculator.com Physical Inactivity www.ecu.edu/picostcalc Tobacco www.businesscaseroi.org/roi/default.aspx
Conclusion 1 Chronic disease costs 2 3 Well-designed wellness programs are successful Healthier employees are happier employees
Diane Andrea J.W. Terrill Wellness Consultant Q&A (314) 594-2704 dandrea@jwterrill.com Copyright / Legal Disclaimer
Employee Participation Rates 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 46% 46% Health Questionnaire Screening 21% Fitness Activity 7% Smoking Cessation 10% Weight Program 16% Disease Management