snook - why employers are missing the mark with wellness
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Why Employers are Missing the Mark with Wellness
Matthew L. Snook, Principal813.207.6310
1© 2010 Mercer, all rights reserved
Discussion Topics
Background – the problems to address
Why wellness?
What is “wellness?”
So what’s the problem?
How to do it differently
Background – the problems to address
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Health status driven by behaviors
Determinants of Health Status
20%
10%
50%
20%
Access Genetics Environment Behavior
Source: Institute for the Future, Centers for Disease Control and Prevention
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Evolution of a health plan participant…
Source: The Economist
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…and the health status impact of those behaviors
10.044.664.55 2.5917.199.94 8.51 5.22Osteoarthritis
64.5348.95 34.1623.47 63.1647.95 38.7723.26 High Blood Pressure
13.9716.01 9.60 8.84 19.2212.5611.136.87 Coronary Heart Disease
10.6510.104.932.0319.897.24 7.12 2.38Type 2 Diabetes
Prevalence Ratio (%) – MenPrevalence Ratio (%) – WomenMedicalCondition
> 4030 to 3925 to 2918 to 24> 4030 to 3925 to 2918 to 24
Body Mass IndexBody Mass Index
Prevalence of Medical Conditions by Body Mass Index (BMI)
Source: NHANES III, 1988 - 1994.
So why wellness anyway?
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Why Wellness Internally/Externally?What we’ve heard…
It’s the “right thing to do”
Improve recruitment
Create a “culture of health”
Reduce workers’compensation costs
Reduce health care costs
Be an “employer of choice”
Minimize turnover/improve retention
Improve morale
Improve community perception
Generate revenue/referrals
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Questions to ask yourself…
Why are you engaged in wellness and do you want to be engaged inwellness?
What business issues are you trying to address?
How will you know if you are successful?
Have you been successful?– If yes, how do you know? – Do you have the data/information to support success?
What program model best matches your desired outcomes?
What is “wellness?”
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Population Health BreakdownNumerous groups to address
Healthy At Risk Chronic Conditions
Catastrophic Conditions
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Managing population health is a BIG job!Traditional thinking regarding program categories
The Spectrum of “Population Health
Management”
Wellness Disease Prevention
Disease Management
Case Management
Focus on general health maintenance
and improvement
of whole population
Focus on prevention,
usually addressing
specific health risks
Focus on health
improvement for those with
specific conditions
Focus on management
of large/ catastrophic
claimants
So what’s the problem?
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Claims DistributionSmall percent of the population drives the cost
53%
10%
25%
35%
19%
50%
5%
3%
% of Employees % of Claims
Population Costs
Source: Mercer Proprietary Data
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Managing Across the Health ContinuumWhere does the CFO want your focus?
Healthy At Risk Chronic Conditions
Catastrophic Conditions
15% of members = 75% to 85% of cost
85% of members = 15% to 25% of cost
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Managing Across the Health ContinuumWhere does the CFO want your focus?
Healthy At Risk
85% of members = 15% to 25% of cost
Conclusion: If your “wellness” program is focusing primarily or solely on general health maintenance and improvement for your whole population, rather than the specific individuals and issues driving your claims costs, positive and significant ROI may never be achieved.
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“Return on investment for wellness initiatives is uncertain, particularly for one-size-fits-all programs purchased from vendors with little
direct employer involvement.”
Programs that consist of nothing but a health risk assessment and web-based “let’s shape up!” tools, with no personalized follow-up such as health coaching, are the most likely to fail.
The health message needs to come from the top, and senior leaders need to “communicate clearly and honestly with employees about shared goals and responsibilities of health and wellness.”
Programs to help workers stop smoking or lose weight aren’t likely to produce lasting results unless there are broader changes to the work environment– such as an end to the plate of muffins at meetings and remodeled, more appealing stairwells.
Any investment in wellness programs will likely take “several years” to pay off, if it ever does.
Study by Center for Studying Health System Change
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Another problem…The more complex, the less prevalent
Complexity
Pre
vale
nce
HRA
Completion
Wellness/Behavior
Modification
Program
CompletionCare Management
Program
Completion
Treatment
Protocol
Compliance
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While measurement of the medical claims impact directly attributable to even the most effective health management interventions can be very, very difficult, measurement of the more likely areas of impact…
Decreased absenteeism
Improved presenteeism/workplace productivity
…can be even harder
One other issue
How to do it differently…
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Total Health Management (THM)
Total Health Management includes all of the actions an employer can take to engage and support employees in making good choices to avoid all of the costs and consequences of poor health.
Design• Programs designed to facilitate greater engagement, compliance and sustained
utilization of higher quality providers and treatment options Stakeholder Engagement• Hold all parties accountable – organization leaders, employees, dependents and
vendors – to achieve success through continued improvementProgram Integration• Bring all data, systems and programs under one real-time, comprehensive participant
focused umbrella
Definition:
Three essential building blocks:
20
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THM creates a holistic view of illness and productivity
The Total Cost of Illness
Indirect cost of absence = 2.5% of payroll
Direct non-occupational absence cost = 3.5% of payroll
Health care benefits cost = 17% of payroll
Total expense = 23% of payroll
+
* Assumptions:• 5,000 employees• $48,000 average salary
Sources: Mercer’s National Survey of Employer-Sponsored Health Plans; Mercer’s Survey of Health, Productivity and Absence Management Programs
$55M Health & absence costs
$240M Payroll*
Goals of a holistic view:
■ Understand what’s driving current health & disability costs, absenteeism, productivity losses
■ Identify magnitude of future expenses - “ticking time bombs” who may or may not appear in claims data – but who will have a significant future expense
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The Art & Science of THM
Science – what you implement– Make sure the programs are effective and science-based– Make sure the programs address your specific needs
Art – how you implement it– Wellness is tied to the business, leadership is on board and corporate policies
and practices support a healthy culture– Program policies and procedures are documented and an accountable
infrastructure is in place– Program variety is offered and participation options are varied– Effective mass and targeted communications are used (and relentless) to
keep the message in front of people and valued incentives are selected– Program status information is collected and reported to key stakeholders– Continual input and feedback is obtained from various key stakeholder groups
More Science – measuring results
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The cultural shift required for effective THM
A paradigm shift needs to occur that transcends
From: To:
Employees feeling a responsibility for maintaining good health, and preventing disease and illness.
Employees feeling an entitlement to coverage when they are sick
Budgets including funding for programs that change outcomes and reward results
Dollars being spent only on sick employees
Leaders modeling best-practice behaviors
Leaders following talking points
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Getting Started Analyze data
2%
3%5%
10%11%
13%
14%21%
23%
24%25%
32%39%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
High Blood Glucose
High Alcohol UseReported Depression
Current Tobacco User
Safety BeltPerception of Health
High CholesterolHigh Blood Pressure
Former Tobacco User
Life SatisfactionInactive
High Stress
High Body Mass Index
* Actual client data.
Health Risk Distribution
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And Why That Matters…
XXXX8. High Blood Pressure
XXX10. High Cholesterol
XXX9. Reported Depression
XXXX7. High Blood Glucose
XXXXXX6. High Alcohol Use
XXXXXXX2. High Stress
XXXXXXXX1. Current Tobacco User
Cirrhosis
X
X
Injuries/ Accidents
X
X
Low Back Pain
X
X
X
High-risk Pregnancy
X
COPD
X13. Perception of Health
12. Safety Belt use
X11. Life Satisfaction
XXXX5. Inactivity
XXXX4. Former Tobacco User
XXXX3. High Body Mass Index
StrokeGastro-
Intestinal Disease
DiabetesDepressionCardiovasc. DiseasesCancerAsthma
The Correlation of Health Risks and Disease
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HERO Best Practice Scorecard© (v.3)Free employer tool to assess THM practices
20012945Total Score
11536: Measurement and Evaluation
6741105: Engagement Methods
5637204: Programs
221253: Program Level Management
332622: Leadership Engagement
11851: Strategic Planning
Total Points PossibleNational AverageCompany ABCSection
Link to HERO Scorecard: http://mercer.inquisiteasp.com/cgi-bin/qwebcorporate.dll?idx=NPPY5J
Benchmark current THM practices against “best practice standards” –the lower the HERO score, the higher the savings opportunity
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Plan Design and IncentivesIssues and Considerations
Behavior Change is critical to achieving optimal outcomes and better management of health costs
Plan design and incentives are key to achieving specific changes in behavior
Principal areas of focus are:– Being Aware of Health Status – Health Assessment and Screenings– Preventing Illnesses – Immunizations and Maintenance of Healthy Lifestyles– Reducing Risks – Mitigating or Eliminating Unhealthy Behaviors– Accessing Right Care – Access and Use the Right Care, at the Right Time, from the
Right Providers– Complying with Treatment Regimens – Follow Through with What is Prescribed
Evidence/value-based design that focuses on creating total value is a guiding principle for strategy and program design
Approaches to Plan Design and Incentives can range from Mild to Moderate to Aggressive
Plan design and incentives must be supported by strong marketing campaign
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Plan Design and IncentivesEvolution
Plan Design and Incentives
Year #3
2013
Year #2
2012
Year #1
2011
Year #5
2015
Year #4
2014
Key Behaviors
Complying with Treatment Regimens– Follow Through with What is Prescribed
Accessing Right Care – Access and Use the Right Care, at the Right Time, from the Right Providers
Reducing Risks – Mitigating or Eliminating Unhealthy Behaviors
Preventing Illnesses – Immunizations and Maintenance of Healthy Lifestyles
Being Aware of Health Status –Health Assessment and Screenings
Goal is to ultimately develop an Evolving Long Term Approach
that more strongly reinforces appropriate behavior over time
Goal is to ultimately develop an Evolving Long Term Approach
that more strongly reinforces appropriate behavior over time
29© 2010 Mercer, all rights reserved
Broad Program DesignComponents across the health care continuum
Other Programs: Health advocacy (e.g., navigational, clinical and claims advocacy)Treatment decision supportHealth advisorWellness Champions Support Program
NICU & Maternity case management
Gaps in carePopulation Based CampaignPopulation Based Campaign
Care CoordinationSupplemental programsLifestyle Management (online)Immunizations & Screenings
Patient AdvocacyCore programs (CAD, COPD, Diabetes, Asthma,
CHF)
Lifestyle Management (telephonic)
Health portal
Resource ManagementPatient Identification (claims + HRA)
Patient Identification (claims + HRA)
Onsite seminars, worksite initiatives
High Cost Case ManagementDisease Management
Health Risk Management and Disease PreventionHealth Promotion
Acute Conditions (e.g., maternity, disability, self-diagnosed conditions, strains, sprains, colds)• Nurseline, self-care skills, employee assistance program, on-line resource, safety at home and work
Catastrophic ConditionsChronic ConditionsAt-RiskHealthy
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Structuring incentives to meet desired results
Moderate return;
Short- to mid-term paybackModerateReturn to Work – Returning to work early
from disability absences
High return;
Short-term paybackHighComplying with Treatments – Adhering to
treatment plans, medications
Moderate
Moderate
Low
Low
Impact Financial ROIKey Behaviors
High return;
Short-term payback
Accessing Right Care – Making good decisions about getting care at the right time, from the right providers
Moderate to high return;
Mid- to long-term paybackReducing Risks – Improving unhealthy behaviors
High return;
Short- and long-term paybackPreventing Illnesses – Preventive care, immunizations, healthy lifestyles
LowBeing Aware of Health Status – Health assessment, screenings
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CRITICAL issues we have no time to discussIncentive design and communications
Incentive design is challenging– Many, many designs and approaches– Reward good behaviors– Discourage bad behaviors– Carrot vs. stick?– Are you providing reward for folks already doing the “right things?” Should
you be?
Communications – May be the most critical aspect of THM other than the interventions
themselves– Must be ongoing, consistent, pervasive, multi-faceted, multi-lingual, and
relentless!
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