Wellness in the Workplace

Benefits Forum 2005

Atlanta Association of Health Underwriters

February 17, 2005

William BurkeCapital Health Associates, LLC

James PriceHispaniCare, a division of DrTango

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Agenda

1. Common issues regarding “wellness”

2. Defining a wellness program

3. Critical Success Factors

4. Logic for investing in wellness

5. What’s different today from 1995

6. An interesting client example

7. Lessons learned

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Corporate CFOs expect that healthcare costs will be the biggest cost increase for their company.

Health Benefits:Top Management Concern

Top Three ConcernsFor 1,482 CFOs at companies with revenue of $500,000 to $1 billion

Employee healthcare plans 45% Technology spending 20%Employee recruitment/training 11%

Source: Robert Half Management Resources survey, USA Today, January 25, 2005, p. B-1)

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Typical Issues

• How Do You Invest in a Wellness Program That Provides Return?

• What Is the Best Allocation of Wellness-type Resources?

• What Is the Timeframe Most Suited for an Effective Wellness

• Program to Produce Return on Investment?

• What Company Profile Is Best Suited for a Wellness Program?

• What Is the Best Step Taken in Implementing a Wellness

• Strategy That Establishes Buy-in and Results?

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Our Assumptions

Companies do not want to• Invest in extending the life of a 20-year old

Companies do want to• Provide resources to prevent unnecessary

health care costs

• Provide resources to prevent individuals from developing costly medical conditions

• Educate their employees as responsible health care purchasers and users

• Help employees with a chronic condition optimize their wellness

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How Does It Work Really?

Incentives• Financial• Non-financialDirectivesCultural MotivatorsBenefit Plan Design

Providing programs and tools that Providing programs and tools that empower People with information empower People with information

that encourages and supports them that encourages and supports them to take a more active role in their to take a more active role in their

health carehealth care

Providing programs and tools that Providing programs and tools that empower People with information empower People with information

that encourages and supports them that encourages and supports them to take a more active role in their to take a more active role in their

health carehealth care

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IdealHealth

WorriedWell

Mod. ToSevere

ChronicallyIll

Sick, NotYet

Diagnosed

MildChronically

Ill

Segmenting your Covered Lives and Addressing each Segment’s Needs

Population Health Management/Wellness

DiseaseManagement

Prevention (for well people)

Awareness Compliance

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Different Approach, Different Results Different Approach, Different Results

Health Maintenance VS Risk Management

• Have a problem, Fix It• Minimal organizational

commitment• Standard Plan Design• Willingness to allow benefit

plan design to control costs

• Assume there is Risk –

Find It, Fix It• Organizational Dedication• Wellness Integrated into

Plan Design

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Predictive Modeling

Self AssessGuides

Cost/Impact

Invasive HRAs

Non-invasiveHRAs

Group Programs

DiseaseManagement

Health Library

News LettersNutrition &ExerciseEvaluators

Self- reportingTools/Programs

IndividualizedPrograms

HealthCoaching

HealthFairs

Claims Analysis

Workshops

Program Complexity

Less More

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Factors affecting Investment in Wellness

• Industry Segment• Budget• Employee Turnover• Workforce Composition• Worker’s Compensation Claims• Employee communications culture• Medical claims• Current benefit plan design• Centralized Workforce

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• Understand Client’s Goals and Objectives on Cost &

Impact• Willingness to Invest and Timeframe for ROI• Get Management’s Sponsorship• Develop a Communication Plan• Measure the Program Participation and the Outcomes• Reporting on the Aggregate and for the Individual• Aggressive Follow-up on High-cost & chronically ill

enrollees• Choice-oriented Programs• Strong Linkage to Health Benefits• Privacy, Privacy, Privacy

Critical Success Factors

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Changes over past 10 years

1. Real healthcare costs per employee have tripled….so dollar value of 10% savings has tripled

2. Realization that chronic conditions drive healthcare costs

3. Realization that behavior change is required

4. Behavior change is hard to effect

5. Current health outcomes (awareness, status, process) are poor

6. The nation’s workforce is becoming very multi-cultural

7. Most people access the Internet

8. Explosion of Internet-based health/wellness applications…at very low costs

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People with Chronic Conditions: 31% of total population have 64% of costs

$1,224

$634

$1,918

$4,352

All adults None One Two or more

Source: Fishman, et al, “Chronic Care Costs in Managed Care,” Health Affairs, May/June 1997, page 243

Enrollee Cost by Age 35–44, 1992

Group Health Coop., Puget Sound

Distribution of:

Enrollees 100% 69% 23% 8%

Health Care Costs 100% 36% 36% 28%

Chronic Conditions

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Chronic Conditions Accumulate with Age, Driving Costs

$1,444

$407$877 $788 $1,136

$2,081

$3,590

$4,723

$5,795

$179

$644

$444

$426

$446$436$431

$419

$562

All adults 18–24 25–34 35–44 45–54 55–64 65–74 75–84 85+

People without a Chronic ConditionPeople with 1+ Chronic Conditions

Enrollee Cost by Age, 1992

Group Health Coop., Puget Sound

Source: Fishman, et al, “Chronic Care Costs in Managed Care,” Health Affairs, May/June 1997, page 243

38% 21% 30% 31% 38% 49% 62% 71% 72%People with 1+ condition

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Importance of Weight Management for Employers

45%

36%

17%

Normal Overweight Obese

Prevalence of Weight Status, Adults with Commercial Insurance

13%

37%

Overweight Obese

Increase in Adult per Capita Medical Spending Attributable to Weight

(Commercial)

Total Medical Expenditures due to Overweight/Obesity: 8.2%

$12-15 PMPM cost for typical commercial plan

Source: Health Affairs, May 2003

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Relative risk of Selected Obesity-Related Diseases

Relative Risk, by BMI

< 25 25 – 28.9 > 29

“normal” “overweight” “obese”

Men

Hypertension 1.0 1.9 2.6

Type 2 Diabetes 1.0 2.6 10.4

Coronary heart disease 1.0 1.4 2.4

Women

Hypertension 1.0 2.3 3.8

Type 2 Diabetes 1.0 4.4 48.9

Coronary heart disease 1.0 1.7 3.0

Source: Oster et al, “The Clinical and Economic Burden of Obesity in a Managed Care Setting,” The American Journal of Managed Care, June 2000.

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• Probability of diabetes, newborns:• 33% all American• 50% for Hispanics

• More than most other issues diet & health

driven by culture and language

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Self-Management by Diabetics, NYC (2002): Currently Very Poor

WellControlled

PoorlyControlled

Don't Know

Source: NYC Vital Signs, January, 2003

Well Controlled: 2%

Poorly controlled &Don’t know: 98%

Blood Sugar Control (A1c)

Normal

High-normal

High

Don't Know

Normal & High-Normal: 11%

High & Don’t Know: 89%

Blood Pressure

Normal

High

Don't Know

Normal: 7%

High & Don’t Know: 93%

Cholesterol

60

40 3+ Times

Under 3 Times

Weekly Exercise

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“Minorities”: Driving population growth with Employer-Sponsored Insurance

Source: Census data; HispaniCare analysis

Demographic group 1990 2002 Growth

White non-Hispanic 123.3 130.8 7.6 6%

Hispanic 8.9 16.7 7.8 88%

African-American 13.6 18.8 5.2 38%

Asian 3.9 7.6 3.7 95%

Other 0.6 1.3 0.7 117%

Total 150.2 175.2 25.0 17%

Total “minority” 26.9 44.4 17.5 65%

Hispanic share 6% 10% 31%

Total U.S. Population with Employer-Sponsored Insurance (in millions)

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35%

52%56%

White (non-Hispanic) Hispanic African-American

Source: Harris Interactive, 2003 (Feb 2003 survey)

Percent of ALL Adults who have sought health information online

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Web-based Smoking Cessation Program• Online Quit Program, including

– 11 dynamic exercises– Results stored in personal Glove Compartment– Quit Diary to track progress– Quit Stats: money saved, cigarettes not smoked, life gained

• 11-week Outbound Motivational Email Campaign• Printable Dependency Test• Follow-up email at 1, 6 and 12 months to assess

abstinence• Expert-moderated chat rooms

• Public Pledges • Gallery of Quitting Tips • Anniversary Celebrations

Smoking Cessation Program Highlights

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Consumer-Directed Healthcare

Objective Key capability required

Make informed decisions

Knowing one’s own health status

Understanding relevant conditions and potential tests/procedures

Evaluating cost implications of alternative care options

Appropriately use health care providers

Understanding when to use a provider (versus self-care)

Knowing what to expect (and ask) of one’s physician

Self-manage Understanding one’s role in personal health

Tools to change one’s behavior

Tracking of personal performance

Objective: Help members make informed decisions, appropriately use providers, and self-manage

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Example Page from Lab-Test Driven HRA

Links to targeted content (driven by lab value) within health portal

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Diet & Exercise Self-Management

Diet & Exercise Evaluation

Wellness Management (Menu & Exercise Planner)

E-mail Newsletter (encourage change)

Food Shopping List

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Member-Personalized Weekly Newsletter

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What We Don’t Know Yet:

1. Net present value to the employer of each wellness “success”:

a. 35-year old whose BMI is reduced from 30 to 25b. 45-year old who stops smokingc. 50-year old diabetic who becomes compliantd. 40-year old depressive who responds well to treatment

2. Value of Health Insurance with a distinctive wellness component to the typical employee (for whom minimal claims are incurred in a given year), in terms of recruitment, retention, sick days, “presenteeism”

3. Incremental return of adding human counseling to web-based tools

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Robert Wood Johnson Health e_Technologies Research Project

Overall Goal: Rigorously evaluate the ability of the MiDieta™ (MyDiet) eHealth portal to facilitate improved diets, increased fitness-levels, and weight-loss among U.S. Hispanics.

Settings: Managed care (AtlantiCare, BCBS-FL) and Hospitals (Tenet, CHRISTUS)

Design: * Formative Research (6 m)* Randomized Trial (12 m)* n = 500 among four groups (at least)

Subjects: Overweight online Hispanics attending clinic / enrolled in managed care plan

Currently recruiting 2-5 employers by March 31

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As a former VP-HR, I would:

1. Provide my employees with information to understand healthcare, increase awareness/interest, and help them make better decisions

2. Offer an inexpensive (but extensive-looking) basic wellness program/portal with:

a. Diet and exercise plannerb. Smoking cessationc. Depression supportd. Stress/anxietye. Guides for common chronic conditions

3. Increase awareness via:

a. Web-based Health Risk Assessmentb. Personalized weekly health newsletterc. Health fairsd. Incentives

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As a former VP-HR, I would:

4. Explore:

a. Lab-test based Health Risk Assessmentb. Intensive support/tools for employees with chronic conditionsc. Offering employees (particularly those at high-risk or already

with a chronic condition) a Personal Health Recordd. On-site primary care

5. Document all outcomes, for future ROI discussions with the CFO

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Questions

Contacts

Bill Burke(770) 579-8323WBurke@Cap-Health.com

Jim Price(678) 242-6778JPrice@HispaniCare.com

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Appendix

• Slides we couldn’t delete

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Number of People in U.S. that Speak at home….

0.7 0.7 0.9 1 1 1.2 1.4 1.6 2

Polish

Russian

Korean

Italian

Vietnamese

Tagalog

German

French

Chinese

Spanish?

The Importance of Language

Source: Census data; HispaniCare analysis

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0.7 0.7 0.9 1 1 1.2 1.4 1.6 2

28.1Polish

Russian

Korean

Italian

Vietnamese

Tagalog

German

French

Chinese

Spanish

Spanish!

Number of People in U.S. that Speak at home….

Source: Census data; HispaniCare analysis

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INSURED Hispanics Very sick, did NOT seek medical care

15

1930

0

5

10

15

20

25

30

NH-White English-Hisp. Spanish-Hisp

Source: Commonwealth Fund, Feb 2003

Percent

Language and culture are particularly relevant for health issues

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INSURED - Easily understands instructions on prescription bottle

83 77

55

0

20

40

60

80

100

NH-White English-Hisp. Spanish-Hisp

Source: Commonwealth Fund, Feb 2003

Percent

Language and culture are particularly relevant for health issues

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…results in Sub-optimal utilization of medications by Hispanics

Of 100 Sick, insured Spanish-speaking Hispanics:

70% go to doctor, and of these, only 55% adequately understand English

Instructions on the bottle.

Thus, due to these two factors alone,

Just 39* of the original 100 are getting and properly understanding the medications they need

*(100 x 0.7 x 0.55 = 39)

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“Go Online” by race

46%48%

64%

35%

40%

63%

30%

40%

50%

60%

70%

80%

Mar-00 Feb-01 Jan-02 Mar-03 Feb-04

Whites

Blacks

Hispanics

Pew Internet Study, 2004.

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35%

52%56%

White (non-Hispanic) Hispanic African-American

Harris Interactive 2003

Percent of ALL Adults who have sought health information online

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HispaniCare

Mission

Provide healthcare organizations with online:

Communications, Marketing, Health improvement

solutions

Strategy Best of breed solutions Culturally & linguistically

adapt each solution Integrate & customize