Does a Wellness program for your employees actually affect your bottom line? YES! See the details here!

1. Employee Wellness and Your
Bottom Line
Managing Health Care Costs
Presented to:
ABC Corporation
Presented by:
The Gifford Health Institute
Corporate
Health Care
Cost Containment
The Gifford Health Institute

2. Agenda
• Rationale for Worksite Health Promotion
Programs
– Why Wellness?
– Why the Worksite?
– What’s the Goal?
• Published Research on WHP Programs
– High Risk Employees Cost More
– WHP Programs Have an Impact
– Comprehensive Programs Have Positive ROI
• Bottom Line
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Health Care
Cost Containment
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3. Rationale for Worksite Health
Promotion Programs
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4. Rationale For WHP Programs
Why Wellness?
Health Spending in US
• Topped $1 trillion in 1996 ($1,035.1 billion)
• Doubles every 10 years
1960 $26.9 billion
1970 $73.2 billion
1980 $247.3 billion (tripled)
1990 $699.1 billion
2000 $1.3 trillion
• Forecast for 2010 is $3.07 trillion
Corporate
Health Care
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5. Rationale For WHP Programs
Why Wellness?
Increasing Costs
• Health plans raising premiums
• US Business share of health expenditures is 25%
• Approximately 50% of a company’s profits are
spent on healthcare benefits
• Productivity costs estimated at twice direct costs
Corporate
Health Care
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6. Rationale For WHP Programs
Why Wellness?
Lifestyle Accounts for 50% of Deaths
10%
20% Lifestyle
Environment
50%
Biology
Health Services
20%
Source: CDC (1980)
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Health Care
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7. Rationale For WHP Programs
Premature Death: Fact or Fiction?
Perceptions
Perceptions Reality
Reality
1. Cancer 30% 1. Tobacco Use 38%
1. Cancer 30% 1. Tobacco Use 38%
2. Heart Disease 29% 2. Obesity/Inactivity 28%
2. Heart Disease 29% 2. Obesity/Inactivity 28%
3. Auto Accidents 28% 3. Alcohol Abuse 9%
3. Auto Accidents 28% 3. Alcohol Abuse 9%
4. Tobacco Use 25% 4. Nonsexual Infectious 8%
4. Tobacco Use 25% 4. Nonsexual Infectious 8%
5. Alcohol Abuse 18% 5. Toxic Agents 6%
5. Alcohol Abuse 18% 5. Toxic Agents 6%
6. Drug Abuse 17% 6. Firearms 3%
6. Drug Abuse 17% 6. Firearms 3%
7. Firearms 15% 7. Sexual Behavior 3%
7. Firearms 15% 7. Sexual Behavior 3%
8. Obesity/Inactivity 9% 8. Auto Accidents 2%
8. Obesity/Inactivity 9% 8. Auto Accidents 2%
9. AIDS 8% 9. Illicit Drug Use 2%
9. AIDS 8% 9. Illicit Drug Use
Source: Partnership for Prevention. Based on
2%
Source: Partnership for Prevention. Survey of 1,000
research by McGinnis & Foege published in the
adults in March 2000. Percentage who described
Journal of the American Medical Association,
each as the leading cause of premature death.
November 10, 1993.
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8. Rationale For WHP Programs
Why the Worksite?
• Captive Audience
• Consistent Environment
• Social Support
• Organizational Support
• Employers Will Fund
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9. Rationale For WHP Programs
What’s the Goal?
• It’s Good for Business
• Employee Job Satisfaction
• Recruitment & Retention
• Enhance Competitiveness
• Decrease Absenteeism
• Decrease Workers Comp & Disability
• Manage Healthcare Costs
Corporate
Health Care
Cost Containment
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10. Published Research on
Worksite Health Promotion
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11. Published Research on WHP
What the Research Says
1. High Risk Employees Cost More
– Higher Costs
– Less Productive
2. WHP Programs Have an Impact
– Health Risks
– Medical Claims
– Absenteeism
– Disability
3. Comprehensive Programs Have Positive ROI
Corporate
Health Care
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The Gifford Health Institute

12. Published Research:
High Risk Employees Cost More
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13. Published Research on WHP
High Risk Employees Cost More
Impact on Individual Health Care Costs:
100% High versus Lower-Risk Employees
Individuals at high risk for
Individuals at high risk for
75% 70.2% depression have 70.2% higher
depression have 70.2% higher
costs than those at lower risk
costs than those at lower risk
46.3%
50%
Percent
34.8%
21.4% 19.7%
25% 14.5% 11.7% 10.4%
0%
Depression
Glucose
Exercise
Weight
Tobacco-
Tobacco
Stress
Pressure
Blood
Past
-25%
-50%
Source: Goetzel et al. (1998)
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Health Care
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14. Published Research on WHP
High Risks Impact Organizational Health Care Costs
Annual Impact of High Risks on
Organizational Health Care Costs
Percent of Expenditures
10% •• High stress generates 7.9% of
High stress generates 7.9% of
7.9% annual medical expenditures
annual medical expenditures
8% •• $428 per employee annually (1996
$428 per employee annually (1996
5.6% dollars)
dollars)
6%
4.1% •• 24.9% of health care costs
24.9% of health care costs
4% 3.3%
2.5%
1.7% 1.5%
2%
0.5%
0%
Stress
Exercise
Glucose
Pressure
Tobacco
Depression
Tobacco-
Weight
Blood
Past
Source: Anderson et al. (2000)
Corporate
Health Care
Cost Containment
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15. Published Research on WHP
Costs Follow Risks
Changes in Cost Associated with Risk
Average Annual Costs*
$1,500 Risk Change
$1,250 Lo-Lo
Lo-Hi
$1,000
Hi-Lo
$750 Hi-Hi
$500
1985-87 1988-90
Time
Source: Edington et al. (1997) *Claims costs adjusted to 1996 dollars.
Corporate
Health Care
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16. Published Research on WHP
High Risk Employees are Less Productive
Worker Productivity Index
100%
Productivity Level
80% 89% % Not
79% Productive
60% 67% % Productive
60%
40%
20%
0%
Overall Digestive Mental Hlth Musc/skel
Source: Burton et al. (1999)
Corporate
Health Care
Cost Containment
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17. Published Research:
WHP Programs Have an Impact
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18. WHP Programs Have an Impact on:
Health Risks
Targeted Programs Reduce Risks
Average Number of Risks
7.0
Participants
6.5 6.24 6.36 Nonparticipants
6.0
Net Risk Reduction is .85
Net Risk Reduction is .85
5.5 5.90
5.0
5.17
4.5
Baseline Follow-Up
Source: Gold et al. (2000)
Corporate
Health Care
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19. WHP Programs Have an Impact on:
Health Risks
Targeted Programs Reduce Risks
50%
Participants
Percent Reduced Risks
40% 44% 46% 45%
Nonparticipants
41%
38%
30%
28% 27%
20% 25% 23% 25%
16% 18%
10% 14% 14%
0%
* l * * * * *
ck ero ing ise ing ss ht
Ba l es
t
Ea
t
er c ok St
re
Wei g
ho Ex Sm
C
Source: Gold et al. (2000) * Significant difference
Corporate
Health Care
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20. WHP Programs Have an Impact on:
per Employee and Retiree Medical Claims
$3,000
Average Claims Paid
Nonparticipants
$2,500
Participants
$2,000
$1,500
Nonparticipants’ expenses increased
Nonparticipants’ expenses increased
$1,000 27.7% more than participants.
27.7% more than participants.
$500 Possible Savings = $437/person
Possible Savings = $437/person
$0
Baseline Study Year
Source: Fries et al. (1994)
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21. WHP Programs Have an Impact on:
Absenteeism
5.00 4.32
Mean Days Absent
4.05
4.00
2.87 Participants
3.00 Nonparticipants
2.00 2.50 2.58
2.06
1.00
Intervention
0.00
1984 1985* 1986*
Source: Wood et al. (1989) * Significant difference
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22. WHP Programs Have an Impact on:
Short-Term Disability
Short-Term Disability Savings
versus Non-Participants
Average STD Days Lost
Nonparticipants
45.0
HRA/Reimbursement
38.1
40.0 36.7
33.2
35.0 Estimated Difference =
Estimated Difference =
$1350 per participant
$1350 per participant
30.0
29.4
25.0 27.8
Intervention 24.7
20.0
1996 Baseline 1997* 1998*
Source: Serxner et al. (2001) * Significant difference
Corporate
Health Care
Cost Containment
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23. Published Research:
Comprehensive Programs Have
Positive ROI
Corporate
Health Care
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24. Comprehensive Programs Have
Positive ROI
Short-Term Long-Term
Demand $2-$5
Management 1st Year
Health $3-$8
Promotion 3-5 Years
Corporate
Health Care
Cost Containment
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25. Comprehensive Programs Have
Positive ROI
Savings per Dollar Invested
$8.22
$10
$8
$4.87
$6
$3.35
$4
$2
$0
Health Care Absenteeism Combined
Costs Source: Aldana (1998)
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Health Care
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26. Bottom Line:
“What the Research Tells Us”
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27. Bottom Line
Principles of Effective Program Design
• Behaviorally staged
• Focus on maintenance and reinforcement
• Program beyond risk or disease specific
• Tailored to health and safety risk
• Incentives for participation
Source: Serxner (in press)
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28. Bottom Line
Principles of Effective Program Design
• Repeated contacts
• Varied formats
• Personalization
• Low cost & portable
• Easy to administer
• Emphasis on health and productivity
Source: Serxner (in press)
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29. Bottom Line
Principles of Effective Program Design
• Multiple distribution channels
• Built in program evaluation
• Long-term orientation
• Integrated with Safety, Occupational Health,
EAP, and Training
• Visible management support
Source: Serxner (in press)
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Health Care
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30. Bottom Line
Millions Can Be Saved
Projecting Medical Care Cost Increases Using
Four Scenarios of Lifestyle Risk Rates
$9.96
$10
$8.85
$7.89
(in Millions*)
$8 $7.74 Million
$7.74 Million
Saved/Year
Saved/Year
Cost
$6
$4 $2.22
$2
$0
No program w/ Program Program Program
current risk holds risks reduces reduces
trends constant risks 0.1%/yr risks 1%/yr
Source: Leutzinger et al. (AJHP 2000) *1998 Dollars
Corporate
Health Care
Cost Containment
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31. Bottom Line
Wellness is a Healthy Investment
• Lower Health Care Costs
• Lower Absenteeism
• Additional Benefits
– Higher Productivity
– Lower Turnover
– Improved Employee Satisfaction/Morale
– Improved Employee Health/Quality of Life
– Improved Recruitment
– Improved Corporate Image
Corporate
Health Care
Cost Containment
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32. References
Aldana SG. Financial impact of worksite health promotion and methodological quality of the
evidence. Art of Health Promotion 1998; 2(1):1-8.
Anderson DR, Whitmer RW, Goetzel RZ, Ozminkowski RJ, Wasserman J, Serxner SA. The
relationship between modifiable health risks and group-level health care expenditures.
American Journal of Health Promotion 2000; September/October: 45-52.
Burton WN, Conti DJ, Chen CY, Schultz AB, Edington DW. The role of health risk factors and
disease on worker productivity. Journal of Occupational and Environmental Medicine 1999;
41(10): 863-877.
Edington DW, Yen LT, Witting P. The financial impact of changes in personal health practices.
Journal of Occupational and Environmental Medicine 1997; 39(11): 1037-1047.
Fries JF, Harrington H, Edwards R, Kent LA, Richardson N. Randomized Controlled Trial of
Cost Reductions from a Health Education Program: The California Public Employees’
Retirement System (PERS) Study. American Journal of Health Promotion 1994; 8(3): 216-223.
Goetzel RZ, Juday TR, Ozminkowski RJ. A systematic review of return-on-investment studies
of corporate health and productivity management initiatives. AWHP’s Worksite Health 1999
(Summer); 12-21.
Gold DB, Anderson DA, Serxner, S. Impact of a telephone-based intervention on the reduction
of health risks. American Journal of Health Promotion 2000; Nov/Dec: 97-106.
Corporate
Health Care
Cost Containment
The Gifford Health Institute

33. References
Leutzinger JA, Ozminkowski RJ, Dunn RL, Goetzel RZ, Richling DE, Stewart M, Whitmer
RW. Projecting future medical care cots using four scenarios of lifestyle risk rates.
American Journal of Health Promotion 2000; 15(1): 35-44.
Ozminkowski RJ, Dunn RL, Goetzel RZ, Canior RI, Murnane J, Harrison M. A return on
investment evaluation of the Citibank, N.A., health management program. American
Journal of Health Promotion 1999; 14: 31-43.
Pelletier KR. A review and analysis of the clinical and cost-effectiveness studies of
comprehensive health promotion and disease management programs at the worksite:
1995-1998 update (IV). American Journal of Health Promotion 1999; 13:333-345.
Serxner SA. Practical Considerations for Design and Evaluation of Health Promotion
Programs in the Workplace. Disease Management and Health Outcomes (in press).
Serxner SA, Gold DB, Anderson DR, & Williams, D. The impact of a worksite health
promotion program on short-term disability usage. Journal of Occupational and
Environmental Medicine 2001; 43(1): 25-29.
US Department of Health and Human Services (1980) Ten leading causes of death in the
United States. Atlanta: Center for Disease Control, July.
Wood EA, Olmstead GW, Craig JL. An evaluation of lifestyle risk factors and absenteeism
after two years in a worksite health promotion programs. American Journal of Health
Promotion 1989; 4(2): 128-113.
Corporate
Health Care
Cost Containment
The Gifford Health Institute