Frank Hone; noted Author of "Why Healthcare Matters," delivered a very informative and fact packed presentation that described how employers can effect their bottom line in Health Care costs within their own organizations. They key to success is to take the lessons learned by pharmaceutical companies in their marketing and apply it to health care consumerism programs to engage employees to make lifestyle changes.

1. Employee Health Benefit Trends:
How Healthcare Consumerism
Can Help Change the Game
Frank Hone
Sustainable Engagement Leader
Healthways
August 18, 2009
1

2. 2

3. Presentation Overview
1. Key Issues and Challenges
2. The Employer Role in Healthcare
3. Why Healthcare Matters
4. How Healthcare Consumerism Fits
5. Driving Health Behavior Change
3

4. Introduction and Background
Recently joined
Healthways as
Sustainable
Engagement Leader
28 year career in
consumer advertising and
marketing with NY
advertising agencies
and consultancies
16 years focused on
healthcare
communications,
particularly DTC 4

5. Why Healthcare Matters
• Encourages business leaders to
proactively address employee
health issues and strategies
• Focus is on free-market solutions
and demand-driven strategies:
• Healthcare Consumerism
• Personal Responsibility
5

6. 1. Key Issues and Challenges
Quality, Access, Cost
– The “Holy Grail”
Complex provider networks and insurance schemes
– Outgrowth of “managed care” era
Third-party Payments
– Limits consumer knowledge of price/value
Rising Chronic Disease Incidence
– Cardiac, Metabolic, Respiratory, Cancer, etc.
Lifestyle/Behavioral Issues
– Sedentary ways, excess, limits on personal responsibility
Employer role
– Hands-off or Hands-on?
6

7. 2. The Employer Role in Healthcare
Hands-off or Hands-on?
7

8. Two-thirds of insured Americans have employer-
provided health insurance
100%
90% 99% 99% 99% 98% 98% 99% 98% 98% 99% 99%
80%
68% 68% 66%
70% 65% 65% 63%
60% 62%
59% 59%
60%
50% 56% 57% 58% 58%
55%
52%
47% 48% 49%
40% 45%
30%
20%
10%
0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
All Small Firms (3-199 Workers)
All Large Firms (200 or More Workers)
3-9 Workers
8
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.

9. Higher health premiums cut into
corporate profits
9

10. Healthcare is the #1 CEO issue
Source: Mercer 10

11. Employee Benefits: Top Challenges
Five leading factors representing the top
challenges in maintaining affordable employee
health benefit coverage:
– Employee’s poor health habits 67%
– Underuse of preventative services 42
– Catastrophic/end-of-life care 36
– Poor information on provider costs 24
– Overuse through inappropriate care 21
– Source: Watson Wyatt, January 2009 survey of 489 employers
11

12. Big Companies Are Investing
In Employee Health
Onsite flu shots 97%
Weight loss programs 85%
Health Risk Appraisals 80%
Tobacco cessation programs 74%
On-site workout facilities 73%
Online wellness programs 72%
Organized walking/exercise programs 66%
– 2007 Business Roundtable Survey
12

13. 3. Why Healthcare Matters
13

14. Overweight = Unhealthy
14

15. Lifestyle-related chronic disease on the rise
15

16. Individual health behaviors are lacking
What percentage of Americans
can agree to all five of these
statements?
I exercise 30 minutes or more on most days of the week
I eat a healthy diet with 5 fruits/vegetables on most days
I am within 5 pounds of my ideal body weight
I don’t use tobacco products
I have 2 or fewer alcoholic drinks per day
16

17. Behavior is #1 Driver of Health Status
60
50%
50
40
30
20% 20%
20
10%
10
0
Care Access Genetics Environment Behavior
Source: Inst for the Future, CDC
17

18. 4. How Healthcare Consumerism Fits
Concepts and Best Practice
18

19. Healthcare Consumerism Can Help
– “Healthcare Consumerism is about transforming an
employer’s health benefit plan into one that puts
economic purchasing power — and decision-making
— in the hands of participants.
– “It must focus on health behavior change.
Employers can supply information and decision
support tools, along with financial incentives,
rewards, and other benefits that encourage
greater personal responsibility for their health.”
Ron Bachman
Senior Fellow
Center for Health Transformation
19

20. Healthcare Building Blocks….
+ +
Financing Medical Behavior
20

21. Healthcare Building Blocks….
+ +
Financing Medical Behavior
Health Insurance Medical Marketing Model Consumer
Co-Pays Doctor Stay healthy
Out of Pocket Hospital Prevention
Government Funding Pharmacy Engagement
Drugs and Procedures Adherence
21

22. Employers can’t really change the healthcare
system, but they can influence positive
outcomes through financing and behavior
change
22

23. Financing and Behavior Change:
A few examples
1. CDHPs
2. Obesity
3. Smoking Cessation
4. Health Risk Assessments
5. Incentives
23

24. 1. CDHP growth continues…a way to
encourage personal responsibility
Source: Mercer 24

25. CDHP Example: Blue Ridge Paper
Problem
– Blue collar mill - with 2,100 primarily male, older union
employees, with “entitlement” mindset and little health
benefit knowledge or investment - couldn’t afford
premium increase projections
Solution
– Focus on creating “culture of health”; engage employee
reps in decision-making; educate workforce and family –
shift to CDHP + 17 specific population health
management programs + coaching + fitness program +
onsite clinic
Results
– Absenteeism dropped by 50%, Disability claims dropped
by 20%, chronic claims dropped by 16%.
– Five year cost savings = more than $17 million
25

26. 2. Obesity… a major health challenge
Obesity accounted for 27% of the rise in medical costs
from 1987 to 2001
Ken Thorpe - Emory University
Obesity costs Companies $45 billion annually
Conference Board
Obesity is a more powerful trigger for chronic health
problems than either smoking or heavy drinking
RAND
But many employers see it as sensitive issue to
address head on…
26

27. Weight Loss Example: Quest Diagnostics
• Problem
Workforce obesity was on the rise,
increasing each year from 2005-2008
• Solution
Management initiates company-wide
weight loss challenge
• Results
Broad Participation – spurred Bill
Germanakos to drop 164 pounds on
“The Biggest Loser” TV program.
He’s now “Wellness Ambassador”
Positive ROI - Winner of the Healthy
Lifestyles Gold Award for its Healthy
Quest employee wellness program
27

28. 3. Tobacco Use.. leading cause of death in
the US
28

29. Smoking Cessation Example: Weyco
Problem: Lifestyles risk drive costs
– Illegal drugs and tobacco
– Excess use of alcohol
– Unhealthy eating
– Physical inactivity
Strategy
– Stop hiring or retaining tobacco users - adopt a no-
smoking policy that required employees to quit smoking
during their private time and/or submit to a smoking
test. Smoking cessation program options were offered.
Results
– Policy took effect in January 2005, a year after
announcement
– Four employees refused to take smoking test
– Smoking was effectively eradicated at Weyco
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30. 4. Health Data…a way to manage risk
Claims data Health Risk Appraisal Biometrics
Past behavior Current status Future Risk
Then, the data can help drive
the design…
30

31. HRA Example: Johns Hopkins
Problem
– Workforce was becoming older, sicker and more costly due
to asthma, hypertension, diabetes, depression, anxiety,
COPD, cancer, back pain
Solution
– Redesign health benefits and health initiatives, tied to
Health Risk Assessment (HRA)
– Add health coaching, education, incentives
Results
– HRAs provided more data on employee health than claims
– Identified areas where interventions would help
– Chronic care management has led to savings of $300 PMPM
31

32. 5. Incentives…a path to motivation
More companies are offering a financial incentive to participate in health initiatives:
32

33. Incentives Example: Pitney Bowes
Problem
– As medication co-pays increased with newer health plans,
many employees cut or eliminated drug usage. Complications
caused increased medical bills
Solution
– Provide lower cost or free drugs for certain chronic conditions:
asthma, diabetes, hypertension
Results
90
81 82
80 75 76
– Adherence on drug increased 70
62
substantially and medical
60
50
costs declined for three areas 40
33
30
20
10
0
Asthma Diabetes Hypertension
2001 2006 33

34. Incentives: Penalties would increase adherence
to chronic treatment regimens
How Likely Would You Be To Comply With
the Treatment Regimen Recommended by
Your Doctor If You Would Be Required to
Pay Higher Insurance Costs Otherwise?
63%
31%
18%
14%
9% 6% 8%
3% 3% 4% 5%
1 2 3 4 5 6 7 8 9 10
Not at all likely Extremely likely
Deloitte's 2009 Survey of Health Care Consumers n = 2,192 respondents with one or more chronic conditions
34

35. What does all this mean
for employers?
Behavior change comes from encouraging personal
responsibility about health, lifestyle and treatments
– Engage employees as partners in managing healthcare costs
and quality
Corporations can adapt by treating employees as if
they were customers of the company
– Motivate them to accept their role and understand your
support and financial commitment
35

36. Does having health and wellness programs
equate to better outcomes?
Between…
Wellness, Care Management, Health Interventions, Fitness Programs
Consumer
Engagement
Enrollment and
Interventions Influence
+
Incentives
+
Motivation
..and
Actual Employee Health Behavior Change
36

37. 5. Driving Health Behavior Change
Using Communications Effectively
Needs to be multi-stage
Accommodates consumer decision pathway
37

38. Employee health engagement is a lot
like consumer advertising…
38

39. “AIDA”
Awareness Interest Desire Action
Of a In Wanting it Buying it
brand, knowing
category, more
service,
etc.
39

40. Comparing the two…
Consumer advertising: Employee health
engagement:
Focuses on getting Focuses on getting
consumers to buy your employees to change
brand behavior
Effective use of media, Effective use of media,
messages, and metrics messages, and metrics
Follows “AIDA” Addresses the decision
pathway
40

41. Consumers have a decision pathway to
follow with healthcare…
Compliant patient
BARRIERS
Rx written/filled
Physician appointment
Desire to treat
Information gathering
Relevance to disease
Recognition of symptoms
Undiagnosed
sufferer
41

42. …that also has many emotional barriers….
Fear
Confusion
Cost
Denial
Trust
Solutions
Support
42

43. …that need to be addressed in different
ways
Emotional vs. rational messages
Storytelling vs. facts
Consider timing and sequencing
– Media consumption and penetration
– Different motivation and incentives
– Recognize varying behavior change dynamics
Communicate two-way with reinforcement
43

44. Some DTC TV ads as examples…
44

45. Synvisc Advertising and Fulfillment
Advertising shows
target adults in
situations that OA knee
sufferers cannot do or
enjoy
Fulfillment materials provide
deeper education/ information
and a list of providers
45

46. Print
Print w/BRC
Documercial
Branded and unbranded TV
Branded and unbranded web sites
OA educational events
Synvisc Consumer-friendly call scripts
Fulfillment materials
Reminder mailings Tell-A-Friend
Program
6,000 Physician Provider Network Follow-up surveys
Physician and rep letters/e-mails
Community-based outreach materials
Specialist Specialist
Specialist
Ad easel
Patient brochures
Exercise flyer
Doctor mention statistics Specialist Specialist
PPN reprint carrier
Doctor mention flash card
46

47. Lessons Learned from DTC
1. Relevant segmentation leads to Identify key segments of your
smarter strategies employer population
2. The decision pathway begins Consider the challenges and
with a health issue and involves barriers that your employees are
psychological and attitudinal facing in dealing with an array of
barriers conditions
3. Information overload is Deliver messages in a format and
counterproductive. Bite-sized form that will best lead to
pieces of information work behavior change in measurable
better ways
4. Most healthcare products and Find ways to stress the
services are purchased because importance of dealing effectively
of need, not desire with health issues
5. Interactive communication Supplement your health portals
opportunities can be more with ways to interact directly with
productive than “push” employees
marketing
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48. Strategic Development Framework for
Employee Communications
communication objectives target audiences
communication strategy and tactical approach
media choices
key messages, and creative work
Measure results, encourage and share feedback
Revisit everything with an eye to continual improvement
48

49. Health Behavior Change Requires:
Customized solutions, tailored to their:
– Readiness to change
– Lifestyle preferences and capabilities
– Media consumption, message responsiveness
Convenience elements that reduce as many
barriers as possible
Incentives that help make the abstract benefits of
good health more near-term and concrete
49

50. Thank You!
50

51. Questions and Discussion…
frank.hone@healthways.com
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52. Why Healthcare Matters – on sale now!
• Encourages business leaders to
proactively address employee
health issues and strategies
• Focus is on free-market solutions
and demand-driven strategies:
• Healthcare Consumerism
• Personal Responsibility
$20 check or cash
52