The New Wave of Wellness. Shelly Nelson Regional Vice President Nationwide Better Health Phone:

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1 The New Wave of Wellness Shelly Nelson Regional Vice President Nationwide Better Health Phone:

2 Today s Health & Productivity Challenges 70% of health care costs are attributable to lifestyle choices, thus preventable Focus is shifting from only managing sick to maintaining health and preventing risk Health care costs are expected to soar from today s 15% of GDP toward 20% around 2020 >133 million Americans (45% of the population) have at least one chronic condition 75% of all healthcare spending is for chronic disease Accounts for 26% of short-term disability episodes and drives unscheduled absences Retirees generally spend 35% of their retirement income on health care Cost of lost workforce productivity estimated to be four times higher than actual medical costs

3 What is it called? Multiple terms used today: Wellness Care Management Health Management Population Management Health & Productivity Lifestyle Management Health Promotion

4 Not as Simple as it used to be Rules now regulate Wellness programs HIPAA Nondiscrimination Rule HIPAA Privacy and Security Rules Americans With Disabilities Act (ADA) Age Discrimination in Employment Act (ADEA) COBRA GINA Federal and State tax laws State lifestyle and nondiscrimination laws

5 Programs to Invest in Health & Productivity Health Risk Assessment Health Promotion Disease Management Disability Management Absence Management EAP Workers Compensation Management Occupational Medicine On-site Clinics Health Education Seminars/Health Fairs Fitness and Exercise Programs

6 Health & Wellness Outcomes Improve health status Manage risk factors Don t allow risk factors to degrade Improve participant sense of well-being Improve participant healthy knowledge Personal physician Regular dental care Preventative care follow up Impact medical costs more of a result costs follow risk Critical to success Percent of population at low risk Participation levels

7 Designing a Program for Maximum Results Lifestyle and disease management can have a significant impact on a population s risk factors In this case, lifestyle programs combined with disease management over the last three years have had a positive impact on risks over time The number of members classified as high risk decreased, while the number of low risk increased Percentage of Population Case Study 70% 60% 50% 40% 30% 20% 10% Low Risk (0-2 risks) Risk change over 3 years Moderate Risk (3-4 risks) Tangible Results High Risk (5 + risks) Year 1 n=20,023 Year 2 n=26,845 Year 3 n=25,131 Chronic Disease

8 Designing a Program for Maximum Results This case study shows the time over time comparison of medical and drug costs associated with staying the same, increasing or decreasing a risk level. For example, a member who fell into the Low Risk category in 2008, but regressed to a Moderate Risk in 2009, on average increased their medical and drug cost footprint by $719 In every case where risk level remained the same, the cost effect still increased to some degree The combination of risks reduced, and the proven cost savings, brought this client s health care cost trend from 10-12% to flat Change in Cost per individual from Moving Risk Levels Case Study $1,500 $1,000 $ $500 -$1,000 -$1,500 Average Change in Cost from 2008 to 2009 Low to Low $162 Low to Moderate $719 n = 21,539 Low to High $1,345 Moderate to Low -$95 Moderate to Moderate to Moderate High $263 $1,371 -$903 -$604 Low Moderate High Previous Year s Risk Level High to Low High to Moderate High to High $178

9 The New Wave of Wellness Driving Participation You should be happy with your vendor s plan for gaining participation; it starts with consultation on how to drive participation within your company s culture the first step to producing outcomes proven to control healthcare costs.

10 Participation Drivers Key Program Components Communications & Branding Incentives Value Incentives Structure Corporate Sponsor Low Employer Support Level High

11 What Doesn t Work Health Assessments as only product Non-fully integrated HRA and Lifestyle Management programs No source for fresh numbers Lack of Champions within organization No or low incentives Undefined Communication Plan Lack of concrete measurable metrics

12 Case Studies Diverse results driven by incentives, communications and culture Energy Company Provided incentive to take the HRA (up to $100) and to participate in a LHC program (up to $100) Result as high as 88% of eligible employees took the HRA (location specific variation) Result over 47% of HRA respondents participated in an LHC program Financial Services Company Provided a strong incentive for participation in the HRA built into the benefit plan design valued at $370 for HRA participation Strong communications campaign Result 77% of eligible employees took the HRA Poor level of incentives client Provided no incentive to take the HRA or to participate in an LHC program Result less than 5% of eligible employees took the HRA Result approximately 5% of HRA respondents participated in an LHC program

13 The New Wave of Wellness Integration

14 Total Value of Health Relative Costs of Poor Health: Total Value of Health Direct Costs: Medical & Pharmacy Indirect Costs: LTD STD Workers Compensation Absenteeism Presenteeism Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney)

15 What Does it Cost To NOT keep employees well in the first place? $37,000,000 $36,000,000 $35,000,000 $34,000,000 $33,000,000 $32,000,000 $31,000,000 Do Nothing vs. Integrated Health & Productivity Management $33,662,791 $31,256,073 $31,437,478 $36,254,826 $33,009,352 Cost Savings = $8,004,888 $30,000,000 $29,000,000 $29,021,424 $29,798,557 $28,000,000 $27,000,000 $26,946,540 $28,245,078 $26,000,000 $25,000,000 $24,000,000 $26,646,300 $25,020,000 $25,020,000 Current Yr Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 ABC Company 5-Year Scenario:

16 Health & Productivity Challenges Unique grouping of health and productivity management solutions HEALTHY AT RISK CHRONIC Health Promotion Maternity Management Health Promotion Disability Management Maternity Management Disability Management Disease Management ACUTE & CATASTROPHIC Disability Management Disease Management Medical Management Absence and Leave Management Identify barriers to individuals health and well-being Integrate your health and productivity offerings based on your employees needs Improve your workplace productivity and health care investment Your vendor should provide innovative, comprehensive programs across the entire health continuum, and be proficient at integrating any of these individual services with your other vendors. 16

17 Integration Value Proposition Core Values from Integration 1. Enhanced levels of identification 2. Improved efficiencies of program referrals 3. Advanced opportunities to achieve teachable moments to engage and change individual s behavior 4. Ability to use integrated information to improve management insight and actionable information Choose a vendor that coordinates wellness with all other company sponsored programs!

18 Increase in Identification Integrating programs provides dramatically increased opportunities for effective identification of populations needing programs Examples of cross program identification opportunities Identify Disease Management Cases through HRA, Lifestyle Health Coaching and Disability Identify increased risk cases through evaluation of employee absence patterns for Disease and Lifestyle Management referrals Proven results: Integrated Absence & Disability Management services is a consistent and solid source of referral into the Disease Management Company ABC: Fully integrated programs with over 5,000 members Disability Management program referrals account for 4% of total DM program identification. Of those members identified through integration, the enrolled in the program is over 300% of the typical rate Company XYZ: Fully integrated programs with over 30,000 members Disability Management program refers over 200 individuals into Chronic Disease Management programs

19 Benefits of Integration Identifying individuals at a time of need can help increase the incentive for engagement Organizational Level: Through a comprehensive review of your vendor s integrated program performance, with the availability of the book results and various industry benchmarks as comparison, lead to improvement opportunities for better designed benefit plans, and can provide insight into more effective incentive level and communication strategy that are tailored to each organizations population Member Level: Your vendor s integrated programs should provide opportunities to monitor and assess your organizations disease patterns, behavioral changes, and productivity impact, and allow coaching and engagement of members from the earliest point possible Increased points of contact enhance vendor s ability to reach an individual at a point of potential impact

20 Integrating Data Benefits Strategic Planning Integrating data is at least as important as integrating programs. For example, our data warehouse takes information from multiple programs and blends it, enabling us and our clients to extrapolate trends and develop strategy never possible before. The example to the right demonstrates the relationship of modifiable risk factors to the monthly claim costs of HRA participants 0 Risks = $143 PMPM 1-2 Risks = $179 PMPM 3-4 Risks = $255 PMPM 5+ Risks = $454 PMPM We see a steady increase in PMPM cost as the number of total modifiable risk factors increase. The conclusion is that eliminating these risks will result in a reduction of total medical claims costs and shows the value of continuing/expanding this clients health promotion programs Claim Expenditures per Member per Month Risk Factors vs. Claim Costs $600 $500 $400 $300 $200 $100 $0 0 Risks 1-2 Risks 3-4 Risks 5+ Risks Number of Modifiable Risk Factors *Only members who completed an HRA are included in the above graphical analysis

21 Integrating Data Benefits Strategic Planning In addition to utilizing our health management integrated reporting capabilities to validate the correlation between behavioral change programs, number of risk factors and associated medical and drug costs, our groundbreaking data warehousing capabilities have the ability to compare data from both productivity and health management programs. Risk level affects more programs than simply disease or lifestyle management. It s affect can also be felt in absence and disability. The sample graph to the right helped one of our clients visualize the causal relationship between number of risks and number of short term disability claims. They can see the evidence that as risks increased within the employee population, so did the percent with one or more STD claims. % With One or More STD Claims 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Short Term Disability Incidence Rates Across Risk Categories n= 31,360 0 Risks 1-2 Risks 3-4 Risks Risk Categories 5+ Risks No HRA Chronic Integrating data sources help to demonstrate the powerful relationships between health, risk, absence, disability and productivity

22 Markers of Improvement in Wellness Risks Reduce the progression of risk Reduce the severity of risk Reduce the incidence and prevalence of risk Disease/Conditions Improve the severity of chronic diseases Reduce the incidence and prevalence of conditions that can be cured Events Adverse events hospitalizations, E.R. visits reduce the frequency Absence reduce illness related absence (self/family) Disability reduce incidence and duration of disability Clinical gaps in care fill in gaps in evidence-based care Quality of life / Self perception of health Improve the sense of well being of individuals and populations

23 Thank You for Your Time We hope you will agree that it is important to choose the right partner as you develop a comprehensive Wellness strategy for your company. Choose based on expertise in developing tailored, effective, innovative solutions that will support you in your mission to provide the best programs for your employees and your company.