Snook - Why Employers Are Missing the Mark with Wellness
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Employers are missing opportunities with wellness programs by focusing too much on general health improvement for all employees rather than targeting those driving the highest costs. Effective wellness requires analyzing data to understand health risks and targeting interventions at populations with conditions linked to increased costs and poor outcomes. A total health management approach integrating programs across the health continuum can help shift culture and incentivize behaviors to reduce costs and improve productivity.
Snook - Why Employers Are Missing the Mark with Wellness
- 1. Why Employers are Missing the Mark with Wellness Matthew L. Snook, Principal 813.207.6310 matthew.snook@mercer.com
- 2. Discussion Topics Background – the problems to address Why wellness? What is “wellness?” So what’s the problem? How to do it differently 1 © 2010 Mercer, all rights reserved
- 3. Background – the problems to address
- 4. Health status driven by behaviors Determinants of Health Status 10% 20% 50% 20% Access Genetics Environment Behavior Source: Institute for the Future, Centers for Disease Control and Prevention 3 © 2010 Mercer, all rights reserved
- 5. Evolution of a health plan participant… Source: The Economist 4 © 2010 Mercer, all rights reserved
- 6. …and the health status impact of those behaviors Prevalence of Medical Conditions by Body Mass Index (BMI) Body Mass Index Body Mass Index 18 to 24 25 to 29 30 to 39 > 40 18 to 24 25 to 29 30 to 39 > 40 Medical Condition Prevalence Ratio (%) – Women Prevalence Ratio (%) – Men Type 2 2.38 7.12 7.24 19.89 2.03 4.93 10.10 10.65 Diabetes Coronary Heart 6.87 11.13 12.56 19.22 8.84 9.60 16.01 13.97 Disease High Blood 23.26 38.77 47.95 63.16 23.47 34.16 48.95 64.53 Pressure Osteoarthritis 5.22 8.51 9.94 17.19 2.59 4.55 4.66 10.04 Source: NHANES III, 1988 - 1994. 5 © 2010 Mercer, all rights reserved
- 8. Why Wellness Internally/Externally? What we’ve heard… It’s the “right thing to do” Be an “employer of choice” Improve recruitment Minimize turnover/improve retention Create a “culture of health” Improve morale Reduce workers’ compensation costs Improve community perception Reduce health care costs Generate revenue/referrals 7 © 2010 Mercer, all rights reserved
- 9. Questions to ask yourself… Why are you engaged in wellness and do you want to be engaged in wellness? 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? 8 © 2010 Mercer, all rights reserved
- 11. Population Health Breakdown Numerous groups to address Chronic Catastrophic Healthy At Risk Conditions Conditions 10 © 2010 Mercer, all rights reserved
- 12. Managing population health is a BIG job! Traditional thinking regarding program categories The Spectrum of “Population Health Management” Disease Disease Case Wellness Prevention Management Management Focus on Focus on Focus on Focus on general health prevention, health management maintenance usually improvement of large/ and addressing for those with catastrophic improvement specific health specific claimants of whole risks conditions population 11 © 2010 Mercer, all rights reserved
- 14. Claims Distribution Small percent of the population drives the cost Population Costs 3% 19% 50% 25% 35% 53% 10% 5% % of Employees % of Claims Source: Mercer Proprietary Data 13 © 2010 Mercer, all rights reserved
- 15. Managing Across the Health Continuum Where does the CFO want your focus? 15% of members = 75% to 85% of cost Chronic Catastrophic Healthy At Risk Conditions Conditions 85% of members = 15% to 25% of cost 14 © 2010 Mercer, all rights reserved
- 16. Managing Across the Health Continuum Where 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. 15 © 2010 Mercer, all rights reserved
- 17. Study by Center for Studying Health System Change “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. 16 © 2010 Mercer, all rights reserved
- 18. Another problem… The more complex, the less prevalent HRA Completion Wellness/Behavior Modification Prevalence Program Completion Care Management Program Completion Treatment Protocol Compliance Complexity 17 © 2010 Mercer, all rights reserved
- 19. One other issue 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 18 © 2010 Mercer, all rights reserved
- 20. How to do it differently…
- 21. Total Health Management (THM) Definition: 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. Three essential building blocks: 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 improvement Program Integration • Bring all data, systems and programs under one real-time, comprehensive participant focused umbrella 20 © 2010 Mercer, all rights reserved
- 22. THM creates a holistic view of illness and productivity The Total Cost of Illness Indirect cost of absence $55M Health = 2.5% of payroll Goals of a holistic view: & absence costs Direct non-occupational ■ Understand what’s + absence cost = 3.5% of driving current health & payroll disability costs, Health care benefits absenteeism, cost = 17% of payroll productivity losses Total expense = 23% of $240M payroll ■ Identify magnitude of Payroll* future expenses - “ticking time bombs” who may or * Assumptions: may not appear in claims • 5,000 employees data – but who will have • $48,000 average salary a significant future expense Sources: Mercer’s National Survey of Employer-Sponsored Health Plans; Mercer’s Survey of Health, Productivity and Absence 21 © 2010 Mercer, all rights reserved Management Programs
- 23. 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 22 © 2010 Mercer, all rights reserved
- 24. The cultural shift required for effective THM A paradigm shift needs to occur that transcends From: To: Leaders following talking Leaders modeling best- points practice behaviors Dollars being spent only on Budgets including funding for sick employees programs that change outcomes and reward results Employees feeling an Employees feeling a entitlement to coverage when responsibility for maintaining they are sick good health, and preventing disease and illness. 23 © 2010 Mercer, all rights reserved
- 25. Getting Started Analyze data Health Risk Distribution High Body Mass Index 39% High Stress 32% Inactive 25% Life Satisfaction 24% Former Tobacco User 23% High Blood Pressure 21% High Cholesterol 14% Perception of Health 13% Safety Belt 11% Current Tobacco User 10% Reported Depression 5% High Alcohol Use 3% High Blood Glucose 2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% * Actual client data. 24 © 2010 Mercer, all rights reserved
- 26. And Why That Matters… The Correlation of Health Risks and Disease Gastro- Low Cardiovasc. High-risk Injuries/ Asthma Cancer Cirrhosis COPD Depression Diabetes Intestinal Back Stroke Diseases Pregnancy Accidents Disease Pain 1. Current Tobacco X X X X X X X X User 2. High Stress X X X X X X X 3. High Body Mass X X X X X X Index 4. Former Tobacco X X X X X X User 5. Inactivity X X X X X X 6. High Alcohol X X X X X X Use 7. High Blood X X X X Glucose 8. High Blood X X X X Pressure 9. Reported X X X Depression 10. High Cholesterol X X X 11. Life Satisfaction X X 12. Safety Belt use X 13. Perception of X Health 25 © 2010 Mercer, all rights reserved
- 27. HERO Best Practice Scorecard© (v.3) Free employer tool to assess THM practices Benchmark current THM practices against “best practice standards” – the lower the HERO score, the higher the savings opportunity Total Points Section Company ABC National Average Possible 1: Strategic Planning 5 8 11 2: Leadership Engagement 2 26 33 3: Program Level Management 5 12 22 4: Programs 20 37 56 5: Engagement Methods 10 41 67 6: Measurement and Evaluation 3 5 11 Total Score 45 129 200 Link to HERO Scorecard: http://mercer.inquisiteasp.com/cgi-bin/qwebcorporate.dll?idx=NPPY5J 26 © 2010 Mercer, all rights reserved
- 28. Plan Design and Incentives Issues 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 27 © 2010 Mercer, all rights reserved
- 29. Plan Design and Incentives Evolution Plan Design and Incentives Key Behaviors Year #1 Year #2 Year #3 Year #4 Year #5 2011 2012 2013 2014 2015 Being Aware of Health Status – Health Assessment and Screenings Preventing Illnesses – Immunizations and Maintenance of Healthy Lifestyles Goal is to ultimately develop Goal is to ultimately develop Reducing Risks – Mitigating or an Evolving Long Term Approach Eliminating Unhealthy Behaviors an Evolving Long Term Approach that more strongly reinforces that more strongly reinforces Accessing Right Care – Access and appropriate behavior over time appropriate behavior over time Use the Right Care, at the Right Time, from the Right Providers Complying with Treatment Regimens – Follow Through with What is Prescribed 28 © 2010 Mercer, all rights reserved
- 30. Broad Program Design Components across the health care continuum Catastrophic Healthy At-Risk Chronic Conditions Conditions 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 Health Risk Management High Cost Case Health Promotion and Disease Prevention Disease Management Management Onsite seminars, Patient Identification (claims + Patient Identification Resource Management worksite initiatives HRA) (claims + HRA) Health portal Lifestyle Management Core programs (CAD, Patient Advocacy (telephonic) COPD, Diabetes, Asthma, CHF) Immunizations & Lifestyle Management (online) Supplemental programs Care Coordination Screenings Population Based Population Based Campaign Gaps in care NICU & Maternity case Campaign management Other Programs: Health advocacy (e.g., navigational, clinical and claims advocacy) Treatment decision support Health advisor Wellness Champions Support Program 29 © 2010 Mercer, all rights reserved
- 31. Structuring incentives to meet desired results Key Behaviors Impact Financial ROI Being Aware of Health Status – Health Low Low assessment, screenings Preventing Illnesses – Preventive care, Low High return; immunizations, healthy lifestyles Short- and long-term payback Reducing Risks – Improving unhealthy Moderate to high return; Moderate behaviors Mid- to long-term payback Accessing Right Care – Making good Moderate High return; decisions about getting care at the right time, from the right providers Short-term payback Complying with Treatments – Adhering to High return; High treatment plans, medications Short-term payback Return to Work – Returning to work early Moderate return; Moderate from disability absences Short- to mid-term payback 30 © 2010 Mercer, all rights reserved
- 32. CRITICAL issues we have no time to discuss Incentive 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! 31 © 2010 Mercer, all rights reserved
- 33. www.mercer.com