Measurement & ROI: How to get 1+1=3
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Employee wellness programs can provide a significant return on investment. Johnson & Johnson saved $250 million from 2002-2008 with a ROI of $2.71 for every dollar spent on their wellness program. A study found 57% of high-risk individuals converted to low-risk after a 6-month wellness program, saving $1,421 per participant in medical costs. Organizations with highly effective wellness programs report lower voluntary employee attrition. Moving just 10% of employees from high-to-low risk through a wellness program yielded a 6:1 ROI for one company. Lost productivity costs are over twice as high as direct medical costs, so wellness programs aimed at common conditions can boost productivity.
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Measurement & ROI: How to get 1+1=3
- 1. ROI How to Get 1+1=3 May 16, 2012
- 2. The Case for Wellness What’s the Hard Return on Employee Wellness Programs? Johnson & Johnson saved the company $250M from 2002-2008 with a ROI of $2.71 for every dollar spent. 57% of high risk individuals were converted to low risk at end of 6-month program saving $1,421 per participant in medical costs (study by Doctors Richard Milani and Carl Lavie). Towers Watson and NBGH shows that organizations with highly effective wellness programs report significant lower voluntary attrition (8% vs 15%). H-E-B analyses show that annual health care claims are about $1,500 higher among nonparticipants in its workplace wellness program. Moving 10% of its employees from high - and medium-risk to low-risk status yields an ROI of 6 to 1. Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 2
- 3. Greater Productivity Research shows benefits of absenteeism & presenteeism exceed those of health insurance*. Loss productivity is 2.3 times higher than medical & pharmacy costs. Conditions that most contribute to lost productivity: depression, anxiety, migraines, respiratory illness, arthritis, diabetes and back and neck pain. *Harvard Business Review Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com
- 4. The Potential Pay Off Johnson & Johnson • Leaders estimate the wellness program have cumulatively saved the company $250 million on health care costs over the past decade. • From 2002 to 2008, the return was $2.71 for every dollar spent MD Anderson Cancer Center • Created worker’s comp & injury care unit for its own employees, staffed by physician and nurse case manager. • Within 6 years, lost work day decreased by 80% and modified-duty days by 64% Source: Harvard Business Review, “What’s the Hard Return on Employee Wellness Programs?,” available at http://hbr.org/2010/12/whats-the- hard-return-on-employee-wellness-programs/ar/1 December, 2010 Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com Intercare
- 5. The Role of “Big Data”
- 6. Key Dimensions of Population Health Management IBI Research Insights, May 2012 Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 6
- 7. Trend Savings 500 Life Company Cost Per Person Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com
- 8. The ROI 500 Life Company Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com
- 9. Effective Dashboards Engaging Relevant Actionable Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 9
- 10. Health And Performance Dashboard Lagging Indicators Treatment Indicators Leading Indicators Members Enrolled in Medical Utilization per 1000 Biometric Risk as % of 1207 Participants 9631043 1055 930 968 0% 10% 20% 30% 40% 64.8 HMO 33.2 admits/1000 42.8 Tobacco = Yes 51.2 2009 2010 2011 Glucose > 125 211 Blood Pressure >= HMO PPO HMO 67.6 139/89 days/1000 104.5 197.3 LDL >= 130 HMO Medical + Rx Net Claims Cost PMPY 120 Obesity >= 30 $5,268 HMO ER 90.5 Metabolic Syndrome $3,900 $3,742 visits/ 1000 94.1 = 3-5 Factors $3,444 $5,052 118 $3,732 $3,228 2010 2011 Norm $168 $216 $216 2009 2010 2011 Norm Preventive Care 2009 2010 2011 Norm Breast cancer 74% Total Medical + Rx Net Claims screening % 73% Cost PMPY EAP Utilization Rate Eligible 70% 11% Colon cancer 65% PPO Medical + Net Claims Cost PMPY screening % 63% Eligible 37% $3,492 $3,840 $3,408 $2,916 8% Prostate cancer 70% 5% screening % 78% $2,916 $3,048 Eligible $2,544 $372 $492 $444 Cervical cancer 80% screening % 77% 2009 2010 2011 Norm Eligible 66% Total Medical + Rx Net Claims Cost PMPY 2009 2010 2011 2010 2011 Norm Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 10
- 11. Intercare’s Health & Performance Team John Kahle Dr. Lee Rice Lane Caruso Beth Taylor Dan Openshaw Chief Wellness Officer Chief Medical Officer Senior Vice President Senior Consultant Health Informatics Consultant Megan Buzbee Kate Rittenhouse Kimberly Wells Lindsay Steckler Consultant Jennifer Martinsen Consultant/ Operations Specialist Account Representative Consultant Education Specialist Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 11
- 12. Risk Factor Reduction Top Risk Factors 8 Biometric Categories Asthma Lifestyle Risks COPD Diabetes Metabolic Syndrome 2.8 2.8 Cost of Risk Factors Estimated savings: $500/risk factor 2.7 $500 x .6 x 1000 employees = $300,000 in savings 2.6 2.5 2.5 2.4 Doing Nothing 2.3 Intercare Client 2.3 2.2 2.1 2.2 2.1 2.1 2.0 2.1 2.0 2007 2008 2009 2010 Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com 12
- 13. “You can’t manage what you can’t measure” 60% 50% 40% 30% 20% 10% Blood Total Waist Circ BMI Glucose LDL HDL TRIG Pressure CHOL National Norms 52.0% 34.0% 29.0% 10.0% 21.0% 40.0% 18.0% 16.0% Intercare Clients 22.4% 27.9% 15.4% 3.2% 22.7% 33.3% 16.1% 7.7% High Risk Norm M>=40in >=30 >=140/90 >125 >= 130 M<40 >=200 >=240 W>=35in W<50 National Norms Intercare Clients Estimated cost of high risk for blood pressure is $7,657 per individual (Sources: www.secure.hhcfoundation.org; Milliman) Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 13
- 14. Intercare Book of Business Example: High Risk for Blood Pressure Assisted Care 14.1% Retail 7.5% Education 23.0% Entertainment 20.0% Finance 11.9% High Tech 13.6% Life Science 17.2% Medical Devices 11.4% Pharmaceuticals 10.4% BOBTotal 12.0% Norm 20.0% Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 14
- 15. Intercare Book of Business Drilldown on the Financial Industry- Blood Pressure Risk: Financial Co. ABC vs. Financial Industry Financial Industry 11.9% Financial Co. ABC 7.9% Financial Co. ABC Risk by Gender Financial Co ABC Female 9.3% Financial Co ABC Male 10.0% Intercare Insurance Solutions • Private & Confidential • CA Insurance Lic #0D80830 • intercaresolutions.com pg. 15
Editor's Notes
- Lincoln Industries calculates wellness savings by looking at the following areas. Health care costs vs the regional average for like industries. Workers Compensations savings are compared to a fully insured premium, we are self insured. Intervention programs are savings we achieve from finding our peoples issues through quarterly checks and blood profiles and applying focused interventions. Absentee savings is calculated by comparing Lincoln Industries absentee rate vs the nation average absenteeism. While we could argue any of the specific points, we feel we are dramatically impacting our business and our people’s lives through our wellness program. When looking at Wellness ROI keep in mind that your greatest cost savings comes from keeping the healthy people healthy vs. moving people from a chronic state or from a critical event back to a post incident state. The ROI numbers on this page reflect 6 large buckets; 1) Health Care Cost Savings per person vs. region (so our actual savings from that of a company in the region), 2) Workers compensation cost savings (reduction of muscoskeletal injury expenses year over year, workers compensation annual expense vs. that of a company our size that would be fully insured, have a larger Mod rate, and medical claims for WC – ours is low do to the nature of how we manager our workers compensation medical claims), 3) per the opening slides you saw how expensive a smoker is to an organizations bottom line – this ROI reflects the savings if a smoker quits for 6 months or longer – so total smokers who actually quite during any given year at 6 months or longer, 4) absenteeism savings is an adjusted savings for what we assume we are saving for having a healthy workforce with low abseentism rates below that national average – absenteeism costs would include expenses such as payroll for a person who is absent from work, expenses for a temporary replacement or shared work, productivity loss (efficiency of work), etc., 5) Intervention programs show on the ROI because intervention strategies of wide nature are needed to get and keep your people healthy. Again – keeping your healthy people healthy requires less expense then moving someone our of a disease or chronic state, therefore – we assume a return on our intervention programs given that we are not only continuing to keep the healthy people healthy but we are also providing intervention programs and strategies to move people out of disease states, 6) Turn-Over we assume a 3% reduction in our turn-over vs. the average company because of the comprehensive nature of our program and the integration of the program into the business climate and company culture.
- Lincoln Industries has a return on investment from our wellness program of 4 to 1 as a minimum. Remember the real work in the wellness program was done starting in 2002 when we changed our approach to the program. Many of the people who showed up on the HC savings side were individuals who came in healthy and we were able to keep them that way, it is 4 years out from a tobacco free campus movement which decreased our tobacco users – in turn reducing overall disease burden, and you will see a larger change in expenses early on in the program with the greatest changes and improvements in health are had. Moving forward we have been able to manage the health of our organization through creative population specific programming, strong intervention programs, and actionable company improvements – selection process, safety practices, and wellness attached to performance plans and evaluations.
- This slide uses an average of 300 lives per year multiplied by the difference between doing nothing and Clark then multiplied by 304 to determine the per year cost savings. They were then added to arrive at the $103, 968. The do-nothing scale assumes a 10% increase to the risk average year over year. This is based off information found in D. Edington’s book Zero Trends and The American Journal of Health Promotion and the University of Michigan. Note- Lifestyle risks includes smoking. Disease States includes:arthritis, asthma, allergies, kidney disease, glaucoma, ulcers, personal and family history etc.