Work, Health, and Productivity: The Johnson & Johnson Story Fikry Isaac, MD Vice President Global Health Services and Chief Medical Officer, Wellness & Prevention Inc.

Global Leader in Health Care More than 250 Operating Companies In 60 Countries Selling Products in More Than 175 Countries 125,000 Employees Worldwide Company Overview

“It’s an investment, not a cost” –Alex Gorsky, Johnson & Johnson CEO “It's an investment, not a cost. Spending money before people get sick, to help keep them well, makes sense.” “It starts with personal accountability for our health. I hope all our employees recognize that and take advantage of the programs we offer for them to get and stay healthy.” “You can look at the outcomes from our Johnson & Johnson health and wellness programs for proof. In the US, where we've sponsored health and wellness programs for over 20 years, we have lower rates of tobacco use and cardiovascular disease, for example, than the workforce in general.” 3

Culture of Health within Johnson & Johnson - Our Journey Fix The Health Care Crisis One Employee at a Time 2007 harmonization 2004 global launch 1978 big goals 2015 healthy future 2008 new business 1995 integration 1886 visionary 2013 one health “I’m talking about prevention, specifically in the workplace. …Johnson & Johnson has been making substantial, systematic, and effective investments in prevention for more than 30 years. We dedicate resources to prevention because, like any successful investment we’ve made, it yields steady returns.” Bill Weldon, Former Chief Executive Officer, Johnson & Johnson Harvard Business Review

Benefits of a Culture of Health Transform Employee Health from an accelerating burden to a competitive advantage Reduce the burden of chronic disease and instill prevention & wellness behaviors in work places as well as communities Allows for partnership with policy makers to improve labor productivity,economic competitiveness, and ultimately reduce healthcare spending

Global Health Services Integrating Protection, Prevention & Performance Protection Keep people safe: Compliance, Assurance & Quality Care Prevention Keep the well well and manage the ill/injured: Innovation in Intervention Performance Leading in business by leading in health: Health is a key business imperative 6

Health Strategy- Five Pillars Does management lead by example ? Does management establish organizational health goals? How effective is the health strategic plan? What are participation and retention rates? What is the level of deployment and integration of key policies? Have you Implemented effective communication strategies? How can you Continue to evaluate results and end user satisfaction? Enterprise Programs Leadership & Commitment Policy & Procedures Measurements & Outcomes Has the organization achieved company-wide health goals? What is the level of accountability for these goals? Engagement & Participation

Leadership - Top Down Goal Setting 8 90% of employees have access to “culture of health” 1 programs 80% of employees have completed a health risk profile and know their key health indicators 80% of measured population health risk will be characterized as low health risk Established by senior leadership 125 years ago…until today Leadership & Commitment

Integrated Holistic Program Delivery Integrate service delivery with innovative solutions that focus on prevention, behavior modification, and linkage to benefit design Enterprise Programs

A Multimodality Approach Providing tools, resources and environment support Person to Person Fitness/Wellness Professional Occupational Health Nurse, Nurse Practitioners Employee Assistance Program Counselors Health Advisors Group Workshops (Weight Watchers™ at work and in the community, energy mgmt.) Behavioral Change Offerings Exercise Classes Health Campaigns (Lose to Win, Pedometer - Million Step Challenge, Steps for Caring, Family Activity Challenge, etc.) Energy Management principles Local events and educational seminars Online HealthMedia Move™, Nourish™, Balance™, Overcoming Binge Eating My Live for Life™ website (Cool Tools, Resources) Weight Watchers™ Online Mental health screenings Culture and Environmental Support Fitness Centers or Exercise Reimbursement walking / running routes eatcomplete Energy for Performance in Life Health Champions Communications & Marketing Incentives Toolkits (i.e. Mental wellbeing) Allows a choice of value-added services that meet people where they are in their health continuum Enterprise Programs

Standardized Approach Globally harmonized procedures – Tobacco-free sites – Wellness programs, occupational health programs, employee assistance programs – HIV/AIDS – Others Standardized procedures (“toolkits”) that support program implementation worldwide Policy & Procedures

Sustaining our Standards Management Action and Assessment Review System (MAARS) Annual self assessment of EHS programs against J&J standards (GHS included) Every 3 year external “joint” assessment Results part of Supply Chain dashboard 12 Meeting Key Standards  Zero Class 1, 2, & 3A issues  Some (up to 3) Class 3B issues Some Gaps in Standards Implementation  Zero Class 1 issues  Some (up to 3) minor Class 2 1 issues  Some (up to 3) Class 3A issues  Multiple (more than 3) Class 3B issues Significant Gaps in Standards Implementation  One or more Class 1 issues  One or more significant Class 2 issues  Multiple (more than 3) Class 3A issues Policy & Procedures

Tracking Utilization Using electronic medical records Q1 US and PR Utilization 23,280 Individual Health Encounters 357 Health Programs & Events with 10,117 Participants 101,801 Fitness Center Visits 6,622 Medical Surveillance Evaluations 88% of Occupational Injuries & Illnesses treated “in-house” (No Workers Compensation Claim Costs) Case Management Metrics*: Recordable cases avoided due to case management: 20 (Valued at $255,780) Restricted work day cases avoided due to case management: 19 (Valued at $287,071) Lost work day cases avoided due to case management: 17 (Valued at $843,047) Engagement & Participation

Measure Outcomes Not Effort Accessible via Johnson & Johnson intranet Reporting by all operating companies annually In-depth validation of stated culture of health and program elements including population risk data Reporting by all operating companies annually Reports can be broken down by region (seen here) or Enterprise Sector Location 2011 Worldwide Reporting- 424 locations (100%) 14 SAMPLE SCORECARD Program Offerings % sites with FULL programs Region 1Region 2 Tobacco Free Worksites92%97% HIV Aids in the Workplace58%78% Mental Health Services (EAP)96%91% Medical Surveillance Programs78%81% Physical Activity Opportunities100%99% Health Profile Assessments96%100% Stress Mgmt. & Resiliency79%85% Cancer Awareness & Prevention 96%95% Health Promotion Programs92%98% Healthy Eating Cafeteria38%63% Travel Health Resources71%82% Modified Work Programs96%95% example Measurements & Outcomes Global Health Assessment Tool

Ongoing Measurement Occupational Health Index Quarterly/Annual metric used to evaluate clinical service delivery Measures: Compliance, Quality, Satisfaction and Efficiency 15 ComplianceQualitySatisfactionEfficiency Medical Surveillance Process Medical Record ReviewsStakeholder Survey Medical surveillance Compliance Modified Duty/Return to Work Health Clinic InspectionEmployee Survey Record keeping Travel health Health Audit Management Action Plan Closure Each element rated to give Green-Amber-Red and scored (3 – 2 – 1) Overall score calculated from the 10 elements Measurements & Outcomes

Measurement tools- next generation Health and Performance Index (HaPI) 16 The index combines health, productivity, well- being and culture of health and program sustainability measures. Scoring can provide a scorecard, and benchmark against other companies. Correlations to business value and financial Business Value / Financial Linkages Next generation metrics Global Health & Performance Platform Value-based decision making Transforming healthcare debate to prevention- focused Engagement & Participation Measurements & Outcomes

Population Health Risks ( U.S. Outcomes) /2012 High Risk Data: J&J Lower Compared To US And comparable employers Overall reduction in health risks over time Health risks lower compared to benchmark Measurements & Outcomes

Centralized Health Management - Impact 2002 Journal of Occupational & Environmental Medicine This study estimated the longer-term impact of the Johnson & Johnson Health & Wellness Program on medical care utilization and expenditures. Employees were followed for up to 5 years before and 4 years after Program implementation. Results indicated a large reduction in medical care expenditures (approximately $ per employee per year) over the 4-year Program period. These benefits came from reduced inpatient use, fewer mental health visits, and fewer outpatient visits compared with the baseline period. (J Occup Environ Med. 2002;44:21–29) 18 Utilization Type Healthcare Expenditures in Dollars Measurements & Outcomes

External validation of program success & opportunities “Company employees benefited from meaningful reductions in rates of obesity, high blood pressure, high cholesterol, tobacco use, physical inactivity and poor nutrition. Average annual per employee savings were $565 in 2009 dollars, producing a return on investment equal to a range of $1.88-$3.92 saved for every dollar spent on the program.” Long Term Outcomes Measurements & Outcomes

J&J Study – Health Affairs, March 2011 Overall Long Term Program Impact Health Outcomes and Cost Johnson & Johnson health risk trends significantly better than US and other industries Company employees benefited from meaningful reductions in rates of obesity, high blood pressure, high cholesterol, tobacco use, physical inactivity and poor nutrition. Johnson & Johnson’s Health & Wellness program had a projected return on investment (ROI) of $1.88-$3.92 for every $1.00 spent Average annual per employee savings were $565 in 2009 dollars, Benchmarking against similar industry shows an average rate of growth in medical and pharmaceutical costs that is 3.7% lower Lower increases in ER and Inpatient admissions and higher increases in doctor visits and prescription drug fills compared to other large companies US Medical Program ranks in top 1/3 compared against other Peer Companies 20 Measurements & Outcomes

Summary Success springs from a culture of health, which is built into the fabric of the business Senior leadership support - commit to the long-term Set standards, short & long term goals and measure outcomes Phased approaches, pilots and cultural adaptability are critical to successful implementation Integrated service delivery with a focus on prevention, protection, and performance yields positive health, wellbeing and economic results

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