W W W. W A T S O N W Y A T T. C O M Employer response and possible implications for workplace policy National Health Policy Conference Obesity: Strategies to combat the epidemic January 29, 2004

1 Financial picture of consumer health behavior 50% 30% 4%66% 15% 35% 50% Chronic Disease Acute Conditions High Risk Moderate Risk Low Risk Catastrophic Illness Chronic Disease Acute Conditions High Risk Moderate Risk Low Risk Catastrophic Illness 4%66% 15% 35% Missed Opportunity Less than $1,000 Maintain Health $1,000 to $9,999 Improve Health Greater than $10,000 Manage Health

2 Health influences more than medical costs in the workplace Medical costs account for less than half of the total health and productivity-related costs. Other health-related expenses include: – Absenteeism from work – Disability program use – Workers’ compensation program costs – Turnover – Family medical leave – Presenteeism (on-the-job productivity losses)

3 Employers are beginning to link health and work performance Health VariableWork VariableEffect on Performance Moderate physical activity Quality of work performed Improvement Moderate physical activity Overall job performanceImprovement Cardiorespiratory fitnessOverall job performanceImprovement Cardiorespiratory fitnessExtra effort exertedImprovement BMI (obesity > 30 and < 40 kg/m 2 ) Getting along with coworkers Decrement BMI (obesity > 40 kg/m 2 ) Work loss daysDecrement Source: N. Pronk,et al, JOEM, 2004

4 The sense of urgency is real! Health care costs are on target to double in five years or less. Employers are giving serious consideration to redirecting funding toward health and productivity improvement programs, which: – Reduce health care use – Moderate cost increases – Reduce illness absenteeism – Improve work performance

5 Obesity at the Workplace: Potential Policies and Implications Three categories of policies to provoke discussion today – Easy, That’s a “No Brainer” – Difficult but Achievable – Are You Crazy!

6 Easy, That’s a “No Brainer” Pros Easy to implement with vendors Choice is still available Makes visible change in work environment Cons May have to subsidize cost difference All onsite vending machines and food service providers have lower cost healthier alternatives

7 Easy, That’s a “No Brainer” Pros Integrates into an existing program and training structure Shows how obesity impacts both worker and co-worker safety Cons May eliminate an established safety training topic Obesity prevention education is mandated as part of annual safety training requirements

8 Difficult, but Achievable Pros Treats obesity like any other disease Focuses on both prevention and treatment Cons Health care cost trends are on the rise many employers may be reluctant to increase coverage Investment dollars for prevention Employer health care benefit plans cover both prevention and treatment of overweight and obesity

9 Difficult, but Achievable Pros Works physical activity into the work environment Increases physical activity levels of sedentary employees Visible activity at the workplace Cons Employees may view break time as “their” time and they can do what they want Enforcement and consequences for not participating Mandate two 10-minute physical activity breaks during the work day

10 Are You CRAZY! Institute medical plan premium differentials (like smoker, non-smoker) using healthy weight versus overweight/obesity

11 Are You CRAZY! Being at a healthy weight and meeting physical activity requirements becomes part of the equation in determining gain sharing, bonuses and variable compensation but not base salary. Health is part of overall performance and is measured.

12 Employers who focus on solutions to improve health and productivity understand... Employees don’t get and stay healthy by chance. Keeping workers healthy requires new approaches. Maintaining a healthy workforce means investing hard dollars. Not everything that counts is countable. The bottom line is the bottom line and every business investment MUST have a return. Source: WELCOA, 2002 J:\allusers\pronk\pres\2004\speedlearningghc.ppt