The Business Case for Worksite Wellness Source: WellCert sm Program, Chapman Institute © Chapman Institute. All rights reserved. 1

Definitions of Wellness 2

Many Perspectives on Wellness Physical –Fitness, nutrition, medical self-care, control of substance abuse Emotional –Care for emotional crisis, stress management Social –Communities, families, friends Intellectual –Educational, achievement, career development Spiritual –Love, hope, charity Source: American Journal of Health Promotion (AJHP) & National Wellness Institute (NWI) EmotionalSocial PhysicalIntellectual Spiritual NWI AJHP © Chapman Institute. All rights reserved. 3

Key Definitions Wellness — “An intentional choice of a lifestyle characterized by personal responsibility, moderation, and maximum personal enhancement of physical, mental, emotional and spiritual health.” Worksite Wellness Program — “An organized program in the worksite that is intended to assist employees and their family members (and/or retirees) in making voluntary behavior changes which reduce their health and injury risks, improve their health consumer skills and enhance their individual productivity and well- being.” p. 2 © Chapman Institute. All rights reserved. 4

Relevance of Worksite Wellness 5

Most of Us are Connected to a Worksite 82% of U.S. population has employer connection Source: The National Data Book, © Chapman Institute. All rights reserved. 6

Top Ten Causes of Death: U.S and Pneumonia (all forms) and influenza 2.Tuberculosis (all forms) 3.Diarrhea, enteritis, and ulceration of the intestines 4.Diseases of the heart 5.Intracranial lesions of vascular origin 6.Nephritis (all forms) 7.All accidents 8.Cancer and other malignant tumors 9.Senility 10.Diphtheria Heart disease 2.Cancer 3.Respiratory disease 4.Stroke 5.All accidents 6.Alzheimer’s disease 7.Diabetes 8.Nephritis 9.Pneumonia (all forms) and influenza 10.Suicide Source: CDC, © Chapman Institute. All rights reserved. 7

Top Ten Causes of Death By Age Group: U.S © Chapman Institute. All rights reserved. 8

2000 Obesity Trends* Among U.S. Adults BRFSS, 1990, 2000, 2010 (*BMI 30, or about 30 lbs. overweight for 5’4” person) No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30% © Chapman Institute. All rights reserved. 9

Economics of Worksite Wellness 10

Health Benefit Cost Trends Affect Wellness © Chapman Institute. All rights reserved.

Major Minor Future Direction of Healthcare Cost Growth? Enhancing Cost Aging Technology Risk factors increasing Cost shifting increasing Market imperfections Managed care limits Defensive medicine Collective bargaining pressures Entitlement mentality Margin/profitability erosion Complexity of human health Quality artifacts Costs of privacy/confidentiality Confusion about health & healthcare Restraining Cost Employee cost sharing DC approach Selected technological developments Improved price competition Prevention improvements Enlarged public role EDI applications Selected alternative therapies © Chapman Institute. All rights reserved. 12

Health Spending is Not Normally Distributed A Small Percentage of Employees Account for a Large Percentage of Claims Cost $150/person Generally well with episodic need for services Chronically ill requiring systematic management: e.g. diabetes, hypertension % of Employees% of Claims $20,000/person Complex, multiple problems requiring aggressive, unique case management: e.g. Alzheimer's © Chapman Institute. All rights reserved.

Factors that Determine the Amount of Healthcare You Use Supply-Side Factors (outside the individual)  Extent and scope of insurance coverage*  Point-of-use cost sharing*  Geographic access to services Supply-Side Factors (outside the individual)  Regional or local practice patterns  Provider incentives affecting diagnosis and treatment decisions* Demand-Side Factors (inside the individual) Age* Sense of responsibility for personal health* Clinical risk factors* Current morbidity* Self-efficacy* Gender Personal health behavior* Attitudes about personal health and health care use* * =Potentially modifiable. Source: L. Chapman, 2010 © Chapman Institute. All rights reserved. 14

Important Quote…. …….almost two thirds of the growth in national health spending over the past 20 years can be attributed to Americans’ worsening lifestyle habits and, in particular, the epidemic rise in obesity rates.” Source: Goetzel, R.Z., Pickens, G.T., Kowlessar, N.M., The Workforce Wellness Index: A Method for Valuing U.S. Workers’ Health, J Occup Environ Med, Feb 2013, 55(2):1-8. © Chapman Institute. All rights reserved. 15

Source: Goetzel RZ, et. al. (1998, October). The relationship between modifiable health risks and health care expenditures: An analysis of the multi-employer HERO health risk and cost database. JOEM, 40(10): Percent Higher Annual Health Plan Costs Health Risks Increase Health Costs (Original HERO Study) N = 46,000+ X 3 yrs © Chapman Institute. All rights reserved.

Health Risk Factor Definitions Risk FactorsHigh-Risk Definitions Body mass index BMI ≥30 Blood pressure Systolic ≥140 mmHg or diastolic ≥90 mmHg Cholesterol Total cholesterol ≥240 mg/dL Blood glucose Total blood glucose ≥126 mg/dL Tobacco Currently smokes cigarettes or uses tobacco Alcohol More than two drinks per day Stress Often feels stressed and has trouble coping Exercise Fewer than 2 days per week of at least 20 minutes of exercise or self-reported non-exerciser/light exerciser in the previous month 17 Source: Goetzel, R.Z., Pickens, G.T., Kowlessar, N.M., The Workforce Wellness Index: A Method for Valuing U.S. Workers’ Health, J Occup Environ Med, Feb 2013, 55(2):1-8. © Chapman Institute. All rights reserved.

Percent Higher Cost of Key Health Risk Factors (Updated HERO) © Chapman Institute. All rights reserved. 18

Prevalence of Key Health Risk Factors (Frequency) © Chapman Institute. All rights reserved. 19

Association Between Changes in Health Risk Status and Changes in Future Health Care Costs 20 Annual Medical Plan Cost © Chapman Institute. All rights reserved.

Relationship of Risk Factors to Medical Conditions Source: Bolnick, H., Millard, F., and Dugas, J., Medical Care Savings from Workplace Wellness Programs, JOEM 2012, Jan, 55(1): 4-9. © Chapman Institute. All rights reserved. 21

Percent of Total Medical Care Expenses Due to Risk Factors Source: Bolnick, H., Millard, F., and Dugas, J., Medical Care Savings from Workplace Wellness Programs, JOEM 2012, Jan, 55(1): 4-9. Uses WHO Global Burden of Disease and Risk Factors Study and The Medical Expenditure Panel Surveys of the NCHS. Age Groups © Chapman Institute. All rights reserved. 22

Percent of Total Medical Care Expenses Potentially Preventable Source: Bolnick, H., Millard, F., and Dugas, J., Medical Care Savings from Workplace Wellness Programs, JOEM 2012, Jan, 55(1): 4-9. Uses WHO Global Burden of Disease and Risk Factors Study and The Medical Expenditure Panel Surveys of the NCHS. If theoretical minimums are reached. Age Groups © Chapman Institute. All rights reserved. 23

Lifetime Health Costs $316,579 $361,192 $268,679 Source: Alemayehu, B., Warner, K.E., The Lifetime Distribution of Health Care Costs, Health Services Research, (June, 2004), 39:3, p. 627 – 642. © Chapman Institute. All rights reserved. N = 3.7 million 24

Average Annual Health Cost Growth Source: Alemayehu, B., Warner, K.E., The Lifetime Distribution of Health Care Costs, Health Services Research, (June, 2004), 39:3, p. 627 – 642. © Chapman Institute. All rights reserved. The average amount of increase in health care costs with one more year of age. 25

Source: Musich, S., Schultz,A., Burton, W., Edington, D., Overview of Disease Management Approaches: Implications for Corporate-Sponsored Programs. Disease Management & Health Outcomes. 2004, 12(5): Healthcare Spending Doesn’t Stay High Over Time Quarters N = 29,472 Dollars per Qtr © Chapman Institute. All rights reserved.

Financial Impact of Selected Health Risk Factors Source: Kowlessar NM, Goetzel RZ, Carls GS, Tabrizi MJ, Guindon A., The relationship between 11 health risks and medical and productivity costs for a large employer. J Occup Environ Med May;53(5): N = 63,013. Cost Per Year N = 63,013 © Chapman Institute. All rights reserved. 27

Financial Impact of Selected Health Risk Factors Source: Kowlessar NM, Goetzel RZ, Carls GS, Tabrizi MJ, Guindon A., The relationship between 11 health risks and medical and productivity costs for a large employer. J Occup Environ Med May;53(5): N = 63,013. Cost Per Year N = 63,013 © Chapman Institute. All rights reserved. 28

Source: Serxner, S., et al., (2001). The impact of behavioral health risks on worker absenteeism. JOEM, 43(4), Percent Higher Absenteeism Health Risks Increase Sick Leave Use (Early Study) N = 35,451 X 1 yr © Chapman Institute. All rights reserved.

Source: Musich, S., et. al., (2001, June). The Association of Health Risks with Workers’ Compensation Costs, JOEM,, p Percent Higher Annual WC Costs Health Risks Increase Workers’ Comp Cost (Early Study) N = 3,388 X 4 yrs © Chapman Institute. All rights reserved.

Source: Yen, Louis, et al., (2004, Sept/Oct). Associations between health risk appraisal scores and employee medical claims costs in a manufacturing co., AJHP, 11(1), p Multiple Health Risks Multiply Cost (Early Study) Multiples of annual healthcare costs compared to someone with no health risks Number of Risks Multiples N = 1,838 © Chapman Institute. All rights reserved.

Source: Musich, S., et. al., (2001, June). The Association of Health Risks with Workers’ Compensation Costs, JOEM, p Multiple Health Risks Multiply WC Cost (Early Study) N = 3,338 (0 – 1) (2 – 3) (4+) Health Risk Factors © Chapman Institute. All rights reserved.

Health Costs are Potentially Preventable (Early Study) 25% 75% Preventable Depression Stress Blood Sugar Smoking Obesity Blood Pressure Sedentary Life Not Related Source: Anderson, et. al., (2000, Sept/Oct). The Relationship Between Modifiable Health Risks and Group-Level Health Care Expenditures, AJHP, 15(1), p N = 46,026 X 6 Yrs © Chapman Institute. All rights reserved.

Lifetime Health Costs Perspective Source: WellCert Program Birth $ Annual Health Costs Without Wellness With Wellness 65 “Compression of Morbidity” Death © Chapman Institute. All rights reserved. 34

Presenteeism is a Major Cost for Employers Percent of total labor costs Source: Collins, J., Baase, C., Sharda, C., Ozminkowski, R., Billoti, G., Turpin, R., Olson, M., and Berger, M., The assessment of chronic health conditions on work performance, absence and total economic impact for employers, J Occup Environ Med., 2005, Jun: 47(6): % Enterprise-wide Health Costs © Chapman Institute. All rights reserved. N = 56,

Economic Rationale for Worksite Wellness Source: Goetzel, JOEM, (2004) data adjusted to 2010 by Mercer Employer Survey Results and by Collins Presenteeism study (2005) of Dow Chemical that was used for determining the Presenteeism cost. Total = $28,541* © Chapman Institute. All rights reserved. * = 2010 Dollars 36

Contents of Worksite Wellness 37

National Worksite Wellness Survey Results Sources: Office of Disease Prevention and Health Promotion, U.S.P.H.S. National Survey of Worksite Health Promotion Activities: A Summary. Summer 1987, p. 51., Office of Disease Prevention and Health Promotion, U.S.P.H.S. National Survey of Worksite Health Promotion Activities: A Summary. Spring 1993, p. 30., Association for Worksite Health Promotion, US Department of Health and Human Services, Office of Disease Prevention and Health Promotion, 1999 National Worksite Health Promotion Survey: Report of Findings. Linnan, L., et.al., Results of the 2004 National Worksite Health Promotion Survey, Am J Public Health. 2008;98:1503–1509. © Chapman Institute. All rights reserved. 38

Six Step to Designing Your Wellness Program Scope the Program Plan Infrastructure Plan Communications Plan Health Management Process Plan Group Activities Plan Supportive Environment Step #1 Step #2 Step #3 Step #4 Step #5 Step #6 “Program” Infrastructure “Administrative” Infrastructure Source: Chapman, L., Planning Wellness: Getting Off to a Good Start, 2013, p © Chapman Institute. All rights reserved. 39

There Are Several Ways to Do “Wellness” Quality of Work Life Program Model Fun activity focus No risk reduction No high risk focus Not HCM oriented All voluntary Site-based only No personalization Minimal Incentives No spouses served No evaluation Morale-Oriented Main Features Primary Focus Traditional Approach Mostly health focus Some risk reduction Little high risk focus Limited HCM oriented All voluntary Site-based only Weak personalization Modest Incentives Few spouses served Weak evaluation Activity-Oriented Population Health Management Add productivity Strong risk reduction Strong high risk focus Strong HCM oriented Some required activity Site and virtual both Strongly personal Major Incentives Many spouses served Rigorous evaluation Results-Oriented © Chapman Institute. All rights reserved. Source: Chapman, L., Planning Wellness: Getting Off to a Good Start, 2013, p

The Overall Relationship of Risks to Health Costs Source: 2012 Health Care Survey, Aon Hewitt, 2012, p © Chapman Institute. All rights reserved. 41

Aon Hewitt 2012 Health Care Survey: PHM Intentions Source: 2012 Health Care Survey, AonHewitt, 2012, p N = 1,800+ employers © Chapman Institute. All rights reserved. 42

Source: 2012 Health Care Survey, AonHewitt, 2012, p Aon Hewitt 2012 Health Care Survey: PHM Interventions N = 1,800+ employers © Chapman Institute. All rights reserved. 43

Source: 2012 Health Care Survey, AonHewitt, 2012, p Aon Hewitt 2012 Health Care Survey: PHM Intentions N = 1,800+ employers © Chapman Institute. All rights reserved. 44

Worksite Wellness Standards & Recognition Programs WELCOA: welcoa.org Wellness Council of America is one of the nation’s most-respected resources for building high-performing, healthy workplaces. 25+ year history Well Workplace Checklist & Guide Well Workplace Awards Well Workplace Training The American Heart Association: heart.org Worksite Wellness Resources Fit Friendly Worksite Award 45

ROI Evidence of Worksite Wellness 46

Psychologically Healthy Companies have Lower Turnover, Stress and Higher Satisfaction Source: American Psychological Association, © Chapman Institute. All rights reserved. 47

Source: Proof Positive: An Analysis of the Cost-Effectiveness of Worksite Wellness, Chapman Institute, Seventh Edition, Summary of C/B Results Bank of America Blue Shield of CA Duke University Citibank City of Birmingham Coors DuPont General Foods General Motors GlaxoSmithKline Indiana BCBS Johnson & Johnson Life Assurance Nortel Prudential Travelers Union Pacific Washoe County Traditional Newer Programs Outliers C/B Ratio Study Number © Chapman Institute. All rights reserved. 48

2012 Meta-Evaluation Findings: Overview Study Parameter Averages & Totals (N=62) Average Study Years3.83 Observational Years241.3 Year Reported (Median)1996 # of Study Subjects546,971 # of Control Subjects213,291 Average # of Program Targets5.2 % Change in Sick Leave-25.1% (26) % Change in HCs-24.5% (32) % Change in Workers’ Comp-40.4% (4) % Change in Disability Mang.-24.2% (3) C/B Ratio1:5.56 (25) © Chapman Institute. All rights reserved. Source: Chapman, L. Meta-Evaluation of Economic Return Studies of Worksite Health Promotion Programs:2012 Update, America Journal of Health Promotion, March/April, 2012, 26(4):

Study Number C/B Ratio Source: Chapman, L. Meta-Evaluation of Economic Return Studies of Worksite Health Promotion Programs, America Journal of Health Promotion, March/April, 2012, 26(4): Average C/B Ratio = 1:5.56 © Chapman Institute. All rights reserved Meta-Evaluation Findings: Summary of C/B Ratios 50

Blue Shield of CA Kansas BCBS Indiana BCBS Highmark BCBS Prudential Life Assurance (Canada) City of Birmingham, AL Washoe County, NV Salt Lake County, UT Swedish IRS Citibank Bank of America Unilever Coors DuPont General Foods General Motors Johnson & Johnson GlaxoSmithKline Nortel DirectTV Duke University Union Pacific Regional Hospital © Chapman Institute. All rights reserved. Source: Chapman, L. Meta-Evaluation of Economic Return Studies of Worksite Health Promotion Programs, America Journal of Health Promotion, March/April, 2012, 26(4): Meta-Evaluation Findings: Organizational Sites 51

Even More Authoritative Meta-Analysis… Source: Katherine Baicker, David Cutler, and Zirui Song, Workplace Wellness Programs Can Generate Savings, HEALTH AFFAIRS February,2010, 29(2) 1-8. C/B = 1:6.0 © Chapman Institute. All rights reserved. 52

The Chapman Institute  Five (5) levels of professional certification for worksite wellness practitioners. Both Online and Onsite: - CWPC (Level 1) - CWPM (Level 2) - CWPD (Level 3) - CWWPC (Level 4) - CWWP (Level 5)  30+ recertification online modules  eBooks  “New Research Findings”  “Excellent National Wellness Resources” Visit WellCert sm Program: “The premier practitioner certification program for the Worksite Wellness field.” © Chapman Institute. All rights reserved. 53