Healthy Culture Healthy Bottom line Steven M. Chevarria, CEO Health and Productivity Practice Leader Pansalus Consulting, LLC York Society for Human Resource Management September 10, 2013

Healthy engaged people are safer, perform better & cost less Making Wellness Work

Today’s Learning Objectives 1.Understand the benefits of aligning your corporate culture with your business strategy 2.Why wellness – benefit vs. investment 3.and Ultimately how to develop true financial cost strategies

Why Wellness The Opportunity The Solution Making Wellness Work

Why Wellness Making Wellness Work

Our Role as Human Resources Professionals is… Contribute to the bottom line of an organization Be a steward of culture & change Strategic architects Operational executor Business alley-know the business direction of the company Why Wellness

Culture Why Wellness

Culture affects… Productivity Absenteeism Moral Turnover Employee health and safety Health care costs, and Business Profits Why Wellness

Understanding the players Why Wellness

Providing the “right” tools and resources Why Wellness

Environment Setting up the “right” conditions Why Wellness

If nothing is wrong with our culture, why change? Why Wellness

The rising cost of chronic disease, direct costs and indirect costs (lost productivity) is affecting business’s bottom line. Productivity losses associated with employees with chronic disease are as much as 400% more costly than treating the disease itself. Loses in productivity include disability, unplanned absences, reduced workplace effectiveness, increased accidents, and negativity with regard to customer service and work quality. PricewaterhouseCoopers analysis in conjunction with the World Economic forum as reported in wellnessjunction.com April 2009 Why Wellness

Health, Wellness and Safety Why Wellness

Obesity is correlated with injuries, illnesses and recovery Tobacco users take 3X as long to heal after a work related injury then non-tobacco users Chronic conditions such as diabetes, asthma, high cholesterol, and musculoskeletal disorders cost companies money in health care dollars and workers comp. Both health and safety are behavioral disciplines Why Wellness

In addition to health care costs, poor health is a primary driver of workplace injuries and other productivity related costs. Consider Workers’ Compensation - In the most definitive study of employee health on Workers’ Compensation costs, it was concluded that: Why Wellness

There is a remarkable association between obesity and Workers’ Compensation costs. Some conclusions include: – Claims – 2x higher for obese and overweight workers – Lost workdays – 12x higher for obese and overweight workers – Medical Claims Costs – 6x higher for obese and overweight workers – Indemnity Claims – 11x higher for obese and overweight workers by Johns Hopkins School of Public Health and by Duke University Why Wellness

Lost Work Days per Employee per Year BMI less then 25 = Lean BMI over 30 = Obese Source: Duke University Medical Center / downloaded from American Medical Association Why Wellness

Medical Cost per EE per Year Indemnity Claims Cost per EE per year BMI less then 25 = Lean BMI over 30 = Obese Source: Duke University Medical Center / downloaded from American Medical Association Why Wellness

Cost of Absenteeism, Healthcare, Worker’s Compensation Medical & Indemnity Claims per employee per year TOTAL $16,492 TOTAL $16,492 TOTAL $5,485 TOTAL $5,485 Source: Duke University Medical Center / downloaded from American Medical Association Why Wellness

Clearly, improving employee health can be a primary Workers’ Compensation cost reduction strategy. Why Wellness

The prevalence of obesity among U.S. adults has increased over 61% in the past decade…its cost…>$2,500 per year for obese people. The prevalence of Diabetes increased by almost 40% during the same period…its cost >$12,000 per year for people suffering from Diabetes. Why Wellness

Bad and getting worse! Literally, we’re killing ourselves, but slowly and expensively Why Wellness

Over 40% of premature deaths in this country are due to unhealthy lifestyle choices and behaviors. 70% of our nation's health care costs are caused by lifestyle related chronic diseases. Costs of lost productivity due to poor employee health are as much as 3X the direct medical and disability costs. Why Wellness

Frightening Business and Human Consequences * Incremental Annual Health Care Costs - Source: University of Michigan Health Management Research Center Data Base + 1 Health Risk Factor...$5,018* 3 Health Risk Factors…$8,071* 5 Health Risks Factors…$11,596* 7 Health Risks Factors…$15,209* Workplace injuries, disability, absenteeism, presenteeism…and diminished quality of life Why Wellness

Employers bear the lion’s share of the health care cost burden for their employees, with health insurance expenses now the fastest growing business cost component. (Source: CDC) Why Wellness

The reasons are simple: Wellness is for the well people Too passive, remote, and indirect Too much reliance upon self-direction Inflexible and program based Not responsive to ever-changing personal needs and goals Not comprehensive Not timely Not enough active, ongoing support and reinforcement Not tailored enough to the company and individual needs The culture doesn’t support the population’s behavior change Why Doesn’t Wellness Work

There is hope because the primary driver of increasingly poor health is risky lifestyle behaviors like poor nutrition, overeating, lack of exercise, and smoking which can all be prevented. Why Wellness

Health and wellness is not a Human Resources problem Why Wellness

It is a business problem and needs a business solution Why Wellness

The Opportunity The Solution Making Wellness Work

The Opportunity Making Wellness Work

What are some of the benefits of creating a safe and healthy culture? Improved Professional Image Increased Productivity Improved Morale Reduced Turnover Increased Recruitment Potential Reduced Absenteeism Lower Health Care Costs Improved Employee Health Increased Profit The Opportunity

Employee Satisfaction – How healthy people feel, affects their job satisfaction and their productivity. And, how satisfied people are with their job affects their own health. A 5% increase in employee satisfaction can result in a 1.3% increase in “customer impression” and a 0.8% revenue increase. Sears Roebuck and Company (USA), 1998 The Opportunity

What is the hard dollar savings of having a Healthy Employee? – Costs We understand all of these benefits but how do we measure them? – Track the “right” information The Opportunity

Why Wellness The Opportunity The Solution Making Wellness Work

The Solution Making Wellness Work

Understanding the employees The Solution

We can not force people to change their behavior. Culture and behavior are much different then wellness The Solution

Providing the “right” tools and resources The Solution

Integrating Lifestyle and Safety The Solution

Environment Setting up the “right” conditions The Solution

Prepare your people for success The Solution

It starts with setting up the right culture. …Safety The Solution

How to start building a culture of health – Work with a behavior expert – in safety you work with a environmental safety experts. – Conduct a culture audit – in safety we are constantly completing audits/assessments. – Update your strategy monthly/quarterly/annually and set a strategy that is projected between 3-5 years. – Put the right initiatives in place. The Solution

Bridging the gap between workplace safety and wellness has a number of benefits for both employees and employers Bottom Line

Most importantly, Healthy engaged people are safer, perform better & cost less Bottom Line

Thank you Steven M. Chevarria, CEO Health and Productivity Practice Leader Pansalus Consulting, LLC York Society for Human Resource Management September 10, 2013 For more information please contact us at Or online at