1. People Helping People Insurance Employee Benefits Risk Management Financial Strategies Return on Investment with Performance- Based Health Management

2. Insurance Employee Benefits Risk Management Financial Strategies Objectives Explain why traditional wellness has failed Identify the 6 best practices of a successful health Identify the 6 best practices of a successful health management program How to design an effective incentive strategy Demonstrate real Return-On-Investment

3. Insurance Employee Benefits Risk Management Financial Strategies Why Traditional Wellness Has Failed  Price Waterhouse Coopers Study  71% of employers offering wellness program… few said they are effective at lowering costs  Participation remains low  <50% of those who are eligible actually participate  Participation in disease management remains low…less than 15% eligible actually participate  Opt-in health coaching participation in the single digits

4. Insurance Employee Benefits Risk Management Financial Strategies The Reality  Despite the popularity and prevalence of employee wellness programs, we are not getting healthier.

5. Insurance Employee Benefits Risk Management Financial Strategies Obesity Trends * Among U.S. Adults BRFSS (*BMI 30, or about 30 lbs. overweight for 5’4” person) 1990 2009 1999 No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

6. Insurance Employee Benefits Risk Management Financial Strategies Diabetes Trends Diagnosed Diabetes among Adults aged ≥ 20 years 2004 2007 2009 Percent

7. Insurance Employee Benefits Risk Management Financial Strategies Life is Getting Easier

8. Insurance Employee Benefits Risk Management Financial Strategies Doing Nothing is a Losing Strategy  Migration study of 43,312 Individuals Over 3 Years Key Findings Risk profile of a population gets worse over time Number of High Risk individuals increased 11.4% Number of Medium Risk individuals increased 7.7% Number of Low Risk individuals decreased 4.9% Results are a function of American lifestyle habits and the realities of age Year 0 Low Risk (0-2 Health Risks) 27,951 Medium Risk (3-4 Health Risks) 10,670 High Risk (5+ Health Risks) 4,691 Year 3 Low Risk (0-2 Health Risks) 26,591 Medium Risk (3-4 Health Risks) 11,495 High Risk (5+ Health Risks) 5,226 High Risk (5+ Health Risks) 5,226

9. Insurance Employee Benefits Risk Management Financial Strategies You Don‘t Know What You Don’t Know HRA FindingsClaims information Diabetes Hypertension 111 with glucose in diabetic range 580 with glucose in pre-diabetic range 50 have claims with a diagnosis suggesting diabetes or pre-diabetes 549 individuals with elevated systolic and diastolic blood pressure readings 78 have claims with a diagnosis suggesting hypertension Heart Attack Risk 815with elevated cholesterol 883 with BMI readings > 30, of which 396 (44.8%) are also pre- diabetic 98 individuals have claims with a diagnosis suggesting being at risk of a heart attack

10. Insurance Employee Benefits Risk Management Financial Strategies 6 Best Practices

11. Insurance Employee Benefits Risk Management Financial Strategies Best Practice #1 Objective and Outcome-Based  Objective measurement is key to success Set baseline Track trends Real information, not a guess  Importance of on-site venipuncture biometric screening Objective data points to measure over time Participants don’t “know their numbers” Uncover hidden risks

12. Insurance Employee Benefits Risk Management Financial Strategies Employee Perception of Health - 88% of participants self-reported a good or great health status - 70% of participants scored a 71 or higher (ideal or low level of risk) 1% of participants self-reported a below average or poor health status 12% of participants scored a 60 or below (high or very high risk)

13. Insurance Employee Benefits Risk Management Financial Strategies Best Practice #2 Clear-Cut Scoring Easy to understand scoring drives engagement and participation Scored model translates risks into compliant measurement model Long term measurement tool

14. Insurance Employee Benefits Risk Management Financial Strategies Personal Report Overall Wellness Dear “Participant”, By completing this assessment, “Participant”, you have taken the first step toward a healthier lifestyle! This guide will give you valuable information to help you achieve a healthier way of life. Better health increased productivity, in both your professional and personal life. This guide is not meant to take the place of a physician visit nor can it diagnose illness or medical problems. It is designed to give you information relating to your health risks and overall wellness. This information is provided to help you develop a plan of action to make healthy lifestyle changes. This program uses scientifically validated research to help you identify risks or behaviors that may cause or lead to chronic illness. Our program concentrates on risk factors that can be modified and that you should be able to effectively control, maintain and/or improve. To get the most out of this guide, you may want to read it more than once. Your Health Score is 58 Your score qualifies as High Risk. The ranges of scores are as follows: An overall score of 71 or above indicates your lifestyle is on the right track. A score below 71 means that you might be at risk for developing certain diseases or health conditions. Very High Risk 50 or less High Risk 51 to 60 Moderate Risk 61 to 70 Low Risk 71 to 84 Ideal Risk over 85

15. Insurance Employee Benefits Risk Management Financial Strategies Best Practice #3 Carrie Independent  Don’t share proactive risk data with risk bearer  Keep program consistent over time  You OWN the data  More flexibility in program design

16. Insurance Employee Benefits Risk Management Financial Strategies Best Practice #4 Meaningful Incentives Direct Correlation Between Value & Participation Results for completion of Health Assessments show a direct correlation between incentive value and participation Incentives reward those who make healthy lifestyle choices

17. Insurance Employee Benefits Risk Management Financial Strategies Best Practice #5 Support Behavior Change Personal InterventionGroup Programming Communication campaign Marketing to drive participation Ensure understanding of available programs Effectively communicate incentives Education Campaign Monthly Newsletter Twitter tip of the day Lunch n Learns Activity Programming Weight loss challenges Pedometer programs Point based initiatives Online Health Portal Health/Wellness content Activity/ Nutrition Tracking tools Program management Push/ Pull Targeted Communications Focus on personal risk factors Reward positive change Coaching/Medical Management Health Coaching Disease Management Case Management

18. Insurance Employee Benefits Risk Management Financial Strategies Best Practice #6 Measure Results Participation  Track participation by employee/dependent, location, and job codes  Goal: 70% participation (minimum) Program Engagement  Track activity in health coaching, online utilization of sites, goal tracking, classes and challenges to determine outcomes and impact Health Risk Analysis and Migration  Break out specific risk factors and risk category to track annually Claims Analysis and Impact

19. Insurance Employee Benefits Risk Management Financial Strategies Designing an Effective Incentive Program

20. Insurance Employee Benefits Risk Management Financial Strategies Effective Incentive Design  Various studies show that 85% of people are wired to not change unless there are consequences  Myth: People won’t change  Reality:  Seat belt use 30 years ago compared to today  Drunk driving 30 years ago compared to today  Worksite/Job safety 30 years ago compared to today

21. Insurance Employee Benefits Risk Management Financial Strategies HIPAA Compliance  Wellness Program conditions and rewards MUST comply with HIPAA Wellness Program Regulations: 1.Limit on Reward 2.Reasonably Designed To Promote Good Health or Prevent Disease 3.Annual Opportunity to Qualify For Reward 4.Reasonable Alternative Standard 5.Disclosure Required

22. Insurance Employee Benefits Risk Management Financial Strategies Example of Implementation  Year 1 - Actions  Increase contribution rates by $25 per month for non-participants  Offer employees $25 per month discount for participating in assessment program  Year 2 - Performance  Offer $10 per month discount for repeat participants (participation incentive)  Offer $15 per month discount for repeat participants who maintain a high level of health, improve by at least 5 points on the scored algorithm, or provide a letter from MD that states compliance with care (outcome incentive)  Year 3 and beyond -Increase premium rates as necessary -Include spouses

23. Insurance Employee Benefits Risk Management Financial Strategies Cost Difference by Participation

24. Insurance Employee Benefits Risk Management Financial Strategies Claims Experience Related to Health Score

25. Insurance Employee Benefits Risk Management Financial Strategies Repeat Participation Demonstrates Reduction in Claims Expense  *Non-Participants are costing $2,000 more than Year 1 Participants and more than $3,000 more than those continuously participating in the biometric screenings

26. Insurance Employee Benefits Risk Management Financial Strategies Medical Claims Correlation to Glucose

27. Insurance Employee Benefits Risk Management Financial Strategies Workers Comp Claims by Participation

28. Insurance Employee Benefits Risk Management Financial Strategies Workers Comp Claims Correlation to BMI

29. Insurance Employee Benefits Risk Management Financial Strategies Excess Risk Equals Excess Cost Cost AreaLow Risk (N=671) Medium Risk (N=504) High Risk (N=396) Short-Term Disability $160$288$444 Worker’s Compensation $304$325$662 Absence$327$455$703 Medical & Pharmacy $1,544$1,983$4,929 Total$2,335$3,052$6,738 High Risk employees cost $4,403 more per year! Source: University of Michigan Health Management Research Center Inflation adjusted to 2009: http://www.halfhill.com/inflation.html

30. Insurance Employee Benefits Risk Management Financial Strategies Return on Investment

31. Insurance Employee Benefits Risk Management Financial Strategies Questions? Sarah Kuretzky Health Solutions Coordinator sarah.kuretzky@kapnick.comarah.kuretzky@kapnick.com 888.263.4656 x1157