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Wellness Programs. Eric Samaniego VP Wellness Strategy. Keys to Success. Agenda. Wellness Programs - Keys to Success - Justifying the Cost of Wellness Comprehensive Program Strategy Incentive Research Alere Incentive Strategy Alere Incentive Data Analysis Questions. Wellness Programs.

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Wellness programs

WellnessPrograms

Eric Samaniego

VP Wellness Strategy

Keys to Success


Agenda

Agenda

  • Wellness Programs

  • - Keys to Success -

    • Justifying the Cost of Wellness

    • Comprehensive Program Strategy

    • Incentive Research

    • Alere Incentive Strategy

    • Alere Incentive Data Analysis

    • Questions

Wellness Programs


Wellness programs1

Wellness Programs

  • JUSTIFYING THE COST

  • OF Wellness


Justifying the cost of wellness the full cost of employee illness

Justifying the Cost of Wellness:The Full Cost of Employee Illness

Personal Health Costs

Medical Care

Pharmacy

Medical & Pharmacy Costs

$3,376 PEPY

25%

Productivity Costs

Overtime

Health-Related Productivity Costs

$10,128 PEPY

Turnover

Turnover

75%

Absenteeism

Temporary Staffing

Administrative Costs

Replacement Training

Off-Site Travel for Care

Total PEPY

= $13,504

Presenteeism

Customer Dissatisfaction

Variable Product Quality

Sources: Edington DW, Burton WN. Health and Productivity. In McCunney RJ, Editor. A Practical Approach to Occupational and Environmental Medicine. 3rd edition. Philadelphia, PA. Lippincott, Williams and Wilkens; 2003: 40-152. Loeppke, et.al., JOEM, 2003; 45:349-359 and Brady, et.al., JOEM, 1997; 39:224-231


Justifying the cost of incentives incremental cost for every risk factor

Justifying the Cost of Incentives:Incremental Cost for Every Risk Factor

$11,917

$10,524

$9,086

$7,741

$6,324

$5,097

$3,932

$2,807

Source: Dee Edington, PhD, Health Management Research Center, University of Michigan


Justifying the cost of wellness physiology of behaviors

Justifying the Cost of Wellness:Physiology of Behaviors

Research shows a positive correlation between consistent exercise and proper nutrition with improving many illnesses.

Significance:

Change your behaviors, and improve your health.

Wellness Programs


Wellness programs

Comprehensive Program Strategy

Outcomes

C O R P O R A T E C U L T U R E


Corporate culture

Corporate Culture


Program design

Program Design

Wellness Programs


Program design influencing behavior change

Program DesignInfluencing Behavior Change

Wellness Programs


Program design1

Program Design

Variety

of

Activities

Wellness Programs


Marketing communication

Marketing & Communication

Wellness Programs


Marketing communication1

Marketing & Communication

Presentation name_081408


Incentives

Incentives

  • INCENTIVE RESEARCH


Integrated benefits institute study employer incentives for workforce health and productivity

Integrated Benefits Institute StudyEmployer Incentives for Workforce Health and Productivity

  • Published 2008

  • Survey of more than 500 employers

  • Approximately 5 million employees

  • Employers using Incentives & Disincentives

  • Incentives73%

  • Disincentives19%


Ibi study employer demographics

IBI Study – Employer Demographics


Ibi study number of incentives offered

IBI Study Number of Incentives Offered


Ibi study types of incentives

IBI Study – Types of Incentives


Ibi study subjective effectiveness

IBI Study – Subjective Effectiveness


Ibi study types of disincentives

IBI Study – Types of Disincentives


Ibi study program goals

IBI Study – Program Goals


Ibi study value of incentive

IBI Study – Value of Incentive

HOW MUCH INVESTMENT/PENALTY?

Per participant per year


Ibi study key findings

IBI Study – Key Findings

  • IBI Finding #1:Employers appear to use a shotgun approach in developing incentives programs.

  • IBI Finding #2:Employers target participation as their most frequent incentives goal, outcomes much less so.

  • IBI Finding #3:Corporate culture is critical to a successful incentives program.

  • IBI Finding #4:Employers often don’t view the incentives and the disincentives they offer as the most effective.

  • IBI Finding #5:Employers invest substantial sums in incentives and disincentives programs.


Incent one survey employee health productivity management programs the use of incentives

Incent One SurveyEmployee Health & Productivity Management Programs: The Use of Incentives

  • Survey conducted April-May 2008 to member employers of National Association of Manufacturers and the ERISA industry Council

  • Representing 225 employers with 7.6 million employees

  • From 2007 to 2008 there was an increase from 62% percent to 71% of employers offering incentives

  • Average incentive was $192 PPPY

  • Most common incentives:

  • gift cards

  • premium reduction

  • cash

  • Rewards for participation; completion (38%); outcomes (16%)


Book influencer the power to change anything

Book: InfluencerThe Power To Change Anything

  • Chapter 8:

  • Design Rewards and Demand Accountability

  • Structural Motivation

  • Choose Extrinsic Rewards Third

    • Connect behaviors to intrinsic satisfaction

    • Provide social support

    • Choose extrinsic rewards


Book influencer the power to change anything1

Book: InfluencerThe Power To Change Anything

  • Use Incentives Wisely

  • Don’t use incentives to compensate for failure to engage personal and social motivation.

  • Take care to ensure that rewards:

    • Come soon after the desired behavior

    • Are gratifying

    • Are clearly tied to vital behaviors


Book influencer the power to change anything2

Book: InfluencerThe Power To Change Anything

  • Principles of Extrinsic Rewards

  • If you’re doing it right, less is more.

    • Symbolic significance and social forces carry a lot of weight

  • Reward vital behaviors, not just results.

    • Reward small improvements in behavior along the way

  • Reward right results and right behaviors.

    • Set clear goals and ensure appropriate behaviors

  • Reward vital behaviors alone.

    • Reward behaviors that support valued processes

  • Watch for divisive incentives.

    • Align your message with your rewards


Incentives1

Incentives

  • ALERE INCENTIVE STRATEGY


Meaningful incentives

Meaningful Incentives

  • Focus on an incentive that best meets the company goals, culture, and resources.

    • Merchandise(tax consequences; fulfillment)

    • Cash / Cash equivalent(tax consequences)

    • Benefits related (premiums, deductibles, coinsurance)

    • Health Savings Accounts(FSA, HSA, HRA)

  • Awarded to everyone who reaches the program goal.

  • Reward participation – Not changes in biometric values

  • A meaningful incentive has a perceived value that is significant enough to initiate and maintain behavior change over time.


  • How much do incentives cost

    How much do incentives cost?

    • First consider Cost vs. Perceived Value

    • Cost Neutral  Perceived Value High

      • company may increase the deductible amount from $250 to $500, and then offer an incentive of $250 reduction in deductible

    • Cost = Value

      • $250 contribution in FSA; becomes an expense when employee withdraws from FSA

    • Cost > Value

      • $250 Cash

        • the real cost becomes almost $270 (with FICA and Medicare), and the employee receives around $185 if in a 20% tax bracket.

      • $250 in merchandise, add the fulfillment fee to the company’s $270 expense, and it is taxable income to the employee.


    Alere incentive structure

    Alere Incentive Structure

    • Competitive Model

      LevelCreditsIncentive

      Bronze 15 $200

      Silver20 $250

      Gold25 $300

      Significant increase in reward for achieving more.

    Provide a variety of activities and assign “weighted” credits

    Establish credit requirements for the Program Cycle

    Track credits earned through completion of activities

    Award incentives to those who met the goal


    Incentive structure options

    Incentive Structure Options

    • Inverted Model

      LevelCreditsIncentive

      Bronze15 $250

      Silver20 $250 + certificate

      Gold25 $250 + certificate + gift

      Key incentive paid at lowest level, “recognition” rewards for achieving more.

    • Single Level Model (one credit criteria  one incentive value)

      LevelCreditsIncentive

      Met criteria 20$250


    Incentive structure options1

    Incentive Structure Options

    • Activity Model

    • Incentive is earned as each selected activity is completed

    • Activity CompletedIncentive Earned

    • Wellness Assessment$50

    • Biometric Screening$50

    • Health Coaching$50

    • Disease Management$50

    • Healthy Living Program$50

    • Challenge$50


    Incentive structure

    Incentive Structure

    • Considerations in Selecting an Incentive Structure

      • Corporate culture

      • Perceived difficulty of obtaining the “highest” award

      • Simplicity of communication

      • Ease/cost of fulfillment

      • Value of incentive

      • Short-term vs. long-term incentive strategy


    How long should it take to earn an incentive

    How long should it take to earn an incentive?

    • Annual Program Completion

      • Participate in a variety of activities over a long-enough period of time that a behavior change is likely to take place

    • Single Activity Completion

      • Provided immediately after activity – low cost items to drive participation in selected activities

        Which one to use? What are your Goals & Objectives?


    Wellness programs

    Recommended IncentivesResearch & Alere Experience

    • Program Incentive (full 12-month program cycle)

      • Earn the required wellness credits by (month 12) to receive program incentive.

      • Optimal value = $300 range

    • Activity Incentive (i.e. Wellness Assessment)

      • Complete the assessment by (month 2) to receive the incentive.

      • Optimal value = $50 range

      • Combine activity and program incentive strategy


    Incentives2

    Incentives

    • ALERE INCENTIVE DATA ANALYSIS


    Alere incentive data analysis

    Alere Incentive Data Analysis

    • Number of Clients = 62

    • Eligible Population N = 524,862

    • Client Population Size Range N = 325 – 63,000

    • Types of Incentives

    • Benefits related incentives = 26

    • Cash / cash equivalent = 28

    • Merchandise = 2

    • No Incentive = 6

    • Other program variables: culture; communication; program design; # required engagements; program year


    Alere incentive data analysis1

    Alere Incentive Data Analysis

    • Top 10 clients in percent participation

    • N Eligible = 42,433

    • N Participation = 37,990 (89.5%)

    • N Participation Range: 76.2% - 99.6%

    • Program Incentive Value

      • $301 - $350 = 1

      • $201 - $250 = 4

      • $151 - $200 = 2

      • $101 - $150 = 2

      • $ 51 - $100 = 1

  • Incentive Type

    • Benefits Related = 6

    • Cash = 4


  • Alere incentive data analysis2

    Alere Incentive Data Analysis

    • Top 10 clients for percent program completion

    • N Eligible = 92,058

    • N Met Goal= 56,833 (61.7%)

    • N Met Goal Range: 45.6% - 93.7%

    • Program Incentive Value

      • $301 - $350 = 3

      • $201 - $250 = 2

      • $151 - $200 = 2

      • $101 - $150 = 3

  • Incentive Type

    • Benefits Related = 8

    • Cash = 2

  • Average Number of “Touches”: 3.7


  • Outcomes key metrics

    Outcomes – key metrics

    Wellness Programs


    Wellness programs keys to success

    Wellness ProgramsKeys to Success

    • QUESTIONS

    • If you have questions after the presentation, please contact your local UBA Member Firm for assistance.

    • Thanks!


    References

    References

    • References

      • 2008 Integrated Benefits Institute. Employer Incentives for Workforce Health and Productivity. (Survey of over 500 employers representing approx. 5 million employees.)

      • Edington DW, Burton WN. Health and Productivity. In McCunney RJ, Editor. A Practical Approach to Occupational and Environmental Medicine. 3rd edition. Philadelphia, PA. Lippincott, Williams and Wilkens; 2003: 40-152. Loeppke, et.al., JOEM, 2003; 45:349-359 and Brady, et.al., JOEM, 1997; 39:224-231

      • Dee Edington, PhD, Health Management Research Center, University of Michigan

      • Patterson K, Grenny J, Maxfield D, McMillan R, Switzler A. Influencer – The Power To Change Anything. VitalSmarts, LLC. McGraw-Hill 2008.

      • IncentOne. Employee Health and Productivity Management Programs: The Use of Incentives. June 2008.


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