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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

slide7
Comprehensive Program Strategy

Outcomes

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

program design
Program Design

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
  • Incentives 73%
  • Disincentives 19%
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

Level Credits Incentive

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

Level Credits Incentive

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)

Level Credits Incentive

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?

slide36
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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