The Impact of Employee Wellness on 4-Year Healthcare Costs May 14, 2009 Brian Day, Ed.D Health Plan Informatics
Jan 20, 2016
The Impact of Employee Wellness on 4-Year Healthcare Costs
May 14, 2009
Brian Day, Ed.D
Health Plan Informatics
Where do our Healthcare Dollars Go?
Rising Healthcare Costs
• Cardiovascular Disease– Over 80 million cases and over 870,000
people who die of heart disease and stroke each year
– Economic burden: $448 billion a year including direct and indirect costs.
National Center for Chronic Disease Prevention and Control [2008]
Rising Costs
• Chronic diseases increase labor costs through many means, including health care costs, but also through productivity losses from missed work, decreased on-the-job effectiveness, and turnover when an employee becomes too ill to return to work.
• Since 2001, the cost to employers of providing health insurance has increased by 78%. Data suggest that, for chronic diseases, the cost of productivity losses exceeds the cost of health care by as much as 4-fold.
Kaiser Family Foundation 2007Loeppke R, et al 2007
Rising Costs
Diabetes
• 23.6 million cases and over 200,000 deaths from complications from the disease each year.
• Economic burden: $174 billion a year including $116 billion in medical costs and $58 billion for lost work days and productivity.
National Center for Chronic Disease Prevention and Control [2008]
Rising Costs
• Cancer
– 553,000 deaths and 1.3 million new cases each year.
– Economic burden: $217 billion a year including $89 billion in medical costs and $130 billion for lost work days and productivity.
National Center for Chronic Disease Prevention and Control [2008]
Rising Costs• Smoking and Substance Abuse
– Substance abuse costs the US more than $346 billion per year
– Illicit drug use alone costs $116 billion
– Alcohol-related problems cost the U.S. approximately $185 billion each year.
– Smoking: Approximately 438,000 deaths each year. Economic burden: Over $96 billion in medical costs and $97 billion in indirect costs.
National Center for Chronic Disease Prevention and Control [2008]
National Institute of Alcohol Abuse and Alcoholism The George Washington University Medical Center
Rising Costs
• The total cost of obesity in the U.S. is estimated at $92.6 billion annually
– Medical expenditures for obese workers, depending on severity of obesity and sex, are between 29%–117% greater than expenditures for workers with normal weight.
– Obesity is believed to be associated with more chronic disorders and worse physical health-related quality of life than is smoking or problem drinking
– Estimates of the number of years of life lost as a result of obesity range as high as 20 years of life lost for certain age and racial/ethnic groups.
CDC (2004, 2009)
Highmark’s Investment
Reinvigorating Highmark’s Employee Wellness Program
• In 2002, Highmark’s internal wellness initiative was reinvigorated. – Incentive of $50 – Strong endorsement of senior
leadership– Participants rose from 547 to
2,888– Significant impact on HRA-
based risk as measured by annual aggregate reports
Fitness Center, October,2003
PittsburghFitness Center, October,2004
Camp Hill
Preventive Health Services (PHS) Offerings
• Worksite Programs– Personal Nutrition
CoachingSM
– Eat Well for Life ISM & IISM
– Discover Relaxation Within ISM & IISM
– HOPESM
– Diabetes Awareness & PreventionSM
– Clear the AirSM
– Weight Watchers at Work
– Physical Activity
Preventive Health Services Campaigns
• 10,000 Steps ChallengeSM
• Bands on the RunSM
• Drop 10 in 10SM
• Color Your PlateSM
• Maintain Don’t GainSM
Highmark Employee Participation
40%
50%
62%
80%
90%
2002 2003 2004 2005 2006
Employee Wellness Participation by Year
The Impact of Highmark Employee Wellness Programs on
4-year Healthcare Costs
Journal of Occupational and Environmental Medicine, Feb 2008
Objective of the study
Determine the Return on Investment (ROI) of Highmark’s Wellness
programs using a rigorous scientific methodology
Methodology
• 1,892 employees included (18%)
• Matched participants using age, gender, 2001 claims, and Charlson score to a similar cohort
• Growth curve analysis
• Examine claims trends for 2001-2005
Costs of Wellness
Wellness Program Costs, Highmark Inc., inflation-adjusted to 2005 dollars
Naydeck, et. al, JOEM 2008
# Used Total # Used Total # Used Total # Used Total GD Total
HRA & Incentive 1892$243,731 1303$143,111 1308$140,785 1355 $142,605
Online 201 $1,142 247 $1,372 248 $1,300 512 $2,575
Group 34 $1,544 56 $3,077 56 $3,010 0 $0
Nutrition Coaching 2 $66 23 $740 51 $1,585 111 $3,420
10,000 Steps 244 $2,441 413 $3,851 223 $2,061
Fitness Center 407 $25,603 495 $29,939 879 $50,958
Highmark Challenge 112 $348 910 $2,766
Maintain Don't Gain Newsletter 85 $182 93 $192
Wellness Program Costs $246,483 $176,343 $181,000 $204,577
Cost per participant $130.28 $135.34 $138.38 $150.98
Net Savings (Estimated Savings - Wellness Program Costs) $87,398 $157,538 $152,881 $129,304 $527,121
$1,335,524
$808,403
$1.65Return on Investment
$333,881$1,335,524
Total Savings Estimated 4 Years
Total Costs 4 Years
$333,881 $333,881
Estimated Annual Savings from Model $176.47/person
$333,881
$808,403
2002 2003 2004 2005
RESULTS
0
5
10
15
20
25
30
35
40
45
50
% p
arti
cip
atin
g
Fitness
Center
Highmark
Challenge
Health
Media
10,000 Step
Campaign
Nutrition
Counseling
Group
Program
2002
2003
2004
2005
Program participation
500
1000
1500
2000
2500
3000
3500
4000
2001 2002 2003 2004 2005
Net
Pa
yme
nts
, in
20
05
do
lla
rs
Participants Non-Participants
Annual Growth in Total Payments
Growth in Healthcare Costs Comparison
Highmark Employees
With Baseline Heart Disease Change from 2003-2007(directional t tests)
Medical ConditionWellness Group N 2003 2004 2005 2006 2007 Difference t df p
Concurrent Risk Participant 849 2.25 2.69 2.53 2.69 2.79 0.54 2.07 1542 <.05Control 849 2.42 2.63 2.79 3.16 3.61 1.19
Predictive Risk Participant 849 2.20 2.34 2.35 2.46 2.58 0.37 1.94 1590 <.05Control 849 2.25 2.45 2.48 2.67 2.92 0.68
Charlson Score Participant 849 0.37 0.43 0.45 0.52 0.58 0.21 n.s.Control 849 0.39 0.50 0.50 0.56 0.66 0.26
**Participants with heart disease had a significantly lower increase in concurrent and predictive risk, relative to controls.
Established HRA Plus Employers
With Baseline Heart Disease Change from 2003-2007(directional t tests)
ExpenseWellness Group N 2003 2004 2005 2006 2007 Difference t df p
Medical Expenses Participant 1181 $ 3,335 $ 3,835 $ 3,764 $ 4,210 $ 4,838 $ 1,497 1.69 2356 <.05Control 1181 3,207 3,909 4,386 4,647 5,498 2,288
Inpatient Expenses Participant 1181 375 802 663 793 927 550 2.21 2057 <.05Control 1181 418 804 1,043 1,003 1,582 1,164
Outpatient Expenses Participant 1181 1,158 1,155 1,161 1,241 1,769 608 n.s.Control 1181 1,023 1,159 1,337 1,459 1,619 595
Professional Expenses Participant 1181 1,751 1,861 1,927 2,190 2,231 477 1.91 2317 <.05
Control 1181 1,640 1,858 1,928 2,141 2,486 845
Preventive Service Expenses Participant 1181 120 a 106 104 169 178 58 n.s.
Control 1181 98 a 91 105 110 136 38 Pharmacy Expenses Participant 1163 1,597 1,683 1,741 1,943 1,990 393 n.s.
Control 1163 1,724 1,858 1,903 2,041 2,101 377
a= Wellness groups are significantly different from each other with regard to preventive services (t = -2.19, df=2208, p<.05)
DxCG Risk Category Changes2001-2005
Program Risk Decrease
HRA & Fitness Center 14.4%
HRA & Media, Group, or Individual Programs
12.6%
HRA Only 11.2%
Controls 11.1%
Predicted Risk and Years in WellnessHighmark Employees
1
1.2
1.4
1.6
1.8
2
2003 2004 2005 2006 2007
Year
Pre
dic
tive
Ris
k
0 1 2 3 4
Established Wellness Employers
1
1.2
1.4
1.6
1.8
2
2.2
2003 2004 2005 2006 2007
Year
Pro
spec
tive
Ris
k
0 1 2 3 4
0.9
1
1.1
1.2
1.3
1.4
1.5
1.6
2001-2005
DxC
G p
red
icti
ve r
isk
sco
re
HRA Only HRA & Other HRA & FC Controls
Predicted Risk for Wellness Groups
Preventive Screening Rates
0
10
20
30
40
50
60
70
Controls HRA only HRA/other HRA/Fitness
Scr
een
ing
Rat
e
2001 2002 2005
ROI Calculation
• Savings 4 Years after Baseline (2001) $1,335,524
• Total Costs 4 Years (2002-2005) $808,403
• ROI = 1.65:1
Significant Findings
• Overall savings of $176 PPPY
• Inpatient savings greatest, $182 PPPY
• Preventive screening rates increased for participants
• Incremental risk decreases
• Participants in wellness were not just healthy employees
• ROI of $1.65
Conclusions
• Positive findings for all participation groups
• Savings sustained over multiple years
• ROI does not include increase in productivity and decreased absences
• Positive and conservative ROI – wellness works!
• HRA is a good start