The 5 Smartest Things You Could Ever Do

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Decreasing Healthcare Costs Through
Wellness Prevention Thomas J.
Montgomery, MHA, MBA
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• Speakers Background Philosophies

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Speakers Background

• Education
• MHA from Univ. of Minnesotas prestigious School
  of Public Health
• MBA with an emphasis in Finance and Strategy
• BA in Business with an emphasis in Healthcare
  Administration
• Employment Experiences
• Acquired Wellspring Healthcare in 2003
• Consultant/business developer for two companies
  offering risk reduction programs
• CEO of one of the nations largest
  Otorhinolaryngology practices
• Administrator of five IPAs with full risk
  contracts with payors
• Senior Consultant with Deloitte Touche
• Sales and marketing of a large health plan
• During college, patient transporter and
  respiratory technician of a large trauma hospital

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Speakers Philosophies

• Wellness is a vague term that is often a
  barrier in getting decision makers to take action
• Early detection is not prevention
• Wellness is a lifelong pursuit of reducing risk
  factors to optimize ones health
  holistically--physically, emotionally,
  spiritually, and financially resulting in
  happiness
• How happy are you?
• Would you like to be happier?
• For employers, wellness prevention Risk
  Management
• If you cant measure it, you cant manage it
• True for risk identification and evaluation of
  intervention strategies
• Dont focus on cost reduction. Instead, focus on
  risk reduction. Cost follows risk.

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• Why is wellness and prevention essential for
  reducing healthcare costs/improving profitability?

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Claims Drive Insurance Costs

• The cost of poor health is quantifiable by risk
  factor, for example
• Employees who smoke consume approximately 400
  more in annual medical claims
• Employees who lead a sedentary lifestyle, 500
  more in annual medical claims
• Overweight employees have 75 higher median
  annual healthcare expenses
• Overall, employees with multiple risk factors
  cost an employer 42 more than those without!
• Adults with multiple risk factors are more
  likely to be high cost employees in terms of
  healthcare use, absenteeism, disability, and
  overall productivity. Actual Causes of Death in
  the United States, Journal of American Medical
  Association

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Risk Factors Impact More Than Claims

• Presenteeism is reduced productivity due to
  poor physical or emotional health
• Presenteeism is more costly to employers than the
  increase in healthcare costs due to health risks
• A University of Illinois study illustrates the
  health risks most closely linked to poor
  productivity
• Use of antidepressants (8.4 excess lost)
• Life dissatisfaction (4.5)
• High stress (4.1)
• Current smoker (2.8)
• Physical inactivity (1.9)
• Medium risk employees experienced a 6.2
  reduction in productivity
• High risk employees a 12.2 reduction

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• How can employers reduce risk?

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How Can Employers Reduce Risks?

• Avoid hiring employees with risk factors
  predictive of claims and other costs to the
  employer
• Drug testing
• Prevalence of drug use
• Approximately 16 of the working population use
  drugs
• Impact to employers
• Drug users are 10x as likely to have unscheduled
  absenteeism (American Council on Drug Education)
• Self reported by drug users
• 75 use drugs while at work
• 64 admit drug use impacts performance
• The average company implementing drug testing
  reduced workplace injuries by 51 after two years
  (An Evaluation
  of Drug Testing in the Workplace A Study of the
  ConstructionIndustry, Gerber, Cornell
  University National Council on Compensation
  Insurance / NCCI)

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How Can Employers Reduce Risks?

• Avoid hiring employees with risk factors
  predictive of claims and other costs to the
  employer (continued)
• Functional testing
• Legally matching the worker to the job
• Screens for risk factors
• Objectively identifies who cannot perform the job
  safely
• Creates a functional baseline for those who are
  hired
• Prevalence
• Approximately 10 of those taking the test are
  NOT qualified to perform the job
• Impact to employers
• Hiring those who cannot do the job safely will
  result in greater Workers Comp claims, lower
  productivity, and higher absenteeism
• Employers implementing functional testing
  recognize a 50 reduction in Workers Comp
  incidences after just one year

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How Can Employers Reduce Risks?

• Actively assist the current workforce in
  improving/maintaining their health.
• Components of an effective behavioral and
  lifestyle wellness program
• Assessment Identify risk factors via clinically
  obtained bio-metrics and a Health Risk Assessment
• Intervention Multifaceted with an emphasis on
  face to face tailored to each participants
  readiness for change
• Education Year round including on-site health
  presentations
• Access Promotion of wellness providers and
  services
• Incentives (negative and positive) to drive
  participation
• Monthly reporting
• Key considerations
• Must be family based (versus employee only)
• Not carrier-based

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How Can Employers Reduce Risks?

• Actively assist the current workforce in
  improving/maintaining their health (continued)
• Pricing
• No more than 5 pepm
• Seek programs offering a guaranteed ROI
• Should be offered to employers WITHOUT requiring
  any investment on their behalf (at least in the
  first year)
• Embed into the employees contribution for
  benefits
• Have the non-participants pay for the
  participants
• Many brokers will provide with Agent/Broker of
  Record

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• If wellness and prevention is so important, why
  arent more clients asking me about it?

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Where Is The Demand?

• Why arent all your clients asking for it?
• They may bejust not you!
• Have you educated your clients?
• They think they already have it covered and dont
  know what they dont know
• Are you asking the right questions?
• How interested are you in lowering your insurance
  costs?
• What are you doing about it?
• Could I share with you some proven strategies
  that we offer our clients?
• Have you tried to introduce without success?
• Are you selling wellness or offering risk
  reduction programs?
• Its the improved profitability they want, not
  the program.
• Are you asking them to pay for it before they
  believe in the value?

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• What are some practical strategies for
  implementation of wellness and prevention for my
  clients?

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Practical Strategies

• Best Practices
• Opt-out vs. opt-in
• Waivers for non-participation
• Embed into benefit package
• Promotion
• Press releases
• Initial
• As each new employer signs up
• Monthly webinars
• Drip marketing
• Educational topics/industry trends
• Promote webinars and success stories
• Leverage Chamber and Trade Association
  relationships
• Conduct an annual survey

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• What should I do after I return from this
  conference?

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What Do I Do Next?

• Determine if your organization would benefit by
  proactively offering your clients (and prospects)
  strategies to reduce risks
• If so, sign YOUR employees up to participate in a
  wellness program
• Survey your clients and prospects
• Gain valuable insight
• What are their priorities?
• What are they doing about them?
• What are your opportunities?
• Establish credibility and differentiation
• Most wellness vendors will do this for you free
  of charge
• Develop a written strategy with timeline based
  upon the survey results

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• Questions (hopefully) Answers