Wellness Program Trends

Wellness Programs – What does
the future hold?
Curt Palmer – MasterCard
Laurie Knutson – FIS Healthcare & Wellness Product Strategy
gy

Agenda

• Laurie Knutson FIS Healthcare & Wellness Product Strategy
Laurie Knutson, FIS Healthcare & Wellness Product Strategy
– The business case for wellness
– Wellness program ROI
– Choosing a wellness partner
– Best practices for ensuring wellness program success

• Curt Palmer, Business Leader, Healthcare Solutions; MasterCard
– Review of research – wellness program insights
– Role of incentives

2

Wellness Program Trends & Best Practices

Why is Wellness Important?

4

Unsustainable U.S. Healthcare Costs

All Other
Healthcare

Medicaid

Medicare

Source: Congressional Budget Office.
Note: Amounts for Medicare are net of beneficiaries’ premiums. Amounts for Medicaid are federal spending only.

5

What is Driving Healthcare Costs?

• Chronic disease: resulting from longer life spans and a host of social and cultural
“advancements”
– The CDC estimates that healthcare costs for chronic disease treatment account for more than
75 percent of national health expenditures.
– The obesity epidemic is estimated to cost private employers $45 billion per year in combined
medical expenditures and worker absenteeism
medical expenditures and worker absenteeism 1
– Total cost of diagnosed diabetes patients in U.S. was $174 billion in 2007, which included
$116 billion as direct costs and $58 billion as indirect costs such as disability, work loss and
premature mortality. 2
• Technology and prescription drugs
• Aging of the population
• Administrative costs

Some studies suggest at least 50 percent of an organization’s healthcare costs are
linked to smoking, poor diet and lack of exercise on the part of employees.
1 Rosen, B. and Barrington, L. “Weights & Measures: What Employers Should Know about Obesity.” New York, NY: The Conference Board, April 2008.
2 National Center for Chronic Disease Prevention and Health Promotion. 2007 National Diabetes Fact Sheet.

6

The Challenge

The challenge for companies amidst global competition is to create an organizational
culture that promotes a high‐performing workforce in a high‐performance workplace.
culture that promotes a high performing workforce in a high performance workplace

• The total costs of an unhealthy workforce are growing at an unsustainable pace.
• Workforce health and productivity translate into direct and indirect costs for every
employer, and both the workplace environment and the lifestyles of employees and
their families influence those costs.
• Employer‐sponsored health insurance plays a part, but avoiding conditions is
preferable to treating conditions.
preferable to treating conditions
• Employers are looking for creative ways to help employees and their families improve
their health—or simply stay healthy.
• Cost shifting is not a sustainable solution and employers do it reluctantly.
Cost shifting is not a sustainable solution and employers do it reluctantly.
• A better investment would be to elevate employee health to an integral part of an
overall human capital “asset management” strategy.

7

Patient ‘Self‐pay’ Ratios

30%
Consumers are now
increasingly
25%
responsible for the
p ity
ent Responsibili
cost of their own
healthcare.
20%
% Patie

15%

10%

2007 2008 2009 2010 2011 2012

Source: Celent, Effective Solutions, athenahealth, CMS

Population Health

• FIS believes that long‐term wellness and healthier lifestyles are achieved when using
wellness programs that examine both financial and physical wellness.
ll h b hf l d h l ll
• While it is critically important to support the highest risk employees who suffer from
chronic disease and represent the highest cost claims, it is equally important to help
all employees stay healthy and remain at the low end of the risk spectrum or reverse
all employees stay healthy and remain at the low end of the risk spectrum or reverse
their trend toward unhealthy behaviors.
• This is what we mean by “population health” – the ability to provide coaching and
support to every employee or member, no matter where they are on the health
continuum.
• You need to target wellness programs through your healthcare plans to your most
costly populations, but not forget about helping the general population from getting
sicker.
i k
• The focus of this webinar is the Wellness Programs we believe address your
employees’ physical health.

9

The Wellness Incentive Opportunity
Curt Palmer- VP, Healthcare Solutions

©2010 MasterCard
ADVANCING PROFITABILITY ADVANCING COMMERCE Proprietary and Confidential

About This Presentation

Confidentiality Notice
The information contained in this presentation is the property of MasterCard
Worldwide and may not be duplicated or distributed by any third-party without the
prior written consent of MasterCard Worldwide. MasterCard Worldwide does not
make any representations or warranties with respect to the completeness or
k t ti ti ith t t th l t
accuracy of the research and information contained within this presentation and
hereby disclaims any liability with respect to reliance upon the content contained
herein.

Third Party Research Notice
Please note that the information provided in the slides in this presentation is based
on information obtained from third-party survey responses and other third-party data
inputs. MasterCard has not verified the accuracy of this information and disclaims
any liability arising from the accuracy or completeness of the information.

©2010 MasterCard.
ADVANCING PROFITABILITY ADVANCING COMMERCE Proprietary and Confidential Page 11

Situation Analysis:
Increasing Need for Wellness Programs

• The cost of insuring employees has increased 54
percent since 1991.
• About two-thirds of U S adults are overweight or
two thirds U.S.
obese. Fifty-five percent do not get enough physical
activity, while 26 percent are completely inactive.
• If diet and physical activity patterns continue t worsen
di t d h i l ti it tt ti to
at their current rate, they will soon surpass tobacco use
as contributors to mortality.

Source: Kaiser/HRET survey of employee sponsored health benefits cited in, “Employee Health Promotion Programs: Supporting Scientific Research and
Wellness Statistics,” American Chronicle (September 17, 2008).

©2010 MasterCard.

Situation Analysis:
Financial Incentives are Being Offered
Percentage of companies offering financial incentives in
wellness programs

Completion of a Health Risk Appraisal 66%

Participation in Smoking Cessation P
P ti i ti i S ki C ti Program 40%

Participation in Weight Management Program 34%

Completion of Biometric Screening 32%

Participation in Health Coaching 29%

Participation in Disease Management Program 26%

Completion of an Adult Health Exam 15%

Maintenance of a Personal Health Record 7%

Sources:”Incentives: Detailed Findings from the 15th Annual Towers Watson/National Business Group on Health Survey on Purchasing Value in Health Care, “Towers
Watson (2010).

©2010 MasterCard.

Research Objectives

• In the fourth quarter of 2009, MasterCard and Harris
Interactive conducted a 30-minute online survey to investigate
what motivates employees to engage in a wellness program.
• Th research objectives were t
The h bj ti to:
– Identify wellness program trends
– Better understand the wellness incentive market
– Test a new product concept: a reloadable, prepaid wellness card
for employers to offer their employees
– Determine meaningful incentive thresholds
– Identify obstacles to program adoption

©2010 MasterCard.

Online Surveys: Propensity Weighting

• I this study, results were weighted on th b i of:
In thi t d lt i ht d the basis f
– Age, income, gender
– Region, race,
Region race education
– Propensity to be online

• Harris Interactive uses p ope s ty weighting tec ques to
a s te act e propensity e g t g techniques
ensure that a survey fielded solely online is representative
of the entire population (and not just the online portion of the
population).

©2010 MasterCard.

We Surveyed Employees
from a Variety of Companies

• E
Employed f ll ti
l d full-time at
t
companies with 250 or more 250 – 999 Employees 326
employees
• 1,381 respondents
1,000 – 9,999 Employees 526
• U.S. adults ages 18 − 64

10,000 + Employees 532

Q: Approximately how many employees does the company that you work for have in total?

©2010 MasterCard.

Wellness Program Insights

ADVANCING PROFITABILITY ADVANCING COMMERCE

Wellness Programs Are Available
to Most Employees in the Survey
In our survey, 1,080 people − 78 percent of those surveyed
− worked for a company offering a wellness program.
p y g p g

250 − 999 Employees: 67%

1,000 − 9,999 Employees: 81%

10,000 + Employees: 82%

Q: Does your company currently offer any [of the following types of] wellness programs for employees?
Q: Approximately how many employees does the company that you work for have in total?

©2010 MasterCard.

Poll A

• Q What percentage of employees in the U.S. have
Q: Wh t t f l i th U S h
participated in at least one employer-offered
wellness program in the p
p g past y
year?
– A.14%
– B. 26%
– C. 46%
– D. 61%
– E. Not sure

©2010 MasterCard.

How Many Employees are Participating?
In the past year, 46 percent of those with access to a wellness program
have participated.

33%

44%
46%

13%
10%
Have Wellness Programs (n=1,080)

Currently Participating Have Participated This Year Have Not Participated This Year Have Never Participated

Base: Company Offers Wellness Programs
Q: Have you actively participated in any of the wellness programs offered by your company?

©2010 MasterCard.

Why aren’t More People Participating in
Wellness Programs?
Time constraints seen as biggest barrier

I Am Too Busy/Don't Have Time 46%

I Lack the Necessary Self-Discipline 29%

The P
Th Programs A I
Are Inconvienient
i i t 24%

I Don't Know Enough About the Programs Offered 20%

I Don't Have Enough Energy 19%

I Am Concerned About Confidentiality 17%

I Do Not Have Access To On-Site Programs 15%

The Programs Are Disorganized 12%

My Manager Doesn t Allow Me the Time
Doesn't 10%

I Met My Initial Goals and Am No Longer As Motivated 7%


Base: Active and Nonparticipants
Q: What barriers, if any, keep you from [signing up for and] sticking with your company’s wellness programs?

©2010 MasterCard.

Motivating Factors are Both Intrinsic
and Extrinsic
Receiving rewards/incentives and the desire to improve
health are the most motivating
g
Opportunities to Receive Rewards or Incentives 25%

Personal Desire to Improve Health and Well-Being 25%
Free or Reduced-Cost Access to Health-Related Services and
Programs at work Programs at work
21%

On-Site Access to Health-Related Services and Programs at Work 15%
Opportunity to Do My Share to Help My Company Keep Health Care
Affordable Affordable 4%

An Employee Competition or Challenge 4%
Opportunities to Learn More and Be Encouraged to Stay Healthy and
Balanced And Balanced 2%

Improved Morale and Camaraderie Among Coworkers 2%

Ability to Track Progress Online 1%

Total (n=1,381)

Base: All Qualified Respondents
Q: How motivating is/would each of the following [be] for you to participate in a wellness program?

©2010 MasterCard.

Role of Incentives


Participation is Higher when Incentives
are Part of the Program
Companies offering rewards/incentives have a significantly higher
participation rate

Companies That Offer Companies That Don’t Offer
Rewards/Incentives Rewards/Incentives

26%

39%

61%

74%

(n=511) (n=417)

Nonparticipants Active Participants Nonparticipants Active Participants

Q: What types of rewards or incentives, if any, are offered for participating in your company’s wellness programs? Please select all that apply.
Q: Have you actively participated in any of the wellness programs offered by your company?

©2010 MasterCard.

Rewards Work Better than Penalties
Likelihood to Participate to Receive Change in Perception of Company
Incentives vs. Avoid Disincentives if Disincentives Were Used

Mean 3.9 3.1 3%

Extremely likely 6%
23%
%
40% 18%
19%

30%
30% 24%

11%
19%
43%
5%
24%
Not at all likely 6%
Receive an Incentive Avoid a Disincentive Much More Positive Perception
Much More Negative Perception
Total (n=1,381) Somewhat More Positive Perception
Somewhat More Negative Perception
No Change in Perception
No Change in Perception
Somewhat More Positive Perception
Somewhat More Negative Perception
Much M
M Much More Negative Perception
h More P iti P
Positive Perception
ti
Q: How likely would you be to participate in a wellness program to…?
Q: If your company were to penalize those who do not participate in company wellness programs, how would your perception of your company change?

©2010 MasterCard.

Poll B

• Q What percentage of employees in the U.S. who
have participated in an employer-offered wellness
p g
program in the p
past yyear have received a reward
or incentive?
– A. 57%
– B. 42%
– C. 32%
– D. 21%
– E. Not sure

©2010 MasterCard.

A Variety of Rewards and Incentives Are
Being Offered
Over 40 percent of employees with wellness programs
are receiving rewards/incentives
Types of wellness rewards/incentives offered to
employees already participating in the wellness program
16% 64%
Discounts or Reimbursements
or Health Insurance Premium Reduction
Monetary Rewards (e.g. Extra Money In
Paycheck, PrepaidPrepaid Card)
Paycheck, Card) 36%

Prizes or Merchandise 26%
42%
Awards or Recognition 17%

42% Perks (e.g. Time Off, Special Events) 12%

Lottery or Drawing 9%
Other 4%

Respondents (n=511)

Q: What types of rewards or incentives, if any, are offered for participating in your company’s wellness programs? Please select all that apply.

©2010 MasterCard.

Money Is the Top Motivator
Monetary rewards are more motivating than insurance premium
reductions

Monetary Rewards 38% 24% 20% 81%

Health Insurance Premium Reduction 38% 20% 12% 69%

Perks (e.g., Time Off, Special Events) 8% 17% 27% 52%

Discounts or Reimbursements 12% 20% 14% 45%

Prizes or Merchandise 12% 16% 32%

Awards or Recognition 6% 11%

Lottery or Drawing 6% 10%

Ranked First Ranked Second Ranked Third Ranked in Top 3
Motivated by Incentives (n=1,224)
(n=1 224)
Base: Company Offers Incentives
Q: Thinking specifically of the various types of rewards and incentives that can be offered for participation in a wellness program, what would be the most motivating to you?

©2010 MasterCard.

Money Motivates—
But How Much Money Motivates Most?

• The range between
$70 and $100 appears 50%
to promote the greatest

letion
40%
incremental gains in

tion and Compl
program participation 30%

• The wellness card 20%

demonstrates Participat 10%

diminished return at 0%
investment at $150
$ $25 $50 $75 $100 $125 $150 $175 $200 $225 $250

Total Cash Value of Incentive

Likelihood to enroll in program
Likelihood to co p e e p og a
e ood o complete program

Note: Base case assumes a 6-week program for Exercise, Healthy Eating, and Stress Management, with incentives distributed monthly. Health Risk Assessment is a one-time event.

©2010 MasterCard.

Poll C

• Q What percentage of employees in the U.S. who
have participated in an employer-offered Wellness
p g
program would like to receive a p p
prepaid card as
their reward for participation?
– A. 89%
– B. 73%
– C. 67%
– D. 9%
– E. Not sure

©2010 MasterCard.

Prepaid Cards Are Well Liked as a Form of
Monetary Reward
Most appealing monetary reward is either extra money
in paycheck and branded prepaid cards

Direct Deposit Into Bank Account or Paycheck 91%

Receiving a Branded Prepaid Card 89%

Receiving a Paper Check 80%

Receiving a Store Brand Gift Card 40%

Total (n 381)
(n=381)
Q: If you were to earn monetary rewards for participating in your company’s wellness programs, which of the following would be most appealing?

©2010 MasterCard.

Incentives Are Typically Given at the
Beginning and End of Programs
There may be an opportunity to increase participation through
incremental rewards

At Program Initiation 45%

Upon Program Completion 25%

Other 17%

Based on Specific Milestones 15%

Not Sure 8% Averaged Across All
Types of Incentives

Q: How often are the rewards or incentives offered or distributed for participating in wellness programs? Please select all that apply.

©2010 MasterCard.

Testing the Wellness Card
Concept


Wellness Rewards Card

Earn: Burn:
Health risk Intended for use at
assessment healthcare providers
completion and merchants

Wellness
W ll Health and
program wellness merchant
participation discounts

Other rewards
Consolidated wellness Aggregate usage
or programs rewards
d reporting for
ti f
employers
Prepaid reloadable card
Incent behavior change
throughout the year
g y
Custom messaging
capabilities
Employer funding tool
Employee web
portal

©2010 MasterCard. February 18, 2011
ADVANCING PROFITABILITY ADVANCING COMMERCE Proprietary and Confidential 34

Participants and Nonparticipants Like
the Wellness Card Concept
Even nonparticipants and employees from companies without wellness
programs responded favorably

Total (n=1,381) 29% 36% 65%

Active Participants (n=503) 37% 44% 81%

Nonparticipants (n=577) 26% 32% 58%

No Wellness Programs (n=301) 25% 43% 68%
%

Total (n=1,381)
Like the Concept a Lot Like the Concept Somewhat

Q: In general, what is your impression of the wellness card concept?

©2010 MasterCard.

The Wellness Card Motivates Employees
to Sign Up and Stick with a Program
Approximately half of nonparticipants say they would participate if a
wellness card is made available

Sign Up 36% 27% 63%
Total
(n=1,381)
Stick With 25% 33% 58%

Active Sign Up 50% 28% 78%
Participants Stick With 73%
(n=503) 40% 33%

Non- Sign Up 27% 26% 53%
participants Stick With 15% 30% 45%
(n=577)

No Wellness Sign Up 34% 29% 63%
Programs
(n=301) Stick With 23% 38% 61%

Extremely Likely Somewhat Likely

Q: If your company were to provide monetary rewards on a Wellness Card, how likely would you be to sign up for and stick with your company’s wellness programs?

©2010 MasterCard.

Factors that Encourage Employees to
Sign Up and Stick with a Wellness
Program
Card acceptance/rewards encourage participation

Monetary Rewards Can be Spent Anywhere Major Credit Cards are
27% 47% 74%
Accepted Are Accepted

Card Can be Reloaded by Company When Rewards Have Been
35% 31% 66%
Earned Earned

Opportunity to Earn Additional Monetary Rewards for Using Wellness
35% 28% 63%
WellnessHealthfor Health and Wellness-Related Purchases
Card for Card and Wellness-Related Purchases

Ability to Log In to an Employee Website to Monitor Wellness Card
Balance Card Balance 31% 19% 50%

Access to Retail Discounts/Special Offers on Health And Wellness-
Wellness
Related Purchases 29% 17% 46%
Related Purchases

Total (n=1,381)
Extremely Motivating Somewhat Motivating
Q: How motivating are each of the following features or benefits of the wellness card to you personally when making a decision about whether to sign up for and stick with
your company’s wellness programs?

©2010 MasterCard.

Conclusions


Offer Incentive Rewards
• Companies that are offering wellness programs have only half of
their employees participating.
• Currently, less than half of employees are offered rewards and
incentives for participation.
• R
Rewards work b
d k better than di i
h disincentives; target employees are more
i l
motivated by incentives than by avoiding a disincentive.
• Approximately half of nonparticipants say they would participate in
wellness programs if a wellness card was made available.
• Broad card acceptance and providing rewards throughout the
y
year scored the highest when the card concept was tested.
g p
• The range between $70 and $100 appears to promote the greatest
incremental gains in program participation.

©2010 MasterCard.

The Impact of Successful
Wellness Programs
W ll P

Wellness Programs = Real Change

• Wellness programs are defined as programs designed to maintain or improve
employee health before problems arise.
employee health before problems arise
• Beginning in 2014, small businesses can apply for grants to implement
comprehensive workplace wellness programs through a $200 billion, five‐year federal
p g
program designed to address underlying poor health habits and promote disease
g y gp p
prevention through:
– Smoking cessation
– Stress management
– Weight loss
– Reduced intake of fatty, high‐calorie foods
– Other ways of healthier living
• PPACA s provisions all demonstrate an interest in supporting wellness programs as a
PPACA’s provisions all demonstrate an interest in supporting wellness programs as a
means to find cost savings through encouraging healthy behavior.

41

Wellness – An Opportunity to Bend the
Cost Curve

42

Wellness – An Opportunity to Bend the
Cost Curve

43

Wellness ROI

• Companies frequently fail to make wellness programs work financially.
•TTwo common pitfalls include a lack of commitment from senior leaders (who must
i f ll i l d l k f i f i l d ( h
function as role models) and the failure to integrate the health promotion program
with the delivery of benefits and incentives.
• The most effective tools bring the financial and health elements together to help
The most effective tools bring the financial and health elements together to help
employees understand the impact of health on wealth
• FIS has integrated a full suite of Wellness programs into our Consumer Directed
Healthcare Solutions to meet the needs of employees when managing their health
and their wealth

44

FIS Wellness/Consumer Engagement
WealthCare Portal

Personal Health Record
Personal Health Record

Mobile Wellness

Wellness tools and Health Risk Assessments

45

Choosing a Wellness Partner

• Wellness programs range from turn‐key content rich to personalized coaching
Wellness programs range from turn key, content rich to personalized coaching.
• The program should reflect your organization’s values, style and budget.
• FIS researched a number of companies to partner with for integrated wellness
p
solutions as part of our WealthCare Product Portfolio.
• Key elements:
– Proven results to effectively change behavior
– Ease of use and integration with our product suite
– Scalable, with durable results for individuals
– Ability to offer mobile solutions to improve participation and results
• FIS has chosen HealthMedia because they offer Digital Health Coaching programs for
the most prevalent and impactful behaviors and the best value for companies to help
th t l t di tf l b h i d th b t l f i t h l
their employees better manage their health.

46

Start with the High Impact Programs

The most impactful programs with respect to improving employee health and
p
productivity include:
y
• Weight Management => HealthMedia® Balance™ Program Results:
– 55 percent of participants lost weight after 180 days
– Productivity Improvements: Estimated productivity savings of $905/year* per participant with a BMI of 30+
• Smoking Cessation => HealthMedia® BreatheTM Program Results:
Smoking Cessation => HealthMedia® Breathe Program Results:
– 52 percent reported they still were not smoking six months after completing the program
– 92 percent of participants who quit smoking indicated they were confident, very confident or extremely
confident they could remain smoke‐free 180 days after completing the program
• St
Stress Managements => HealthMedia® RelaxTM P
M t > H lthM di ® R l Program Results:
R lt
– More than 58 percent of participants reported a decrease in personal symptoms of excess stress 180 days
after taking Relax™
– Productivity improvements: Estimated productivity savings of $590/year* per participant, based on a
$50,000 annual salary
$50 000 annual salary
• Nutrition Management => HealthMedia® NourishTM Program Results:
– 91 percent reported an improvement in their nutrition efforts at 180 days
• Physical Activity Management => HealthMedia® MoveTM
• Sleep Improvement => evidence‐based techniques to help individuals recover from insomnia

47

Whose Responsibility is Wellness?

48

Thank You
Laurie Knutson, FIS Healthcare & Wellness Product Strategy
L i K t FIS H lth & W ll P d t St t
laurie.knutson@fisglobal.com

Curt Palmer, Business Leader, Healthcare;
Curt Palmer, Business Leader, Healthcare; MasterCard
curt_palmer@mastercard.com

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