1. Why Employers are Missing
the Mark with Wellness
Matthew L. Snook, Principal
813.207.6310
matthew.snook@mercer.com

2. Discussion Topics
Background – the problems to address
Why wellness?
What is “wellness?”
So what’s the problem?
How to do it differently
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3. Background – the
problems to address

4. Health status driven by behaviors
Determinants of Health Status
10%
20%
50%
20%
Access Genetics Environment Behavior
Source: Institute for the Future, Centers for Disease Control and Prevention
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5. Evolution of a health plan participant…
Source: The Economist
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6. …and the health status impact of those behaviors
Prevalence of Medical Conditions by Body Mass Index (BMI)
Body Mass Index Body Mass Index
18 to 24 25 to 29 30 to 39 > 40 18 to 24 25 to 29 30 to 39 > 40
Medical
Condition Prevalence Ratio (%) – Women Prevalence Ratio (%) – Men
Type 2
2.38 7.12 7.24 19.89 2.03 4.93 10.10 10.65
Diabetes
Coronary Heart
6.87 11.13 12.56 19.22 8.84 9.60 16.01 13.97
Disease
High Blood
23.26 38.77 47.95 63.16 23.47 34.16 48.95 64.53
Pressure
Osteoarthritis 5.22 8.51 9.94 17.19 2.59 4.55 4.66 10.04
Source: NHANES III, 1988 - 1994.
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7. So why wellness
anyway?

8. Why Wellness Internally/Externally?
What we’ve heard…
It’s the “right thing to do” Be an “employer of choice”
Improve recruitment Minimize turnover/improve
retention
Create a “culture of health”
Improve morale
Reduce workers’
compensation costs Improve community perception
Reduce health care costs Generate revenue/referrals
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9. Questions to ask yourself…
Why are you engaged in wellness and do you want to be engaged in
wellness?
What business issues are you trying to address?
How will you know if you are successful?
Have you been successful?
– If yes, how do you know?
– Do you have the data/information to support success?
What program model best matches your desired outcomes?
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10. What is “wellness?”

11. Population Health Breakdown
Numerous groups to address
Chronic Catastrophic
Healthy At Risk
Conditions Conditions
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12. Managing population health is a BIG job!
Traditional thinking regarding program categories
The Spectrum of
“Population Health
Management”
Disease Disease Case
Wellness
Prevention Management Management
Focus on Focus on Focus on Focus on
general health prevention, health management
maintenance usually improvement of large/
and addressing for those with catastrophic
improvement specific health specific claimants
of whole risks conditions
population
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13. So what’s the
problem?

14. Claims Distribution
Small percent of the population drives the cost
Population Costs
3%
19%
50%
25%
35%
53%
10%
5%
% of Employees % of Claims
Source: Mercer Proprietary Data
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15. Managing Across the Health Continuum
Where does the CFO want your focus?
15% of members = 75% to 85% of cost
Chronic Catastrophic
Healthy At Risk
Conditions Conditions
85% of members = 15% to 25% of cost
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16. Managing Across the Health Continuum
Where does the CFO want your focus?
Healthy At Risk
85% of members = 15% to 25% of cost
Conclusion: If your “wellness” program is focusing primarily or
solely on general health maintenance and
improvement for your whole population, rather than the
specific individuals and issues driving your claims
costs, positive and significant ROI may never be
achieved.
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17. Study by Center for Studying Health System Change
“Return on investment for wellness initiatives is uncertain, particularly
for one-size-fits-all programs purchased from vendors with little
direct employer involvement.”
Programs that consist of nothing but a health risk assessment and web-based “let’s
shape up!” tools, with no personalized follow-up such as health coaching, are the
most likely to fail.
The health message needs to come from the top, and senior leaders need to
“communicate clearly and honestly with employees about shared goals and
responsibilities of health and wellness.”
Programs to help workers stop smoking or lose weight aren’t likely to produce lasting
results unless there are broader changes to the work environment– such as an end
to the plate of muffins at meetings and remodeled, more appealing stairwells.
Any investment in wellness programs will likely take “several years” to pay off, if it
ever does.
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18. Another problem…
The more complex, the less prevalent
HRA
Completion
Wellness/Behavior
Modification
Prevalence
Program
Completion
Care Management
Program
Completion
Treatment
Protocol
Compliance
Complexity 17
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19. One other issue
While measurement of the medical claims impact directly attributable to even
the most effective health management interventions can be very, very difficult,
measurement of the more likely areas of impact…
Decreased absenteeism
Improved presenteeism/workplace productivity
…can be even harder
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20. How to do it
differently…

21. Total Health Management (THM)
Definition:
Total Health Management includes all of the actions an employer can take to
engage and support employees in making good choices to avoid all of the costs
and consequences of poor health.
Three essential building blocks:
Design
• Programs designed to facilitate greater engagement, compliance and sustained
utilization of higher quality providers and treatment options
Stakeholder Engagement
• Hold all parties accountable – organization leaders, employees, dependents and
vendors – to achieve success through continued improvement
Program Integration
• Bring all data, systems and programs under one real-time, comprehensive participant
focused umbrella
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22. THM creates a holistic view of illness and
productivity
The Total Cost of Illness
Indirect cost of absence
$55M Health = 2.5% of payroll
Goals of a holistic view: & absence
costs Direct non-occupational
■ Understand what’s + absence cost = 3.5% of
driving current health & payroll
disability costs, Health care benefits
absenteeism, cost = 17% of payroll
productivity losses Total expense = 23% of
$240M payroll
■ Identify magnitude of
Payroll*
future expenses - “ticking
time bombs” who may or * Assumptions:
may not appear in claims • 5,000 employees
data – but who will have • $48,000 average salary
a significant future
expense
Sources: Mercer’s National Survey of Employer-Sponsored Health
Plans; Mercer’s Survey of Health, Productivity and Absence
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Management Programs

23. The Art & Science of THM
Science – what you implement
– Make sure the programs are effective and science-based
– Make sure the programs address your specific needs
Art – how you implement it
– Wellness is tied to the business, leadership is on board and corporate policies
and practices support a healthy culture
– Program policies and procedures are documented and an accountable
infrastructure is in place
– Program variety is offered and participation options are varied
– Effective mass and targeted communications are used (and relentless) to
keep the message in front of people and valued incentives are selected
– Program status information is collected and reported to key stakeholders
– Continual input and feedback is obtained from various key stakeholder groups
More Science – measuring results
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24. The cultural shift required for effective THM
A paradigm shift needs to occur that transcends
From: To:
Leaders following talking Leaders modeling best-
points practice behaviors
Dollars being spent only on Budgets including funding for
sick employees programs that change
outcomes and reward results
Employees feeling an Employees feeling a
entitlement to coverage when responsibility for maintaining
they are sick good health, and preventing
disease and illness.
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25. Getting Started
Analyze data
Health Risk Distribution
High Body Mass Index 39%
High Stress 32%
Inactive 25%
Life Satisfaction 24%
Former Tobacco User 23%
High Blood Pressure 21%
High Cholesterol 14%
Perception of Health 13%
Safety Belt 11%
Current Tobacco User 10%
Reported Depression 5%
High Alcohol Use 3%
High Blood Glucose 2%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
* Actual client data.
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26. And Why That Matters…
The Correlation of Health Risks and Disease
Gastro- Low
Cardiovasc. High-risk Injuries/
Asthma Cancer Cirrhosis COPD Depression Diabetes Intestinal Back Stroke
Diseases Pregnancy Accidents
Disease Pain
1. Current Tobacco
X X X X X X X X
User
2. High Stress X X X X X X X
3. High Body Mass
X X X X X X
Index
4. Former Tobacco
X X X X X X
User
5. Inactivity X X X X X X
6. High Alcohol
X X X X X X
Use
7. High Blood
X X X X
Glucose
8. High Blood X X X X
Pressure
9. Reported
X X X
Depression
10. High Cholesterol X X X
11. Life Satisfaction X X
12. Safety Belt use X
13. Perception of
X
Health
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27. HERO Best Practice Scorecard© (v.3)
Free employer tool to assess THM practices
Benchmark current THM practices against “best practice standards” –
the lower the HERO score, the higher the savings opportunity
Total Points
Section Company ABC National Average
Possible
1: Strategic Planning 5 8 11
2: Leadership Engagement 2 26 33
3: Program Level Management 5 12 22
4: Programs 20 37 56
5: Engagement Methods 10 41 67
6: Measurement and Evaluation 3 5 11
Total Score 45 129 200
Link to HERO Scorecard:
http://mercer.inquisiteasp.com/cgi-bin/qwebcorporate.dll?idx=NPPY5J
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28. Plan Design and Incentives
Issues and Considerations
Behavior Change is critical to achieving optimal outcomes and better management of
health costs
Plan design and incentives are key to achieving specific changes in behavior
Principal areas of focus are:
– Being Aware of Health Status – Health Assessment and Screenings
– Preventing Illnesses – Immunizations and Maintenance of Healthy Lifestyles
– Reducing Risks – Mitigating or Eliminating Unhealthy Behaviors
– Accessing Right Care – Access and Use the Right Care, at the Right Time, from the
Right Providers
– Complying with Treatment Regimens – Follow Through with What is Prescribed
Evidence/value-based design that focuses on creating total value is a guiding principle for
strategy and program design
Approaches to Plan Design and Incentives can range from Mild to Moderate to Aggressive
Plan design and incentives must be supported by strong marketing campaign
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29. Plan Design and Incentives
Evolution
Plan Design and Incentives
Key Behaviors Year #1 Year #2 Year #3 Year #4 Year #5
2011 2012 2013 2014 2015
Being Aware of Health Status –
Health Assessment and Screenings
Preventing Illnesses – Immunizations
and Maintenance of Healthy Lifestyles
Goal is to ultimately develop
Goal is to ultimately develop
Reducing Risks – Mitigating or an Evolving Long Term Approach
Eliminating Unhealthy Behaviors
an Evolving Long Term Approach
that more strongly reinforces
that more strongly reinforces
Accessing Right Care – Access and appropriate behavior over time
appropriate behavior over time
Use the Right Care, at the Right Time,
from the Right Providers
Complying with Treatment Regimens
– Follow Through with What is
Prescribed
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30. Broad Program Design
Components across the health care continuum
Catastrophic
Healthy At-Risk Chronic Conditions
Conditions
Acute Conditions (e.g., maternity, disability, self-diagnosed conditions, strains, sprains, colds)
• Nurseline, self-care skills, employee assistance program, on-line resource, safety at home and work
Health Risk Management High Cost Case
Health Promotion and Disease Prevention Disease Management Management
Onsite seminars, Patient Identification (claims + Patient Identification Resource Management
worksite initiatives HRA) (claims + HRA)
Health portal Lifestyle Management Core programs (CAD, Patient Advocacy
(telephonic) COPD, Diabetes, Asthma,
CHF)
Immunizations & Lifestyle Management (online) Supplemental programs Care Coordination
Screenings
Population Based Population Based Campaign Gaps in care NICU & Maternity case
Campaign management
Other Programs:
Health advocacy (e.g., navigational, clinical and claims advocacy)
Treatment decision support
Health advisor
Wellness Champions Support Program
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31. Structuring incentives to meet desired results
Key Behaviors Impact Financial ROI
Being Aware of Health Status – Health
Low Low
assessment, screenings
Preventing Illnesses – Preventive care, Low High return;
immunizations, healthy lifestyles Short- and long-term payback
Reducing Risks – Improving unhealthy Moderate to high return;
Moderate
behaviors Mid- to long-term payback
Accessing Right Care – Making good Moderate High return;
decisions about getting care at the right time,
from the right providers Short-term payback
Complying with Treatments – Adhering to High return;
High
treatment plans, medications Short-term payback
Return to Work – Returning to work early Moderate return;
Moderate
from disability absences Short- to mid-term payback
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32. CRITICAL issues we have no time to discuss
Incentive design and communications
Incentive design is challenging
– Many, many designs and approaches
– Reward good behaviors
– Discourage bad behaviors
– Carrot vs. stick?
– Are you providing reward for folks already doing the “right things?” Should
you be?
Communications
– May be the most critical aspect of THM other than the interventions
themselves
– Must be ongoing, consistent, pervasive, multi-faceted, multi-lingual, and
relentless!
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33. www.mercer.com