Health and Productivity Management ROI MODEL. May, Truven Health Analytics Inc.

Transcription

1 Health and Productivity Management ROI MODEL May,

2 Convince me Why should I invest in the health and well-being of my workers? 2 2

3 IT SEEMS SO LOGICAL If you improve the health and well being of your employees quality of life improves health care utilization is reduced absenteeism is controlled productivity is enhanced 3

4 SEEMS LIKE A NO BRAINER RIGHT? 4 4

5 WHAT IS THE EVIDENCE BASE? A large proportion of diseases and disorders is preventable. Modifiable health risk factors are precursors to a large number of diseases and disorders and to premature death (Healthy People 2000, 2010, Amler & Dull, 1987, Breslow, 1993, McGinnis & Foege, 1993, Mokdad et al., 2004) Many modifiable health risks are associated with increased health care costs within a relatively short time window (Milliman & Robinson, 1987, Yen et al., 1992, Goetzel, et al., 1998, Anderson et al., 2000, Bertera, 1991, Pronk, 1999) Modifiable health risks can be improved through workplace sponsored health promotion and disease prevention programs (Wilson et al., 1996, Heaney & Goetzel, 1997, Pelletier, 1991, 1993, 1996, 1999, 2001, 2005, 2009, 2011) Improvements in the health risk profile of a population can lead to reductions in health costs (Edington et al., 2001, Goetzel et al., 1999, Carls et al., 2011)) Worksite health promotion and disease prevention programs save companies money in health care expenditures and produce a positive ROI (Johnson & Johnson 2002, Citibank , Procter and Gamble 1998, Chevron 1998, California Public Retirement System 1994, Bank of America 1993, Dupont 1990, Highmark, 2008, Johnson & Johnson, 2011) 5 5

6 GOOD NEWS WORKSITE HEALTH PROMOTION WORKS! 6 6

7 WHAT ABOUT ROI? CRITICAL STEPS TO SUCCESS Financial ROI Reduced Utilization Risk Reduction Behavior Change Improved Attitudes Awareness Participation Increased Knowledge 7 7

8 HEALTH AFFAIRS ROI LITERATURE REVIEW Baicker K, Cutler D, Song Z. Workplace Wellness Programs Can Generate Savings. Health Aff (Millwood). 2010; 29(2). Published online 14 January

9 CITIBANK 9

10 HIGHMARK 10

11 JOHNSON & JOHNSON 11

12 WHAT IS THE TRUVEN HEALTH ROI MODEL?

13 OVERVIEW The Return on Investment (ROI) Model was developed by Truven Health Analytics and Emory University to: Help employers, health plans, and government agencies project future cost savings and ROI from risk reduction efforts Retrospectively estimate cost savings and ROI for existing programs 13

14 PREDICT SAVINGS FOR TEN HEALTH RISKS The ROI Model predicts cost savings from programs designed to address 10 modifiable health risks: High blood glucose Obesity Physical inactivity Poor nutrition/eating habits Tobacco use High total cholesterol High blood pressure High alcohol consumption High stress Depression 14

15 DATA INPUTS The ROI Model predicts a financial return based on information you enter specific to your population: health risks demographic characteristics program participation the amount spent on risk reduction programs 15

16 HOW WILL THE MODEL BENEFIT YOU?

17 KEY QUESTIONS A sound ROI forecast can help you answer the following questions: Which health risks are the most prevalent and the most costly for your organization and or individual sites? What level of risk reduction is needed to justify an investment in health promotion and wellness? What is the break-even point for a risk reduction program? 17

18 BENEFITS The ROI Model can help you: Design and implement high-impact programs that yield a positive ROI Establish a business case and guide investments in health promotion programs Justify the time, effort, and money spent on intervention programs Negotiate with vendors to ensure programs are cost-effective Run alternative what if scenarios to model potential results with various levels of investment Run overall and site by site level comparisons for you 18

19 BACKGROUND: WHAT IS THE BASIS FOR THE MODEL?

20 HERO STUDY The ROI Model is built on empirical data derived from the original Health Enhancement Research Organization (HERO) study published in 1998 in the Journal of Occupational and Environmental Medicine 1 Updated in 2012: Analysis published in November in Health Affairs 2 1 Goetzel RZ, Anderson DR, Whitmer RW, Ozminkowski RJ, Dunn RL, Wasserman J. The relationship between modifiable health risks and health care expenditures. An analysis of the multi-employer HERO health risk and cost database. J Occup Environ Med Oct;40(10): Goetzel RZ, et al. Ten modifiable health risk factors are linked to more than one-fifth of employer-employee healthcare spending. Health Affairs Nov. 20

21 HERO STUDY (CONT): FIRST PUBLISHED IN

22 UPDATED STUDY PUBLISHED IN

23 LINK BETWEEN COST AND RISK The peer-reviewed research behind the ROI Model supports the concept that health care costs and workplace productivity are influenced by workers health risk profiles in addition to their demographic characteristics For example, individuals who smoke, are not physically active, and are obese have higher health care costs and are less productive compared to those with good health habits 23

24 HERO STUDY UPDATE: NOVEMBER Data collection period Claims data (MarketScan ) Medical Medical and Pharmacy Enrollment Health Plan Health Plan HRA StayWell StayWell N Employees 46,026 92,486 Person Years 113, ,834 Methods Truven Health/HERO Truven Health/HERO (enhanced) Publication JOEM Health Affairs Sponsor HERO ASH/HealthyRoads 24

25 DESCRIPTIVE RESULTS SUMMARY High Risk Category Prevalence: HERO I Prevalence: HERO II Poor Exercise Habits 32% 36% Obesity 20% 32% Poor Nutritional Habits 20% 64% High Stress 19% 17% Current Tobacco User 19% 22% High Cholesterol 19% 10% High Blood Glucose 5% 10% High Alcohol Use 4% 5% High Blood Pressure 4% 8% Depression 2% 11% 25 25

26 RISK-COST IMPACTS HERO II EXHIBIT 1 Average Unadjusted And Adjusted Medical Expenditures, In 2009 Dollars, By Risk Levels Unadjusted difference (%) Risk Unadjusted Adjusted Risk measure level means ($) means ($) Depression High 6,207 6, Lower 3,902 4,553 Blood glucose High 6,532 6, Lower 3,842 5,196 Blood pressure High 5,264 5, Lower 4,132 4,356 Body weight High 4,956 5, Lower 3,498 3,988 Tobacco use High 4,192 4, Lower 3,784 3,597 Physical inactivity High 4,477 4, Lower 3,537 3,976 Stress High 5,024 5, Lower 4,444 4,836 Cholesterol High 4,780 4, Lower 4,688 5,037 Nutrition and eating habits High 3,245 3,261 Lower 4,226 3,440 Alcohol consumption High 3,857 3, Lower 4,015 4,246 Adjusted difference (% ) 26 26

27 Percent COST IMPACTS: HERO I VS. HERO II Difference in Medical Expenditures: High-Risk vs. Lower-Risk Employees HERO 40 HERO II

28 Individual vs. Population-Based Costs 28

29 Cost Per Capita of Risk Factors

30 WALKING THROUGH THE MODEL

31 WALKING THROUGH THE ROI MODEL Features of the ROI Model Opens to the Home page Consists of four pages of inputs seven pages of results a scenario simulation page for what-if analyses a six-page appendix White cells throughout indicate Model inputs with values that can be changed by the user, pink cells indicate results that are calculated by formulas from the Model inputs, and green cells indicate fixed values that cannot be changed Highlights of these features are on the following slides 31

32 WALKING THROUGH THE ROI MODEL Home Page Health and Productivity Management Return on Investment Tool Home Health Promotion Program Employee Characteristics Baseline Risk & Annual Change Annual Rate of Productivity Loss PURPOSE OF THE MODEL This tool will help you forecast the return on investment (ROI) you can expect by investing in programs that improve the health of your employees. The tool is based on research showing an association between employees health risks and health care costs and worker productivity. By reducing these risks, you can thereby expect to see cost reductions. But you also need to consider how much money you invest in order to achieve these reductions. HOW TO USE THE MODEL The model opens with pages that specify demographic and health risk characteristics of an employee population then presents pages of results, which are described below. Each of the pages can be viewed by pressing the navigation buttons on the left. These cells contain model inputs that can be changed (click in the cell and type a new value). These cells contain values calculated from the model inputs and cannot be changed. Summary of Results Predicted Medical Expenditure Projected Productivity Loss Risk Profile with No Program Description of Model Input Pages: Health Promotion Program Employee Characteristics Baseline Risk & Annual Change These cells contain values that are fixed and cannot be changed. Specify basic model settings including program cost and employee participation rate. Specify demographic characteristics of the employee population. Specify the baseline risk level and annual rate of change. Risk Profile with Health Promotion Savings by Risk Factor Annual Rate of Productivity Loss Productive hours lost by risk factor from literature review. Description of Model Result Pages: Summary of Results Total medical & productivity savings and program cost with ROI (return on investment). Total Savings by Risk Factor Predicted Medical Expenditure Medical cost savings per participant tabulated by risk factor and year of program operation. Scenario Simulation Appendix Input Sheet Simulation Projected Productivity Loss Risk Profile with No Program Savings from improved productivity per participant tabulated by risk factor and year. Percentage of employees at risk tabulated by risk factor & year with No Program. Risk Profile with Health Promotion Percentage of employees at risk tabulated by risk factor & year with Health Promotion Program. Savings by Risk Factor Total Savings by Risk Factor Description of Simulation Tool & Appendix: Scenario Simulation Appendix Cumulative medical and productivity savings per participant tabulated by risk factor. Cumulative medical and productivity savings for all employees tabulated by risk factor. Specify 1-5 scenarios by changing the model inputs and run them all automatically. Supplemental information including default values, regression model, and risk definitions. Truven Health Analytics Proprietary Information - Subject to Section 6 (Ownership and Confidentiality) of the Services Agreement between Truven Health Analytics Inc. and StayWell Health Management, LLC dated December 22, Questions about the ROI model: If you have questions about the use of this model, please contact Dr. Ron Z. Goetzel, Vice President, Consulting and Applied Research, Truven Health Analytics, at ron.goetzel@truvenhealth.com. 32

33 WALKING THROUGH THE ROI MODEL Data Input Pages of Model There are four pages of Model inputs that include: 1. Health Promotion Program Participation and Cost Information 2. Employee Characteristics 3. Baseline Risk and Annual Change (Health Risk Information) 4. Annual Rate of Productivity Loss (values can not be changed by the user) 33

34 WALKING THROUGH THE ROI MODEL Health Promotion Program Participation and Cost Information 0.62 Health and Productivity Management Return on Investment Tool Specify the basic model settings Home Number of employees in the base year? 10,000 Press a button to restore default values Health Promotion Program Employee Characteristics Baseline Risk & Annual Change Annual Rate of Productivity Loss Summary of Results Predicted Medical Expenditure Projected Productivity Loss Risk Profile with No Program Risk Profile with Health Promotion Annual % point change in number of employees? 0.0% Medical payment per employee in the base year? $4,692 Please specify an average daily wage. $ Participation rate of employees in the program? 62.0% Annual program cost per employee? $ Time horizon (1 to 10 years)? 10 Restore Defaults from the HERO 2 Study Restore Defaults from Credible National Sources Savings by Risk Factor Total Savings by Risk Factor Scenario Simulation Appendix Input Sheet Simulation Number of years until program levels off? 10 Discount rate applied for ROI calculation? 3.0% Choose the type of analysis: TRUE 34

35 WALKING THROUGH THE ROI MODEL Employee Characteristics 35

36 WALKING THROUGH THE ROI MODEL Baseline Risk and Annual Change 36

37 WALKING THROUGH THE ROI MODEL Annual Rate of Productivity Loss 37

38 WALKING THROUGH THE ROI MODEL Summary of Results 38

39 CONTACTS Direct all inquiries regarding the ROI Model to: Maryam Tabrizi Ron Goetzel 39