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2008 CEO Forum on Workplace Health - Investing in Employee Wellness: A Sound Business Strategy

This report is based on medical evidence presented at sanctioned medical congress, from peer reviewed literature or opinion provided by a qualified healthcare practitioner. The consumption of the information contained within this report is intended for qualified Canadian healthcare practitioners only.

HEALTH RESOURCE LINE

December 2008

Employee health can represent an important burden for organizations in terms of health care costs and loss of productivity. Health risks such as depression, obesity and smoking often lead to poor employee health and the development of chronic illnesses such as diabetes. Health risks also tend to increase with age and older workers will soon account for a larger share of the working-age population.

In a five-year survey of health risks in over 6,000 employees in the Atlantic Canadian workforce:1

• 70% were overweight (body mass index [BMI] =25) and 31% were obese (BMI =30)

• 49% were inactive (exercise <3 times a week)

• 38% had elevated cholesterol

• 16% had elevated blood pressure

• 20% were smokers

• 18% reported elevated stress levels

As health risks increase in a population, so do health care costs and loss of productivity. Organizations are increasingly recognizing this and beginning to consider employee health and wellness as a sound competitive investment strategy. On October 29, 2008, a groundbreaking event took place in Saint John, New Brunswick, as 30 CEOs from diverse sectors—manufacturing, pharmaceutical and service—met to discuss employee health and its impact on the bottom line. The first ever of its kind in Canada, the 2008 CEO Forum was an initiative of Creative Wellness Solutions Inc., a leading provider of evidence-based workplace health programs, and the New Brunswick Business Council (NBBC).

“Workplace wellness is one of four building blocks identified by the NBBC as the key to this province’s agenda of becoming more self-sufficient,” stated forum moderator Don Dennison. A comprehensive workplace wellness strategy must include baseline data collection, strategic planning and goal setting, a coordinated, synergistic and complementary set of interventions, and the measurement of results through process and impact evaluation. Executives from three organizations with existing workplace wellness strategies were invited to present their approach and findings: Michael J. Critelli, Executive Chairman of Pitney Bowes; Lynn Irving, Internal Consultant for Irving Health Services, J.D. Irving Ltd.; and Sandra Greer, President and CEO of Amirix Systems Inc. Renowned researcher Dee W. Edington, PhD, a Professor in the Division of Kinesiology at the University of Michigan and the Director of the Health Management Research Center, was also present to share his insights on how employee health promotion, worksite wellness activities and programs within organizations can affect health care costs and productivity.

The 2008 CEO Forum was modelled after the Leading by Example CEO Roundtable initiative, a US program established by the Partnership for Prevention to advance policies and practices that prevent disease and improve the health of the nation. Garry Lindsay, Managing Senior Fellow and Senior Program Officer for Partnership for Prevention, closed the afternoon’s presentations with a short overview of the Leading by Example initiative and a Call to Action for Canadian CEOs to lead by example.

Pitney Bowes: Managing Health Through Strategic Investments

“One of our key premises is that healthcare should be delivered close to where the individuals spend their working hours and that investments in health by employers can improve health and reduce the burden on the healthcare system.” Michael J. Critelli, Executive Chairman, Pitney Bowes

Pitney Bowes takes a “value-based” approach to healthcare by paying more for high-value, necessary and cost-efficient health interventions. The focus is on interventions that keep people healthy, or keep those with chronic disease at maintenance level. Necessary treatment is fully reimbursed, such as “open access” or “no co-pay” medications for chronic diseases like diabetes. Financial plan provisions are geared towards cost-effective prevention interventions: nutrition, exercise, lifestyle changes, immunization, infectious disease prevention and containment strategies.

Company-owned sites feature fitness centres and pleasant workspaces. Subsidized on-site clinics offer treatment for minor illness or injuries, screening, immunizations, confidential behavioural health counselling and smoking cessation counselling.

For employees at remote company and customer sites, Pitney Bowes offers periodic, preventive on-site screenings, encourages seasonal immunizations and promotes the use of programs available through its Health Care University Web site.

These “value-based” health care initiatives result in healthier employees, fewer workdays lost to hospitalization, medical procedures or visits to outside physicians, and improved productivity. Every dollar spent to support on-site clinics generates a savings of $3.30, a $2.30 return on investment: disability claims have been reduced by 66% and sick days by 19%. The average cost of healthcare has decreased by 6% for employees with diabetes and by 15% for those with asthma. From its inception in 1999 until 2007, savings of US$39.5 MM have been achieved using “value-based” health care initiatives compared to benchmark.

Although the US health care system differs from Canada, Canadian employers can benefit from a “value-based” approach to employee health due to positive impacts on employee productivity, and reduced absenteeism and employee turnover.

Health Management as a Serious Business Strategy: Dr. Dee W. Edington

“If you always go to the high-risk (people) to try to change behaviour (….) you’ll never win because there’s an endless supply, so the strategy is to stop the flow of low-risk to high-risk.” – Dee W. Edington, PhD

For the past 30 years, Dr. Dee W. Edington has been observing the relationships between healthy lifestyles, vitality and quality of life as they benefit both individuals and organizations. He believes that to remain competitive in this global economy going forward, corporations will have to adopt employee health management strategies to move away from the current healthcare system model of not intervening until people fall ill.

The objective of any corporation is to show value to shareholders by producing innovative products. As a healthy workforce is a creative and productive workforce, CEOs need to view employee health as an economic issue, not a health issue. Consequently, the mission of any corporation should be to keep its workforce healthy, and to do so, the best strategy is to focus on employees with little to no health risks.

Although low-risk employees (0-2 health risks) account for a larger distribution of the overall workforce, it is the smaller percentage of high-risk (>4 health risks) individuals who “cost” an organization more in terms of disability, absenteeism and worker’s compensation. Over time, employees in corporations with no health promotion programs tend to migrate from the low-risk group to the medium- (3-4 health risks) and high-risk groups.2 This flow from low-risk to high-risk groups results in rising healthcare costs and loss of productivity for corporations and communities alike, and it is mostly irreversible: once an individual gets sick, the associated healthcare costs rarely decrease. Yet little is done to keep individuals in the low-risk group healthy.

The current health care strategy is to wait for sickness and then treat, which in quality terms translates into “wait for defects and then fix the defects.” According to Dr. Edington, “The same thinking that got us into this situation won’t get us out of it: more doctors, more hospitals, more nurses won’t solve the problem. We have to find a new way to think.” Programs that help people with chronic diseases or that promote prevention are not enough: we also need to keep healthy people healthy. Risk factors are driving healthcare costs: controlling risk, not disease, can help stop the flow. To motivate employees to become self-leaders, you need to change the environment and the culture in order to make the change.

Employee health needs to be fully integrated into corporate culture. “Everybody must understand that health and productivity is critical to the success of your company,” Dr. Edington stressed, and CEO advocacy is essential to make employee health a serious business strategy and ensure it is implemented promptly. The work environment should reflect this new vision by promoting healthy behaviours (e.g. making junk food more expensive in vending machines, providing healthy options at the cafeteria, etc.). Incentives can be offered to improve employee participation. Benefits design should be aligned with a healthy and productive culture: consider partnerships with health plans providers, benefits consultants, primary care physicians, pharmaceutical companies and health enhancement companies to help support health management programs.

To start bending the trend, you need to engage 85% to 95% of your employees with a Health Risk Assessment, screening/counselling, coaching and at least two other health promotion activities. An organization’s goal should be 75% to 85% of employees in the low-risk group. The first step can be “Don’t Get Worse” to stop the flow from low- to high-risk. Then, create a culture of winners by setting goals that are easily achievable: encourage employees to maintain their weight instead of losing weight, to know their body mass index or blood pressure first before asking them to achieve targets. Once you have employee participation, raise the bar in small increments to train people on correct behaviour. Keep the healthy people healthy. Don’t get worse!

J.D. Irving: Translating Employee Health into Productivity

“Rather than viewing the cost of wellness as a sacrifice, we see it as an investment in our primary asset: our people. The concept of wellness in the workplace is good business: improving the health, morale and productivity of the workforce positions the company in a financial advantage for the future.” Lynn Irving, Internal Consultant, Irving Health Services, J.D. Irving Ltd.

Fifteen years ago, the Canadian patrol frigate program was in full swing and over 3000 employees worked at the J.D. Irving shipyard in Saint John, New Brunswick. Between 8% and 10% of employees were off on disability claims related to occupational and non-occupational injuries and illnesses. Most claims were so-called soft tissue injuries: sprains, strains and back pain, which often failed to respond to traditional treatments. When Lynn Irving applied her background in physiotherapy to the design and delivery of educational programs, she soon realized the company needed to focus on the development of structured injury prevention education and a return-to-work program. There was an obvious need to stabilize healthcare cost increases, reduce health and safety risk, increase work productivity and improve employee engagement; failure to do so could result in expected health care cost increases of 10% to 20% per year.

To present the issue in a manner that would get the attention of the executive team, data from various sources, including health premiums and claims costs, were entered in the Disability Management Information System, a database used to generate management trend reports that were presented to every vice president and the entire management team bi-annually. The reports helped identify trends and red flags as well as opportunities for improvement. Data were analyzed to establish actual claim costs, the types of reported illnesses and injuries, which body parts were more frequently involved, and when and where these injuries were occurring.

From this analysis evolved a disability management program now supported by eight certified disability management professionals. The internally driven case management process encompasses early intervention, active rehabilitation and transitional return-to-work programs that can include modified duties. One of the key components of the program is clear communication between all stakeholders, including management, supervisors, union officials and employees. The medical community is also well aware of how the return-to-work program functions: J.D. Irving representatives speak regularly at medical associations, take physicians on tours of the facilities and explain local processes. The return-to-work program has a success rate of 88%.

One of the key drivers of the program is the Health Risk Assessment. Every employee and their spouse meet with a registered nurse once every two years to undergo this confidential evaluation. The data are kept on file by an external provider and only aggregate data are sent to J.D. Irving. Employee health risks are stratified from these data and are used to customize the wellness programs and policies. For example, the Irving Triathlon was conceived in 2005 following the identification of excess weight, poor nutritional habits and lack of physical activity as top employee risk factors.

Promoting healthy lifestyles is one of the best strategies for slowing the flow from low- to high-risk, thus slowing the rise in health care costs. Today, total health benefit premiums are 6.8% of payroll compared to an external benchmark of 9%. In the last three years, the rate of reportable incidents has been reduced by 22% and the level of long-term disability claims has not increased in four years. Investing in employee health is good business.

Workplace Health Management Strategy for Small Businesses: Amirix Systems Inc.

“It really wasn’t going to cost us that much to launch a pretty comprehensive program, so I thought size was a benefit to us.” Sandra Greer, President and CEO, Amirix Systems Inc.

It is not necessary to have the resources of Pitney Bowes or J.D. Irving Ltd. to implement a workplace health management strategy. Amirix Systems, a small company that develops electronics used in marine research, started a health management program eight months ago to help bridge the gap between two very different corporate cultures with different levels of fitness and health: a highly educated research and development workforce and a less educated blue-collar workforce.

After reviewing articles on employee health management and observing what other organizations were doing, president and CEO Sandra Greer chose a very straightforward and economical approach: the company would pay for a Health Risk Assessment for every employee. Individual results would be confidential but aggregate results would be used to target organizational improvements.

A wellness partner was sought to bring industry experience and expertise and to help legitimize the program to employees who might be uncomfortable sharing health information with someone internal to the organization. Participating employees would be provided with a confidential, easy-to-use seven-page health risk assessment and an individualized plan to help them improve or maintain their health.

Employee participation was encouraged through incentives such as monthly prizes while a year-end prize of a sun vacation for two was pledged if 80% of the employees agreed to participate in the program. The initiative was a resounding success with an employee participation rate of 99% and the overall results provided data to give the organization a starting point for improvement. Employees define major steps for themselves and show their commitment by tracking their progress on a wall calendar. Positive action results in ballots towards monthly health-related prizes (e.g. gift certificates for a fitness store, massage, etc.). Employees who are already fit and maintain their healthy lifestyles are also recognized and get ballots for staying fit. Greer will use the insights gained during the 2008 CEO Forum to review and tweak the program for 2009.

Leading by Example in Canada: Partnership for Prevention

“Keeping Canada’s workforce healthy is a key to workforce productivity.” Garry M. Lindsay, Managing Senior Fellow & Senior Program Officer, Partnership for Prevention

Yesterday’s assumption was that health was a cost driver: today’s reality is that health is a performance driver. Investing in health not only controls expenses but also protects, supports and enhances human capital and is fundamental to a healthier bottom line.

The Leading by Example CEO Roundtable initiative was started in the US to:

• Highlight the direct and indirect costs of poor employee health management.

• Convince CEOs of the business case for investing in worksite health through a peer-level initiative.

• Emphasize prevention rather than treatment through CEO influence.

A study of the most successful health promotion programs in the US identified top management support and a supportive culture as the two most important elements.3 As most CEOs do not read journals that publish studies on workplace health management, peer-to-peer influence remains the best way to reach them to explain the link between health, costs and productivity.

Leading by Example CEOs are committed to making a healthy, productive workforce a core part of their companies’ business strategies. They personally lead their companies’ efforts to protect and maximize the return-on-investment in human capital and through the Leading by Example CEO Roundtable, they urge their peers to maximize productivity and minimize health care costs by investing in workforce health.

Garry Lindsay presented the Health Management Initiative Assessment used to evaluate a company’s mission, data management, benefits design, environment and other factors. Indicators point to information and action steps for each of these topics. It provides a self-assessment of where a company is situated and how to move to the next level. A global version was adapted in collaboration with the World Economic Forum. The newest assessment form was released at the annual meeting in Davos, Switzerland, along with a global Call to Action on workplace wellness. The established model of Leading by Example can serve as the framework for Canadian companies to move forward.

REFERENCES

1. Makrides L. Presence of Modifiable Health Risks in Atlantic Canadian Employees: A Five-Year Report. (In preparation). Atlantic Health and Wellness Institute, Research Affiliate of Creative Wellness Solutions Inc.

2. Edington DW. Am J Health Promot 2001;15(5):341-9.

3. O’Donnell M. Health Promotion in the Workplace. 3rd ed. Albany, NY: Delmar, 2001, page 50.

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