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Best Practice for Employee Health Strategies New Jersey Business Group on Health* June 8, 2010

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Title: Best Practice for Employee Health Strategies New Jersey Business Group on Health* June 8, 2010


1
Best Practice for Employee Health StrategiesNew
Jersey Business Group on Health June 8, 2010
A Division of the New York Business Group on
Health
2
PSEG Company Overview
  • Public Service Enterprise Group (PSEG) is a
    publicly traded (NYSEPEG) diversified energy
    company headquartered in New Jersey, and one of
    the ten largest electric companies in the U.S.
  • Total assets 29 billion
  • Total annual revenues 13.3 billion
  • Employees  Approximately 10,500
  • 65 Unionized
  • Average Age 44
  • Average Years of Service - 16
  • PSEG's principal subsidiaries are 
  • Public Service Electric and Gas Company (PSEG)
  • PSEG Power
  • PSEG Energy Holdings
  • PSEG Service Corporation
  • Reliability  In 2009 PSEG was named for the
    fourth time as America's most reliable electric
    utility, by receiving the prestigious National
    Reliability Excellence Award from the industry
    benchmarking group, PA Consulting.
  • In 2003, PSEG celebrated its 100th anniversary.
  • PSEG has paid a dividend annually since 1907.
  • PSEG received NJBiz Magazine's 2007 New Jersey
    Corporation of the Year award for financial
    results, leadership on environmental issues and
    commitment to New Jersey.
  • PSEG is ranked 101 on the 2008 Forbes 400 Best
    Big Companies list.
  • PSEG is ranked 190 on the 2009 Fortune 500 list.
  • In 2009, PSEG was named for a second year to the
    Dow Jones Sustainability North America Index
    (DJSI North America).
  • PSEG was ranked 11 on New Jersey Business
    magazine's 2009 100 Top Employers list.
  • PSEG was recognized by New Jersey Monthly
    magazine as one of their 2009 Great Places to
    Work.

3
A Brief History of Culture Change
  • After 32 fatalities in 27 years, PSEG had to make
    major changes in the health and safety culture.
  • What was needed?
  • A total commitment to transform the culture and a
    plan for action.
  • It wasnt enough to say that health and safety is
    the 1 priority.
  • Hundreds of people got involved.
  • Everyone - from meter readers, generating station
    workers, linemen, customer services
    representatives, office workers, supervisors,
    managers and senior management had to believe
    it and get involved!
  • Results could not be expected overnight
  • Patience was necessary.
  • Most best-in-class companies achieve significant
    culture change in 3-5 years through constant
    reinforcement of the health and safety message,
    hard work, significant employee involvement, and
    consistent support from management.
  • PSEG was on its way
  • We benchmarked best-in-class companies,
  • We took a long hard look at ourselves internally,
    and
  • We got lots of people involved to develop a plan
    for action that is now being implemented and
    continues to evolve.
  • A systematic approach would be required as the
    foundation for an accident-free work environment
    and a healthy workforce.
  • Under strong leadership, PSEG has undergone a
    dramatic shift in its health safety culture.
  • The results have been overwhelmingly positive.
  • OSHA Recordable 1994 5.26

4
Health and Wellness At PSEG
5
Wellness is Not Just a ProgramIts a Health
Improvement Strategy
  • Medifit
  • On Site Fitness Facility Operations
  • Health Promotion, Education/Communication
  • Unstaffed Fitness Center Audits
  • Exercise Reimbursement Program
  • Weight Management and Nutrition
  • Coaching

Hewitt Your Benefits Desktop
  • StayWell
  • Health Risk Assessment
  • Lifestyle Management
  • On Line Education/Resources
  • Optimal Health
  • Disease Management
  • Strategic Planning
  • Vendor Operations Management
  • Partner Integration
  • Program Development Implementation
  • Communications
  • ROI Measurement
  • Work/Life Life Solutions
  • Employee Assistance Program (EAP)
  • CareBridge

Program Integration
PSEG Employee Health
  • Community Outreach
  • Non Profits AHA, ACS
  • Pharmas
  • Weight Watchers, NutriSystem
  • Prevention Works-Pro-Activity
  • On the Ground Physical Therapists
  • Injury Prevention
  • Education, Physical Activity and Nutrition
    Counseling
  • First Response Soft Tissue Injuries
  • Grass Roots
  • Health Safety and Wellness Council
  • Communication
  • Support
  • Engagement
  • On Site Health Services
  • Cardiovascular Disease Screenings
  • Flu Shots
  • Absence Management
  • Workers Comp Work Hardening/Conditioning
  • Wellness Program Integration/Awareness
  • Health Plans Resources
  • Aetna
  • Horizon BCBS
  • Medco
  • Aramark
  • Healthy Food Selections
  • Cafeteria, Catering, Vending

6
PSEG Workforce Health Profile
Demographics
  • Predominately Male
  • 84 Male/16 Female
  • Highly Unionized 65
  • Average Age 44
  • Years of Service 15.8
  • Top 3 Diagnosis Related to Disability Absence
  • Musculoskeletal
  • Mental Health
  • Cardiovascular/All Other

2009 Risk Factors 2009 Risk Factors
Top Risks Overall Health Status
Weight 79 Eating 67 Stress 60 Blood Pressure 56 Preventive Exams 54 Exercise 45 Back Pain 45 Cholesterol 39 Well Being (Depression) 20 Smoking 12 Low risk 11 Medium risk 30 High risk 59
  • Top 3 Diagnosis Related to Medical Claim Payments
  • Orthopedics/Rheumatology (Musculoskeletal)
  • Cardiology
  • Gastroenterology
  • Top 3 Therapeutic Classes Related to Rx Drug
    Payments
  • Cardiovascular
  • Anti infectives
  • Psychotherapeutics

Source 2009 Health Risk Assessment and 2008
Biometrics from CVD Health Screenings
7
Number of Health Risks per Employee
7
8
Health and Safety A Cultural Change Partner
Link Health to Safety
I
  • PSEG Health Safety System
  • Commitment Statement
  • Councils
  • Enterprise (highest level)
  • Medical Director
  • Wellness Leader
  • Lines of Business
  • Local
  • 12 Components
  • Personal Health Wellness
  • Wellness Council
  • Each work location has a Wellness Representative
  • Local office health advocate
  • Disseminate informational materials
  • Update bulletin boards
  • Tailgate messages
  • All Hands Wellness presentations

9
Personal Health Wellness is Essential to
Achieving Safetys Target Zero
  • Individual health status is directly linked to
  • The risk of being injured (both on and off the
    job)
  • The severity of an injury
  • The duration of recovery/ recuperation of an
    injury
  • Most significant predictor of injury is health
    status, tobacco use, stress level and weight.
  • Employees lt35 and overweight have 72 greater
    risk of injury.
  • Employees who perceive health status as other
    than excellent have 65 greater risk of injury
  • Smokers, if injured, are 72 more likely to have
    an incident resulting in lost time.
  • Source 2003 Union Pacific Railroad, Health
    Safety Impact Study

10
Health Wellness Continuum
Take Control of Your Health with PSEG Health
Wellness Resources
Determine Your Health Risks
Build Health in Your Routine
Get the Right Care At the Right time
Manage Chronic Health Conditions
  • NextSteps Lifestyle
  • Management
  • CHAMP Fitness Centers
  • Exercise Reimbursement
  • Staywell Online Tools
  • Helpline
  • Weight Watchers/ NutriSystem
  • Influenza Vaccines
  • Health Risk
  • Assessment (HRA)
  • Health Screenings
  • Optimal Health
  • Disease
  • Management
  • EAP
  • Prevention Works
  • CareBridge
  • Health Plan Resources

Supported by Health Education and
Information Visit Your Benefits Desktop often for
the latest information about your benefits,
health and wellness...there is always something
new.   http//www.pseg.com/benefits
11
Driving Results through Participation/Engagement
2008 Wellness Scorecard

of Employees Participating in .
TARGET 60 in 3 or more programs
Company 0 Programs 1 Program 2 Programs 3 Programs
PSEG Overall 26.1 15.6 16.2 42.1
     
Holdings 43.4 22.6 21.7 12.3
 
PSEG 26.1 15.6 16.2 42.1
 
PSEG Power 35.4 20.6 14.5 29.6
     
Services 17.2 13.4 14.8 54.5
  • Engaging the Right People (93 are Moderate to
    High Risk)
  • Participation in more Programs produces Higher
    Results
  • Participation in 1 program vs. 5 programs
  • Medical/Rx Drug Costs 5 lower
  • WC Disability Lost Time 19 lower
  • Disability Recurrence Rates 7.1 lower

12
The Impact of PSEGs Health Management Strategy
  • A comprehensive evaluation plan to assess PSEGs
    health management strategy outcomes was recently
    completed.
  • The study focused on
  • Health wellness program participation rates,
  • characteristics of participants and
    non-participants in PSEGs health/wellness
    programs,
  • health outcomes, and
  • medical and productivity cost impact over time.
  • Findings - PSEGs health wellness programs are
    showing signs of success
  • Employees who are engaged in their health by
    participating in PSEGs health wellness programs
    are showing lower health care and
    absenteeism/disability costs and trends.
  • Program participation shows a dose-effect with
    more medical and productivity cost moderation
    associated with higher levels of participation
    (2 program vs. 1 program vs. never participants)
  • Cost-benefit analysis demonstrates an overall
    program ROI of 1.1 (medical costs only) and 1.46
    (medical and productivity) after the second year
    of the program.
  • PSEGs ROI reflects results since redesign and
    launch of its health and wellness program since
    2008. An ROI of 11 (i.e. breakeven) is
    considered reasonable for earlier years of
    program implementation.
  • According to the National Business Group on
    Health
  • A mature, comprehensive health management program
    with a highly engaged population can expect to
    see a minimum 3 return for ever 1 invested
    (31) after 3 to 5 years.
  • Source National Business Group on Health,
    (2008) Improving Employee Health Planning,
    Implementing and Achieving Targeted Outcomes,
    p.5.

13
Health Wellness Program Participation Impact on
Employees Medical Drug Cost and Trends
  • Employees who were enrolled in a medical plan
    from 2006 2008 were classified into one of
    three categories (N8,451) to determine the
    impact of participation in PSEGs health/wellness
    programs on health care and absenteeism/disability
    costs and trends.
  • Never Participant Employees who did not
    participate in a program 2007 and 2008
  • 1 Program Participant Employees who participated
    in one program in 2007 or 2008
  • 2 Program Participant Employees who
    participated in two or more programs in 2007
    and/or 2008
  • Medical cost trends show a dose-effect as
    program participation increases.
  • Those individuals who participate in multiply
    health/wellness programs have lower health care
    costs.
  • From 2006 to 2008, the 2 program participant
    group experienced a 26 increase in health care
    costs while the never participant group
    increased 68.
  • Individuals engaged in their health tend to have
    lower health care costs.


Increasing impact on cost outcomes is
evident with increasing program intensity
Employees enrolled in medical coverage during
all reporting years
  2006 2008 Change Change
Never Participated 2,704 4,551 1,847 68
1 Program 3,012 4,272 1,260 42
2 Programs 3,083 3,870 787 26
13
14
Health Wellness Program Participation Impact on
Employees Lost Productivity Cost and Trends
  • Lost productivity cost trends for absenteeism/
    disability also shows a dose-effect as program
    participation increases.
  • Those individuals who participate in multiply
    health/wellness programs have lower
    absenteeism/disability costs.
  • From 2007 to 2008, the never participated group
    showed the highest increase (8) while the 2
    program participant group showed a slight
    decrease (-1).
  • Individuals who are engaged in their health tend
    to have less absences.

Increasing impact on cost outcomes is
evident with increasing program intensity
Employees enrolled in medical coverage during
all reporting years
  2007 2008 Change Change
Never Participated 2,897 3,134 237 8
1 Program 2,640 2,714 74 3
2 Programs 2,104 2,085 (19) -1
14
15
Health Wellness Program ParticipationAlways a
Challenge
PSEG utilizes 9 Best Practice Elements to
Maximize Participation and Engagement
  • Comprehensive program design
  • Integrated incentives
  • Integrated, comprehensive communication plan
  • Strong senior management support
  • Dedicated onsite staff
  • Multiple program modalities (phone, mail, online)
  • Population-based awareness building activities
  • Biometric health screenings
  • Vendor integration

16
Whats Next?A Continuous Improvement Process
The Three Pillars of Engagement
17
The Evolution of Health Management
  • Worksite Wellness the 1980s
  • Worksite-based HRA/screening group education
    and activities
  • Unmanaged, reactive individual support
  • Strength may have been cultural focus
  • Targeted High-Risk Intervention the 1990s
  • HRA/screening targeted individual follow-up
    intervention
  • Stimulated by risk-cost research
  • Focus on high-risk segment
  • Total Health Management the 2000s
  • Enabled by technology delivered at and away
    from work
  • Shaped by integration of wellness disease
    management
  • Manages total population across entire health
    continuum
  • Addresses all health needs with integrated
    services, data, outcomes
  • Renewed recognition of importance of culture and
    work environment

18
Timing of Key Health Care Reform Provisions for
Active Employees Health Plans
  • Employer distribution of uniform summary of
    benefits to participants
  • Employer Quality of Care Report
  • Extension of Adult Child to Age 26
  • Preventive services and immunizations at no cost
    to employees
  • Lifetime Limits and restrictive annual limits
    Prohibited
  • Preexisting conditions exclusion prohibited for
    children under 19
  • CLASS enrollment (voluntary long term care)
  • Flexible Spending Accounts OTC drugs not
    covered
  • HSAs Non qualified withdrawal penalty to 20
  • Employer reporting of health coverage on 2011
    Form W-2
  • Excise tax on high-cost health plans effective
  • Individual Mandate to Purchase Insurance or Pay
    Penalty
  • States establish Health Insurance Exchanges where
    individuals can purchase health insurance
  • Employer Responsibility to Provide Minimum Health
    Coverage
  • Free Choice Vouchers
  • Preexisting conditions exclusions prohibited for
    everyone
  • Cap on rewards for participating in wellness
    programs increased from 20 to 30 of cost of
    employees coverage.

  • Notice to inform employees of coverage options in
    exchange
  • Limit on Flexible Savings Account Contribution
    reduced to 2,500
  • Tax increase on high-income individuals

2018
2012
2013
2011
2014
For Collectively Bargained Agreements
effective after date of new contract. Clarificat
ion on regulations is needed for what may be
considered grandfathered.
19
Use of Incentives in Wellness US Employers
Source Buck Consultants, Working Well A Global
Survey of Health Promotion and
Workplace Wellness Strategies, November 2009.
20
Types of Incentives Offered US Employers
Source Buck Consultants, Working Well A Global
Survey of Health Promotion and
Workplace Wellness Strategies, October 2008.
21
Advantages of Health Plan Integration
  • Potential to integrate into organizational
    fabric
  • Communicates and reinforces the link between
    behavior, health and cost of sick care
  • Maximizes incentive value at less or no cost
  • 200 reward costs employer 200 plus
    administrative costs, and employee only gets
    120-150 after taxes
  • BUT
  • 200 premium reduction can cost employer nothing
  • Assume 60 compliance with required behavior
  • 60 get 200 reduction, which costs employer 120
    per employee (i.e., 200 times 60)
  • With next premium increase, raise premiums an
    extra 120 to cover cost of incentive payouts

21
22
2011 - 2013 PSEG Program Framework
StrategicPlanning
LeadershipEngagement
ProgramLevelManagement
Measurement Evaluation
Best PracticeProgramComponents
  • Population-based approach to total health
    management
  • Strategic planning
  • Annual plan
  • Long-term plan
  • Align vendor partner strategic plans with overall
    plans
  • Senior leadership
  • Budget allocation
  • Supportive policies
  • Active engagement in program promotion
  • Operational accountability
  • Healthy Leaders, Healthy Leadership
  • Integration
  • Vendor Summits and regular calls
  • Use Nurse Line Navigational service to best
    triage participants to appropriate services
  • Data on participation, satisfaction and process
    evaluation
  • Outcomes measurement and program evaluation
    planning and alignment with overall strategy
  • Meaningful reports to key stakeholders
  • Health Assessment
  • Lifestyle Management
  • Disease Management
  • Fitness Centers
  • Exercise Reimbursement
  • Injury Prevention
  • EAP
  • Work/Life Resources
  • Biometric screenings and flu shots
  • Population-based campaign

EngagementMethods
  • Long-term incentive strategy based on sustainable
    outcomes
  • Link to benefit design
  • Annual print piece
  • Explain previous year results
  • Impact on health care costs at PSEG
  • Wellness Council training
  • Lunch n learns
  • Quarterly focus
  • Bulletin boards
  • Stop-by booths
  • Informal discussions
  • Communications
  • Multiple channelsand media
  • Focus on HA, follow-up programs, and other
    resources available to all employees

22
22
23
Tips to Avoid Unintended Consequences
  • Align and strengthen all three pillars of
    engagement
  • Minimize use of do this, get that
    communications
  • Keep it credible by making gaming the system
    difficult or risky
  • Plan for future sustainability
  • Assure compliance with HIPAA, Health Care Reform,
    and ADA
  • Caps incentives at 30 of health coverage cost
  • Discrimination rules related to health status
    factors
  • Reasonable alternatives and consistent
    communications
  • Annual qualification requirement
  • Consult with your legal counsel

24
Thank You
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