Wolf

Wolf

Loss aversion

These are the areas that Buck has identified as your prioritized targets for intervention. It looks at Health Prevalence – what % of the BI population has these conditions – and health risk – the risk to BI based on the costs associated with these conditions. In an area like Weight – where the prevalence and the risk are both high – this should be a key target for BI to improve We believe that these statistics are likely understated as a representation of our entire population. The Health Prevalence above only represents those who completed the HRA. This is a relatively small group of people vs. our total (about 1000 employees completed) Population who initially takes the HRA is likely to be healthier

This is Buck’s conservative estimate on the potential savings from engaging in a Culture of Health. They are attributing a potential savings on the Medical side of $2.4 million and a savings of $5.3 million through increased productivity

This is Buck’s conservative estimate on the potential savings from engaging in a Culture of Health. They are attributing a potential savings on the Medical side of $2.4 million and a savings of $5.3 million through increased productivity

The Future of Employee Wellness: Where are we headed? Barry Hall, FSA Garden State Council • SHRM Annual Conference November 1, 2010

Trends Globalization Motivation Measurement 1 Key Topics 1

2 Where Are We Headed?

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7 Health Care Reform – Wellness-Related Provisions The “law of the land” says health is not just about reactive “sick care” – engagement is required. Nursing mother break time and accommodations required Calories to be posted in chain (>20) restaurants Preventive screening co-pays waived for employer plans* and for Medicare Wellness program grants to small businesses (<100 EEs) for wellness programs National report on effectiveness of wellness programs (after periodic surveys and research) National health promotion plan Workplace health promotion effectiveness research (plan sponsor tax of $1 per year per member, rising to $2) Health status-based incentives may rise from current 20% to 30%, and later, to 50%* Wellness program demonstration project in 10 states * Applies to non-grandfathered plans Childhood obesity demonstration project grants

The Wellness Trend Continues… PricewaterhouseCoopers Trendsetter Barometer™ October 13, 2010 42% of CEOs surveyed plan to increase investment in wellness programs “The fact that a considerable number of CEOs are looking to up their investment in wellness programs signals a shift in thinking, with greater focus on a long-term approach to the health of employees.” 8

4th Annual Global Wellness Survey Objective: Assess trends in employer-sponsored wellness strategies and practices Participants: 1,248 participating employers 47 countries 13 million employees All industry categories Reports: Global survey report Executive summary in 8 languages To be released in November 2010 www.BuckSurveys.com 9 9

Location of Employees 10 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 10

Global Prevalence of Health Promotion Programs 11 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 11

Status of Wellness Strategy 12 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 12

The Health Promotion Value Chain 13 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 13

Employer Objectives Driving Wellness Strategy 14 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 14

Cost Burden of Chronic Disease Source: DeVol R, Bedroussian A, et al., An Unhealthy America: The Economic Burden of Chronic Disease. The Milken Institute. Oct. 2007. 15

Health Issues Driving Wellness Strategy 16 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 16

Source: Employer study, Germany 17

Ten Leading Causes of Burden of Disease 2004 vs. 2030 Source: World Health Organization 18

Top Wellness Program Elements – 2010 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 19

Fastest Growing Wellness Program Elements – 2010 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 20

Motivating Behavior Change 21 21

Key “Levers” to Drive Behavior Change 22 22

Prevalence of Incentive Rewards (or Penalties) 23 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 23

24 Do Incentives Work? Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 24

25 Source: Taitel et. al, Journal of Occupational & Environmental Medicine, 2008. Maximize Results but Don’t Overpay 25

26 It’s Not Just About the Money Source: Seaverson et. al, Journal of Occupational & Environmental Medicine, 2009. 26

27 Loss Aversion: What are you missing out on? 27

Loss Aversion: Leaving Money on the Table

Regret Aversion: An Ounce of Prevention… 29 29

Statistical Optimism: Chances of Chronic Illness 30 30

31 Safeway AisleONE Benefits Portal The Solution A benefits portal for employees and covered spouses/ partners One-stop shopping experience… available through one URL with one password A “sticky” experience that engages employees Comprehensive site to support all aspects of a “Culture of Health” 31

32 Dashboard tracks completion of tasks, biometric scores, attainment of incentives Web 2.0 features create compelling experience… includes configurable avatar that reflects BMI Safeway Benefits Portal 32

33 Safeway Benefits Portal Personalized, action-oriented “to do” lists Resources for health improvement Behind-the-scenes data exchange with benefit plans, administrators and other resources Quick links and single-sign-on to these outside resources 33

Measurement and Outcomes 34 34

35 Dropped smoking rates among employees from 40% to 11% Flat health care cost trend for 5 years From 2005 to 2007 invested $80 million in wellness programs and saved $190 million Measuring the Impact of Wellness 35

36 Bank of America Blue Shield of CA Duke University Citibank City of Birmingham Coors DuPont General Foods General Motors GlaxoSmithKline Indiana BCBS Johnson & Johnson Life Assurance Nortel Prudential Travelers Union Pacific Washoe County Source: Chapman Institute, Proof Positive: An Analysis of the Cost-Effectiveness of Worksite Wellness, 2008. Measuring the Impact of Wellness 36

Measurement and Outcomes 37 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 37

Measurement and Outcomes 38 Source: Preliminary (pre-publication) results from Buck Consultants’ 2010 Global Wellness Survey 38

Healthcare Cost Trend Impact 39 REDUCTION IN HEALTH CARE TREND RATE – U.S. EMPLOYERS AVERAGE ANNUAL REDUCTION IN HEALTH CARE TREND RATE – U.S. EMPLOYERS Preliminary (pre-publication) results from 2010 Global Health Promotion Survey

40 Prioritized Health Risks for Intervention: Source: University of Michigan, Health Management Research Center – Assessment of ABC health risk and claims data * Health Risk Prevalence represents the percentage of members who completed the health risk appraisal and have been identified with the above listed health risks ** Prioritized Health Risks – U Michigan Trend Management market data based on individuals’ health and health costs Building a Business Case 40

41 HRA/Biometric Screening Results Source: Client data – Health care organization 41

42 Building a Business Case Total = $17 M Sources: Client data – Retail organization. Excess costs derived from HERO study (1996) trended to 2008. 29% 34% 34% 9% 5% Prevalence of high risk in total screened population (7,600 employees) $129,000 $128,000 $217,000 $118,000 $82,000 Estimated annual savings per percentage point decrease Excess Health Care Costs Per Risk Factor 42

43 1 University of Michigan, Health Management Research Center – assessment of 2007 ABC health risk and claims experience data, extrapolated to entire ABC population, and trended to 2009. Includes health risk factors such as smoking, nutrition, exercise, etc. 2 2007 health assessment 3 Assumes 20% target reduction in excess health claims and 10% reduction in productivity loss. Building a Business Case 43

44 Building a Business Case Total Projected HC Costs w/o wellness Total with wellness 44

Thank You! Barry Hall +1.617.275.8033 Barry.Hall@BuckConsultants.com www.bucksurveys.com www.buckconsultants.com