Key Strategic Results - NBGH HP Conference S@W Slides

2014 Towers Watson. All rights reserved.The Business Value of a Healthy Workforce2013/2014 Staying@Work SurveyAugust 21, 2014Critics, audiences and employers across the country

CANT STOP TWEETING ABOUT THAT NEW MOVIE

with the really long title, that truthfully

isnt very catchy at all.Written, directed, produced, and

every other functioned

by @TowersWatsonBased on a true story of approximately 892 employers

{PWarning! Rated P forPlease. No laughing 2013/2014Towers Watson/National Business Group on Health Employer survey on the business value of a healthy workforce:Summary of Key Findings.TITLEDTHE SEQUEL.FANS ACROSS THE COUNTRY EXPLAIN THE SURVEYS TOP FINDINGSgrumbles@Employee57Employees view lack of support and inadequate staffing as leading causes of stress

#StrawOnACamelsBack#HelpiNeedSomebody#HelpNotJustAnybody#needabreakSays show me the money... @Takingaction48Incentives are becoming increasingly popular#YouHadMeAt$#You(andMoney)CompleteMecomments@BMI_over35Adoption of outcomes-based incentives continues to expand.

#sodoesmywaistline#cantstopwontstop#iAteTheCarrotandTheStickKnows the best way to manage stress@pradalover1990#TheDevilMadeMeDoIt #SoDidStressThe most prevalent way employees reduce stress is by doing other activities that distract them like shoppingcloses with@TowersWatsonAll the cool employers are going to see this movie. You should too.

#nopressure#justsayin#thanksforwatching#passtheSnowCaps

Our survey results are coming to a theatre near you.

And by theatre, we mean the MBGH 2014 Annual Conference-Taking Care of Business-Linking Wellness & Health Benefits. Stay Tuned

2014 Towers Watson. All rights reserved.The Business Value of a Healthy Workforce2013/2014 Staying@Work SurveyPresentation to Memphis Business Group on HealthAugust 21, 2014 About the Staying@Work surveyRespondents by RegionNumber of Full-time Workers Employed by RespondentsIndustry GroupsSource: Towers Watson/National Business Group on Health 2013/2014 Staying@Work SurveyInaugural global surveyEmployers completed the survey between May and July 2013in North America, Latin America, Europe and AsiaCountries/markets surveyed15Employer respondents have more than >10,000 full-time workers42%892of the respondents have their workforces located in multiple countries and respondents operate in all major industry sectors51% towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #19Top strategic priorities 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.20towerswatson.com

of respondents plan to have an articulated health and productivity strategy in the next three years.94%

respondents say developing a workplace culture where employees are responsible for their health is a top priority of their health and productivity programs.

7in 10Source: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey Top lifestyle risk factors 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.21towerswatson.com

Yet only 15% of employers identify improving the emotional/mental health (i.e., lessening the stress and anxiety) of employees as a top priority of their health and productivity programs. Source: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey

Employer saysLack of work/life balanceInadequate staffingExpanding technology

Employee saysInadequate staffingLow pay/pay increasesUnclear job expectationsTop 3 causes of the #1 issue: workforce stressStress disconnect and consequencesSource: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey

The disconnect potentially risks employers diverting precious time and resources to fixing the wrong problems, alienating employees and suffering the business consequences of increased absence, presenteeism and unwanted turnover.

towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #22Steps taken by employers to manage stressUnited StatesPromotion of EAP85%Access to financial planning information/services61%Flexible working options51%Expanding EAP services and/or other stress management activities to dependents46%Education and awareness campaigns40%Stress management interventions (e.g., stress management workshops, yoga, tai chi)39%Training for managers34%Specialized training for employees23%External specialist/resources used to design and deliver program(s)23%Risk assessment/stress audits22%Anti-stress space10%Written guidelines on stress7% 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.23towerswatson.comSource: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey Provider strategies to improve quality/efficiency of careOffer further access to behavioral health services through virtual consulting sessionsUse value-based benefit designsUse technologies to integrate biometrics with coachingOffer incentive (or penalties) to providers to improve quality, efficiency and health outcomesExpand access to site-based services such as traveling physician, nurse, registered dieticianContract directly with physicians, hospitals and/or ACOs/PCMH beyond what the health plan is offeringSource: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #Some of the emerging trends include a focus improving quality and efficiency of care through plan design, technology linking biometric monitoring with coaching, alternative care delivery models; payment structures, pay for performance these tactics will no doubt continue to expand as the insurance marketplace changes, the excise tax looms closer. E.g. notes for bar chart: 1) Use value-based benefit designs (e.g., different levels of coverage based on value or cost of services, such as reference-based pricing, lower or no cost drugs for chronic conditions; 2) Use technologies to integrate biometrics with coaching (e.g., remote monitoring, real-time interactive services that leverage mobile collaboration technologies); 3) Offer incentive (or penalties) to providers to improve quality, efficiency and health outcomes (e.g., performance-based payments)

24Tougher requirements to earn incentives or avoid penalties (U.S.) 20132014*2015/2016**Program design componentsReward locations that achieve high levels of health engagement7%15%36%Apply rewards (or penalties) and/or requirements under your wellness and health management program to employees and spouses alike28%36%62%Design incentives to deliver frequent and smaller amounts throughout the year20%32%46%Design programs to measure and reward individuals for making progress toward a healthy lifestyle (e.g., reward progress toward achieving physical activity of 150 minutes per week, smoke-free status)17%28%66%RequirementsRequire employees to complete requirements of wellness and health management activities (beyond simply enrolling in a program) in order to receive reward (or avoid penalty)39%49%77%Require employees to take specific steps in order to be eligible for other financial incentives for wellness and health management activities (i.e., gateway approach)32%44%70%Require employees to take specific steps to receive any subsidized coverage under your health plan16%19%39%Require employees to take specific steps to enroll in your health plan11%13%28%Require employees who get certain types of medical procedures without first seeking additional input (e.g., second opinion services) to pay a higher cost share4%6%22%*Estimates are based on companies planning to adopt the tactic in 2014.**Estimates are based on companies considering the tactic for 2015/2016. 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.25towerswatson.comSource: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey Most incentivized programs% using any financial incentive% using a penaltyMean/Median ($s)Health risk assessment/appraisal88%11%270/125Biometric screening85%11%327/175Tobacco-cessation programs54%14%249/125Worksite diet/exercise activities47%0%182/75Weight management programs47%1%166/75Lifestyle behavior coaching programs (telephonic)46%2%158/75Onsite health coaching and condition management42%2%160/125 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.26towerswatson.comSource: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Survey Outcomes-based incentives (U.S.) 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.27towerswatson.comAnnual financial incentive amount under outcomes-based incentive programs (U.S.)Reward (or penalize) based on tobacco-use statusReward (or penalize) based on biometric outcomes other than tobacco-use status (e.g., health-contingent targets such as BMI, blood pressure, cholesterol levels)Notes: Based on U.S. companies. 2011 is based on 2011/2012 Staying@Work Survey.* Estimates are based on companies planning to adopt the tactic in 2014.** Estimates are based on companies considering the tactic for 2015/2016. 27Taking action: High-effectiveness organizations adopt a holistic view of health and productivityCompany leadership, organizational priorities and culture support workforce health and productivity goalsInvolve and address the role of the manager in changing workforce health outcomesProvide customized approaches for different workforce segmentsUse health, health risk behaviors and absence and disability to make program decisionsDefine health and productivity more broadly to include physical, psychological and emotional aspects of healthSource: Towers Watson 2013/2014 Staying@Work Survey towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #The other 5 of the 10 differentiators:

Measurement strategy is multi-faceted, including employee satisfaction, process and results-oriented metrics that are used in decision-making

Taking actions to address stress and mental health in the workplace

Multi-modal communication approaches are used to inspire member action

Health tactics are varied and strategies involve, enable and support employees at different stages

Focusing on long-term sustainability of integrated programs and behaviour change (as well as short-term goals)

28Survey results of companies with the most effective health and productivity programs Source: Towers Watson/National Business Group on Health 2013/2014 Staying@Work Surveypercentage points lower medical trends1.5fewer days (per employee per year) in total absence 1.3Lower medical costs per employee>$1,600higher revenue per employee*34%Financial/ProductivityFewer cases withhypertension(>130/89)26%Lower BMI (>30)22%Fewer Diabetics/High Glucose Risk(>100 with fasting) 47%Fewer users of Tobacco18%Health RisksNote: *Based on Global results towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #Few lost days of disability 1.5 fewer days of disability per employee and lifestyle risks of more than 3:1 higher improvement include tobacco use, physical activity, weight/BMI, and Nutrition. Custom scorecard is part of the deliverable. Key considerations for building a culture of health and well-beingHealth is a top priority for the large majority of employees, but many are failing to engage with employer initiativesTarget communication to specific needs of employees Employees are receptive to their company taking an active role, but do not feel employers are taking active steps to support their health and well-beingGet managers and senior leaders more involvedOvercoming inertiaCultivate healthy social norms through onsite activities and by leveraging new technologies and social appsThe role of incentivesFinancial incentives are supportive of activity but there are limits not a primary motivator and are more important to those alreadyEngagement with health and well-beingNot just a health issue, relates to broader issues of worker engagement and company performance12345 towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #30

Thanks!Link to survey: http://www.towerswatson.com/en/Insights/IC-Types/Survey-Research-Results/2014/02/stayingatwork-report-business-value-of-a-healthy-workforce towerswatson.com 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. #31