LEADING by EXAMPLE

Leading by exampLe
Leading practices
for empLoyee heaLth management
U.S. Chamber of CommerCe
®

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The confluence of rising health care costs and the worsening status of employee health are threatening corporate viabil-
ity and making the health care system unsustainable. Providing coverage for 136 mil ion Americans, the private sector offers
the potential to exert transformative leadership. Business leaders are struggling to find solutions to contain bal ooning health
care costs—costs that encompass more than just the direct cost of employee health care coverage. Research has found that
productivity losses associated with poor employee health hit the bottom line even harder than medical costs. An important
pil ar of strategies to successful y rein in health care costs and reverse productivity losses is commitment from the corner
of ice.
A key tactic is to push health care investment upstream. Instead of spending money on medical treatment for employees
and dependents after they have a disease, leading edge employers are investing to keep employees healthy and, when disease
does occur, to keep it from progressing. These employers are protecting their investments in human capital in much the
same way that they protect their capital equipment.
Through the Leading by Example CEO RoundtableTM initiative, CEOs who have incorporated new, successful approach-
es to employee health and productivity share their experiences and knowledge with other CEOs. The U.S. Chamber of
Commerce and Partnership for Prevention are proud to have developed this guide as a powerful tool for employers. Real
examples and strategies from employers of every size demonstrate the business case for investing in employee health. By
sharing promising approaches to managing employee health, businesses can learn from each other. The health care cost cri-
sis is not an issue to be left to HR departments or middle managers to solve. It should be a top-level issue for every company.
The companies and CEOs featured in this publication have made a healthy workforce part of their core business strate-
gies. They are solving the health care cost chal enge, not just trying the latest temporary fix. We urge CEOs, owners, and
other decision makers to adopt new strategies to contain health care costs and increase productivity. Chal enge yourself and
your firm to Lead by Example. Use the assessment on page 3, make the commitment, and start moving your company to the
next level of performance. You hold the key to successful y meeting this chal enge.
Sincerely,


Thomas J. Donohue
Gerald L. Shaheen
John M. Clymer
President and CEO
Group President, Caterpil ar Inc.
President
U.S. Chamber of Commerce
Chairman, Board of Directors
Partnership for Prevention
U.S. Chamber of Commerce

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Table of Contents
Page
Leading by Example Commitment™ ......................................................................... 2
Health Management Initiative Assessment .............................................................. 3
Health Care Landscape and Value-Based Benefit Design ..................................4–5
• Understanding the health care landscape Steve Burd, Safeway Inc. ........................................................ 4
• Creating value within employee health benefits Christopher A. Viehbacher, GlaxoSmithKline ................... 5
Understanding the Total Costs of Poor Health .............................................. 6–7
• The hidden costs of poor health Dan Ustian, International Truck and Engine Corporation ........................ 6
• Linking health and productivity Marc LeBaron, Lincoln Plating ........................................................... 7
Managing the Health of Your Entire Population .................................................. 8–13
• The workforce health care continuum ...................................................................................... 8–9
• The value of data Neil Patterson, Cerner Corporation ...........................................................................10
• The value of prevention Paul S. Otellini, Intel Corporation .................................................................. 11
• The value of Health Risk Assessments (HRAs) Chris MacAllister, MacAllister Machinery, Inc. ............12
• The value of adherence Jeffrey B. Kindler, Pfizer Inc .........................................................................13
Employer Strategies: Concepts and Goals ........................................................14–19
• What is health promotion? John C. Erickson, Erickson Retirement Communities .....................................14
• Health promotion works Jeff Sterba, PNM Resources, Inc. ...................................................................15
• Consumer-directed health plans ................................................................................................. 16
• Understanding new health care options ................................................................................ 16–17
• Creating a culture of health Danny Wegman, Wegmans Food Markets ................................................18
• Leveraging resources Harold L. Jackson, Buffalo Supply, Inc. .............................................................19
Employee Strategies: Concepts and Goals ...................................................... 20–28
• Reinforcing personal responsibility Robert W. Lane, Deere & Company ..............................................20
• Reinforcing safety on the job Jack Donahue, DonahueFavret Contractors, Inc. .......................................21
• Keeping employees at low risk Surya N. Mohapatra, PhD, Quest Diagnostics Incorporated ....................22
• Addressing at-risk populations H. Lee Scott, Jr., Wal-Mart Stores, Inc. ................................................23
• Supporting medical consumerism Jim Owens, Caterpillar Inc. .........................................................24
• Managing disease .......................................................................................................................25
• Programming matrix ...................................................................................................................26
• Putting it al together Andrew Liveris, The Dow Chemical Company ..................................................... 27
• References ..................................................................................................................................28
Acknowledgements ........................................................................... Inside back cover


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Leading by Example Commitment™
Leading by Example CEOs make 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. Through the Leading by Example CEO RoundtableTM, they urge their peers to maximize productivity
and minimize health care costs by investing in workforce health. The CEOs featured in this publication have
committed to their employee health management strategies by signing the Leading by Example Commitment.
Additionally, each of the featured companies has completed the Health Management Initiative Assessment
found on page 3 of this publication to track the progress of their employee health management initiatives.
How does your organization
measure up?
The assessment on page 3 will reveal
what your organization is doing right
and what more your management can
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Signature
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Partnership for Prevention® · 1015 18th Street, NW, Suite 200 · Washington, DC 20036-5215
Telephone 202-833-0009 · Fax 202-833-0113 · www.prevent.org
U.S. Chamber of CommerCe

®

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Health Management Initiative Assessment
Agree
Disagree
Please forward this assessment to your human capital and health managers.
Page
Check the circle that applies closest to your organization.
Strongly
Agree
Undecided
Disagree
Strongly
See
n Our senior management is committed to health promotion as an
    
14,15,18
important investment in our human capital.
    
7,10,18
n Our health and productivity strategies are aligned with our business goals.

n All levels of management are educated regarding the link between
ission

M





6,7,18
employee health and productivity and total economic value.

n Our employees are educated about the real cost and total value
    
5,6,13,18
of personal health and its impact on business success.

n We have identified the leading physical and mental health conditions


ent





6,7,10
among our employees and know their related direct and indirect costs.
a
M
t
a
n We try to capture and link key medical costs with indirect costs such
D
    
6,7,10
anage
as disability, sick days, and workers’ compensation claims.
M



n Our health benefits support prevention, risk reduction, and disease
management, and are free of barriers to evidence-based interventions.
     11,13,18,25
enefit
esign

n Our incentives support employee responsibility and motivate employees
B
D

to stay healthy, reduce high-risk behaviors, improve clinical measures,
and/or adhere to disease management regimens.
    
20,22



n To encourage employee fitness, we subsidize gym memberships and/or pro-
vide onsite fitness facilities, walking trails, and well-lit accessible stairwells.
    
18,19
ent
M
n We provide healthful food selections in our vending machines/cafeteria.
    
18
ortive
PP
n We provide a safe and clean work environment.

u





21
s
nviron
e
n An employee leadership network supports our health management programs.
    
18,19,26

n We offer Health Risk Assessments (HRAs) to all employees at least every
three years with appropriate follow-up and referral.
    
12,23,26
n We provide a variety of initiatives that support primary prevention
(e.g., preventive health screenings, flu immunizations) and lifestyle
    
8,9,11,22
ing
management (e.g., physical activity, nutrition, stress management).
MM

n We provide education about medical consumerism and self-care.
    
24
rogra
P
n We provide health risk reduction programs or resources (e.g., weight
    
23

management, smoking cessation).
n We provide disease management programs and/or resources targeted to

conditions with high-cost productivity implications (e.g., asthma, diabetes).
    
25
n We measure program effectiveness by stated health/productivity goals.
     7,10,23,26
For example: 70 percent of our workforce is categorized as low risk.
tion

n Eighty percent of our workforce has participated in at least two company-spon-

alua
v
sored health promotion programs within the past three years, including a Health
    
12,22,23
e
Risk Assessment (HRA) and a health improvement or risk reduction program.
©005 Partnership for Prevention/The WorkCare Group, Inc. All rights reserved
Does this assessment show gaps in your current approaches?
Refer to the pages indicated for information and action steps.


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Understanding the Health
Steve Burd
Care Landscape
Chairman, President, and CEO
Safeway Inc.
Healthy Incentives
H ealth care costs pose a serious threat to the competitiveness
of all U.S. businesses. Consider the following:
n Employee health benefits are the fastest growing cost compo-
Company Overview
nent for employers; with overall costs projected to exceed profits
• Type of industry: Food and drug retailing
by 2008 for an average Fortune 500 company.1
• Number of employees: 205,000
n The number of businesses offering health benefits is decreas-
Program Components
ing—69 percent of companies provided health benefits in 2000,
• More individual involvement and responsibility
compared to 60 percent of companies in 2005.2
in health care management
n Our nation’s health spending is expected to increase at a faster
• Health Reimbursement Accounts (HRAs) and
rate than the Gross Domestic Product (GDP) sometime before
Flexible Spending Accounts (FSAs)
2014. The amount of GDP spent on health care is projected to
• Preventive care covered 100%
increase from 15.3 percent in 2003 to 18.7 percent in 2014.3
• Incentives for healthy behavior
n In one national survey, employers reported that they can absorb
• Free wel ness programs
only a 9 percent health care cost increase, in contrast to the
• Health Risk Assessment (HRA) and proactive
care management programs
expected annual increase of 14 percent.4
n Employees continue to demand expensive, state-of-the-art
Program Highlights

treatments; hospital and pharmaceutical costs continue to rise.5
• Strong preventive care program with 100%
n

coverage of annual physicals, wel baby/child
Health risks and chronic illnesses associated with an aging
care and other age appropriate screenings
workforce will increase total health care costs exponentially.6
• Lifestyle Management Program with incen-
Some employers may pass cost increases on to workers
tives for tobacco cessation, weight loss, stress
through higher cost sharing. However, this short-term fix does
reduction, and positive healthy behaviors
not address the primary driver of soaring health costs: inadequate
• Employee health resources available with
24-hour health information hotline, chronic
investment in prevention, health risk reduction, and disease
care management, health advisors and
management.5
education materials for employees and price
transparency tools
• Incentives for healthy behavior that include
premium discounts for healthy decisions and
higher (based) premiums for non-compliance
CEO Statement
“Too often companies look at wel ness as just
another benefit. We have ful y integrated wel -
ness into every aspect of our company’s cul-
ture. It’s a source of pride and reflects how we
care for one another. As a result, wel ness has
become a critical element of our success.”
“Wellness has become a critical element

of our success.”

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Creating Value Within
Employee Health Benefits
Christopher A. Viehbacher
President, U.S. Pharmaceuticals
Health benefit design typically serves as the foundation
GlaxoSmithKline
for employee health management initiatives that include
Do More, Feel Better, Live Longer
health promotion. Benefit design defines the comprehensiveness
of employee health offerings (e.g., preventive screenings, disease
Company Overview
management), while also dictating the cost and accessibility of
• Type of industry: Pharmaceutical
sponsored programs. As such, managers continually assess the
• Number of employees: 25,000 U.S. active
relative value (e.g., health- and productivity-related outcomes) of
their programs compared to the total costs expended.
Program Components
Today, there is a growing movement known as value-based
• Health Risk Appraisal (HRA)
benefit design (VBBD) that views health benefits as an investment
• Preventive screenings, physical exams, and
in an organization’s human capital, rather than just a cost of doing
generous health plan benefits covering medi-
business. Within this model, organizations are challenged to stra-
cal y necessary treatments by quality providers
tegically invest in programs that have the greatest total value. By
• Onsite fitness centers and clinics
lowering health risks, managing disease, and helping employees be • Tobacco-free workplace and nutritious choices
more engaged in their work, organizations are managing costs and
in cafeterias
helping employees remain healthy through reductions in absen-
• Health Enhancement Assistance program
teeism, disability, and presenteeism.7
• Medication compliance programs
A major component of VBBD is the reduction of barriers that
• Health education, interactive toolkits, EAP, and
hinder an employee/dependent’s access to evidence-based pro-
Lifeworks for a healthy life-work balance
grams and effective interventions. For example, high copays or
• Initiative to combat cancer through risk reduc-
tion, early diagnosis and access to quality care
coinsurance levels within a benefit plan may prevent employ-
(www.cancergoldstandard.org)
ees and their dependents from accessing preventive services.7,8
Additionally, adherence to medications for managing a chronic
Program Highlights
health condition may decline. The end result is often poorer health • Comprehensive preventive care program with
outcomes and higher health- and productivity-related costs.8,9
100% coverage
The Pitney Bowes Corporation realized that lower adherence
• Value-based health purchasing to maximize
to medications for asthma, diabetes, and hypertension predicted
chronic disease outcomes
higher future medical costs.10 The company elected to place brand
medications for these conditions on the same level as generics. The
CEO Statement
result? For asthma and diabetes, Pitney Bowes experienced lower
“GSK health care strategy embodies three prin-
rates of hospitalization and emergency department visits, lower
ciples. The first is prevention—it’s cheaper to
overall pharmacy costs, and a net-savings of $1 million in 2004.11
keep people wel . Second is the use of quality
driven interventions to deliver quality out-
The bottom line? An initial increase in spending for selective
comes, and third is innovation to provide new
interventions can bring a greater total return per benefit dollar
prevention tools and medical treatments.”
invested.7,8,10
“GSK’s health care strategy embodies three key

principles: Prevention, Intervention, and Innovation.”
5

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The Hidden Costs of Poor
Dan Ustian
Health
President and CEO
International Truck and Engine
The total impact of poor employee health on a business’s
Corporation
success is illuminated by research in health and produc-
Vital Lives
tivity management. Research has documented that the indirect
costs (e.g., absenteeism, presenteeism) of poor health can be two
Company Overview
to three times the direct medical costs.12-15 (See chart below.)
Type of industry: Manufacturing
Research has linked poor health status to:16-23
Number of employees: 17,000
n Higher direct health care costs.
n Lower work output (e.g., presenteeism).
Program Components
n Higher rates of disability.
• Integrated Health Risk Appraisal (HRA)
n Higher rates of absenteeism.
screening
n Higher rates of injury.
• Financial incentives linking health promotion
efforts to health care premiums
n More workers’ compensation claims.
• Multifaceted health promotion offerings
The conclusion of a June 2005 study in the Journal of
• Onsite fitness centers and health club subsidy
Occupational and Environmental Medicine reported that for all chronic
reimbursement program
conditions studied, the cost associated with performance-based
• Onsite medical services
work loss or presenteeism greatly exceeded the costs of absentee-
ism and medical treatment combined.24 Regardless of your com-
Program Highlights
pany’s size, it is important to be aware of how direct and indirect
• WELCOA Platinum Wel Workplace designation
costs impact your organization’s health and performance.
• Flat or reduced company health care costs
since 2004
IS YOUR ORGAnIzATIOn AWARE OF THE TOTAL
• 75% participation in HRA screening
COST BURDEn OF POOR EMPLOYEE HEALTH?
• 68% of telephonic health coaching partici-
Relative Contribution of Direct and Indirect Costs Within a Large Financial Services Corporation
pants reported improvement or elimination
of at least one health risk
Medical & Pharmacy
• 54% of disease management participants
have documented improvement in quality
Presenteeism
LTD
STD
Absenteeism
indicators
• 53% of eligible smokers enrol ed in a smoking
cessation program—85% have quit
Indirect Costs
CEO Statement
Direct Costs
“Our goal is to help employees perform at the
top of their game at work, at home, and into
Source: Edington DW, Burton WN. Health and productivity. In: McCunney, RJ: A
Practical Approach to Occupational and Environmental Medicine. Philadelphia:
retirement.”
Lippincott Wil iams & Wilkins. 3rd ed. 2003:140-15212
“Our goal is to help employees perform at the
top of their game at work, at home, and into

retirement.”

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Linking
Health and Productivity
Marc LeBaron
Chairman and CEO
Health and Productivity Management (HPM) is defined by Lincoln Plating
the Institute for Health and Productivity Management as the
Go Platinum
“integration of data and services related to all aspects of employee
health that affect work performance; it includes measuring the
Company Overview
impact of targeted interventions on both employee health and
• Type of industry: Manufacturing

productivity.”25
• Number of employees: 450
An emerging metric within the field of HPM that is gaining
more attention by decision makers is presenteeism. Presenteeism
Program Components
refers to diminished on-the-job performance due to impair-
• Mandatory quarterly health screenings and
ment by health risk factors, health problems, or work/life issues.

individual coaching
Unmanaged health issues, such as diabetes, migraine headaches,
• Al employees set wel ness objectives tied
or asthma attacks, can impair productivity significantly when they
to overal performance and pay
are viewed cumulatively across an employee population.12-15,26 As
• Health Reimbursement Account (HRA)
illustrated on the previous page, presenteeism—when compared
with credits for being tobacco free
to other cost-drivers—is a significant liability for any organiza-
• Tobacco-free campus
tion, especially for smaller companies who rely on a concentrated
• Free onsite/on-the-clock tobacco ces-
workforce.
sation and weight management programs
for employees and family members
Measuring presenteeism
Different variables are used to define and measure presentee-
Program Highlights
• The statement, “Wel ness and healthy life-
ism within different job classifications. For example:
styles are important to our success,” has
n Data entry output may be measurably slowed when a keyboard
been in company belief statement since 2004
operator suffers from untreated carpal tunnel syndrome.
• Go Platinum received top national wel ness
n Telephone on-hold times may be excessive when a customer
program award in 2003 and 2006
service representative suffers from unrecognized, untreated
• Health care costs 50% below national

clinical depression.

average
When a job presents no measurable productivity variables, as
• Workers’ compensation costs average
less than 1% of payrol
in the case of most white-collar or knowledge workers, self-
reported survey instruments can provide useful, reliable data for
informed decision making, according to Ronald C. Kessler, PhD,
CEO Statement
professor of health care policy at Harvard Medical School.
“Too often companies look at wel ness as just
26,27
another benefit. We have ful y integrated wel -
For example, the World Health Organization’s Health and Work
ness into every aspect of our company’s cul-
Performance Questionnaire (HPQ) is one of many such tools
ture. It’s a source of pride and reflects how we
available for tracking the effects of health problems on work
care for one another. As a result, wel ness has

performance.13-15,28,29
become a critical element of our success.”
“At Lincoln Plating, we have fully integrated well-
ness into every aspect of our company’s culture.”


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managing the Health of Your Entire Population
Organizations benefit by providing health promotion programs to their entire population, including
dependents. Why? Because the risk status of their population is not static. It is important for organiza-
tions to understand that a low-risk individual today can become high-risk tomorrow. There are two crucial
steps in acquiring a clear view of the total risk picture: first, establish baseline benchmarks defining risk dis-
tribution, then observe the migration (churn) between risk groups. As illustrated below, a company’s entire
population at any one time is distributed across the workforce health continuum.30 The majority of the popu-
T H E W O R K f O R C E H E A L T H C A R E C O n T I n U U m
LOW RISk/HEALTHY
AT RISk
Depending on the needs of a given population,
Risk is not static. 2 percent to 4 percent of an
maintaining employees at low risk may be at
employee population is likely to migrate from low-
least as cost-effective as addressing high-risk
risk status to higher risk within one year in the
employees. The potential savings from average
absence of preventive programs to help low-risk
risk reduction is $153 per person per year, com-
individuals maintain their low-risk status.16
pared to a savings of $350 for keeping low-risk
employees at low risk.14,15
Common Program Elements
Common Program Elements
• Employee health insurance
• General health education/communications
• General health education/communications re-
on risk reduction through print, podcasts,
lated to primary prevention and risk avoidance
and web-based applications
• Periodic preventive screenings
• Health screenings (e.g., blood pressure,

cholesterol, blood glucose)
• Health Risk Assessment (HRA)
• Health Risk Assessment (HRA)
• Immunizations
• Disease-specific risk assessments
• Supportive work environment that encourages
(e.g., Cardiovascular Disease [CVD], diabetes,
healthful eating choices (e.g., vending/cafete-
depression, migraine)
rias), regular physical activity (e.g., walking
paths, company fitness centers), and stress
• Targeted communications based on need
management (e.g., quiet rooms)
(e.g., weight management, physical activity,
smoking cessation, blood pressure)
• Occupational health and safety
• Health coaching (e.g., face-to-face, telephonic,
• Incentive programs for encouraging primary
and/or Internet)
prevention (e.g., 10,000 steps programs, bene-
fit credits for participating in a Health Risk
Assessment [HRA])
• Health fairs
It is important for organizations to understand that the risk status

of their population is not static.

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