Connecting the Dots: Workforce Wellbeing and the Business Bottom Line

Xerox Proprietary

Our Presenter

2 August 29, 2016

Bruce Sherman, MD, FCCP, FACOEM Medical Director, Population Health ManagementXerox HR Services

Bruce.Sherman@Xerox.com

Xerox Proprietary3 August 29, 2016

Workforce health as a business investment in human capital

Relationship of workforce wellbeing to health care cost containment

Importance and value of integrated services and data to foster workforce health and wellbeing

The private exchange as a means to achieve cost containment and health management objectives

Presentation

Outline

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• Triple Aim Goals

− Improved quality

− Better health outcomes

− Lower health care costs

• Lies in alignment of health management strategy with company business strategy

− Increased worker productivity

− Enhanced worker performance

− Increased company profitability

• Targeted offerings generate optimal value

What’s the value of a healthy workforce?

4 August 29, 2016

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Traditional View of Employee Value

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Value Work Output Cost

Responsible Department Operations Human Resources

ComponentsBusiness productivity

Supply chain management

Wages, health benefits, WC costs,

recruitment, talent, workforce planning…

Representative Metric

• Labor hours per unit

• Waste as % of total output

• Revenue per employee

• PEPY healthcare costs

• Employee engagement

• Turnover rate

ValueWork

OutputCost

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Evolution of Workforce Health as a Business Imperative

6 August 29, 2016

Organizational Tactics Measurement Approach

Informal offerings Not monitored

Program-based offerings

(health impacts medical costs)

Program-specific metrics

(ROI)

Integrated health and productivity programs

(health impacts productivity)

Health & productivity metrics integration

(total cost/value)

Organizational policies and practices

influencing health

(health impacts revenue)

Comprehensive integration and reporting

(business/shareholder value)

Health as Employee

Responsibility

Health as Business Imperative

(Culture of Health)

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Higher Wellbeing is Associated with Improved Workplace Performance

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Community

Physical

Mental & Emotional

Social

Financial

Occupational

Wellbeing is More than Physical Health

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A Holistic Approach to Wellbeing has Business Impact

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Working PopulationThriving in physical only

(n=386)

Thriving in all 5 elements

(n=839)

Compared to adults who

are thriving in just

physical – those who are

thriving in all 5 elements:

Average unhealthy days per month 0.81 0.48 Have 41% less absenteeism

Involved in accident resulting in

Workers Compensation claim1.4% 0.5%

Are 65% less likely to be involved

in workplace accident

If job market improves, intent to

look for job with different employer

next 12 months

39.2% 7.3%Are 81% less likely to move when

the job market improves

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Workforce Wellbeing is Associated with Improved Business Performance

9 August 29, 2016

TOP QUINTILE 2ND QUINTILE 3rd QUINTILE 4TH QUINTILE 5TH QUINTILE

Overall

Life

Evaluation

Emotional

Health

Physical

Health

Healthy

Behavior

Work

Environment

Basic

Access

% at Optimal

Income

68.4 60.9 76.4 78.1 62.6 46.9 85.5 41.7%

73.5 73.1 80.6 80.2 65.1 53.7 88.1 66.7%

72.4 70.4 79.7 82.4 66.3 49.5 86.0 64.5%

72.0 71.4 73.8 81.1 67.0 51.2 85.9 59.6%

72.0 69.6 78.6 78.1 65.6 52.6 88.6 39.2%

71.9 66.5 78.4 78.6 66.5 54.9 86.7 50.3%

71.8 64.5 79.1 81.5 64.9 53.9 86.9 69.2%

71.4 68.6 78.0 78.5 67.5 49.3 86.7 47.9%

71.2 67.7 80.0 81.7 64.4 49.1 84.5 51.4%

70.6 60.7 76.5 80.2 66.5 51.9 85.4 44.9%

70.6 65.8 79.6 77.6 62.6 54.4 86.0 41.6%

70.0 63.9 76.2 80.3 63.6 48.5 87.4 55.6%

69.7 58.0 76.5 78.4 68.4 53.2 83.6 63.6%

69.6 62.5 75.0 79.0 65.0 50.0 86.0 56.2%

69.2 64.7 77.5 76.8 62.6 46.0 87.9 51.8%

69.1 60.8 76.8 78.1 61.9 52.2 85.0 39.3%

68.6 61.6 75.5 76.8 65.2 46.4 86.2 51.8%

68.6 59.6 76.3 80.3 66.4 44.4 84.8 41.6%

68.1 59.9 77.9 78.9 61.5 45.3 85.0 40.8%

67.8 58.0 75.7 78.1 63.9 43.4 87.7 57.2%

66.3 58.3 74.7 76.4 59.2 46.0 83.3 31.7%

66.2 52.4 75.0 76.9 61.1 45.4 86.5 37.9%

65.8 59.1 76.4 75.8 53.4 45.6 84.2 28.4%

65.7 57.3 71.9 76.8 61.7 40.1 84.2 36.6%

65.5 56.8 76.3 76.7 56.8 43.2 83.4 28.3%

64.5 52.5 71.0 75.3 60.2 42.4 83.8 26.8%

% Optimal Income(Internal Corporate Measure)

Business Unit Wellbeing Scores

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The Opportunity Exists for Organizations to Actively Promote Wellbeing

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12% of employees strongly agree

that they have substantially higher

overall wellbeing because of their

employer.

A vast majority of employees see

their job as a detriment to their

overall wellbeing.

Organizational

wellbeing lies in

encouraging employees

to do what is in their

best interest.

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Wellness/Wellbeing is Central to Employee Engagement

11 August 29, 2016

1. Senior management sincerely interested in employee wellbeing

2. Improved my skills and capabilities over the last year

3. Organization’s reputation for social responsibility

5. Organization quickly resolves customer concerns

4. Input into decision making in my department

6. Set high personal standards

7. Have excellent career advancement opportunities

8. Enjoy challenging work assignments that broaden skills

9. Good relationship with supervisor

10. Organization encourages innovative thinking

Top 10 Drivers of

Employee Engagement

Globally

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Work unit outcomes comparing top quartile engagement to bottom quartile.

Employee Engagement Affects Key Business Outcomes

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-37%

-25%

-65%

-28%

-49%

-41%

10%

21% 22%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Perc

en

t d

iffe

ren

ce

Source: http://businessjournal.gallup.com/content/163130/employee-engagement-drives-growth.aspx

Absenteeism

High-Turn

over Orgs.

Low-Turn

over Orgs. Shrinkage

Safety

Incidents

Quality

(Defects)

Customer

Satisfaction

Productivity Profitability

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Health Drives Performance

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Stock Price Trend of Companies with a Culture of Health

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0

5,000

10,000

15,000

20,000

25,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Portfolio Worth (6/30) S&P 500

Source: Fabius, Thayer, Konicki, et al. The link between workforce health and safety and the health of the bottom line. JOEM. 2013.

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A Conceptual Framework for Workforce Health and Wellbeing

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Individual

Well-being

Individual

Performance

Organizational

Performance

Inputs

Well-being Status

• Physical

• Emotional

• Financial

• Social

• Personality Attributes

Workplace Practices

• Performance Measures

• Performance Incentives

• Leave Management

• Benefits Design

• Organizational Structure

Work Factors

• Work Relationships

• Role in Organization

• Career Development

• Work-life Interactions

Workplace

Culture

• Well-being Status

• Health Care Costs

• Presenteeism

• Absence

• Engagement

• Skill Level

• Work Output

• Work Quality and Safety

• Customer Satisfaction

• Workforce Engagement

• Workforce Output & Quality

• Customer Retention

• Innovation

• Revenue

• Profitability

Consequences

Source: Sherman B, Lynch W. Connecting the dots: Examining the link between workforce health and business performance. Am J Manag Care, 2014; 20(2):115-120.

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Representative Business Metrics

16 August 29, 2016

Industry Individual Business Performance Metrics Aggregate Business Performance Metrics

All industries• Supervisor performance evaluation

• Workplace accident rate

• Employee engagement

• Voluntary turnover rate

• OSHA injury rate and WC costs

• Net income

• Customer satisfaction

Insurance• Average handling time of claims

• Net written premium amount

• Number of new insurance policies

• Average insurance policy size

• Average handling time of claims

• Net written premium

• Number of new insurance policies

Manufacturing• Quantity of merchandise produced

• Value of merchandise produced

• Occupational injury prevalence

• Throughput/work unit

• Defects per million opportunities

• Production plan variance

• Man-hour per equivalent unit

Retail • Shelf stocking efficiency

• Sales transactions per selling hour

• Comp stores sales growth year over year

• Customer satisfaction

• Profit per customer visit

• Sales per selling hour

Call center• First call resolution rate

• Average time to answer calls

• Calls handled per hour

• First call resolution rate

• Contact quality

• Customer satisfaction

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• Leading and intermediate indicators are directional

• Lack of favorable leading indicator trends should be concerning

Timeline to Demonstration of Value Varies by Metric Category

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Leading Indicators Intermediate Indicators Lagging Indicators

Health care utilization

(Condition management)

Health care utilization

(preventive care services)Health care costs

Program participation rates Clinical outcomes Absence

Patient engagement Population health/health risk profile Presenteeism / Performance

Patient experience and satisfaction Medication adherence

PCPCC. Patient-Centered Medical Home Performance Metrics for Employers, 2011.

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Transitioning from Return on Investment to Value on Investment…

18 August 29, 2016

Stakeholder group Business opportunity

Business level

C-Suite

HR personnel

Employees

Shift from benefits cost containment to focus on bottom line impact

Workforce human capital as organizational investment

More strategic role as managers of workforce human capital

Benefits refocused on wellbeing, fostering greater engagement

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Employers Take Charge – and Make the Connection Between Health and Business Measures

19 August 29, 2016

Company Linking Health and Performance

Caterpillar Business unit wellbeing – achievement of business financial goals

Walmart Employee wellbeing – same-store revenue

Target Employee wellbeing – customer satisfaction

O’Neal Industries Employee health – supervisor performance rating

Bank of America Call center staff wellbeing – customer satisfaction

Comcast Call center staff resilience – customer satisfaction

Goodyear Tire Plant-level health status – work quality

In all cases, favorable

relationship between

workforce health and

measures of business

performance.

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Source: Cascio, Wayne F. Harvard Business Review, December 2006

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A Look to the Future…

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Technology advances:

next-generation data

warehouses integrating both

medical/pharmacy claims with

HR data sources.

Comprehensive analytics:

optimization of health benefits

offerings based on workforce

engagement and other

business impacts.

Thought leadership:

evaluation of health benefits

offerings in the context of

employee engagement and

performance scores.

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Data Integration to Drive Clinical and Business Outcomes Capital Management

22

Truven

Data

Warehouse

and

Analytics

Program Evaluation

Vendor Performance &

Quality Management

Benefit Planning & Design

Health, Productivity, &

Performance Mgmt.

Financial Management

Regulatory Compliance

Eligibility

Medical

Pharmacy

Care Management

Health Risk Assessment

Biometric Testing

User Experience

Program Outcomes

Business Metrics

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• Workforce health can be viewed as a business investment in human capital

• Effective attention to workforce wellbeing can have substantial business impact

• Employees need to see value in available health management tools and resources for them to be successful

• Wellbeing and consumerism engagement are foundational elements for health care cost trend management

Summary

23 August 29, 2016

Xerox Proprietary24 August 29, 2016

Bruce Sherman, MD, FCCP, FACOEMMedical Director, Population Health ManagementBruce.Sherman@Xerox.com

Questions

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