HomeMy WebLinkAboutItem 02 Expansion of Wellness Program
,
S P R I,N G FIE L D
CITY COUNCIL
Meeting Date:
Meeting Type:
Department:
Staff Contact:
Staff Phone No:
Estimated Time:
January 14, 2008~"
Work Session 1 ; J, A/1'?
Human Resource 1f11,,//'
Ardis Belknap
726-3786
15 Minutes
AGENDA ITEM SUMMARY
ITEM TITLE:
EXPANSION OF WELLNESS PROGRAM
ACTION REQUESTED:
To authorize the expenditure to develop and impl~ment an expanded City
Wellness Program.
ISSUE STATEMENT:
This briefing will update Council on the work that has been done, the
reasons for a proposed expansion of the wellness program, and the planned
method to expand the City of Springfield wellness program.
ATTACHMENTS:
Attachment 1: Council Briefing Memorandum
DISCUSSION AND
FINANCIAL IMPACT:
In June 2007 Council approved $45,000 to expand the City's Wellness
Program and begin using more of what is currently paid for illness and
injury towards paying for health. Staff recommends that Council authorize
the expenditure of the budgeted $45,000 and_additional funds received
from an unexpected Workers' Compensation dividend to develop and
implement the expanded City Wellness Program.
A well designed wellness program will encourage and assist employees to
gain and maintain health. A healthy employee results in fewer and less
severe on-the job injuries, lower medical costs, lower disability costs and
ultimately lowerlife insurance costs. National studies report a return on
. investment (ROI) from $1.40 to $4.90 for every dollar spent on wellness
programs. The median ROI is $3 in benefits per dollar spent on wellness.
No unbudgeted funds would be used in this proposal. The expansion of
the Wellness Program for City of Springfield employee, retirees, and
dependents is anticipated to be $116,000 in the first year and an additional
$65,000 per year for on-going program (funded from Benefits Reserve and
SAIF dividend in current Fiscal Year, Benefits Reserve in FY 2008-2009).
The current year request would be expenditure of the previously budgeted
$45,000 and a later supplemental budget request seeking authorization to
appropriate $71,000 in additional funds received from an unexpected
Workers' Compensation dividend.
MEMORANDUM
City of Springfield
From:
Date:
Mayor and City Council
Ardis Belknap, Human Resources Manager
January 8, 2008
Council ;:J I L 'A_~
Briefing r:;J.dJ Wf.f~./'
Memorandum
To:
Subject: Wellness Program
Costs for Fiscal Year 2006-2007 to protect the City and treat employees, dependents and
retirees for illness and injury were $5,145,000. In April, 2007 Council approved $45,000 to
expand the City's Wellness Program and begin using more of what is currently paid for illness
and injury towards paying for health. The purpose of this memorandum is to recommend that
Council authorize the expenditure of the budgeted $45,000 to develop and implement the
expanded City Wellness Program. A later supplemental budget will be prepared to seek'
authorization to appropriate the $71,000 additional funds received from an unexpected
Workers' Compensation dividend.
People fall into three categories - those who are currently healthy, those who are at risk for a
major problem, and those who have a major disease or injury. The goal of health insurance
and workers' compensation insurance should be to maintain the good health of the healthy,
prevention for those at risk for a major disease or injury, treat those who have an injury or
illness, and loss control for those who have a major disease or injury. However, most of what
the City pays to insurance co~panies is for the treatment of those who have an injury or
illness. '
The goal of an expanded City Wellness Program would be to provide more resources to
maintain the good health of the healthy, prevention for those at risk for a major disease or
injury, and loss control for those who have a major disease or injury. The City is already doing
many things to lower the risk of injury and illness. To continue this work, Human Resources
recommends that the City expand the current program to further lower risk of injury and illness.
If the current costs can be reduced by even 2% the City will reduce costs by over $100,000 per
year.
The program would be designed to create a culture of health improvement. In addition to
lower costs to treat those who have an injury or illness, the outcome of similar programs are
increased productivity while reducing absences, increased energy, and an enhanced degree of
mental alertness. For example, the City has seen a 30% reduction in absences in the diabetic
intervention program as described in Attachment A.
Contracted part-time professionals would staff the Wellness Program. There is no anticipated
additional City staff needed for this project. The City will work closely with the PacificSource,
the City's health insurance carrier; DIRECTION, the City's Employee Assistance carrier; and
SAIF, the City's Workers' Compensation carrier, to design and implement the program. Once
the program is developed, there is a high likelihood that other public agencies would join the
effort.
Attachment 1
Page 1 of 4
CBM: Wellness Program
January 8,2008
, Page 2 of 4
Several local entities have on-site Wellness Programs. With approval of this proposal, a task
force made up of Safety Committee members and other interested employees would be
designated to visit these centers and study best practices. Wellness programs in other local
centers include immunizations, Worker's Compensation injury management, prevention
classes, exercise and nutrition assistance, routine acute care, and lab tests.
The proposal includes a dedicated space, however it is intended that the practitioners would
spend time at the City's remote locations such as police, maintenance, and the fire stations.
Backaround
Within the approved budget the health, dental and workers' compensation insurance programs
have contained cost increases and increased in the scope of services over the past years.
1. A benefits reserve has been built through the successful management of PacificSource
(health insurance).
2. Since the addition of the Health Incentive insurance plan (HIP) the City's health
premium increase has slowed. The average premium increases since the inception of
the HIPis 9.5%; the national average is 16%.
3. Chronically iII- Within the lower than expected health insurance premiums, the City is
actively involved in improving the health status of the chronically ill. People covered by
the City of Springfield health insurance had a considerable increase in out-of-pocket
expenses when they transitioned to the HIP. The Empower diabetic program was
established to assist with this problem. (a Case Study concerning the Empower
program is Attachment A)
4. Preventive services - Flu shots and blood draw for lab tests have been offered each
year at City Hall, fire stations', police, and maintenance. Employees, retirees, and
spouses have had occupational health staff present to counsel them about their lab test
results and encourage them to seek help from their primary care physician.
5. Workers' Compensation - Increased injury and return-to-work management has brought
this program under more control. One measure of workers' compensation claims
activity is the comparison of the City to other similar size -and type of organizations.
During Fiscal Year 2006-07 the comparison shpwed the City with 6% more claims
activity than the average of comparators. Fiscal Year 2007-08 has brought the City
even with the average comparators, resulting in an anticipation of no premium increase
for Fiscal Year 2008-09.
6. Enhanced coverage - The City's insurance has increased the number of dental exams
and cleanings for diabetics and pregnant women, PacificSource has started a Healthy
Heart program and enhanced case management, and employees have a health risk
assessment and personal health record available through WeoMD.
7. Within the approved budget the Maintenance Division has successfully reduced on-the-
job injuries, liability claims, and created an atmosphere of safety and health. Some of
the actions taken are: the assignment of safety responsibilities to each employee in the
division, designated a day each month for people to complete their safety
responsibilities, developed a safety resource library and bulletin board, designed and
implemented a safety recognition program with an annual program budget of $2500,
implemented an employee led, professionally designed stretching program for 20
minutes at the beginning of each work day, developed a workout gym, and provide each
employ~e an opportunity to meet with a physical therapist on site twice per year to
design exercise programs and discuss problems. A motto of the Maintenance Division
CBM: Wellness Program
January 8, 2008
Page 3 of 4
is, "A healthy worker is safer and happier."
The premium cost containment will disappear or erode if the City doesn't address the current
and future risk of employees, retirees and dependents. An expanded Wellness Program will
build on what the Maintenance Division has been doing and make resources available to more
areas of the City.
Recommendation
The recommendation is to use the $45,000 budgeted from the benefits reserve and the
unexpected dividend of $71 ,000 from the City's Workers' Compensation carrier, SAIF, to
promote a culture of health and safety. The financial impact of this option is approximately
$116,000 (no unbudgeted funds) the first year to maintain the Empower program and start the
Wellness Center and $80,000 for maintenance of the.program in subsequent years. Specific
planned tasks are:
1. Chronically ill - The City desires to maintain and expand the current Empower diabetes
program to include depression, asthma and heart.
2. Preventive testing and flu shots - The City desires to increase preventive services such
as illness evaluations and recommendations, tetanus and hepatitis immunizations,
health screenings and counseling regarding health goals.
3. Workers' Compensation - Wellness staff would increase meaningful contact with injured
workers to improve support, facilitate appropriate care, and ensure that any necessary
time loss or restricted duty is minimal. The wellness staff would evaluate and monitor
progress in the Modified Duty Program.
4. Worker accommodation and disability - Wellness staff would assist with Americans with
Disability Act accommodations, maintain regular contact with employees on short-term
or long-term disability providing support, facilitate appropriate care, and ensure that any
necessary time loss or restricted duty is minimal.
5. Fitness Center - Wellness staff would assist employees to develop a personal wellness
plan in addition to evaluating and approving participation of employees in existing onsite
fitness centers to prevent the risk of injuries on City provided exercise programs and
equipment.
6. Future loss prevention - By conducting classes and establishing programs, wellness
staff would be involved in ergonomic assessment, stretching, education, and
communication.
7. Weight loss programs - The Wellness Center could be used to encourage participation
in and present weight loss programs. Another motto of the Maintenance Division is, "20
pounds equals 10 years." ,
A well designed wellness program will encourage and assist employees to gain and maintain
health. A healthy employee results in fewer and less severe on-the job injuries, lower medical
costs, lower disability costs and ultimately lower life insurance costs.
There are six recognized stages a person goes through in gaining health or maintaining health.
· Pre-contemplation (do not know or recognize they have problem or are at risk)
· Contemplative (Know there is problem but not sure yet what they will do)
. Preparation (Getting ready)
. Action (Changing)
· Maintenance (maintaining the behavior change)
CBM: Wellness Program
January 8,2008
Page 4 of 4
. Relapse (returning to old behaviors)
Some people have the ability to recognize what needs to be done to gain and maintain good
health. Other people need resources to recognize a problem and take action towards solution.
In partnering with the City's insurance providers, the City can assist employees, retirees, and
dependents to recognize problem areas. The City's insurance providers can offer some of the
resources to take action towards solutions. The Wellness Center would pull together the
resources from all of the community services, City insurance carriers, and City resources such
as work out facilities to develop a comprehensive plan tailored for the individual to take action
towards solution. The Wellness staff would also study planned training exercise particularly for
fire, police and maintenance employees and tailor action plans to prevent injuries. A
significant amount of City on-the-job injuries are suffered during training exercises.
The Return on Investment for Wellness programs is well documented. For instance, a
program similar to the City's diabetes program reduced expenses for Asheville, North Carolina.
At Asheville, the expenses for diabetic care was $7,042 per employee in base year 1996, for
each of the years since implementation expenses have been at or below $4,600 per employee.
A culture of safety and health improvement can lead to reduced absences, increased energy,
and an enhanced degree of mental alertness which will result in containment of health and
workers'compensation costs. Wellness programs work both for the individual and for the
organization. Wellness programs are a way of using part of what is currently paid for illness
and injury towards paying for health.
Financial Analvsis
The current health, dental, and workers' compensation insurance program can be continued
within allowed budget increases. There is no expected short-term financial impact from
continuing current programs.
Maintaining the current Empower diabetes program is expected to be absorbed in the current
budget. The expansion of the Wellness Program for City of Springfield employee, retirees, and
dependents is anticipated to be $116,000 in first year and an additional $65,000 per year for
on-going program (funded from Benefits Reserve and SAIF dividend in current Fiscal Year,
Benefits Reserve in FY 2008-2009).
National studies report a return on investment (ROI) from $1.40 to $4.90 for every dollar spent
on wellness programs. The median ROI is $3 in benefits per dollar spent on wellness.
Reauested Action
Staff recommends Council authorize the expenditure to develop and implement an expanded
City Wellness Program.
For more
Information, visit
our webslte at
www.vbhealth.org,
or emall us at
cyndy@vbhealttLorg
or
tJudd@MJheatth.org
CENTER FOR HEALTH VALUE INNOVATION
@
vAlliE-BAsED HEAlTH
City of Springfield OR
Case Study
Value-Based Plan Boosts Health and Reduces Sick Days
"We needed to address 'the
rising costs of diabetes," says
Ardis Belknap, Human Resource Manager
for the City of Springfield, Oregon. "We
knew the Asheville community model for
diabetes improvement; and we worked
hard to institute the model. But we
wanted to do more-we wanted to provide' 1.
business-based evidence that the model
delivered. So we created a randomized
study that could measure the results."
with their doctor to consider alternatives to the
tired approaches they had tried in the past,. says
Belknap. "They were so excited about having
affordable medications that leveled out their
blood sugar and helped them maintain better
health throughout the day..
The plan:
Enroll eligible employees based on a diag-
nosis ofType I or Type II diabetes.
Randomize participants into two groups:
control and intervention.
2.
The study, called "EMPOWER," also included Lane
County and the City of Eugene, Oregon, and was
conducted through the Oregon School of Pharmacy.
Twenty-five percent of eligible employees enrolled in
the program for people with Type I and Type II
Diabetes. Study participants received waived out of
pocket expenses for prescription medication and
medical visits related to diabetes. In addition, the
control group received educational materials, and
the intervention group received consultations with a
pharmacist consultant. Early results have been
encouraging.
3.
Collect clinical data at the onset of the study
(Dee 200S-Feb 2006), repeat in early 2007.
4.
Provide waiver of co-payments to all partici-
pants for prescription medications and
medical visits related to diabetes control.
S.
Provide educational materials to control
group and face-to-face consultants with
pharmacists to intervention group.
6.
Track clinical and financial outcomes over
time.
"Participants told me they were encouraged to work
Quick glance: program's business results
The Asheville Model of commu- 1.
nlty-based diabetes control pro-
vided the platform to improve 2.
the health of the citizens of
Springfield.
The Asheville model is an icon in
health improvement regarding diabe-
tes management. The City of Spring-
field, working with the Oregon School
of Pharmacy, quickly understood the
power of the model. But the City also
wanted to be the leader in producing 3.
evidence that the model impacted
businesses, so a randomized study
was created in which enrollees would
receive one of two interventions:
The control group received
printed educationai materials.
Ardis Belknap,
a woman with
extraordinary
vision, inspires
others to
embrace the
values of the
City:
Passion,
Integrity,
Results
The intervention group received
one-on-one counseling with phar-
macist experts to encourage
adherence with the total health
management of diabetes, includ-
ing physician and lab visits, reti-
nal and foot exams, medication
and testing, and exercise and
nutrition.
Results: 30% decrease in sick
days for the enrollees in the
pharmacist-consultant group.
ATTACHMENT A
Dee 2007
The City of Springfield,
Oregon has measured
the improvement in dia-
betes management
through a randomized
study based upon the
Asheville model.
1. Hemoglobin A1C dropped
30% in the control group
(comparable to other studies)
and 50% in the intervention
group with pharmacy consult-
ants.
2. Sick leave decreased by 30%
for the intervention group.
3. Low.<Jenslty lipoprotein (LOLl
dropped more in the Interven-
tion group:
o Goal: LOL concentration of
less than 100 mg,tdL
. Baseline: 107mg,tdL for
control group, 101mg,tdL for
Intervention group.
o Mean changes at stUdy end:
decrease of 1.6mg,tdL in
control group, decrease of
5.8mg,tdL in intervention
group.
4. Future plans: Build a
wellness center with 2
onsite professionals; an
exercise physiologist a.nd a
nurse practitioner
5. Future plans: Launch a
value-based depression
model to improve total
health management.
Who is the City of
Springfield, Oregon?
52,864 Residents
430 Employees
1100 Covered Uves
$281,789,000 million fiscal,
Ful~nsured benefit plan throu~
Paci1icSource
Plan Oeducbble: $1500
3liered JreSCriplion drug benefit
generic, preferred brands, noopre(erred
brands