Microsoft’s WellnessMicrosoft’s Wellness& Weight Management Programs& Weight Management Programs

December 14, 2005December 14, 2005

Tom McPhersonTom McPhersonSenior Benefits ManagerSenior Benefits Manager

• Wellness Mission and Program Overview

• Weight Management Program• Description• Measuring Success• Lessons Learned/Next Steps

Agenda

• Self-Insured: Microsoft pays all employee/family member health care costs directly.

• First Dollar Coverage: Microsoft pays 100% of all employee/family member health care costs. With minor exceptions, we do not employ premiums, deductibles, co-insurance or co-pays of any kind.

• Microsoft benefits are designed to attract and retain a top-flight work force.

• ~25 physician groups in the Puget Sound provide care to ~20,000 enrollees.

• Microsoft is growing…8 ‘Microsoft’ babies are born every day!

Microsoft Health Benefits

-Senior Management and CEO Support

-Corporate Culture

-Business Economic Climate

-Healthcare Cost Claims Analysis

-MSFT Population Demographics

-Employee/Family Member Surveys

-Benchmarking/Best Practices

Creating the Business Case for Wellness

Wellness MissionEducate, support, and empower employees and family members toimprove and sustain total health and well-being by rewarding healthylifestyle choices

GoalsEmpowerment: Empower Microsoft employees and their familymembers to make better healthcare decisions

Cost Management: Effectively manage healthcare costs by rewardingindividuals that practice healthy behaviors

Quality: Improve healthcare quality and outcomes

Mission and Primary Goals

Well PopulationHealth Club benefit Ergonomics program24-Hour nurse line MicrosoftHealth web portalAnnual Physicals Peak Health programImmunizations On-site health screenings/flu shotsEAP Wellness assessmentOn-site mammography screenings Running trailsSports Fields/locker rooms Healthy food choices in on-site cafes

At Risk PopulationWeight managementSmoking cessationPersonal health coaching (CY07)

Chronic Care PopulationDisease Management - Diabetes, Asthma, CAD, CHFDepression and Low Back Pain (CY07)

Catastrophic Care (i.e., Cancer, AIDS)Case management

Wellness Program Components

Source: Behavioral Risk Factor Surveillance System, CDC.

19961991

2003

Obesity Trend U.S. Adults

No Data <10% 10%-14% 15%-19% 20%-24% 25%

Business Drivers• Obesity is a major health issue impacting many employers

• 26% of health care costs are related to conditions preventable with lifestyle changes

• ~11% of total health care costs related to obesity

• Obesity trends – and cost trends -- are growing at a staggering rate

• Obesity is associated with a 55% - 78% increase in pharmaceutical costs

• Employers spend 36% more in healthcare costs for obese employees (vs. non-obese)

• Group of Microsoft employees approached Benefits group about weight loss program coverage

Objectives• Reduce health care costs associated with obesity• Improve health and well-being, decrease time away from work

Program Development

Comprehensive Design• Physician Supervision• Nutrition Counseling• Supervised Exercise Program• Behavioral Counseling

Phased Approach • Intensive Phase: 3-6 months of high intensity and frequency • Maintenance Phase: 3-9 months at a reduced frequency

Eligibility Criteria• Employee or Spouse/SSDP• BMI of 30 or greater• BMI of 27-29 + 2 or more co-morbid conditions

• CAD, CHF, Diabetes, Hyperlipidemia, Hypertension, and Depression

Benefit Coverage• Microsoft pays 80% of the program cost up to $6,000 lifetime • Average out-of-pocket expense for a participant is ~$2,000• Weight loss Rx is not covered as part of the benefit

Approved Program Providers• 20 programs in 11 states

Participants• Over 1,500 people have completed the weight management program

Weight Mgt Program Design

Post-Implementation• Short Term: Drive awareness, utilization and provider

expansion• Long Term: Reach ROI target of 192% in five years• ROI is based on reductions in the following areas:

• Prescription drug utilization• Urgent care/ER visits, and hospital admits • Avoidance of surgical and other major medical events

Measuring Success

Total number of enrollees = 794• Employees = 590• Spouses = 204

Co-morbid Conditions

Co-Morbidities Members % of TotalNone identified 477 60.1%Hyperlipidemia 175 22.0%Hypertension 116 14.6%Diabetes 23 2.9%Congestive Heart Failure 2 0.3%Coronary Artery Disease 1 0.1% Total 794 100.0%

Outcomes Data 2003/2004

Improvement in BMI

Program Beginning

30 or greater95%

< 305%

Program End

30 or greater40%

< 3060%

Outcomes BMI

Weight Loss

Total pounds lost by all participants = 25,891 pounds

0

50

100

150

200

0 - 10 11 - 20 21 - 30 31 - 40 41 - 50 51 - 60 61 - 70 71 - 80 81 - 90 91 - 100 100 -110

111 -120

121 -130

Amount of Weight Loss

Num

ber o

f Par

ticip

ants

Blood Pressure

65%

88%

35%

12%

0%10%20%

30%40%50%60%70%

80%90%

100%

Start of the Program End of the Program

Unacceptable SystolicRange

Acceptable SystolicRange

Systolic Blood Pressure Results

41%

73%

59%

27%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Start of the Program End of the Program

Unacceptable DiastolicRange

Acceptable DiastolicRange

Diastolic Blood Pressure Results

Cholesterol

0

50

100

150

200

250

20 -29

30 -39

40 -49

50 -59

60 -69

70 -79

80 -89

90 -99

>100

Range

Nu

mb

er

of

Pa

rtic

ipa

nts

No. of Members (Start ofthe Program)

No. of Members (End ofthe Program)

HDL Cholesterol

LDL Cholesterol

0

50

100

150

200

250

300

350

50 - 99 100 - 149 150 - 199 200 - 249 >250

Range

Mu

mb

er o

f P

arti

cip

ants

No. of Participants(Start of the Program)

No. of Participants(End of the Program)

Lessons• Best to be conservative on ROI projections

• Executive buy-in critical to securing funding over multiple years

• Don’t disregard the secondary outcomes/benefits (productivity, morale, sense of being valued by company)

• Develop service level agreements to ensure consistency across all providers

Next Steps• Expand list of co-morbid conditions

• Implement Centers of Excellence for weight loss surgery

• Pilot web-based weight management program

• Continue to track ROI

Lessons Learned/Next Steps

Summary

• Obesity is a rising health care problem

• Health care and productivity costs related to obesity continue to increase

• Employers are searching for solutions

• Employees must have a financial stake in a program

• Comprehensive physician-directed programs showing signs of success