Health and wellness in the workplaceA UK perspective on the key health and wellness issues

Risk. Reinsurance. Human Resources.

Aon Employee Benefits

Health and wellness in the workplaceA UK perspective on the key health and wellness issues

Improving health and preventing disease is a key issue for policymakers across Europe, whether this is at the UK Government level, driven by European Union initiatives, by non-Government bodies, such as the World Health Organisation or a combination of all of these. The burden of chronic disease is rising at a significant rate globally and this combined with an ageing population means healthcare expenditure is unsustainable.

Employers will have an increasingly crucial role to play as chronic disease is highly prevalent and is increasingly shifting to younger-age workers. With this change, the economics of early onset of chronic disease increases not only through healthcare costs but is further evidenced through illness-related absence and productivity losses.

However, with challenges comes opportunity. Aon is investing millions of dollars in developing health analytics that provide meaningful insights into an employer’s people risks, insights that give a sound base from which to drive future health strategy.

In addition to these insights, advances in digital technology means that the opportunity for employers to engage with more individuals to try and influence healthy behaviours has never been greater. Ensuring this engagement is lasting and meaningful will be vital as the workplace should be a key environment to focus on health promotion and disease prevention, taking advantage of the access to employees and directing interventions at desired healthy behaviours to change the long-term impact of poor health.

Furthermore, the role of the individual employee, or consumer of health, is evolving as they have changing expectations regarding the role of a ‘progressive’ employer and requirements in terms of how they access treatment, services and wellness tools.

Supported by Aon, using this combination of meaningful data analytics, enhancements in digital health technology and changing individual needs and expectations, many leading employers are increasingly integrating health into their core business strategies. This is in recognition of the strong relationship between employee wellbeing, a more fully engaged workforce, and improved business results. For many other employers the time to properly embrace the world of employee health and wellness is now.

The purpose of this paper is to provide an overview of the key issues we believe employers across the UK will have to consider over the short and medium term.

November 2015

The changing workforce

The nature of the workforce is changing. If we accept that there could be up to five generations of employee in the workplace then employers will need to give some serious consideration to their employee health strategy.

Whilst there is a strong argument that age is just a number, and that in the benefits space segmenting employee requirements by age could be viewed as rather simplistic, this is not necessarily true with employee health strategy. There is a correlation between an individual ageing and being a comparatively worse health risk, a risk which is set to become an increasingly important factor if the chart opposite projecting the future ageing trends across the EU28* proves to be correct.

This evolving demographic will undoubtedly impact employers as ‘older’ employees will remain in the workplace for longer, particularly as in the UK the concept of a normal retirement has all but disappeared. However, this challenge is also an opportunity, an opportunity for employers to shift the emphasis from potentially managing the consequences of poor health in the workplace to focus more on health promotion and disease prevention that can prevent or at least delay the onset of many chronic diseases. Understanding how an effective health promotion and prevention strategy can be best implemented across a diverse workforce will need some thought. Crucially the employer will need to understand what their data is telling them about current health risks and how best to engage effectively with their employees. The benefits of getting this right, whether it is through higher productivity or reduced absence related costs, should make this a valuable exercise.

Future population ageing trends in the EU

*EU28 – European Union 28 member states

Multi-generational workforce

Population health is a key focus for the European Union and reports like offer a useful snapshot of health across the region. Many of these insights are relevant to employers as they are reflective of the employee health risk challenges they will face. Produced jointly by the Organisation for Economic Co-operation & Development (OECD) and the European Commission (EC) the report covers a number of different areas including life expectancy, mortality causes, health expenditure and health determinants. Some of the key headlines are:

In addition to looking at life expectancy in isolation the EU also measure Healthy Life Years (or disability-free life expectancy). Whilst mortality rates might be improving this trend is not the same when it comes to Healthy Life Years, and it is noticeable that the gap between female and male healthy life years is minimal unlike the gap in overall life expectancy – as detailed in the tables right.

1 Health at a Glance: Europe 2014 report http://ec.europa.eu/health/reports/european/health_glance_2014_en.htm F

The report outlines that the average life expectancy at birth in EU member states has increased to 79.6 years (81.1 years in the UK), with average female life expectancy being 82.3 years (82.9 years in the UK) compared to 76.7 years for a male (79.2 years in the UK)

53% of the population are either overweight or obese

Of the mortality causes cardiovascular related diseases account for 40% of the deaths and cancer 26%1

Healthy life years

People are living longer and as there is a move towards employees potentially working longer, in 2014 10% of over 65s were in work compared to 5.5% in 19922, then maximising the amount of time they are healthy and productive becomes critical. Employers can play a key role in positively influencing some of the key behavioural and lifestyle risks that are the root cause of long-term illness, including poor diet, lack of exercise, a lack of screening, smoking and excessive alcohol, which in turn result in many chronic illnesses, such as obesity, diabetes, cancer, depression and coronary artery disease.

Spending that only targets benefits, services and treatments to manage these medical conditions when they occur will not in itself address this issue. Employers do not have unlimited budgets and Government spending on health in the UK is unlikely to keep up with the costs of medical developments and new technologies. There has to be a change in approach in order to achieve a sustainable outcome, protecting health and not just treating ill health.

2 ONS labour market data

One of the main tactics used by employers as part of their employee wellbeing approach is to offer flexible working. Indeed, based upon the Aon Employee Benefits 2015 Benefits and Trends Survey more than 50% of employers adopt this approach.

Whilst adopting a flexible working approach will be viewed by many in a positive light, employers do need to be careful that such an approach does not have the opposite effect to that intended. Employees need a break from the workplace, to re-charge and enjoy non-work related activities. The inability to do this could ultimately leave employees feeling less engaged and risk damaging either their physical or mental health, or both. The rise of the employee who is in effect always working, or at least is always available to be contacted about work, needs to be monitored closely.

The 24/7 employee

Whilst mortality rates are on average improving, as we have seen in the Healthy Life Yearssection this does not necessarily mean individuals are living longer in good health. Preventable, long-term diseases represent a significant risk to employers and this will remain the case unless lifestyle risks and behav-iours, such as poor diet, smoking, physical inactivity and excessive alcohol con-sumption are addressed.

Indeed, if we accept that there are 8 risks and behaviours that result in 15 chronic medical conditions, and that these account for 80% of the total costs for all chronic illnesses worldwide3, then the business case for improving this position is clear. The UK Government will not be in the position to continue to increase healthcare spending at the level required in order to deal with these illnesses or provide the breadth of services required via the NHS. The responsibility for this will fall increasingly to employers and in many cases onto the individual.

From an employer perspective the challenges associated with employee health are well documented, including:

Employee health

These challenges mean employers are faced with a choice, the first option would be to maintain the status quo, accept their employee health risks for what they are, and use traditional reactive methods to manage spend, such as broking or rationalising benefit provision.

Alternatively, employers have never been more empowered to build on the traditional approach. There is a real opportunity to use the data available to understand what the health risk position is now, what the future might look like, how data can be segmented to target ‘at risk’ employee demographics, adopt a truly integrated approach with insurers and service providers and achieve better terms from the markets because, by working with Aon, together we are able to demonstrate a real understanding of the risks and outline the strategies in place to mitigate them.

We are seeing an increase in employers moving into this proactive space. Shifting the focus away from managing medical conditions, moving towards a more sustainable and preventable approach, helping employees and their families to engage better with their health and improve their lifestyle risks.

Health & behaviour risks

Increasing benefit spend

Reduced productivity

Increasing absence related costs

Providing benefits and health support that meets the needs of an increasingly diverse employee population

Addressing the impact of chronic medical conditions

Getting recognition for the Employee Value Proposition

Having a real understanding of what the actual employee health risks are 3 World Economic Forum – The New Discipline of Workplace Wellness: Enhancing Corporate Performance By Tackling Chronic Disease

As part of Aon’s 2015 Global Medical Trend Survey we asked questions around the types of health and wellness initiatives currently being implemented by employers as they look to manage costs and improve their people risk position. Completed on a regional basis the figures relating to Europe are outlined in the table below.

Based on these results the opportunity for many employers across Europe to do more is apparent. An opportunity that should be taken as workplace wellness initiatives should result in improved employee health, which in turn should lead to better employee engagement, retention, productivity and reduce health related costs4.

Wellness and health promotion initiatives

4 Aon Hewitt 2015 Global Medical Trend Rate Survey Report5 Journal of Occupational and Environmental Medicine, 2013 55:1

Progressive employers are defined as employers of choice in each territory i.e. known in each country to be successful in attracting and retaining top talent.5

4 Journal of Occupational and Environmental Medicine, 2013 55:1 5 Aon Hewitt 2015 Global Medical Trend Rate Survey Report

As outlined previously, employers who have a strong and meaningful focus on employee health and wellbeing are still likely to stand out as employers of choice. Indeed, based on Aon’s employee engagement research, we know that employees with a strong wellbeing are six times more likely to be engaged at work, with engaged employees generally being healthier, as evidenced below:

However, it is important that employers view health and wellbeing in the broadest possible context. The link between financial, physical and mental wellbeing is widely acknowledged and therefore the evolution for more forward thinking employers is to join up their approach in this area. In the same way we are seeing a shift towards more employers, and to an extent employees, making an effort to understand their health risks, the move towards supporting employees to understand their current and future financial health makes sense. After all, employees who are distracted by money related issues are less likely to be productive in the workplace and arguably also suffer poorer health as a result.

A truly effective wellbeing model will be one that engages employees to understand ‘current me’ and help them plan for what ‘future me’ looks like and needs to do, in terms of financial, physical and mental health. This should be the aspiration for all employers. Having effective flexible working practices, making health information and education (physical and financial) available, offering access to stress reduction programmes, weight management programmes and access to onsite or virtual GP services, are all examples of good practices supporting a wide-ranging approach.

The link between financial, physical and mental health

46% fewer unhealthy days as a result of physical or mental illness

39% less likely to be diagnosed with new disease in the next year

43% less likely to be newly diagnosed with anxiety and depression6

6 Aon Hewitt Engagement Survey

Employers who are successful in motivating employees to engage in employee health over the long term will be those that have a clear and effective communication strategy. The key is to implement communications that reach target audiences effectively and at the right time, that educate, motivate and inspire without being overwhelming. There would appear to be a great opportunity to move away from the current methods typically used by around 80% of employers to communicate with and educate employees around health and wellness, namely printed and email communications7.

To get employees to engage and potentially change behaviours will involve a number of key steps:

By combining the fact based “what” approach with the behavioural insights “why” approach Aon is able to work with employers to achieve the best possible outcomes.

The improved communication strategy that results from our work in this area will increase the likelihood that an employer’s workforce recognises the value of the health and wellbeing programme they have access to, and also make them more likely to actively participate.

Effective communication and influencing behaviour

7 Aon Employee Benefits: Benefits and Trends Survey 2015

Understanding the “what” – Understanding the current state of an employer’s employee health ensures there is a baseline to work from. By completing a full data analysis this allows us to start developing potential options to target different demographics to begin the process of education around the types of health risks they might be exposed to

Understanding the “why” – Building on the “what”, the “why” allows us to leverage our insight and experience with employees’ attitudes, perceptions, values and preferences to develop a more tailored approach to securing true engagement in the employer’s benefits and health and wellness offerings and help achieve mind-set shifts and behaviour changes

Changing the employee communication experience

Analytics

There are a number of employee health related challenges facing employers today. However, based on our experience the key challenges include:

As a result, employers are demanding that Aon supports them using a data-driven, analytical approach to advise on every key health and wellbeing decision they make, often both at the employer and employee level.

To respond to this demand Aon has established the Aon Centre for Innovation and Analytics in Singapore, which has a dedicated Research and Development team primarily focused on developing new financial tools and models. This means that the Innovation Centre, together with local country know how, have been able to build best in class analytical insights and capabilities that can be harnessed locally, regionally, and globally depending on each individual employer’s requirements and in line with the evolution of their employee health strategy.

Aon’s solution areas include but are not limited to: risk and health profiling, claims analytics and benchmarking, absence, financial analysis and health improvement.

Insights to support better understanding of people risks

Understanding – what can an employer do to better understand the health risks of their employees? This includes health risks now but also potentially the health risks of tomorrow, if such data is available

Cost – generally an employer’s health related costs are increasing, whether this is the cost of claims under benefit programmes or the costs associated with absence and strategies for managing this constructively. By constructively this means without worsening terms wherever possible

Engagement – employers spend lots of money on health related benefits and services, the nature of their workforce is changing and therefore engaging them effectively around the Employee Value Proposition is a requirement

Data – there is lots of talk around the power of data and employers are aware that they have access to lots of different data sets. Consequently they are looking to use this information better to build a business case for future activity

Joining together all of the facets of healthcare, such as; absence, productivity, health benefits, health management and wellbeing, delivers tangible advantages for both employers and employees. Understanding the root causes of poor employee health, making improvements to this, and having a truly integrated approach should be an employer’s objective. Experience suggests that taking a piecemeal approach often delivers less benefit for the business than might be expected.

Rather than looking at any single element of an employer’s health management approach, our methodology is flexible enough to complete a comprehensive health risk profile.

By auditing the available information from an employer’s entire suite of benefits we are able to:

Whether an organisation’s focus is on the cost of absence and lost productivity, the increasing cost of benefit programmes, or both, working with us ensures employers are well equipped to tackle the challenges ahead.

Data driven strategies

Analyse and quantify absence data and health data, monitor trends in pricing and benchmark performance

Calculate the total cost of health and project future premium spend

Implement integrated strategies and provide access to key activities, tools and services that will help drive down the employer’s total cost of health and future premium spend

Segment the data and implement a targeted employee communication strategy to raise awareness, increase the likelihood of better employee engagement and improve productivity

Demonstrate best practice protocols to the insurance markets and use this information to achieve the best possible pricing terms

Implement a framework for strong governance reporting

A recent Aon survey found that just over 60% of employers want to understand the health risks impacting their business and that nearly 75% of employers believe it is their responsibility to support employees change their negative lifestyle behaviours and positively influence their health8. We believe that our data analytics approach enables us to inform the employer about the overall health of their employee population. Having this employer level understanding means that informed and targeted decisions can be made around the provision of benefits and health related services going forward.

In addition to any benefit or wellbeing programme developments, a tailored programme should also include the development of an effective communication strategy, which should ideally have wide-ranging objectives. These include, but are not necessarily limited to the following examples:

Tailored programmes based on need

Linked with achieving better recognition for the Employee Value Proposition any communications should serve to raise awareness as to the value and importance of any health and wellbeing strategies or programmes in place.

Effective segmentation of employee demographic, whether this be age, gender, business division or location, will mean employers have the facility to educate different groups of employees on the types of health risks and lifestyle issues they are likely to be faced with and point them towards the valuable benefits, services and awareness resources available in order to try and mitigate these risks.

Engage employees to the extent that rather than be a top down communications approach it is clearly understood what they need to do in order to change their behaviours, and if possible change their current mind set.

Reaching the widest possible audience and therefore tailoring the approach based on how the employee engages or interacts with the employer in relation to health and wellness services or benefits.

8 Aon Employee Benefits: Benefits and Trends Survey 2015

Managing cost For the first time in a number of years the UK health and risk market is witnessing a hardening of pricing across all key insurance lines9. Challenging economic and market conditions mean that in order to effectively manage cost employers need to be able to better demonstrate an understanding of their people risks and that they have robust strategies in place to improve these risks.

Effective broking will help mitigate the impact of price pressures to some degree. However, in order to achieve longer-term sustainable and competitive pricing getting to the root cause of poor employee health is fundamental.

Once employers are in the ‘understanding and action’ phase not only would it be reasonable to expect that the health risk situation will improve steadily over time but crucially it means that the whole dynamic around broking interaction with insurers shifts significantly. Underwriters are much more willing to price a risk more competitively when they have a better understanding and more certainty. Presenting risks in this format will ensure employers will be able to procure their benefits and achieve the best possible price.

9 Aon Broking Report 2015

The future of health

In the future it is not unreasonable to assert that employees will be expecting their employer to provide support in the following areas:

This Avoid Care, Need Care, Support Care ‘Health Experience Cycle’ illustrated below is the approach advocated by Aon when discussing the future of health with employers.

We expect to see a continued interest in wellness programmes as employers look to address the problems caused by many employees’ sedentary lifestyles and the shift in demographics. Many of these programmes will be supported by better and more precise measurement, with greater use of effective communication strategies to increase participation. Technology enabled connectivity for the masses will become the norm.

Furthermore, increasingly the impact of socio-economics will become a factor as employers make the link between an employee’s financial wellbeing and their physical and mental wellbeing.

Access to relevant health benefits and services will be driven by better engagement with employee focus groups and the desire to give individual employees more choice. A benefits programme will need to adapt and recognise that an increasingly diverse workforce will have different health requirements depending on where they are in their employee lifecycle.

With regards to the support around managing health conditions and providing access to the best treatment, the future could be characterised by a more fragmented delivery system. A system of working with benefits and service providers based on their capability to deliver the most effective treatments for specific medical conditions. The delivery of these services will increasingly shift from the conventional face to face model to more remote methods. We are starting to witness this already with tele-medicine and second opinion services.

The future state will see employers increasingly engage with these models as they strive to help employees with often complex health conditions navigate the health system better to get the right care from the right provider at the right time.

For the employer

Helping them to be healthy and stay healthy

Giving them access to relevant health benefits and services

Helping them to manage health conditions when they arise and access the best treatment quickly

Health Experience Cycle

If it is accepted that health and wellbeing is changing both in terms of provision and delivery, for example, due to changes in the nature and needs of the workforce, due to technological advances and due to the fact that employers have never been a better place to get impactful insights into the health of their employee population, then the role and expectations placed on the individual employee will also change.

As a minimum, in the new era employees will expect to have access to the best possible protection benefits, access to support to help them get and remain healthy and structures in place to help them navigate the healthcare system as effectively as possible when they are not healthy, accessing the best possible treatment.

Increasingly, employees are becoming consumers of health and are front and central to the developments continuing to happen. One clear example of this being the number of employees using wearable technology and engaging with various health and fitness related platforms, and whilst much of this is currently focussed on recording physical activity or measuring things like sleep patterns the whole landscape is shifting.

As the health and wellness related technology revolution continues many employees will expect their employers to adapt their health and wellbeing strategies accordingly. Accessing consultations, treatments, information or second opinions remotely will become a core requirement for such individuals, both from a personal health perspective or to support them in work, for example with family friendly policies.

Some individuals will embrace technology or tests that support health predictions, potentially to the extent of diagnosis prior to the medical event actually happening. However, some, or all, of these developments will not appeal to all employees, possibly due to concerns around data privacy or general concerns around the role of the employer in this process. This could be linked and reflect the nature of the workforce (as discussed in the multi-generational workforce section). The needs and expectations of employees will change either incrementally or more rapidly.

If the role of the employee is to engage more in health and wellness, then in return the employer needs to recognise the needs of those employees and support the broadest possible engagement. Success is very much dependant on strong employer and employee interaction.

For the employee

Focus on preventing bad health wherever possible, on health information and allowing more choice around how best to access health services when required, all underpinned by advances in technology, will characterise the future landscape. From the larger organisations, such as IBM, Apple and Google, through to start-up ventures, significant investment in health appears set to continue and overall this should generally be viewed in a positive light.

As we have already seen in this paper, employers are at the sharp end in terms of trying to prevent and ultimately support a workforce where chronic medical conditions, such as obesity, cancer, diabetes and heart disease, are prevalent. Technological advances that help employees avoid the need for care but can also assist them when they need medical treatment or support will result in changes to the health and wellness delivery models employers utilise. The provision of preventative services, diagnostics, treatments and support will increasingly become fragmented; the one-stop shop approach to health and wellness will be a thing of the past for many.

When one considers that developments in digital diagnostic tools, digital platforms to connect all relevant stakeholders in the health chain i.e. patients, carers and medical professionals, next generation wearables, concierge services or online support networks for coaching individuals with different needs, the opportunities to re-think the traditional model of health and wellness appears limitless. Furthermore, the fact that technology is not restricted (generally) by geographical boundaries will further appeal to many employers as they look to implement a consistent health and wellbeing framework regionally or globally, albeit tailored accordingly based on local needs. From an employee perspective, the fact that much of this technology will be portable will also be viewed in a positive light, a bespoke health and wellbeing approach that they can potentially plug and play should they decide to change employer.

The challenge for employers is to ensure that they are not left as bystanders in this whole process. Technology will continue to evolve, employers need to ensure that if they are serious about employee health and wellness they give themselves the best possible chance to take advantage of the opportunities they have access to.

With technology

For more information contact:w aon.co.uk/employeebenefits e letstalkbenefits@aon.co.uk t 0344 573 0033

About Aon Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 66,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, best reinsurance intermediary, best captives manager, and best employee benefits consulting firm by multiple industry sources. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aon’s global partnership with Manchester United.

Aon Consulting Limited 122 Leadenhall Street London EC3V 4AB Aon Consulting Limited is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales no. 3127195. Registered office: Briarcliff House, Kingsmead, Farnborough, Hampshire GU14 7TE.

© Aon Consulting Limited, 2015. All rights reserved.