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© 2010 Towers Watson. All rights reserved.
Global Health for Multinationals:Challenges and Prescriptions for Success
A OneWorld presentation by Nicole Serfontein andFrancis Coleman
May 26, 2010
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Nicole has worked in New York, London and South Africa, where she was a practicing attorney in the commercial and financial services industry. She has consulted on health insurance and related matters for many multinational companies, government and plan trustees, and was appointed in 2003 by the Minister of Finance in South Africa to the South African Financial Services Board to draft and comment on regulations to the Financial Services Advisory Act.
Nicole Serfontein is a senior international consultant for Towers Watson, based in Washington, D.C.
Today’s experts
Associatephotohere
Francis has more than 20 years of international benefit experience and has served in a number of different management roles and assignments worldwide, including in the U.K., France, Greece, Eastern Europe and the U.S.
Francis Coleman is a director in Towers Watson’s International Consulting Group and is based in the company’s Los Angeles office.
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Today’s discussion
Global health: The significance for global employers
Employee health programs: Prevalence and global reach
Program governance
Issues and strategies
Ingredients for success
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Global health continues to grow as an important topic for global employers
Offshore workforce strategies continue to increase
Public health systems are inadequate in many countries, and high-quality health care benefits and/or services can create a competitive advantage in the war for talent
Leadership recognizes the value of health and that governance will provide a consistent approach to health care across geographies
Vendors are starting to globalize their services/products
Health care regulation is growing in volume and complexity around the globe, forcing large multinationals to react
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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TW continues to research and build on our database of global health risks, costs and medical intervention programs
Global Medical Trends Report
Country surveys, e.g., Health Care Benefits in India
Global Health Care Cost Survey
Global Benefits Benchmarking Database
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Health care trends and issues are transcending local country borders
Demographics
Technology
Disease Changes
Globalization
Consumerism
Definition of Health
Care
Governance
LargeGlobal
Employers
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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About the survey
The survey included human resource and health and wellness executives in North America, Europe and Asia, and was conducted online between November and December 2009 Participation was limited to organizations with at least 500 employees and
significant business operations in more than one country
A total of 106 qualified participants completed the survey Titles of respondents: director of HR operations; director of global benefits;
global benefits manager; global head, human resources; senior director, global compensation and benefits; senior vice president, HR; team lead, health and welfare
All percentages are based on 106 respondents unless otherwise specified
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© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
88
Employee Health Programs: Prevalence and Global Reach
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© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
9
Global reach: Operations and employee health programs
Number of Countries Where Company Has Significant
Business Operations
Number of Countries Where Employee Health Programs
Are Offered
Average number of countries where employee health programs
are offered: 12
Average number of countries where company has significant
business operations: 20
34%
32%
34%
20 countries or more
5-19 countries
2-4 countries
One country
6%
16%
41%
37%
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Respondents have, on average, 25 employee health programs across their operations
Number of Employee Health Programs Companies Have Around the World
Average number of employee health programs: 25
13%
1%
45%
24%
17% 10 or fewer
11-25
26-50
51-100
More than 100
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Most companies have medical programs and pandemic preparedness in virtually all countries of operation
Number of Countries Where Employee Health Programs Are Offered in Lieu of or in Addition to Publicly Provided Programs
75%
42%
77%
23%
55%
23%
2%
3%
All/Most countries Some/Few countries No countries
Pandemic preparedness
Medical/health benefits
Wellness/health promotion programs
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Respondents have robust medical programs in virtually all countries of operation
Number of Countries Where Medical/Health Benefits Are Offered
25%
25%
40%
74%
75%
77%
77%
79%
80%
83%
57%
63%
56%
25%
25%
21%
23%
21%
20%
17%
18%
12%
4%
1%
2%
Health risk assessment (HRA)
Disease management
Case management
Short-term disability
Long-term disability
Physician care
Prescription drugs
Maternity
Hospital — outpatient
Hospital — inpatient
All/Most countries Some/Few countries No countries
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Wellness/health promotion programs have been implemented in some countries
Number of Countries Where Wellness/Health Promotion Programs Are Offered
25%
32%
33%
34%
45%
46%
64%
58%
63%
65%
51%
50%
11%
10%
4%
4%
4%
1%
All/Most countries Some/Few countries No countries
Vaccinations
Health screening
Employee assistance program (EAP)
Health promotion
Behavioral health
Health risk assessment
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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A majority of participants have pandemic preparedness programs in most countries
68%
70%
78%
24%
20%
20%
8%
10%
2%
Number of Countries Where Pandemic Preparedness Programs Are Offered
All/Most countries Some/Few countries No countries
Ready access to medical supplies, hospitals, clinics as required
Employee alert systems,communications
Evacuation processes
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
Program Governance
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© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Governance models vary: Global guidance with local decision making is most prevalent
How Employee Health Benefits Are Managed Within Organizations
2%
17%
27%
41%
13%Completely
decentralized; managed purely at the local level
Other
Corporate/regional guidance, but decisions made at the local level
Completely centralized; all decisions made by
corporate headquarters
Varies by type of health program or by country
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Respondents keep a global watch on the following metrics
Workforce Health-Related Metrics Monitored Around the World From Corporate/Regional Headquarters
0%
25%
27%
27%
59%
63%
70%
71%
78%
79%
Other
Employee health status and risks
Employee well-being
Costs of employee absenteeism
Employee engagement
Key developments in your environment
Competitive trends in benefits and human resources
Changes to employee health programs
Costs of employee health programs
Pandemic preparedness
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
Issues and Strategies
towerswatson.com 18
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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About one in four respondents has an employee health strategy today, with an equal number planning to develop a strategy by 2012
Organizations That Have a Documented Employee Health Strategy
20%
28%
26%
16%
10%
Not considering
Currently have a documented global strategy
Have a global strategy, but not documented
Plan to have a global strategy in place by 2012
Considering developing a global strategy
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Stress, aging workforces and chronic conditions are top cost and productivity challenges
Impact of Health Issues on Health Care Costs and Workforce Productivity
12%
16%
21%
25%
28%
37%
39%
40%
55%
32%
30%
20%
32%
38%
26%
38%
40%
28%
56%
54%
59%
43%
34%
37%
23%
20%
17%
Increased prevalence of infectious diseases
Negative workplace culture
Accidents on the job/safety
Tobacco use
Poor nutrition
Increased prevalence of obesity
Increased prevalence of chronic conditions
Aging workforce
Stress
High impact Moderate impact Minor/No impact
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Health program costs are a concern for more companies than absenteeism costs
How Costs of Employee Absenteeism and Costs to Provide Employee Health Programs Compare With Those of Industry Peers/Competitors
18%
28%
55%
63%
27%
9%
Lower About the same Higher
Costs of employee absenteeism
Costs to provide employee health programs
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Implementation challenges still exist, with cost information and service gaps topping the list
Difficulties Implementing Employee Health Programs in Countries Where There Are Significant Business Operations
32%
39%
44%
51%
Cost information is not available or reliable
Health care products/services are not available
Desired health care vendors are not present in the marketplace
Available health care vendors do not have capacity
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Most health strategies aim to address critical talent management issues but fall short of meeting objectives
Importance of Employee Health Strategy Objectives and the Extent to Which Health Programs Meet These Objectives
44%
44%
56%
21%
30%
36%
55%
27%
60%
32%
45%
43%
45%
28%
33%
39%
41%
41%
51%
64%
67%
69%
70%
70%
81%
83%
Supplement public health system
Improve workplace conditions
Increase employee access to health care
Improve quality of health care
Reduce presenteeism costs
Reduce absenteeism costs
Demonstrate interest in employee well-being
Increase employee engagement
Provide competitive rewards (remuneration) package
Increase productivity
Ensure business continuity
Contain/reduce the organization’s health care costs
Retain key talent
Absolutely critical/High importance Completely/Mostly met objectives
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Controlling costs, addressing health risks and incenting healthy behaviors are top priorities
Top Priorities for Employee Health and Wellness
9%
15%
15%
18%
62%
69%
85%Controlling costs of employee health programs
Other
Addressing emerging health risks
Providing incentive programs to improve employee health/wellness
Improving pandemic preparedness
Expanding health coverage to more/all employees
Increasing quality of health care
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
Ingredients for Success
towerswatson.com 25
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Successful companies are more likely to have a global health strategy than less successful ones
Documented Employee Health Strategy — Successful vs. Less Successful Companies
32%
29%
29%
3%
7%
6%
28%
22%
22%
22%
Successful companies Less successful companies
Currently have a documented global strategy
Not considering
Have a global strategy, but not documented
Plan to have a global strategy in place by 2012
Considering developing a global strategy
Successful companies have health benefit programs that are meeting six or more of the health strategy objectives they consider important. Less successful companies have health benefit programs that are meeting two or fewer health strategy objectives.
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Measurement disciplines are likely to be a key driver of success
Workforce Health-Related Metrics Monitored Around the World bySuccessful vs. Less Successful Companies
11%
9%
6%
34%
37%
60%
46%
66%
51%
31%
33%
36%
67%
67%
69%
75%
78%
86%
Costs of employee absenteeism
Employee well-being
Employee health status and risks
Employee engagement
Key developments in your environment
Changes to employee health programs
Competitive trends in benefits and human resources
Pandemic preparedness
Costs of employee health programs
Successful companies Less successful companies
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Successful companies are turning their focus to leading indicators and not responding to cost only
6%
22%
19%
66%
94%
53%
14%
9%
17%
66%
77%
80%
Top Priorities for Employee Health and Wellness for Successful vs. Less Successful Companies
Addressing emerging health risks
Successful companies Less successful companies
Increasing quality of health care
Controlling costs of employee health programs
Providing incentive programs to improve employee health/wellness
Improving pandemic preparedness
Expanding health coverage to more/all employees
Source: Towers Watson Workforce Health Strategies: A Multinational Perspective
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
towerswatson.com 29
The survey’s key findings suggest that:
It’s important to have a global strategy Sponsorship by senior leadership is critical
Local adaptation
Governance approaches should include local/regional involvement
Health is considered holistically A full suite of health management programs
Measurement Not just ROI (behavior change/productivity/well-being/engagement etc.)
© 2010 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Contact details
Francis Coleman
JP Provost [email protected]
Nicole Serfontein [email protected]