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© Bravo Wellness Proprietary & Confidential 103113

CASE STUDY:

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GRACO, INC. HAS BEEN A LEADING PROVIDER IN PREMIUM PUMPS AND SPRAY EQUIPMENT FOR FLUID HANDLING IN THE CONSTRUCTION, MANUFACTURING, PROCESSING, AND MAINTENANCE INDUSTRIES SINCE 1926.

THE CHALLENGE One of Graco’s largest cost drivers was medical expense. It was predicted that Graco would fall in line with the national medical expense trend, increasing by 8-10% each year. Graco needed to slow down these costs to maintain their leadership position in a competitive market. Graco’s Chief Executive Officer, Pat McHale, had a vision to improve the total health of Graco employees and dependents by creating an innovative wellness program that would spark employee engagement, drive productivity, and control healthcare costs. They initially gave benefit-eligible employees the opportunity to engage in a participation-based program in which participants earned points for biometric screening completion, watching wellness videos, and completing a health risk assessment. Of those eligible, only 60% elected to participate. Graco desired to reach more people and see more measurable improvement

TOOLS FOR HEALTHY LIVING Weight Watchers at Work

Weight management social support group

Onsite yoga

Smoking cessation program

Quarterly Safety & Wellness Newsletter

Dedicated onsite wellness staff

24 hour nurse line

Health club fitness discounts

Employee Assistance Program

Wellness website with health resources

THE INCENTIVES Graco employees can earn up to $1800 per year for

meeting healthy goals or making marked improvement in blood pressure, cholesterol, weight and tobacco use metrics, through the family plan

Smaller, more frequent rewards are available for participation in events throughout the year

“OUR OBJECTIVES WERE TO IMPROVE

THE HEALTH OF OUR U.S. EMPLOYEES

AND THEIR FAMILIES, LOWER

HEALTHCARE COSTS TO 2% BELOW

INDUSTRY STANDARD, AND REDUCE

ABSENTEEISM,” STATED DAVID

AHLERS, VICE PRESIDENT OF HUMAN

RESOURCES & CORPORATE

COMMUNICATIONS. “WE ALSO HOPED

TO ACHIEVE A LOW SAFETY INCIDENT

RATE AND CREATE A CULTURE THAT

SUPPORTS HEALTH, WELLNESS, AND

SAFETY FOR ALL GRACO LOCATIONS.

WE HOLD RESULTS IN HIGH STANDARD

FOR OUR CLIENTS. IT ONLY MAKES

SENSE TO ASK THE SAME OF

OUR EMPLOYEES.”

Headquartered in Minneapolis, Minnesota, Graco works closely with distributors around the world to offer innovative products that set the quality standard. They employ 2,800 people worldwide with 44% of their U.S. employees as factory workers. Graco takes a special interest in the health, wellness, and safety of their employees.

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BMI - Obese Elev. Blood Pressure Elev. LDL Cholesterol

THE RESULTS Biometric screening categories have been improving year-to-year since integrating with Bravo. Shown on the chart above, the percentage of obese participants has decreased from 37.2% to 31.2%, and elevated LDL cholesterol has been reduced from 59% to 48%. Additionally, the percentage of people with high blood pressure decreased from 77% to 31%, since implementation with Bravo. Overall participant health has been impacted greatly by the wellness program as there has been a relative decrease of almost 50% in the number of participants who had more than 1 risk factor.

Unlike the increases in the national trend (as well as with spouses not involved in the Graco program) the actual per-employee claims costs from Year 1 to Year 4 indicated an annual growth rate of only 2.3%. This translates into real savings of over $4,000,000. Recognizing this opportunity to impact savings even greater, Graco may now consider including spouses in their wellness program. In fact, 77% of employees think including spouses is a good idea

The benefits aren’t just in claims costs and biometrics. One of Graco’s values has always been employee safety. Improvement has been shown through workers’ compensation expenses being reduced by two-thirds since the start of their wellness program. Absenteeism has also been reduced which means more people are showing up for work consistently, and fewer people are getting injured on the job.

THE DECISION TO MOVE

TO AN OUTCOMES-BASED

PROGRAM WAS DRIVEN

BY GRACO EMPLOYEES.

THEY FELT THE

PARTICIPATION-BASED

PROGRAM WAS

INCONVENIENT AND THAT

THEY SHOULD BE

REWARDED FOR RESULTS

REGARDLESS OF HOW

THEY ACHIEVED THEM.

PARTICIPATION

INCREASED FROM 60% TO

74% WITH BRAVO

WELLNESS.

PARTNERSHIP WITH BRAVO Graco converted their participation-based approach into an outcomes-based wellness incentive program administered by Bravo Wellness. In the first year with Bravo, lenient biometric goals were presented alongside continued rewards for activity completion and health education. Since the collaboration began, Graco and Bravo have worked to tighten the biometric screening goals to more healthy ranges and have eliminated the impact on healthcare costs, while still maintaining a high percentage of participation in offered activities.

* Data represents a cohort population which participated in all five years of the program

80%

70%

60%

50%

40%

30%

20%

10%

0%

37.2% 33.6%

31.2%

77.0%

50.0%

31.0%

59.0%

53.0% 48.0%

GRACO BIOMETRICS Pre-Bravo Participation-Based

Year 1 Outcomes-Based Year 4 Outcomes-Based

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$600.00

$550.00

$500.00

$450.00

$400.00

$350.00

$300.00

$250.00

$200.00

$150.00

2008 2009 2010 2011 2012

Pe

r M

em

ber

Pe

r M

on

th

www.bravowell.com

IN ADDITION TO OVER $4 MILLION

IN CLAIMS SAVINGS, GRACO

EMPLOYEE SURVEYS SHOW THAT

92% AGREED WITH RECEIVING

PREMIUM DISCOUNTS FOR

MAKING HEALTHY CHOICES & 78%

OF THOSE SURVEYED FELT

MOTIVATED BY DISCOUNTS FOR

MEETING HEALTH GOALS.

C. EVERETT KOOP NATIONAL HEALTH AWARD (HONORABLE MENTION)

Graco’s commitment to the health, wellness and wallets of their employee population earned them esteemed recognition, as a 2013 honorable mention recipient for the C. Everett Koop National Health Award. With the tradition of awarding programs with demonstrated health improvements, coupled with cost savings, the C. Everett Koop Award has been instrumental in promoting the measurement and evaluation of evidence-based, workplace health promotion programs. Congratulations Graco!

THE RESULTS (cont…) Workers’ compensation expenses have

been reduced by two-thirds (over $300,000)

Participants take personal accountability for

their health, evidenced by high participation rates in Graco’s offered wellness programs.

Decrease of almost 50% of participants with

more than 1 risk factor.

High program impact - Obesity lowered

from 37.2% to 31.2%. The number of employees with high LDL cholesterol has been reduced by more than 11%. High blood pressure has gone down by 46%.

$426.00

$529.00

$564.00

$320.00 $311.00

$328.00

$189.00

$215.00

$193.00

2008-2012 spouses (non-participants) cost increased 32% thru 2012

2008-2012 employees (participants) cost remained relatively flat

Employee Spouse Child