Michigan Purchasers Health Alliance

Kellogg Company

September 18, 2008

• Strategy• Programs• Coaching ROI

AgendaAgenda

Benefit strategyBenefit strategy

Competitive position

Actual (salaried)

95

Goal

100

Cost

Actual (4 year CAGR)

Active health – 3.0%

Benefit trend – 3.5%

Goal

Active health – 0%

Benefit trend - @ inflation

Employee Health

Actual (2007)

65% low risk (+2 from 06)

Goal

70%-80% low risk

Productivity

Actual

17% report medical issues

Goal

10% report medical issues

Employee Satisfaction

Actual

67% satisfied

Goal

70% satisfied (56% norm)

• Feeling Great• Screening/Health Assessment

• Weight Loss Challenge

• Holiday Hold Out

• Weight Watchers at Work

• Go The Distance

• Flu Shots

• Coaching

• Incentives

• Rec Leagues

• Corporate Cup

HealthHealth

Overall Program Comparison 2006Overall Program Comparison 2006

Program Participation 2005 2006 TotalsLM-12 DM LM-12 DM To Date

# of Eligible 742 222 845 562 2,371# of Enrolled 324 132 277 175 908% of Eligible Enrolled 44% 59% 33% 31% 38%% Still Active 0% 0% 2% 18% 5%

Return on InvestmentReturn on Investment

• The model used to calculate the ROI is based of research conducted by the Health Enhancement Research Organization (HERO).

• HERO determined the cost of a particular risk using a large database of individuals tracked over 3 years.

• Risks have been adjusted for medical inflation.

• The total benefit per resolved risk is calculated by multiplying the inflation adjusted HERO risk costs by the actual number of risks resolved.

• An ROI is generated by comparing the total program costs with the benefit savings.

Outcomes – Lifestyle ManagementOutcomes – Lifestyle Management

Kellogg 2006 Top 8 Risks Pre & Post LM12

0

50

100

150

200

250

Weight Cholesterol Exercise Hypertension Stress Life Sat Tobacco Safety

Numb

er of

Risk

s

Starting Ending

Outcomes – Disease ManagementOutcomes – Disease Management

Kellogg 2006 Top 8 Risks Pre & Post DM

0

20

40

60

80

100

120

140

Weight Cholesterol Back Pain Exercise Diabetes Hypertension CAD/CVD Stress

Num

ber o

f Risk

s

Starting Ending

Kellogg Overall Program Comparison Kellogg Overall Program Comparison

Total ROI 2005 2006 TotalsLM-12 DM LM-12 DM To Date

Enrollment Cost $51,840 $32,640 $44,320 $44,625 $173,425Estimated Benefit $79,889 $30,825 $63,167 $70,890 $244,771Year 1 ROI Forecast 1.54 0.94 1.43 1.59 1.41

Questions?Questions?