Employers Health Care Issues Barb Schaefer, Senior VP Human Resources & Corporate Secretary August 28, 2007

2 Objectives for Employers Health Care Issues After viewing and listening to the Internet lectures posted on Blackboard, the student will be able to: –Explain why rising health care costs are a problem for industry. –Give the example of the total cost of health care per employee in one industry, Union Pacific. Other large companies will experience similar costs. –Recognize the concepts of disease management and consumerism in health care policies. –Discuss how the health of employees affects productivity, safety and costs.

3 Portland Oakland LA Calexico Nogales El Paso Seattle Eagle Pass Laredo Brownsville Dallas Houston New Orleans KC Memphis St. Louis Chicago Omaha SLC Eastport Twin Cities Duluth Denver Fast Facts Commodity Revenue $14.9 B Miles of Track32,300 in 23 States Employees50,000+ Annual Payroll$3.7 B Customers25,000 Locomotives 8,500 Freight Cars 104,700 Union Pacific System

4 Why is Health a Critical Business Issue? Health Care Costs Productivity Safety

5 Challenges for Union Pacific Geographically Dispersed; Rural Locations Mobile Jobs Employee Demographics 13 Unions Represent 90%of Employees Benefits Design Issues Self Insured

6 Health & Wellness Strategy Keep People Healthy Manage Disease & Illness Improve Quality of Care Promote Smart Consumerism Goal: Make UP Healthiest Workforce in America

7 Improve Health Health Risk Appraisals –35,682 Participants –Ten Risk Factors Preventive Care and Screenings Not Hiring Smokers - 7 States Lifestyle Behavior Change –Smoking Cessation, Weight Management, Etc. Health Focused Cafeteria / Vending Fitness Centers / Exercise Programs Telephonic and Web-based Programs

8 Disease management Integrate Disease Management Programs With Health Promotion and Customized Care Programs Disease Management Programs Include: –Coronary Artery Disease –Congestive Heart Failure –Asthma –Diabetes Care Advocates Engage Participants When: –High Costs, Multiple Risks, Receptive to Behavior Change

9 Improve Quality Centers of Excellence Programs: –Transplants –Congenital Heart Defects –Complex Cancers –Musculoskeletal

10 Health Care Consumerism Shop Smart for Prescription Drugs –Generic Vs. Brand Names –Home Delivery Service Gather Information / Prepare for Office Visits Use Network Providers

11 Maintain and Improve Consumerism Introduce a Consumer Driven Health Plan, Which –Protects Employees From Catastrophic Loss –Rewards Consumerism –Rewards Healthy Employees / Behaviors Health Risk Appraisals Non-smoking Preventative Care