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Health and Productivity Bottom Line for Employers. Sean Sullivan President & CEO. NDEP Diabetes at Work Workshop Spokane, WA ~ March 25, 2004. Mission. To establish the vital relationship of employee health to workplace productivity and, thereby, to organizational performance.

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Health and ProductivityBottom Line for Employers

Sean Sullivan

President & CEO

NDEP Diabetes at Work Workshop

Spokane, WA ~ March 25, 2004


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Mission

To establish the vital relationship of employee health to workplace productivity and, thereby, to organizational performance


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What do we do?

  • Serve as a global resource on health and productivity management with database analysis, business case studies and implementation tools

  • Champion health and productivity management internationally as a strategy for improving organizational performance

  • Organize and manage pilot projects to produce the evidence that investing in employee’s health produces large returns

  • Develop and make available better methods and tools to employers, providers, health plans and employees for managing health and productivity


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What Do We Do? (continued)

  • Hold education forums with leading practitioners of health and productivity management to advance the knowledge and skills of all stakeholders

  • Establish and maintain communication vehicles to get the best current information on health and productivity management to decision-makers and practitioners – such as our national conference and the publication Health and Productivity Management


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Employers Need a New Value Model in Health Care

  • The old cost/quality model is inadequate

    • Cost and quality are not correctly defined

    • As a result, they are not properly measured and managed to produce true value

    • The definitions of cost and quality must be expanded

      • And the measurement of cost and quality must be improved


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The New Value Model: Health and Productivity

  • The old model was confined to a medical view of cost and quality

    • Direct medical costs of care

    • Quality defined clinically and by patient satisfaction

  • The new model gets outside the “medical box” to look at the workplace for value

    • The value of health benefits-and health care- for employers is seen in healthy employees who are productive


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The New Value Model: Health and Productivity

  • Cost-savings opportunities in the new value model are much larger

    • Medical cost offsets

    • Reduced absence from work

    • Reduced productivity loss while at work

    • Enhanced quality of goods and services

  • Thus employee health becomes a big contributor to business performance

    • No longer just an expense to be controlled

    • But an investment with a return to be gained


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ROI and BOI (Burden of Illness)

  • Employers want a return on their “investment” in their employees’ health

  • But ROI cannot be calculated on “health” basis alone

    • Need to know the BOI first

      • Workplace cost including ripple effects

      • Care giver burden for family members

  • Without knowing these costs employers cannot determine the true cost, or value, of their health costs


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Top Ten Conditions by Total Payments (1996 MarketScan Database for 4.1 mil. Lives)

  • Coronary Artery Disease$467 mil.

  • Disorders of Gastrointestinal tract 173

  • Essential Hypertension 155

  • Vaginal Delivery 146

  • Osteoarthritis 145

  • Back Disorders 144

  • Disease of Ear, Nose, & Throat 135

  • Diabetes Mellitus 131

  • Cerebrovascular Disease 114

  • Cholecystitis & Cholelithiasis 110

    Source: MEDSTAT Study for IHPM


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Top Ten Most Prevalent Conditions (1996 Number of Patients)

Ear, Nose, & Throat628,000

Sinusitis376,000

Skin Disorders339,000

Essential Hypertension328,000

Pharyngitis327,000

Gastrointestinal307,000

Back Disorders285,000

Immune and Metabolic259,000

Otitis Media248,000

Spinal Trauma220,000

Source: MEDSTAT Study for IHPM


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Producing bigger outcomes requires measuring “indirect” cost savingsas well as medical cost offsets

  • Absence from work

    • Incidental absences or sick leave are not easy to obtain any more

    • Short-Term disability is the common “proxy” for productivity loss due to absence

  • “Presenteeism” is the new frontier of health and productivity measurement

    • Data are self-reported via survey tools designed and tested to produce valid results


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Average Hours Lost Per WeekBecause of Health Problems

Absence/STD“Presenteeism”Total

Digestive Disease 6.24 9.72 15.96

Mental Health 9.57 3.72 13.19

Disorders

Respiratory Disease 3.40 5.85 9.25

Injury 2.38 6.05 8.43

Musculoskeletal 6.86 1.38 8.24

Conditions

Source: Dr. Wayne Burton, Bank One, Published in JOEM


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Measuring Performance Loss on the Job

  • Presenteeism is the new frontier of health and productivity measurement

    • More important than absence in an economy producing more ideas than things

  • Not found in any corporate databases

    • Created by using psychometrically designed self-report survey tools

    • Validating self-reported data where “objective”data exist (e.g., call centers)


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Frequency of Disease Management Programs

  • Cardiovascular(5)

  • Diabetes(5)

  • Respiratory(4)

  • Disability Management(3)

  • Weight Management(3)

  • Musculoskeletal(2)


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The New Value Model: Health and Productivity

  • The new model views employee health as the outcome of an integrated system of:

    • Health management

      -Keeping the population mostly healthy most of the time to avoid all the direct and indirect costs of illness

    • Disease management

      -Managing increasingly prevalent chronic conditions in an

      aging workforce to optimize the health, functionality, and

      productivity of these employees

    • Demand management

      -Engaging employees in health and disease management


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Integrating Disease Management intoHealth & Productivity

  • Integrating data on health-related costs

    • “Busting” the “silos” inside corporations

  • Analyzing employee demographics/cost/risks

    • Targeting intervention for the best returns

  • Integrating prevention and care management

    • Preventing risks from becoming serious events

      or chronic conditions

    • Managing chronic conditions

  • Measuring the impact on workplace performance and total health-related costs.


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Health & Productivity Management is

  • Integrated collection of data and delivery of services

  • Across the “silos” of

    • Health promotion / disease prevention

    • Disease state management

    • Workers comp / disability case management

  • To measurably improve total health and

  • Reduce total health-related costs – including lost productivity / performance


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The Importance of Diabetes to Employers

  • Type-II diabetes is an incipient “epidemic" in the U.S.

    • Incidence has increased by 6 percent annually for the past decade

  • The largest part of the increase among adults is in the working-age population

    • More than 700,000 new cases were diagnosed in adults aged 20-65 in the Year 2000

    • This is about 70 percent of the total increase in total population age 20 and older

  • A study of one large employer found combined medical and lost productivity costs were $4,000 higher for workers with diabetes


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Defining the Problem Correctly to Address it Effectively

  • The problem is not just diabetes per se

    • It is a complex of factors increasingly going by the name of “metabolic syndrome”

      • Critical factors include obesity, hypertension, and coronary artery disease along with Type-II diabetes

  • The costs of these “co-morbidities” are huge for employers

    • One-third of diabetics also have hypertension or coronary artery disease

      • They incur direct medical costs 4 to 5 times greater than diabetics without these conditions -- $10 billion annually

      • And the “indirect” costs of these conditions are unknown


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Obesity – the Twin Epidemic to Diabetes

  • Employers – and society – must address obesity to address diabetes

    • More than $60 billion of direct medical and “indirect” other costs of diabetes have been attributed to obesity

      • This is nearly half the total estimated cost of diabetes

  • Employers increasingly have recognized the importance of diabetes as a workplace issue

    • They are just beginning to understand the importance of obesity

      • As linked with hypertension, coronary artery disease, osteoarthritis, and depression, as well

    • Disease management of diabetes must include obesity – and the other parts of metabolic syndrome


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IHPM’s Agenda for Diabetes and its Fellow Travelers

  • Field research project with Intermountain Health Care

    • Analyzing impact of improved management of diabetes as measured by impact on self-reported productivity

      • Also analyzing impact on direct medical costs

    • Other study partners are Healthy Utah (state employees), Aventis, and Harris Allen Associates

  • Establishing new Center for the Study of Metabolic Syndrome in the Workplace

    • Disease Management session on Metabolic Syndrome at 4Ps Leadership Forum April 16 in Orlando (w/Abbott Labs)

    • Special issue of Health & Productivity Management magazine on obesity this fall with Mayo Clinic


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