Health and Productivity Bottom Line for Employers - PowerPoint PPT Presentation

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

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

• 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

• 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

• 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

• 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

• 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

• 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

Ear, Nose, & Throat 628,000

Sinusitis 376,000

Skin Disorders 339,000

Essential Hypertension 328,000

Pharyngitis 327,000

Gastrointestinal 307,000

Back Disorders 285,000

Immune and Metabolic 259,000

Otitis Media 248,000

Spinal Trauma 220,000

Source: MEDSTAT Study for IHPM

• 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

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

• 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)

• Cardiovascular (5)
• Diabetes (5)
• Respiratory (4)
• Disability Management (3)
• Weight Management (3)
• Musculoskeletal (2)

• 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

• 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.

• 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

• 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

• 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

• 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

• 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