Health and Productivity Bottom Line for Employers

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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 employees 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, 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

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Producing bigger outcomes requires measuring
indirect cost savings as 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 Week Because 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
  objectivedata 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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IHPMs 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