Barton Margoshes, MD Chief Medical Officer CIGNA Group Insurance 1 Health, Absence, & Productivity...
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Transcript of Barton Margoshes, MD Chief Medical Officer CIGNA Group Insurance 1 Health, Absence, & Productivity...
Barton Margoshes, MDChief Medical Officer
CIGNA Group Insurance
1
Health, Absence, & ProductivityTrends and New Perspectives
Atlanta Association of Health UnderwritersMay 13, 2005
3
Aging Workforce
● In 2010, 51% of labor force will be over 40
US Census Bureau
● In 2003, Americans aged 55 and older made up approximately 12% of the workforce - the highest percentage ever recorded
Bureau of Labor Statistics
● Aging labor force is expected to cause 37% increase in incidence of disability
JHA Factbook 2001
4
Chronic Conditions
● The five illnesses where costs increased the most were heart disease, asthma, mental disorders, cancer and hypertension
Health Affairs 8/04
● “The highest rate of increase in medical and disability claims costs is among 30 to 39 year olds, and both are due to obesity.”
Helen Darling, president of the National Group on Health, a Washington, D.C. consortium of 208 large employers
● 26% of STD episodes involve a chronic illness and represents 52% of employee medical costs
CIGNA Study, 2004
5
Rising Medical Costs
● Factors fueling rising costs include: Rapidly rising hospital unit costs Prescription drug cost increases Increasing consumer demand Aging population
0%
2%
4%
6%
8%
10%
12%
14%
1982 2002$0
$500
$1,000
$1,500
$2,000
2000 2002
Health care as a % of GDP Employee contributions
Source: John Hopkins Bloomberg School of Public Health
Total cost = unit cost x utilization
6
Volume 348(26) 26 June 2003 pp 2635-2645
The Quality of Health Care Delivered To Adults In the United States
McGlynn, Elizabeth A.: Asch, Steven M.: Adams, John: Jeesey, Joan: Hicks, Jennifer:DeCristofaro, Alison: Kerr, Eve A.
BACKGROUNDWe have little systematic information about the extent to which standard processes involved in healthcare—a key element of quality—are delivered in the United States.METHODSWe telephoned a random sample of adults living in 12 metropolitan areas in the United States and…received written consent to copy their medical records…to evaluate performance on 439 indicators of quality of care for 30 acute and chronic conditions as well as preventative care…RESULTSParticipants received 54.9 percent of recommended care. CONCLUSIONSThe deficits we have identified in adherence to recommended processes for basic care pose serious threats to the health of the American public. Strategies to reduce these deficits are warranted.
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Disability Costs
● 33% of employers reported in a National survey that short-term disability incidence rates increased while only 10% reported a decrease in incidence rates
● Employers responding to the survey also cited certain disability conditions as increasing in cost or frequency (ranked from high to low):
stress or depression (70%);
cancer (60%);
low back pain (57%);
upper extremity repetitive trauma, such as carpal tunnel syndrome (55%);
other musculoskeletal issues (52%); and
respiratory conditions (37%).
2002 Survey of Employers' Time-Off and Disability Programs
by Mercer Human Resource Consulting and Marsh Inc.
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0
1
2
3
4
5
6
1992 2002
Mil
lio
n
Source: Department of Labor
Individuals Receiving LTD Increased 62% from 1992-2002
9
The Aging Workforce & Lifestyle Health Risks Correlate with Short Term Disability● Risk factors studied:
Age High blood pressure High cholesterol Diabetes
Family history of heart disease Obesity Tobacco use Lack of exercise
$1,389
$1,730
$2,701
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
0-1 Risks 2-3 Risks 4+ Risks
2.45
5.28
13.16
0
2
4
6
8
10
12
14
0-1 Risks 2-3 Risks 4+ Risks
Days
Source: Wayne Burton, M.D., IHPM North American Summit Meeting 2000
10
Employer Costs of Lost (% of Payroll)Direct Indirect Total
AON 4-6% 8-12% 12-18%
Towers Perrin 8-12% 4-6% 12-18%
Watson Wyatt 6.1% 2-4x direct costs 12-30%
Mercer 4.4% .5-4x direct costs 7-22%
The Impact of Lost Productivity
● Average $6,000 Per Employee Per Year
● Averages 15% Of Payroll
Direct Premium Costs – Only 1-2% of payroll
11
Presenteeism
According to studies at Cornell University 60% of the total cost of worker illness stems from”on-the-job productivity losses” also known as “presenteeism” exceeding what companies spend on medical and disability benefits and sick days. The biggest productivity drains are headaches, allergies, and arthritis.
Research shows the average U.S. employee loses 115 productive hours each year to health conditions, costing employers an estimated $2,000 per worker per year.
12
Integrated Health & Productivity Management Model
● Holistic approach to optimize a company’s human capital – investment in an employer’s people
● Addresses presenteeism, lost time, and employee health to lower costs and increase productivity
● Health related systems involved include: Healthcare Incidental absence & FMLA Short and long term disability Behavioral health
Pharmacy Wellness and disease management Workers’ compensation
13
Non Health Related Systems involved in a HPM Model
Corporate Culture
Policies and Procedures
Benefit plan designs
Alignment of incentives
Training and human resources
Employee communication
Data Integration
14
Integration Rationale
● The ultimate health outcome is return to work and productivity BUT return to work is not a traditional healthcare outcome
● There is inherent fragmentation within the healthcare and disability system
Healthcare controls cost and quality through appropriate medical utilization and medical necessity
Disability management controls cost and quality through matching functional ability and functional demands of the job
● Integration helps employers measure and manage the total cost of benefits
15
Integration is not just for large employers
48%
64%
77%
0% 20% 40% 60% 80% 100%
Small (lessthan 500FTE's)
Mid-sized (500to 5,000FTEs)
Large (Morethan 5,000
FTEs)
Interest in Linking Benefits by Employer Size
The Workplace Path to Productivity and Health, Integrated Benefits Institute 2004
16
26%
31%
38%
65%
79%
21%
0% 20% 40% 60% 80% 100%
1
2
3
4
5
6 medical cost savings
employee health
reduce absence
employee sat
productivity
disability savings
Goals of HPM Strategy
The Workplace Path to Productivity and Health, Integrated Benefits Institute 2004
17
CIGNA’s Disability & Healthcare Connect
● A comprehensive and integrated approach for controlling quality and cost outcomes of a disability event
● Key components include:
Proactive pre-disability outreach
Coordinated disability and medical case management
Referral to disease management services
EAP assessment and referral
● Common philosophy, linked processes and technology
18
Key Study Findings
● Short term disability (STD) durations and return to work percentages are consistently better for claimants having both CIGNA Disability and CIGNA HealthCare
● 20% of employees were responsible for 91% of employee medical costs
● Employees on short term disability represented only 5% of employees, but were responsible for 35% of employee medical costs
● Behavioral health conditions associated with a medically related disability result in poorer outcomes (durations 28% longer; incidence rate 7% greater)
19
Key Study Findings (continued)
● Most of the top cost drivers are the same for both disability and medical
● Disability claimants with chronic conditions experience longer durations whether or not the disability was primarily due to the chronic condition
● Employees engaged in WellAware’s (disease management) Cardiovascular Disease and Low Back Pain programs experience shorter disability durations & lower incidence of short term disability
20
12%Shorter STD
Durations
6%Higher Return to
Work Rates
0%
5%
10%
15%
20%
Solutions that Address Both Medical and Disability Cost Drivers Have a Greater Impact
Proven Results
Claimants with both a CIGNA STD and a CIGNA HealthCare claim have:
22
Disease Management Reduces Both Medical and Disability Costs
ConditionAdmission Rate
ReductionMedical Cost
Savings
DisabilityIncidence Rate
Reduction
DisabilityDuration
Reduction
Cardiac 4.0% 13.0% 3.0% 7.7%
Low Back 2.2% 12.0% 1.0% 18.0%
Disease Management
24
Summary● Healthcare and disability costs will continue to escalate due to
demographic trends
● Aging, chronic diseases, and mental health are inter-related and will have an adverse effect on employers profitability and competitive advantage
● Employers need to consider the total cost of care (healthcare + disability + lost productivity)
● Investing in an employer’s human capital through wellness, disease management, quality healthcare, and integrated disability makes business sense