Workforce Health -- From Cost to Value --
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Transcript of Workforce Health -- From Cost to Value --
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Workforce HealthWorkforce Health-- From Cost to Value ---- From Cost to Value --
Thomas Parry, Ph.D.President
Integrated Benefits Institute
Michigan Purchasers Health Alliance
September, 2006
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Today’s Discussion
• What’s the issue?
• Does senior management get it?
• What are the real costs of health?
• Emerging ER strategies to manage health and productivity
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What’s the What’s the RealReal Issue? Issue?
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ThisThis??
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$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Calendar Year
Bill
ions
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
GD
P S
hare
NHE GDP Share
National Healthcare Expenditures
Source: CMS, Office of the Actuary, National Health Statistics Group.
Actual
Projected
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Plan Design
Healthcare Costs
Then, The Solution
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Or ThisOr This??
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Leveraging Human Capital
0
1
2
3
4
5
6
7
8
9
10
A B C D E F G H I J
HC
L R
atio
Company
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Demonstrating Healthcare Value
Health Status
Business Impacts
Black Box
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About IBI• National, non-profit
• 400+ corporate sponsors
• Programs
– Research
– Health & productivity measurement
– Benchmarking
– Education
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Can Senior Management Can Senior Management be Change Agents?be Change Agents?
IBI’s CFO Research
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Linking Health, Productivity & the Bottom Line
Moderate link32%
Weak link7%
Strong link61%
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The Impact of Ill-Health
0%
25%
50%
75%
100%
Highermedical
Job focus Absence Bottomline
Otherbenefits
costs
Largerworkforce
Agree Strongly agree
96%90% 86% 84%
71%
47%
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How Much Absence?
16%
48%
24%
8%
1%
4%
0% 10% 20% 30% 40% 50% 60%
DK
> 15%
10 to 15%
5 to 10%
2 to 5%
< 2%
Rat
e
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How Much Presenteeism?
7%
4%
9%
22%
35%
23%
0% 10% 20% 30% 40%
DK
> 15%
10 to 15%
5 to 10%
2 to 5%
< 2%
Rat
e
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Lost Worktime Criticality
32%
17%
51%
0%
10%
20%
30%
40%
50%
60%
Actual > Critical Actual = Critical Actual < Critical
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CFO’s Role in Benefit Decisions
71%
51%47%
18%
0%
20%
40%
60%
80%
Analyticalsupport
Benefitsofferings
Integral teammember
Primary leaderof strategy
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Measuring the Impact
• Absence– Overtime pay
– Lost revenue
– Temporary help
– Quality lapses
– Wage replacement
• Presenteeism– Overtime pay
– Temporary help
– Quality lapses
– Lost revenue
– Additional staff
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Are CFOs Being Informed?
• Absence– 44% never get reports on occurrence
– 72% never get reports on financial impact
• Presenteeism– 83% never get reports on occurrence
– 84% never get reports on financial impact
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Healthcare Management Objectives for Next Two Years
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
2.8
3
Controlcosts
ManageHC costs
Improvehealth
Shift costs QuantifyHC impact
Improvebenefits
Expandbenefits
Rati
ng
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Quantifying Health-Related Lost Productivity
29%
22%19%
13%16%
0%
5%
10%
15%
20%
25%
30%
Opportunitycost
Time lost fromwork
Staffing cost Wagereplacement
cost
All othermeasures
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Translating to the Business79%
51%45%
13%
0%
20%
40%
60%
80%
100%
% of humancapital cost
Total health-related costs
% of revenue Share priceimpact
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How CFOs Would Use Productivity Information
75% 75% 73% 70%65%
0%
20%
40%
60%
80%
Consideragainst health
plan costs
ReduceAbsence
Manage allhealth costs
Examinebusiness
impact ofhealth plans
Reducepresenteeism
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Then, the SolutionHealth Status
Absence Presenteeism
Healthcare Costs
Lost Productivity
Business Impacts
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The Real Costs of Health
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Perceived Costs/Program
$0
$1,000
$2,000
$3,000
$4,000
Ave. Cost
/FTE
EE GH WC STD LTD Incid.Absn.
FMLA
2002 Benefit Data
$3,090
$172
$762
$6
* Mid-point of lost productivity estimate used
$435 $387
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What is the real cost of people being away from work?
The Opportunity Cost of Absence
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Responding to Work Absence
Employer Strategy
Lost Revenue
Staffing Costs
Do Nothing XTemp Help/ Overtime X XAdditional Staff X
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The Range of Lost Productivity Costs
$2,929
$19,433
$0
$5,000
$10,000
$15,000
$20,000
Avera
ge/FTE
Excess Staffing Lost RevenuePotential
2002 Benefit Data
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Full Costs/Program
$0
$1,000
$2,000
$3,000
$4,000
Ave. Cost
/FTE
EE GH WC STD LTD Incid.Absn.
FMLA
Payments Lost productivity
2002 Benefit Data
$3,090
$675
$1,890
$178
$2,621
$418
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Top 15 Health Conditions
11%
12%
12%
14%
14%
15%
17%
17%
21%
24%
27%
28%
29%
31%
40%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Bronchitis
Urinary
Headache
Irritable bowel
Hypertension
Anxiety
GERD
Back/neck
Arthritis
High cholesterol
Obesity
Depression
Allergy
Fatigue
Sleep disorder
% w/ condition in workforce
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Top 15 Causes of Lost Work Time
0
50
100
150
200
250
300
350
400
450
500L
ost w
orkd
ays/
100
FTE
s
Absence Presenteeism
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How are Employers How are Employers Responding?Responding?
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Employers Abandoning Silos
0%
20%
40%
60%
80%
Siloed Programs Linked Programs
Both integrated &coordinated programs
Coordinated programsonly
Integrated programs only
Siloed programs21%
44%
17%
18%
IBI 2004 Employer Survey
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3%
6%
6%
7%
7%
19%
26%
29%
0% 15% 30%
Other
Change insurers/providers
Absorb cost increases
Change health plan type
Improve medical-care delivery
Promote workforce health
Shift costs to EEs
More EE healthcare responsibility
“Most Important” Strategies Today
IBI 2004 Employer Survey
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Be Careful of This
17%
31%35%
21%
31%
40%
26%
42%48%
0%
10%
20%
30%
40%
50%
% d
elay
ing
heal
thca
re d
ue to
co
st
Total With healthproblems
<$50K annualincome
Comprehensive HDHP CDHP
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Managing the Economic Burden of Ill Health
2%
61%
23%15%
0%
25%
50%
75%
Minimize MedicalCosts Year-to-Year
Manage WorkforceHealth
Manage in Concertwith Absence,Disability andProductivity
Other
IBI 2004 Employer Survey
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5%
6%
18%
24%
47%
5%
8%
19%
36%
32%
0% 20% 40% 60% 80% 100%
Absorb costs
Limit coverage
Cost shift to EEs
Manage diseaseas continuum
Incent EE health
Best ApproachSecond Best
Approaches to Offering Health Benefits Longer Term
IBI 2004 Employer Survey
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The Health-Related Data Solution
49%
37%
14%
0%
20%
40%
60%
Group health data only Link GH data to absence,disability and productivity
Integrated health,absence/disability,
productivity/financialoutcomes
IBI 2004 Employer Survey