Workforce Health From Cost to Value

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Workforce Health-- From Cost to Value --

• Thomas Parry, Ph.D.
• President
• Integrated Benefits Institute

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Whats the Real Issue?
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National Healthcare Expenditures
Projected
Actual
Source CMS, Office of the Actuary, National
Health Statistics Group.
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Then, The Solution
Plan Design
Healthcare Costs
5
Or This?
6
Leveraging Human Capital
Company
7
Demonstrating Healthcare Business Value
Health Status
Business Impacts
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About IBI

• National, non-profit
• 400 corporate sponsors
• Programs
• Research
• Health productivity measurement
• Benchmarking
• Education

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How Can Senior Management be a Change Agent?

• IBIs CFO Research

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Linking Health, Productivity the Bottom Line
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CFOs Dont Abide Ill Health
96
90
No Difference
86
84
Source The Business Value of Health Linking
CFOs to Health and Productivity, IBI, 2006
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Are CFOs Getting Lost-time Information?

• Absence
• 51 ever get reports on occurrence
• 22 get reports on financial impact
• Presenteeism
• 22 ever get reports on occurrence
• 8 get reports on financial impact

Source The Business Value of Health Linking
CFOs to Health and Productivity, IBI, 2006
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Lost Work Time Criticality
49
Source The Business Value of Health Linking
CFOs to Health and Productivity, IBI, 2006
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How CFOs Would Use Lost- Productivity
Information
Source The Business Value of Health Linking
CFOs to Health and Productivity, IBI, 2006
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Companies have two choices to increase net
income Grow revenue or reduce lost productivity
Revenue growth equivalent
Lost productivity savings
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The Real Costs of Ill Health
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Perceived Costs/Program
3,090
762
435
387
172
6
Source IBI 2002 Benefit Benchmarking Data
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The Opportunity Cost of Absence

• What is the real cost of people being away from
  work?

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Range of Lost Productivity From Absence
Source IBI 2002 Benefit Benchmarking Data
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Real Costs/Program
3,090
2,505
1,796
660
392
178
Source 2002 IBI Full-cost Benefit Data
Nicholson Lost-productivity
Modifier
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Top 15 Causes of Lost Work Time
Source HPQ
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Managing the Economic Burden of Ill Health
Source Beyond Cost Containment, IBI - 2005

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The Impact of Pharmaceutical Plan Design

• New IBI Research

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Average Medication Adherence
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Impact of Out-of-Pocket Cost
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Filling at least one Disease Modifying script
reduces STD incidence
-36
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Filling at least one Disease Modifying script
reduces STD duration
-6
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Impact on Lost Productivity Costs-- No Script
Group --
-19
-26

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Where to from Here?

• Do benefits and risk managers talk?
• Do you attempt to control costs or to manage
  health?
• Are you ready to begin measuring health and
  productivity outcomes?
• How will you get business-relevant outcomes
  information?
• Focus health-plan discussion on value

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What Does Good Look Like?

• Health Productivity Management on the National
  Scene

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The Asheville Project Education, Lowered
Pharmacy Copays, Professional Coaching

• Started in 1997 with 85 employees from 2
  employers now gt1000 employees with diabetes,
  asthma, hypertension, and lipid-therapy
  management enrolled from 5 employers
• Employers/payers remove barriers to improve
  adherence and continuity of health maintenance
• Copay waivers
• Labs without copays
• Glucose meters
• Local networks of trained pharmacists help
  patients manage their care and are reimbursed for
  this service

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Decreased Total Medical Costs
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Decrease in Sick Days Taken
Source Cranor CW et al. J Am Pharm Assoc.
200343173-184
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Asheville Project - Clinical Outcomes
Patients With Clinical Measure Improvement
Compared With Baseline at 6 Months
Source Cranor CW et al. J Am Pharm Assoc.
200343173-184
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International Truck and Engine

• In late 2001 ITE found musculoskeletal
  disabilities to be a major problem
• Significant share of WC costs
• Often unnecessary referrals to orthopedic
  specialists or not referred when appropriate.
• EEs frequently given sedating controlled-substance
  pain relievers that hurt safe return to work.

• ITE developed a unique solution involving PCP
• education, use of medical-treatment
  guidelines,
• improved employee communications and ITE
• on-site medical facilities.

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ITE Program

• Establish baseline data
• EE status/RTW report for PCP
• Evidence-based medicine training for PCPs
• Give PCP job functions
• Emphasized to PCP importance of timely and proper
  use of medications
• On-site PT facilities for safe, early RTW
• Communicate, communicate, communicate to EEs,
  PCPs, operations and senior management

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ITE Program Results
Musculoskeletal Disability Cases Costs/Case
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ITE Program Results

• Lost workdays per injury ? 21
• Days lost per FTE were cut in half
• Light-duty days almost doubled from 6.1 to 11.1
  days per injury
• On-site physical therapy ? 50
• Productivity gains through reduced lost time 99
  more trucks built per year

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Lessons Learned

• Data Baseline and track all relevant results
• Align incentives to bottom-line value
• Dont discourage best medicine
• Communicate/Educate PCPs, EEs, operations,
  senior management
• Keep the focus on real costs include lost time
  and lost productivity