Maximizing Employee Health and Productivity

Transcription

1 Maximizing Employee Health and Productivity Disease Management Colloquium May 11, 2006 Ron Loeppke, MD, MPH

2 Integrated Health and Productivity Enhancement Converging Trends in the Market (When) Clinical/Financial Business Case (Why) Integrated H&P Solutions (What) Employer Case Studies (How)

3 Converging Healthcare Trends Affecting Employers Spiraling costs driven by: Epidemiologic Trends (aging workforce, BOI/BOR) Significant quality gaps Rising unit costs Complex benefit designs Disconnected/fragmented control levers Providers, employers, health plans, patients Current non-system too fragmented and uncoordinated Simultaneous Demand side and Supply side opportunities Employer appetite for more engagement of total population Consumer movement and Physician Pay for Performance

4 Corporate Profits vs. Rising Health Benefit Costs All U.S. Corporations $ Billions Corporate Profits Health Benefit Costs Source: The National Data Book and IRS Data Reports

5 The Real Problem: The Full Cost of Employee Illness Medical & Pharmacy Costs *$6,020 PEPY *2003 PEPY Avg. Health-related Productivity Costs $12,000 PEPY Total PEPY = $18,020 33% 66% Personal Health Costs Medical Care Pharmacy Hospitalization Behavioral Health Productivity Costs Absenteeism Presenteeism STD LTD Workers Comp Medical Costs Salary Continuation Overtime Turnover Temporary Staffing Administrative Costs Replacement Training Off-Site Travel for Care Employee Dissatisfaction Customer Dissatisfaction Variable Product Quality Sources: Loeppke, et.al., JOEM, 2003; 45: and Brady, et.al., JOEM, 1997; 39:

6 Health and Human Capital Just as we have a corporate priority on enhancing our financial capital and economic assets of our company, we must have a corporate priority on enhancing the human capital and health assets of our company. The health of our workforce is inextricably linked to the productivity of our workforce and therefore the health of our bottom line.

7 CFO s s Concern Over Rising Healthcare Costs Not important 1% Somewhat important 6% One of top issues 17% Very important 55% Important 21% IBI CFO Study 2005

8 Linking Health, Productivity & the Bottom Line Weak link 7% Moderate link 32% Strong link 61% Source: IBI CFO Study 2005

9 Ballooning Total Health Costs Tinkering with the peripheral financial transactions of healthcare does not lower Total Costs it only shifts costs However Improving the clinical transactions of healthcare by better managing the burden of illness and reducing health risks does lower Total Costs as well as improves the health and productivity of the workforce. The International Value Proposition

10 Transforming the System Old Way New Way Focus Medical Cost Mgt Quantity/Cost of Service Illness & Injury Unaligned Incentives Total Cost Mgt Quality/Value of Service Health and Productivity Aligned Incentives Approach Results Permission to Drs & Pts Health Benefit Mgt Fragmentation Patients are passive recipients Lacks Patient/MD Rewards for Clinical Results EEs Use it or Lose it Drs not rewarded for Quality Employers Pay for Volume Empowerment of Drs & Pts Health Care Mgt Integration / Coordination Patients are active participants Shared Patient/MD Rewards for Clinical Results EEs Use Wisely & Save Dr. rewarded for Quality Care Employers Buy Value

11 Integrated Solutions Must Address the Health Continuum Population Health Management 15% members = 85% cost Well At Risk Acute Self Limiting Chronic Illness Complex Care Prevention Screenings Health Risk Assessment Lifestyle Modification Programs Nurse Advice Line Web Tools Disease Management Empowering Education and Support Complex Case Management Predictive Modeling D i s a b l i n g C o n d i t i o n s 85% members = 15% cost

12 Integration With Quality Focus Fragmented - Uncoordinated Integrated - Aligned Health Mgt Demand Mgt Case Mgt Employee-- Patient Disease Mgt Disability Mgt Integrated Care Disease Mgt. Demand Mgt. Patient RN/MD RN/MD EE--Patient Disability Mgt. Health Mgt. Case RX Mgt.

13 Example Percentages of Integrated Health & Productivity Solution % of Population 1% 14% Example of 100,000 People in a Population 1000 Lives 14,000 Lives Complex Case Management Disease/Demand Management % of Claims Cost 25% 50% 15% 15,000 Lives Health 15% 70% 70,000 Lives Mgmt 10%

14 Prevention An investment to be leveraged Rather than a cost to be justified.

15 Mortality Risk Factors in the United States Environment 19% Health Services 10% Heredity 20% Lifestyle 51%

16 Obesity Trends* Among U.S. Adults BRFSS, 1991, 1996, (*BMI 30, or about 30 lbs overweight for 5 4 person) No Data <10% 10% 14% 15% 19% 20% 24% 25% Center for Disease Control and Prevention Data

17 Full Costs of Poor Health: Total Value of Health Medical & Pharmacy Presenteeism LTD STD Absenteeism Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney)

18 Health Risk and Absenteeism Work Days Lost/Person/Year Days Days 9.3 Days 1 Risks 3 Risks 4+ Risks Tsai, et al. JOEM: Vol. 47, No. 8, August, 2005

19 Health Risk and Disability STD Days/Yr Days Days 5.28 Days 0-11 Risks 2-33 Risks 4+ Risks Source: Wayne Burton, MD, IHPM North American Summit Meeting 2000

20 Health Risk and Presenteeism 30.00% % of Workplace Productivity Loss 25.00% 20.00% 26.9% 15.00% 20.9% 10.00% 5.00% 0.00% 14.7% 0-22 Risks 3-44 Risks 5+ Risks Source: Burton, et al, JOEM: Vol. 47. No. 8, August, 2005

21 3+ Risk Factors Health Risks and Behaviors: X hours lost 8 Illness STD Presenteeism Current Smokers Physical Activities (<1/wk) Seatbelt Usage (<90%) Encountered Violent Events Distress High Blood Pressure Cholesterol BMI at risk 0-1 Risk Factors 2 Risk Factors Source: Burton, Conti, Chen, Schultz, Edington. JOEM.41, , 1999.

22 W/Other Disease States: X hours lost 16 Illness STD Presenteeism w/mental Health w/respiratory w/injury w/digestive w/musculoskeletal w/diabetes w/cancer Source: Burton, Conti, Chen, Schultz, Edington. JOEM.41, , 1999

23 Change in Productivity follows Change in Risk 6% 5% 4% 3% 2% 1% 0% -1% -2% 2 or more or more 2 or more or more

24 Change in Costs follow Change in Risks Cost reduced Cost increased $600 $400 $200 $0 -$200 -$400 -$ Risks Reduced Risks Increased Overall: Cost per risk reduced: $215; Cost per risk avoided: $304 Actives: Cost per risk reduced: $231; Cost per risk avoided: $320 Retirees<65: Cost per risk reduced: $192; Cost per risk avoided: $621 Retirees>65: Cost per risk reduced: $214; Cost per risk avoided: $264 Source: Updated from Edington, AJHP. 15(5): , 2001.

25 Health-Related Productivity Loss vs. Net Income Your company's human capital costs $9,045 Your Company's net income $1,246 Modeled Lost Productivity $1,511 $0 $2,000 $4,000 $6,000 $8,000 $10,000 Modeled Lost Productivity Your company's human capital costs Your Company's net income

26 Profitability Through Health-Related Productivity Enhancement 40% 35% 36% Additional revenue needed to equal lost productivity savings 30% 25% 20% 24% 15% 12% 10% 5% 0% 10% 20% 30% Lost Productivity Savings

27 Employer Case Study Integrated Health & Productivity Enhancement

28 Who Is Incurring the Medical Costs? % of Population $12,001,184 Medical/Rx Costs Site % of Claims $ 1% 40 Members $2,921,075 24% 15% 606 Members $ 9,131,472 75% 1212 Members 30% 89% $ 10,767, Mbrs 100% 100%

29 Top Medical Conditions by Total Medical/Pharmacy Costs Musculoskeletal Normal Delivery Pregnancy complications Fetal Immaturity Gynecological disorders Gallbladder disease Abdominal Pain Obesity Procedure complications Headaches (incl Migraine) $618,869 $333,956 $273,256 $208,541 $162,121 $159,695 $143,246 $113,725 $95,869 1,098,562 $0 $500,000 $1,000,000 $1,500,000

30 Corporate Wide vs Site Prevalence of Claims by Medical Condition Company Wide Boise Back Pain Headaches/ Migraines Diabetes Asthma Fetal Immaturity 2.8% 5.0% 2.0% 4.8% 1.4% % 2.6%.07% 1.4%

31 Company-wide vs. Boise Site Disability Experience Average Length of Disability and Days per 100 Employees Site h h h h h h ALOD = Average Days Absent - from date of disability to claim end date Baseline = 1999 Full Year Results Data has been annualized STD closed claims only 2002 ALOD is 14% higher than baseline Days per 100 employees is 26% higher than baseline Average LOD Site Baseline Days per 100 EE's Claims Closed: 01/01/2001 to 09/30/ /01/2002 to 09/30/2002

32 Medical and Disability Costs* Related to Medical Conditions Includes direct disability costs, but does not include related absenteeism, presenteeism and productivity costs/losses $350 *Disability Dollars PEPY (per employee per year) $300 $250 $200 $150 $100 $ Medical $0 52 Musculoskel Strains Depression Anxiety Cancer Ischemic Heart Disease

33 Aligning Incentives Increased Participation from 22% to 65% On-site Biometric Screening and Health Risk Assessment Incentives: Initial = $15 Gift Certificate $300 off next year s annual health plan premiums To receive the ultimate incentives, the member: If moderate or high risk, must participate in Lifestyle Management program Engage in quality EBM initiatives with their physicians for better Care Management of current medical conditions Or in Low Risk category

34 HRA Risk Stratification of DIRECTV Population Corporate vs. Boise Health Risk Factors Blood pressure (>150/90) Corporate (Excluding Site) (276 High Risk EEs out of 1281 EEs taking HRA) #High Risk 61 % of Population High Risk 5% Site (445 High Risk EEs out of 817 EEs taking HRA) #High Risk 117 % of Population High Risk 14% Pre-diabetes (FBS > 110) 5 <1% 7 <1% Cholesterol (>240; >190; >40) % % Stress management 5 <1% 26 3% Smoking 63 5% % Weight management (M-BMI >36; F-BMI >35) 54 4% %

35 Health & Productivity Survey Results Corporate Wide Average Per Ill Worker/Year Total for all 1,864 Workers/Year Medical Condition Prevalence % in Treatment Total Days Lost Total Dollars Lost Total Days Lost Total Dollars Lost Allergies 38.5% 30% 4 $1,275 3,151 $916,161 Obesity 7.0% 36% 20 $5330 2,496 $703,840 Depression 10.4% 34% 10 $2,473 1,875 $479,675 Pain 8.6% 35% 10 $2,879 1,626 $466,544

36 Health and Productivity HPQ Survey Survey Results Data cross-matched with objective supervisor performance data from workplace Results showed: *HPQ presenteeism scale significantly predicts supervisor ratings of performance About 10% of workforce has complex co-morbidity issues driving significant productivity losses due to presenteeism Multiple conditions correlated to lower productivity Source: Kessler, Hymel, Loeppke, etal. JOEM. Vol 46 (6). June, 2004.

37 HRA related to Cost Trends Relative Increase in Medical/Pharmacy Costs in X 0 HRAs 2X 1X 1 HRA 2 HRAs

38 Integrated Health & Productivity Enhancement In the Workplace Centers for Disease Control (CDC) Grant Three year research study by CorSolutions and Cornell University to develop and implement new method of valuing an employer s s investment in the health of its workers Determine whether DM and health risk reduction programs generate substantial ROI by reducing spending and absence, improving productivity Job-specific presenteeism/absenteeism multipliers

39 The Bottom Line Good Health is Good Business