connecting health, productivity and business thomas parry, ph.d. president

Connecting Health, Productivity and Business

Thomas Parry, Ph.D. President

Integrated Benefits Institute

About IBI• National, not-for-profit corporation• 674 corporate sponsors• Employers: 90% of IBI’s members• IBI’s mission. Demonstrate the business

value of a healthy workforce through:– Independent HPM research– Measurement and modeling tools– Forum for sharing ideas and experience

• Visit www.ibiweb.org

“The healthcare issue that connects employers all over the world – regardless of how the healthcare system is financed in their country – is time loss from work and resulting lost productivity.”

New Employer Realities• Unprecedented economic challenges• Show the C-suite the value of improved

workforce health• Dead end: attempting to control claims

costs in separate program silos• Looking for best strategies to improve

workforce health, reduce lost time and enhance productivity

• Limited data, time and dollars

What’s at Risk for Employers? Even in the US, health-related lost

productivity is a big deal

The Full Costs of EE Health-- Auto Manufacturers

• Estimates based on IBI’s new FCE modeling tool

• 171,250 employees• Employer-paid claims costs only• Published as IBI Quick Study in

February 2011

Full Cost Components

Medical Wage replacementsAbsence LP Performance LP

8%48%

28%

16%

A View of the Canadian Workforce

Prevalence of Chronic Disease

No chronic

condi-tion

s (25%)

>= 1

chronic

condi-tion (75%)

Changing Importance of Top 10Prevalence Treatment

PenetrationLost Time

1) Allergies/hay fever 1) Diabetes 1) Depression

2) Back/neck pain 2) Hypertension 2) Chronic fatigue

3) High cholesterol 3) Congestive heart failure

3) Anxiety

4) Heartburn/GERD 4) Coronary heart dis. 4) Back/neck pain

5) Arthritis 5) Osteoporosis 5) Obesity

6) Anxiety 6) High cholesterol 6) Sleeping problems

7) Depression 7) COPD 7) Heartburn/GERD

8) Obesity 8) Asthma 8) Irritable bowel

9) Hypertension 9) Depression 9) High cholesterol

10) Chronic fatigue 10) Sleeping disorders 10) Chronic pain

Treatment of Chronic Disease

Cur-rentl

y treated (27%)

Never treated (37%)

Treated only in

the past (36%)

Prevalence of Co-Morbidity

None (25%)

One (23%)

Two (17%)

Three

(12%)

Four (8%)

>= five (15%)

The View from the C-Suite

Linking Health, Productivity & the Bottom Line

Strong link61%

Weak link7%

Moderate link32%

CFO Survey, IBI, 2002

Critical Factor

4%

Moderate Degree

54%

Great Degree21%

Slight Degree18%

Not At All3%

Effect of Benefits Programs on Financial Performance

A big deal for only 25%

Source: On the Brink of Change – How CFOs View Investments in Health and Productivity. Integrated Benefits Institute. 2002.

The Impact of Ill-Health

0%

25%

50%

75%

100%

Highermedical

Troublefocusing on

job

Moreabsence

Affectsbottom line

beyondhealthcare

Adverselyaffects other

benefitscosts

Need largerworkforce

Agree Strongly agree

96%90% 86% 84%

71%

47%

Source: The Business Value of Health: Linking CFOs to Health and Productivity , IBI, 2006

Are CFOs Getting 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

Quantifying Financial Lost Productivity*

• Lost productivity – “the financial impact on a company when employees are not at work and fully functioning”

• Two components: absence and decrements in job performance (“presenteeism”)

• The Financial Impact of Absence– Wage replacement payments– “Opportunity costs” of ER’s response

• The Financial Impact of Presenteeism– Wage and benefit “overpayments”– Opportunity costs of resulting lost time

*Source: Sean Nicholson, Mark Pauly, et al., "Measuring the Effects of Work Loss on Productivity with Team Production," Health Economics 15: 111-123 (2006).

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

RA Study Population

• 5,483 employees with RA• Ave. age: 51 years (14%

under 40 and 14% over 60)• 41% Male; 59% female

45%

0%

10%

20%

30%

40%

50%

Baseline plus $5 plus $10 plus $15 plus $20

Increase in copay - Disease modifying drug

% E

mpl

oyee

s fill

ing

at le

ast o

ne sc

ript

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

Impact of Out-of-Pocket Cost-- on medication adherence --

45%39%

0%

10%

20%

30%

40%

50%

Baseline plus $5 plus $10 plus $15 plus $20

Increase in copay - Disease modifying drug

% E

mpl

oyee

s fill

ing

at le

ast o

ne sc

ript

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

Impact of Out-of-Pocket Cost-- on medication adherence --

45%39%

36%

0%

10%

20%

30%

40%

50%

Baseline plus $5 plus $10 plus $15 plus $20

Increase in copay - Disease modifying drug

% E

mpl

oyee

s fill

ing

at le

ast o

ne sc

ript

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

Impact of Out-of-Pocket Cost-- on medication adherence --

45%39%

36%32%

0%

10%

20%

30%

40%

50%

Baseline plus $5 plus $10 plus $15 plus $20

Increase in copay - Disease modifying drug

% E

mpl

oyee

s fill

ing

at le

ast o

ne sc

ript

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

Impact of Out-of-Pocket Cost-- on medication adherence --

45%39%

36%32%

28%

0%

10%

20%

30%

40%

50%

Baseline plus $5 plus $10 plus $15 plus $20

Increase in copay - Disease modifying drug

% E

mpl

oyee

s fill

ing

at le

ast o

ne sc

ript

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

Impact of Out-of-Pocket Cost-- on medication adherence --

45%39%

36%32%

28%

0%

10%

20%

30%

40%

50%

Baseline plus $5 plus $10 plus $15 plus $20

Increase in copay - Disease modifying drug

% E

mpl

oyee

s fill

ing

at le

ast o

ne sc

ript

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

Impact of Out-of-Pocket Cost-- on medication adherence -- Adherence

reduced 38% by $20 copay

increase

Savings in Lost Productivity Costs-- For No-Script Group --

$12.8$14.0$17.2

$0

$5

$10

$15

$20

Baseline Reduced incidence

Reducedincidence +

duration

Lost

Pro

duct

ivity

Cos

ts ($

Mill

ions

)

-26%

Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

New Report: Linking VBBD and Productivity

Health Risks & Job Performance

Co-Morbidity and Absence

Prevalence across broad condition clusters among those with at least one chronic condition

Annual Absence DaysSingle vs. Co-Morbid Condition Clusters

Annual Presenteeism DaysSingle vs. Co-Morbid Condition Clusters

Annual Lost DaysAbsence and Presenteeism

Transitioning from ROI to Value of Investment

Key Health Dimensions• Financial• Program participation• Biometric screening• Health risks• Utilization• Preventive care• Chronic conditions• Lost worktime• Lost productivity• Employee engagement

The Temporal Dimension• Leading indicators

– Health risks– Preventive care – Biometric screening– Chronic conditions– EE engagement

• Treatment indicators– Utilization– Program participation

• Lagging indicators– Financial– Lost worktime – Lost productivity

Dimensions & Dashboard Metrics Dimension Summary Metric

Financial Program cost/EE

Program participation EEs participating/All EEs

Biometric screening EEs reaching target/All EEs

Health risks # of health risks/EE

Utilization # EEs getting care/All EEs

Preventive care # EEs getting screened/All EEs

Chronic conditions # EEs w/ chronic conditions/All EEs

Lost worktime # of lost workdays/EE

Lost productivity Lost productivity $/EE

Employee engagement Engagement score/EE

Thinking about Metrics as Hierarchies

Dashboard metrics

Component metrics

Contributing metrics

Contact IBI

Thomas Parry, Ph.D., Presidenttparry@ibiweb.org

www.ibiweb.org