Caring for a loved one is an activity that takes place outside the workplace, but its impact inside the workplace can be significant, if often overlooked. The majority of those caring for a loved one are employed, and the impact of their care commitment on their workplace productivity is usually underestimated.
MetLife, in a 2010 study in conjunction with AARP and the National Alliance for Caregiving, estimates that lost productivity in the workplace as a result of caregiving costs businesses approximately $33 billion a year. Lost productivity can come in the form of tardiness, leaving early from work, or even in the case of some employees, rejecting promotions that would force a caregiver to move far away from elderly parents.
“Providing care for a family member is an act of kindness and love,” said Annette Kolski-Andreaco, manager of account services for LifeSolutions, an employee assistance program (EAP) that is part of the UPMC Insurance Services Division. “And with increased life expectancies due to medical advances, the need for caregivers will continue to rise.”
Smart Business spoke with Kolski-Andreaco about the impact caregiving has on the workplace and on employees, as well as what employers should know about it.
What is the extent of the impact of caregiving in the workplace?
There is a hidden cost for employers when it comes to caregiving. An employer has to understand that employees are managing difficult life challenges at different stages in their lives. Employers tend to be more aware of some of these challenges, such as marriage, childbirth, day care and the responsibility of school-age children. But employers don’t think as much about the challenges their employees face later in life. And, yet, these are challenges that employers should focus on because the working population is getting older as people continue to live longer and also want to stay in the workplace longer.
What does this mean? For employers, there is likely to be a large cohort of their employees who have increased caregiving responsibilities for elderly parents and other elderly loved ones. In today’s workplace environment, we have an older working population caring for an even older age group, and that is a significant hidden cost.
How extensive is the issue for employers?
An estimated 17 percent of full-time workers are also caregivers, and nearly one-third of all working caregivers are in a professional position. According to a Caregiving in America study, more than 73 percent of caregivers were employed at some time during their caregiving.
That is significant because the study also showed that 66 percent of employed caregivers have gone in to work late, left early or taken off time during the day to deal with caregiving issues. Also, 20 percent of employed caregivers have reported taking leaves of absence as a result of their duties.
In general, it is estimated that caregivers miss an average of 6.6 workdays per year as a result of caregiving activities. A majority of caregivers believe that caregiving has some impact on their work performance.
Is there a physical toll on caregivers?
Surveys conducted by the Centers for Disease Control and Prevention and the National Alliance for Caregiving showed that 17 percent of women over the age of 50 who are caregivers reported fair or poor health, about double the rate for other women in that age group. Similar results were evident among younger male and female caregivers, ages 40 to 49, who also reported poorer health.
The medical conditions for which caregivers are at increased risk include diabetes, high cholesterol, hypertension, pulmonary disease, heart disease, kidney disease and depression.
Caregivers are under a great deal of stress, which can cause a number of physical problems such as muscle tension, impaired immune system function, increased blood pressure, sleep difficulties and a lack of exercise. Essentially, the caregiver is at extreme risk healthwise. To compound the issue, when the caregiver’s health is compromised, the care receiver is put at increased risk.
What other impact is there on the workplace?
The stress felt by caregivers can adversely affect their job performance. Employees who are also caregivers are tired, distracted by worries and have less mental energy at times. This is an issue that employers need to recognize and address.
What can an employer do to help employees deal with caregiving issues?
In general, employees who are caregivers need some flexibility, if it is possible for the employer to grant it. Offering flexibility in terms of schedules, leave time, etc., and support from the workplace can help them deal with these difficult issues.
There also needs to be increased awareness of the caregiving issue and its potential impact on a work force. A company’s human resources department could provide information about helpful community resources, for example. Remember, for most employees, caregiving is a new experience and they need help in knowing where to turn for assistance.
If an employer has an EAP, it should be promoted as a source of support, information and referral to resources. EAPs also provide emotional and practical solutions to problems and can be a source of information about the legal implications and financial repercussions of caregiving.
ANNETTE KOLSKI-ANDREACO is manager of account services for LifeSolutions, part of the UPMC Insurance Services Division. Reach her at email@example.com or at (412) 647-8728.
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There’s an app for that.
That’s become a popular expression, as mobile phones/computers/smart phones become more commonplace and consumers spend more time with them and become more comfortable using them for a wider range of tasks. Not surprisingly, therefore, health insurers are also looking to mobile applications to enhance the way they connect with their members.
“Mobile platforms present a real opportunity to engage people in ways that haven’t been possible before,” said David Passavant, senior director, Consumer Innovation, UPMC Health Plan. “There are some exciting ventures that will be coming into the market that will supercharge the connection between members and health insurers.”
Smart Business spoke with Passavant about mobile applications and their increasing presence in health insurance.
How can mobile applications impact health insurance?
We are seeing the emergence of the mass adoption of smart phones and smart phone technology. One of the advantages of that is that it gives health insurers new opportunities to engage their members. It’s truly a new channel.
More than 40 percent of U.S. adults now have smart phones, and that number will double in the next three to five years. These phones are essentially mini-computers in the pockets of millions of consumers. Health insurance can be incredibly complex and confusing, and mobile apps are one tool for empowering people to better understand and improve their health and their use of health care
How can members use mobile applications?
To begin with, a mobile app should make it easy to search for health care providers and to contact your insurer. Most health insurers will reach that point some time in 2012. Then we’ll start to see some exciting innovation. Insurers will provide real time updates on claims status, tools to help members better understand the cost and quality of care, customized health tips for each individual, and many types of health tools and trackers. The opportunities these devices provide are endless; we’re just scratching the surface.
Can’t members simply get the same information online?
For many services, that is true. But what health insurers have learned over the years is that most members, for whatever reasons, do not like to interact with their insurers online. It could be that the time commitment is too much, but industrywide, fewer than 20 percent of members tend to use the Internet to conduct their health insurance business. In contrast, a much higher percentage of, say, bank customers choose to do their banking business online.
When companies first started to build websites, they spent very little time on the research and design component. The important thing was to build and launch as quickly as possible. But over time, we learned that the most important part of delivering great technology is taking the time to understand people’s needs and motivations, then to design your site around the needs of your customers.
Hopefully, we can learn from past experience and tread new ground with mobile apps. These devices are fundamentally different from websites for two reasons: one, people always have the devices with them, and, two, because the screens are so small, you have to be incredibly judicious about what you put on them.
How do you see use of these apps evolving?
Initially, they will be used for the basics. Members can be introduced to using the devices to access their personal health record, view claims, locate network providers and pharmacies using the device’s internal global positioning system, and to access a virtual identification card.
Once the use of mobile technology is accepted and members are able to let us know how they want to use it and how it can best fit their needs, we will evolve. Soon it will be possible to include, for example, technology that could collect blood glucose level readings and send them directly to a member’s physician. It’s possible that members might see a value in spending a few minutes while they are, for instance, waiting for a bus, to answer health questions that can be used to earn health incentive points or some other financial incentive from their insurer.
Would use of mobile apps be extended to physicians?
Absolutely, yes. We see these devices as a conduit for empowering the relationship among physician, patient and insurer. For example, a good app will give the member quick access to an accurate and understandable health history that will allow them to maximize their time with their doctor. Because physicians have been so enthusiastic about using smart phones, it makes sense for them to be involved and able to take advantage of these tools. For instance, it’s possible that physicians could be alerted to possible gaps in a patient’s care, such as when that patient is due for a test or screening of some kind.
What do you see as the future for mobile apps in this area?
There is no question that the adoption of smart devices and the maturity of the app marketplace are creating fundamentally different opportunities to engage our membership. This is a redux of the excitement felt at the birth of the Internet. The plans that innovate and win in this space will borrow the best ideas from other industries (travel, banking, retail, gaming) and engage members in ways that websites never could.
DAVID PASSAVANT is senior director, Consumer Innovation, UPMC Health Plan. Contact Passavant at (412) 454-5609.
Keeping current with health care rules and regulations is never easy. For many companies, staying up to date with all the changes in health care can create a drain on resources, both from the standpoint of the enormous amount of time necessary for someone in the organization to spend to understand the systems, and in revenue if mistakes are made and the company is fined for noncompliance.
The problem becomes more difficult when dealing with the management of complicated health care regulation such as the Consolidated Omnibus Budget Reconciliation Act, which is better known as COBRA. COBRA is a program that was designed to provide a way for employees and their covered dependents to maintain group health benefits after experiencing a qualifying event, such as job loss, divorce, or loss of dependent status.
“Many companies underestimate what is involved with COBRA administration,” says Tammy Clay, manager of COBRA Operations, UPMC Benefit Management Services, a division of UPMC Health Plan. “COBRA has many requirements that involve notices and account tracking for varying time frames, depending upon the type of qualifying event. It’s not something all companies can or should handle themselves.”
Smart Business spoke with Clay about the complexities of COBRA administration and how employers should approach it in their companies.
What is COBRA?
COBRA gives workers and their families who lose health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances, such as voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce and other life events.
Why does an employer need a COBRA administrator?
COBRA can be complex to administer. Employers need to be aware of deadlines and details that can make it difficult to be compliant with COBRA regulations. Because mistakes can be costly, in terms of fines or in lost time, it makes sense to outsource the task to an expert. Often, that means a third-party administrator of benefit programs.
COBRA specialty administrators are experts in staying up to date on the regulations and in keeping an employer in compliance.
What does COBRA require of employers?
Essentially, COBRA requirements call for employers to send notices to employees, former employees and their spouses and children, and to calculate and collect premiums. They are required to keep track of employees who are eligible and employees who are not. They also need to have a record of who received notices and when they were sent. Lastly, they need to determine whether premiums are accurate and paid on time.
What are some advantages to outsourcing COBRA administration for employers?
In a sense, outsourcing COBRA administration can be looked at as a form of risk management for the employer. Because of the legal issues that surround proper administration of COBRA, it is essential that all aspects of the process are done correctly. One of the primary reasons employers outsource COBRA administration is in an effort to minimize their exposure.
How can employers determine if they need to outsource COBRA administration?
There are three questions an employer might want to ask when determining whether or not outsourcing COBRA administration would make sense for the organization. First, does the company have the time to administer COBRA correctly? Second, is the company knowledgeable about the latest COBRA requirements? Third, can the company afford the cost for the liability of noncompliance should it get it wrong? If the answer to any of those questions is ‘no,’ then the employer should strongly consider outsourcing COBRA administration to a professional.
What kinds of features should an employer look for in a COBRA administrator?
There are several features employers should expect from a COBRA administrator. You should expect billing and collection service on a monthly basis. You may also want online credit and debit payment options available to COBRA participants. Flexible remittance options and the ability to interact with multiple carriers are services that give an employer the choice of how the premium will be paid to the carrier, the employer or both. It’s important that COBRA administrators be capable of monitoring and tracking. This would include the 60-day election period, the 45-day initial premium payment period, the ongoing 30-day grace period and cessation of COBRA coverage.
Expect an administrator to provide user-friendly monthly activity reports that summarize billing and collection from COBRA participants. Offering an employer a portal to view COBRA participants and activity in real-time, or even to enter information, is also a feature that many COBRA administrators are now offering in their menu of services.
What else can an employer gain by outsourcing COBRA administration?
Because COBRA can be difficult to understand as well as confusing, access to experts who can walk participants through the process is essential. Employers benefit by being able to rely on an experienced COBRA administrator that has a member services department and that understands COBRA and can answer COBRA questions from former employees. Being able to provide 24/7 access to account information online and having a broad time frame available for participant calls are also two important factors that employers can expect from any well-rounded COBRA administration service.
Tammy Clay is manager of COBRA Operations for UPMC Benefit Management Services. Reach her at (412) 454-8739 or firstname.lastname@example.org.
Normally, people are advised to stay away from cliffs. The steep vertical drop, the hard rocks, the water below — there’s too much danger if you get too close.
However, a different kind of “cliff” is looming on the horizon and for employers it doesn’t represent danger, but rather opportunity.
“They call it the ‘patent cliff,’” says Chronis Manolis, RPh, the vice president of pharmacy for UPMC Health Plan. “It refers to the years 2012 to 2014, when many pharmaceutical companies will lose patent protection on some of their most popular products.”
Smart Business talked with Manolis about the “patent cliff” and the opportunity it presents for employers.
What exactly is the ‘patent cliff’?
The term ‘cliff’ is used because pharmaceutical companies are facing a steep revenue shortfall as their blockbuster products lose patent protection. It’s estimated that drugs representing approximately $100 billion in sales will be available as generic drugs over the next several years. That loss to the pharmaceutical industry creates a significant opportunity for employers and employees alike.
When a pharmaceutical company develops and markets a new drug, it gets patent exclusivity for a specified number of years. What that means is that for that period there can be no generic equivalents to the brand-name drugs for the public to choose from. Over the next few years, a number of the most popular and biggest-selling drugs of recent years will all have their patents expire.
These include Lipitor, the top-selling anti-cholesterol drug in the world; Plavix, the top-selling antiplatelet medicine; Viagra, the most popular erectile-dysfunction drug; Singulair, an anti-asthma medicine; Lexapro, an anti-depressant; and several others. Every year, drugs have their patents expire, but there have never been so many popular drugs all losing patent exclusivity at the same time as there will be over the next two to three years.
Why is this an opportunity for an employer?
This is a truly unique time for employers. They have the opportunity to leverage the introduction of all these generic versions of top-selling drugs to help them bring down their health care costs. Employers need to work with their health insurer to ensure their pharmacy benefit design can leverage this significant opportunity. Generic drugs are a win-win for both the employer and employee. In addition to the cost savings, there is substantial evidence to suggest that cost is a barrier to medication adherence and lower co-pays for generic drugs can remove these cost barriers.
In conjunction with innovative formulary management, co-pay designs that promote generic drugs are the easiest way to leverage the patent cliff. For example, having a material difference in co-pay amounts between brand and generic drugs is a powerful incentive for employees. Additional examples include applying deductibles to only brand drugs as well as having co-insurance only for brand drugs while having flat dollar co-pays on generic drugs.
Can employers increase awareness and acceptance of generics?
It’s important to implement promotional and educational campaigns with your benefits administrator to educate employees. This can include educational materials, work-site promotional materials and pharmacist informational sessions to build employee awareness and confidence in generics.
There continues to be a general lack of confidence in generic drugs in regards to safety and effectiveness. Generic drugs save patients money without compromising quality and safety. The patent cliff will bring many ‘first-in-class’ generics to treat conditions such as diabetes, stroke, asthma and hypertension. We will have unprecedented access to high-quality generic drugs in almost all of the major therapeutic categories.
The ultimate goal is to get plan members talking to their physicians about therapeutic alternatives. This inquiry into generic drugs will provide a shift from brand name to generic drug utilization and help reduce benefit costs. For every 1 percent increase in generic drug use, employers can save approximately 1.5 percent in drug costs.
Is there a significant difference between generics and brand-name drugs?
The Food and Drug Administration requires generic drugs have the same effectiveness as the brand-name product. Generic drugs have exactly the same dosage, intended use, safety profile and side effects as the brand drug.
Brand-name drugs develop reputations with consumers, much of which is created through extensive media campaigns that raise awareness of the product and also increase its cost. Generic drugs have the same chemical make-up but are not backed by expensive advertising. That helps to make them less expensive and is the reason that insurance companies can offer these drugs to members for a much lower co-payment.
What kind of savings can be expected by going with generics?
For generics, employees pay, on average, co-pays that range from $5 to $15 compared to $20 to $40 for the brand-name drug. The average retail price plan sponsors pay for a brand-name drug is now approximately $128 compared to the average retail generic price of $18. So the savings are material for both employers and employees alike.
Will the ‘patent cliff’ help to increase the acceptance of generics?
Absolutely. With the influx of new generics, we should approach generic drug use rates greater than 80 percent. With high-cost biotech drugs projected to increase significantly in the next several years, maximizing generic drug adoption will be a key strategy to contain costs in the overall pharmacy benefit. Additionally, the savings is achieved without compromising safety and quality.
Chronis Manolis, RPh, is vice president of pharmacy for UPMC Health Plan. Contact him at email@example.com or (412) 454-7642.