Although health care reform has caused a lot of tumult, employers are still dealing with many of the same issues, especially escalating health care costs. For years, the only feasible option to try to contain health care spending was to adjust benefits and shift costs to employees through higher copays and deductibles.
“These days, people need to look beyond rates and benefits,” says T.C. Williams, the manager of channel strategy for Kaiser Permanente. “People need to concentrate on return on investment. They need to have a measurable return on their health care dollar and they need to find a health care plan that is going to provide that.”
Williams advises employers to partner with a health plan that focuses on total health and productivity — in other words, keeping employees at work and productive.
Smart Business spoke with Williams about how to ensure your health plan is maximizing the productivity of your work force.
What is total health and productivity, and how can it be achieved?
It is what it says: the total health of the employee base, the importance of that health, and the tools and resources an employer can expect from a health plan. The focus is on employee productivity. To achieve it, you must identify, analyze and understand some of the key drivers that have adverse effects on employee productivity.
How can employers control health care costs?
There are direct and indirect health care costs. Direct costs are actual medical and pharmaceutical costs based on utilization. Indirect costs are made up of short-term and long-term disability, absenteeism and presenteeism. Absenteeism is when you’re out of the office and therefore not productive. Presenteeism is when you’re at work, but you’re dealing with something, like a medical condition or a chronic disease, or when you’re coordinating care for a family member. You’re there but just not able to be as productive as you could be.
Studies have shown that health-related productivity costs are up to three times greater than direct medical and pharmacy costs alone. People have no idea that the most significant drivers of total health care expenditure come from indirect health care costs.
There are two schools of thought: one is that we can’t really control costs. On one hand that’s true. For example, we can’t control getting older, and as we get older the demand for health care increases.
On the other hand, there are some costs we absolutely can influence. We can have an impact on both direct and indirect costs with an emphasis on prevention, chronic condition management and work force health programs. Using these strategies not only addresses the largest source of employers’ health care costs — lost productivity — it also helps employees lead healthier lives.
What can be done to control presenteeism?
Employers have to accept that presenteeism is, and always will be, a major driver to expenditures. But, if employers have the right resources, they can do a lot to combat it.
Find a health plan that promotes health advocacy, gives employees and their families useful tools, and also drives better health outcomes with the use of health information technology, specifically by enabling individuals to be active participants in their health care through a personal health record.
Ask your health plan what tools they have. What’s in the arsenal of wellness programs? Do they offer on-site programs, like smoking cessation, behavior change classes and/or health risk assessments? The information that can be extracted from the completion and compilation of health risk assessments on your employee base is useful because it reports back to the employer: ‘Here’s what you’re dealing with. You have a high population of people dealing with morbid obesity. Here are the downstream effects of morbid obesity: diabetes and heart disease. Here’s what you can do now so you aren’t dealing with those costs down the line.’
What are the keys to implementing successful wellness initiatives?
Having wellness programs and incentive-based programs that an employer can implement at the worksite is a good start, but not enough by itself. There must be total buy-in at the executive and employer level. Owners and executives must embrace and promote the programs for them to be successful. Wellness programs are just one piece of total health and productivity. Also, ask your health plan what is done as far as prevention and the actual health care delivery system.
For instance, does the health plan have an integrated delivery system? Do patients and physicians both get reminders about needed screenings or immunizations? Do they enable secure online communications between the members and their physicians? That capability is extremely important in controlling presenteeism, because time away from work adds up with each visit to the doctor’s office.
What other controllable areas impact health care costs?
Chronic disease management is a huge factor. It’s a case of 10 percent of patients with chronic conditions using 80 percent of the total health care resources. The lack of coordination prevalent in American health care results in poor outcomes and higher costs across the board. You might want to ask if the health plan has electronic medical records, so that all caregivers — physicians, pharmacists, lab techs — can access a member’s record, helping avoid drug interactions and redundant tests. Does the system enable online sharing of best practices among providers so that the latest treatment protocols are readily accessible and available to implement in weeks or months, not years?
Partnering with your health plan can help identify some of the health-related conditions and situations that drive up costs, and give you strategies to put your work force on the path to improved health and productivity.
T.C. Williams is the manager of channel strategy for Kaiser Permanente. Reach him at (216) 479-5230 or firstname.lastname@example.org.