Connecting Health to BusinessThomas Parry, Ph.D.President      Integrated Benefits Institute
About IBI• National, not-for-profit corporation• 700+ corporate sponsors• Employers: 90% of IBI’s members• Liberty Mutual ...
New Employer Realities• Show the C-suite the value of improved  workforce health• Healthcare reform: the value of a health...
What’s at Risk for Employers?
The Full Costs of EE Health  -- Auto Manufacturers• Estimates based on IBI’s new FCE  modeling tool• 171,250 employees• Em...
Health Costs – The Traditional View                                 Medical$500       Total = $509 MM$400$300$200$100  $0 ...
Health Costs – Adding Pharmacy                          Medical        Pharmacy$500       Total = $623 MM$400$300$200$100 ...
Health Costs – Adding Lost-Time Pay              Medical      Pharmacy        Wage replacements$500       Total = $824 MM$...
Health Costs – Adding Absence Impact       Medical    Pharmacy      Wage replacements       Absence LP$500       Total = $...
Health Costs – Adding Performance Impact       Medical             Pharmacy              Wage replacements       Absence L...
Full Cost Components      28%                    48%   8%         16% Medical       Wage replacements Absence LP    Perfor...
Quantifying Financial Lost Productivity*    • Lost productivity – “the financial impact on a      company when employees a...
Full Costs –                         Medical, Pharmacy, Absence                         and Presenteeism                  ...
Co-Morbidity and Lost Time                         Absence lost time     Presenteeism lost time            40            3...
The View from the C-Suite
Making Health the CFO’sBusinessThomas Parry, Ph.D.President      Integrated Benefits Institute
Key Research Questions• How do CFOs view workforce health as a  priority in their business?• What’s the relationship betwe...
Health as a corporate priority           8%                          8%                            6%                     ...
Leaders and Non-LeadersH+P Leaders           The uninitiated        29%                    53%              18%  The ambiv...
Workforce productivity as "one of the     most important factors" for …        62%                               45%      ...
“Very important” to workforce      productivity       Maintaining skilled                                                 ...
% CFOs that say EE health is "veryimportant" to workforce productivity    48%                        23% H+P Leaders      ...
The Importance of   Information
Improving workforce health:     information credibilityCompanys claims costs               70%                 28% 2%     ...
Usefulness of Information100% 96%           91%   90%   90%   89%   88%                                           83%   82...
Availability of Helpful Information100%80%60%    79%             75%40%                   54%                          51%...
Lessons
Lessons for CFOs• Credible information and methods  for measuring impact are available in  market• Partner with colleagues...
And if you’re working with CFOS...• Access the solid business case info that  is available• Advocate a culture of health• ...
Employers and    Data
Key Dimensions of Population   Health• Financial       • Preventive care• Program         • Chronic  participation     con...
The Temporal Dimension• Leading indicators  – Health risks  – Biometric screening  – Chronic condition prevalence• Treatme...
Dimensions & Dashboard Metrics         Dimension                Summary MetricFinancial               Program cost/EEProgr...
Thinking about Metrics asHierarchies                    Dashboard                    metrics                     Component...
Dimension: Lost Work Time  Dimension     Dashboard   Component Metrics   Contributing                 Metrics             ...
Dimension: Lost Work Time  Dimension        Dashboard   Component Metrics   Contributing                    Metrics       ...
Dimension: Lost Work Time  Dimension        Dashboard    Component Metrics    Contributing                    Metrics     ...
Dimension: Lost Work Time  Dimension        Dashboard    Component Metrics      Contributing                    Metrics   ...
Contact IBIThomas Parry, Ph.D., Presidenttparry@ibiweb.orgwww.ibiweb.org
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Making the Wellness Case to the CFO

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Making the Wellness Case to the CFO

  1. 1. Connecting Health to BusinessThomas Parry, Ph.D.President Integrated Benefits Institute
  2. 2. About IBI• National, not-for-profit corporation• 700+ corporate sponsors• Employers: 90% of IBI’s members• Liberty Mutual IBI Board member• 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
  3. 3. New Employer Realities• Show the C-suite the value of improved workforce health• Healthcare reform: the value of a healthy workforce or the cost of healthcare?• 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
  4. 4. What’s at Risk for Employers?
  5. 5. 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
  6. 6. Health Costs – The Traditional View Medical$500 Total = $509 MM$400$300$200$100 $0 Medical (EE) Medical (family)
  7. 7. Health Costs – Adding Pharmacy Medical Pharmacy$500 Total = $623 MM$400$300$200$100 $0 Medical (EE) Medical (family)
  8. 8. Health Costs – Adding Lost-Time Pay Medical Pharmacy Wage replacements$500 Total = $824 MM$400$300$200$100 $0 Medical (EE) Medical (family) Time-loss pay
  9. 9. Health Costs – Adding Absence Impact Medical Pharmacy Wage replacements Absence LP$500 Total = $923 MM$400$300$200$100 $0 Medical (EE) Medical (family) Time-loss pay Lost productivity
  10. 10. Health Costs – Adding Performance Impact Medical Pharmacy Wage replacements Absence LP Performance LP$500 Total = $1.29 B$400$300$200$100 $0 Medical (EE) Medical (family) Time-loss pay Lost productivity
  11. 11. Full Cost Components 28% 48% 8% 16% Medical Wage replacements Absence LP Performance LP
  12. 12. 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 withTeam Production," Health Economics 15: 111-123 (2006).
  13. 13. Full Costs – Medical, Pharmacy, Absence and Presenteeism $400,000 $350,000 $300,000Cost per 1000 EEs $250,000 $200,000 $150,000 $100,000 $50,000 $0 Medical Pharmacy Absence lost prod Presenteeism lost prod
  14. 14. Co-Morbidity and Lost Time Absence lost time Presenteeism lost time 40 35 30Lost days 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10+ # of chronic conditions
  15. 15. The View from the C-Suite
  16. 16. Making Health the CFO’sBusinessThomas Parry, Ph.D.President Integrated Benefits Institute
  17. 17. Key Research Questions• How do CFOs view workforce health as a priority in their business?• What’s the relationship between health of EEs and health of the company?• What types and sources of information are considered credible?• How do CFOs see VBBD?• What kind of information is needed?
  18. 18. Health as a corporate priority 8% 8% 6% 19% 24% 24% 49% 56% 48%69% 68% 75% 20% 20% 19% Promoting healthy A culture of health is a key Comprehensive health behaviors is a company company goal coverage is important to priority company financial strategy Strongly Agree Agree Neither Agree Nor Disagree Disagree or strongly disagree
  19. 19. Leaders and Non-LeadersH+P Leaders The uninitiated 29% 53% 18% The ambivalent
  20. 20. Workforce productivity as "one of the most important factors" for … 62% 45% 8% Ability to respond to Financial performance Reputation w/customer/market needs lenders/investors
  21. 21. “Very important” to workforce productivity Maintaining skilled 75% workforce Controlling staff size 61%Increasing EE satisfaction 51% Controlling turnover 48% Providing EE training 42% Making capital 37% investments Health Improving EE health 30% Other 22%
  22. 22. % CFOs that say EE health is "veryimportant" to workforce productivity 48% 23% H+P Leaders Other CFOs
  23. 23. The Importance of Information
  24. 24. Improving workforce health: information credibilityCompanys claims costs 70% 28% 2% EE surveys 31% 62% 8% Companys information 22% 70% 8% Outside information 21% 75% 3% Modeled estimates 15% 74% 12% Supplier recos 14% 76% 10% Very Credible Somewhat Credible Not Credible
  25. 25. Usefulness of Information100% 96% 91% 90% 90% 89% 88% 83% 82%80%60%40%20% 0% Helpful Not helpful
  26. 26. Availability of Helpful Information100%80%60% 79% 75%40% 54% 51%20% 37% 36% 24% 15% 0% Available Unavailable
  27. 27. Lessons
  28. 28. Lessons for CFOs• Credible information and methods for measuring impact are available in market• Partner with colleagues in your organization who measure/manage lost time• Make your financial goals well known within your organization and with key supplier partners
  29. 29. And if you’re working with CFOS...• Access the solid business case info that is available• Advocate a culture of health• Start with maximizing available internal information• Learn CFO’s strategic financial goals and focus there• What’s the current culture of health?• Are you working with an H+P Leader?
  30. 30. Employers and Data
  31. 31. Key Dimensions of Population Health• Financial • Preventive care• Program • Chronic participation conditions• Biometric • Lost worktime screening • Lost productivity• Health risks • Employee• Utilization engagement
  32. 32. The Temporal Dimension• Leading indicators – Health risks – Biometric screening – Chronic condition prevalence• Treatment indicators – Preventive care – EE engagement – Health services utilization – Program participation• Lagging indicators – Financial – Lost worktime – Lost productivity
  33. 33. Dimensions & Dashboard Metrics Dimension Summary MetricFinancial Program cost/EEProgram participation EEs participating/All EEsBiometric screening EEs reaching target/All EEsHealth risks # of health risks/EEUtilization # EEs getting care/All EEsPreventive care # EEs getting screened/All EEsChronic conditions # EEs w/ chronic conditions/All EEsLost worktime # of lost workdays/EELost productivity Lost productivity $/EEEmployee engagement Engagement score/EE
  34. 34. Thinking about Metrics asHierarchies Dashboard metrics Component metrics Contributing metrics
  35. 35. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics MetricsLost worktime
  36. 36. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics MetricsLost worktime # of lost days/EE
  37. 37. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics MetricsLost worktime # of lost days/EE Incidental absence days/EE LTD lost days/EE WC lost days/EE Reduced performance days/EE STD lost days/EE
  38. 38. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics MetricsLost worktime # of lost days/EE Incidental absence days/EE LTD lost days/EE WC lost days/EE Reduced performance days/EE STD lost days/EE Incidence/100 EEs Ave. duration/claim Median duration/claim
  39. 39. Contact IBIThomas Parry, Ph.D., Presidenttparry@ibiweb.orgwww.ibiweb.org

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