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The Hidden Risk That Is Tearing Your Company Apart Acbg 3 30 10

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The ACBG Edge is an process that allows construction companies manage the health and productivity risk of their employees. This complements American Construction Benefits Group\’s Lean Health …

The ACBG Edge is an process that allows construction companies manage the health and productivity risk of their employees. This complements American Construction Benefits Group\’s Lean Health Insurance Advantage. Together, these construction wellness processes create champion companies in 3 short years.

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  • Behavior related deaths
  • 1998-2000 Mean Annual Costs

Transcript

  • 1. The Hidden Risk That is Tearing Your Company Apart:
    Understanding Your Total Cost of Healthcare and its Impact on Your Profits
    Presented by: Steve Heussner
    March 30, 2010
  • 2. The Pathway To Today’s Health!!!!
    2
  • 3. 3
    3
  • 4.
  • 5. 5Confidential, unpublished property of CIGNA. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © Copyright 2008 CIGNA.
  • 6. Per capital health expenditures in US $
    Source: Organization for Economic Cooperation and Development (OECD)
  • 7. Source: Organization for Economic Cooperation and Development (OECD)
    Acute care beds/1,000 population
  • 8. Source: Organization for Economic Cooperation and Development (OECD)
    Practicing physicians/1,000 population
  • 9. Source: Organization for Economic Cooperation and Development (OECD)
    Percent of population over age 65
  • 10. Source: Organization for Economic Cooperation and Development (OECD)
    Obesity rate (BMI>30kg/m2)
  • 11.
  • 12.
  • 13.
  • 14.
  • 15.
  • 16.
  • 17.
  • 18.
  • 19.
  • 20.
  • 21.
  • 22.
  • 23.
  • 24.
  • 25.
  • 26.
  • 27.
  • 28.
  • 29.
  • 30.
  • 31.
  • 32.
  • 33. Obesity
    The effects of obesity is similar to 20 years of aging.
    Obesity is a greater trigger for health problems and increased health spending than smoking or drinking.
    Individuals who are obese have 30% to 50% more chronic medical problems than those who smoke or drink heavily.
    National Business Group on Health
    Healthy Weight, Healthy Lifestyles Primary Fact Sheet
  • 34. Obesity
    Overweight and obese individuals are at an increased risk for:
    Type 2 diabetes
    Heart disease
    Hypertension
    Endometrial, breast, prostate and colon cancers
    Respiratory problems
    Stroke
    Osteoarthritis
    Sleep apnea
    Gallbladder disease
    Poor female reproductive health
    Depression
  • 35. Sleep Apnea
    Sleep disorder that causes excessive daytime sleepiness.
    Upper airway is blocked by relaxing soft tissue causing complete or partial obstruction.
    Breathing can stop from 10 seconds to 2 minutes.
    Episodes can occur from 5 to 100 times an hour.
  • 36. Sleep Apnea Signs & Symptoms
    92% of those diagnosed are male.
    Average BMI of 31 (Obese).
    Short, stocky neck (>17 inches).
    Snoring.
    Pauses in breathing at night.
    Waking up gasping or choking.
    Weight problems.
    High blood pressure.
  • 37. Over 17 Million Undiagnosed Patients
    ~ 10 to 15% have been diagnosed
    17 million
    Undiagnosed
    for OSA
    3 million
    Treated
    for OSA
    85% of OSA patients remain untreated
  • 38. Prevalence of Sleep Apnea
    Logan et al.
    J. Hypertension 2001
    Bassetti et al.
    Sleep 1999
    Javaheri et al.
    Circulation 1999
    Sjostrom et al.
    Thorax 2002
    Schafer et al.
    Cardiology 1999
  • 39. Schneider Study, 2004 - 2006
    Tracked 339 driver associates with Sleep Apnea
    Evaluated safety performance and health care costs- 12 months before treatment and 12 months after treatment
    Findings:- Preventable crashes were reduced by 30%- Median cost of crashes reduced by 48%- Retention rate improved by 60% over fleet avg.- Health care costs reduced by over 50%- Health care savings of $539.00 per driver / month
    Expanded study in 2006 to 788 drivers – Similar results- Statistically analyzed by 3rd party
  • 40. Schneider Study, 2004 - 2006
    For every dollar invested into the program, their return on investment was a two to three dollar savings on medical and accident expenses
    A 200% increase in employee retention for those in their program as compared to the company overall
    Drivers treated for sleep apnea had a 73% reduction in accidents
    A 91% reduction in hospital admissions
    And an overall a 57% reduction in healthcare costs.
  • 41. Avg. Hospitalization Expenses
    Avg. Physician Visit Costs
    $5,000
    $7,500
    $6,176
    $3,972
    $4,000
    $6,000
    $3,000
    $4,500
    $3,734
    $1,969
    $2,000
    $3,000
    $1,000
    $1,500
    $0
    0
    NON-OSA
    GROUP
    $1,969
    OSA
    GROUP
    $6,176
    NON-OSA
    GROUP
    $3,734
    OSA
    GROUP
    $3,972
    Individual Impact of OSA on Utilization Costs
    ¹ Kryger, et al. OSA Patients Use More Health Care Resources Ten Years Prior to Diagnosis. Sleep Research Online 1998:1(1):71-74
  • 42. The Link Between OSA and Diabetes
    Diabetes affects nearly 21 million Americans (7% of population)
    Diabetes is the 6th leading cause of death in US
    50% of people with type 2 diabetes also suffer from sleep apnea
    1Centers for Disease Control and Prevention, National Diabetes Fact Sheet, 2005
    2Babu, Ambika, R., et al. Type 2 Diabetes, Glycemic Control, and Continuous Positive Airway Pressure
    in Obstructive Sleep Apnea. Arch Intern Med 2005:165:447-452
  • 43. Diabetes
    23.6 million people or 7.8% of the population of the United States has diabetes.
    Cases of diabetes doubled from 1990 to 2005.
    Cases are expected to double again by 2030.
    The incidence of Type II Diabetes in adolescence has increased 10 times over the last decade and now constitutes just over 1/3 of new pediatric diabetes cases.
  • 44. Diabetes is the 7th leading cause of death nationally, over 233,000 deaths per year.
    According to the National Center for Health Statistics, diabetes is the only major disease besides Alzheimer's with a death rate that continues to rise.
    Diabetes deaths have climbed 22% since 1990
  • 45. Cost of Diabetes in the U.S.
    Total cost is $174 billion a year.
    Direct medical cost are $116 billion a year.
    Indirect costs are $58 billion a year (Disability, Work Loss, Premature Death).
    Annual health cost of a person with Type II Diabetes is 3.2 times the average American without diabetes.
  • 46. Complications of Diabetes
    Of those with diabetes:
    3 out of 5 people have 1 other serious health problem.
    1 in 3 has two other serious health problems.
    1 out of 10 has three other serious health problems.
    1 out of 13 has four or more other serious health problems.
    Diabetes is the leading cause of adult blindness, lower limb amputation, kidney disease and nerve damage.
    Diabetes Sources:
    National Diabetes Fact Sheet of the National Center for Chronic Disease Prevention and Health Promotion; NCHS; CDC; ADA; AACE
  • 47. “Behaviors drive 80% of disease, premature deaths, healthcare and productivity costs.”
    Michael D. Parkinson, MD, MPH, FACPM
    Former EVP, Chief Health and Medical Officer
    Lumenos/Wellpoint
    UM HMRC Wellness in the Workplace Annual Conference
    March, 2009
  • 48. 70% of medical & Rx claims are from poor lifestyle choices
    48
    New England Journal of Medicine
  • 49.
  • 50. #1 Source of Calories in the U.S. = Soft Drinks
    Coca Cola (12 oz. can)
  • 51. #1 Vegetable in the U.S. = French Fries
    McDonald’s Large Fries
  • 52. Common Lunch???
    McDonald’s Value Meal
  • 53.
  • 54. Is Cancer Preventable by Behavior?
    “…one-third of the more than 500,000 cancer deaths that occur in the U.S. each year is attributed to diet and physical activity habits, including overweight and obesity, while another third is caused by exposure to tobacco products.”
    “Although genetic inheritance influences the risk of cancer, most of the variation in cancer risk across populations and among individuals is due to factors that are not inherited.”
    American Cancer Society
    Cancer Journal for Clinicians
    January 28, 2010
  • 55. Behavioral Causes of Death
    Mokdad, A.H., Marks, J.S., et al. Actual causes of death in the United States. JAMA. 2004; 291:1238-1245.
  • 56. Master List of Risk Factors
    • Glucose 110 or greater
    • 57. HDL less than 40 mg/dl
    • 58. LDL greater than 100
    • 59. Triglycerides 150 or greater
    • 60. Family history of heart disease
    • 61. Family history of diabetes
    • 62. High fat intake
    • 63. Current Diabetes
    • 64. Alcohol use
    • 65. Current tobacco use
    • 66. Reported use of medications
    • 67. Sedentary lifestyle
    • 68. Rate Health as poor or fair
    • 69. Absent 5 days or greater in the past year
    • 70. Blood pressure 130/85 or greater
    • 71. Cholesterol 220 or greater
    • 72. Greater than 20% over ideal body weight
    • 73. Report high stress on the health risk appraisal
  • There is a direct relationship between the number of risk factors an individual has and their propensity to be a low, medium or high spender of the health care system.
    0 – 1 risk factors = low risk
    2 – 4 risk factors = medium risk
    5 or more risk factors = high-risk
    Source: University of Michigan Health Management Research Center
  • 74.
  • 75. Excess Self-Reported Major Diseases Associated with Excess Risks
    Percent with Disease
    High
    Med Risk
    Low Risk
    Age Range
    Musich, McDonald, Hirschland, Edington. Disease Management & Health Outcomes 10(4):251-258, 2002.
  • 76. Medical/Drug Cost Comparison by Risk Status
    Yen, Witting, Edington. AJHP. 6:46-54, 1991
  • 77. Costs Associated with Risks
    Medical Paid Amount x Age x Risk
    AnnualMedicalCosts
    High
    Med Risk
    Non-Participant
    Low
    AgeRange
    Edington. AJHP. 15(5):341-349, 2001
  • 78. Spill Over Medical Costs
    Work Comp
    LTD & STD
    Absenteeism
    Presenteeism
    Productivity
  • 79. Relative Value of Health to the Organization: Total Value of Health
    Medical & Pharmacy
    Worker’s Compensation
    Presenteeism
    Absenteeism
    STD
    LTD
    Time-Away-from-Work
    Edington, Burton. A Practical Approach to Occupational and Environmental Medicine (McCunney). 140-152. 2003
  • 80. Health and Presenteeism
    The Institute for Health and Productivity Management coined the term “presenteeism”.
    The time when employees continue to work despite the presence of illness that reduces their productivity.
    Good health optimizes employee functionality; in other words, individuals who feel better also work better.
  • 81. Total Disability Cost by Risk Status
    Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002
  • 82. Estimated Loss of Productivity by Risk Status
    Burton, Chen, Conti, Schultz, Pransky, Edington. JOEM. 47(8):769-777. 2005
    *p<.05, **p<.01
  • 83. Excess Medical Costs due to Excess Risks
    $5,520
    $3,460
    $3,039
    $2,199
    Edington, AJHP. 15(5):341-349, 2001
  • 84. Excess Disability Costs due to Excess Risks
    $1,248
    $783
    $666
    $491
    36% of Absence, STD, Worker’s Comp
    Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002
  • 85. Excess On-The-Job Loss Due to Excess Risks
  • 86. Association of Risk Levels with Corporate Cost Measures
    Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002
  • 87. 2007 Duke University Medical Center Study Findings
    Study includes 11,728 employees from 1997 to 2004
    Obese employees:
    Filed twice as many WC claims as non-obese.
    Had 7 times higher medical costs from those claims.
    Lost 13 times more days from work injury or work illness.
  • 88. 1200%
    1194%
    1000%
    755%
    729%
    800%
    600%
    430%
    347%
    400%
    236%
    191%
    155%
    118%
    200%
    100%
    100%
    100%
    0%
    18.5
    -
    24.9 BMI
    30
    -
    34.9 BMI
    35
    -
    39.99 BMI
    ?40 BMI
    (Recommended)
    (Obesity class I)
    (Obesity class II)
    (Obesity class III)
    Medical Claim Cost
    Workers Comp Cost
    Productivity/Lost Time
    Business Impact of Today’s Poor Health
    72
    Source: The McKinsey Quarterly, Dec 2008
    Arch. Of Internal Medicine, April 2007
  • 89. Other Areas Impacted by Poor Health
    Insurance premiums
    Retained losses
    Stop loss deductible payments
    Self-insured claims
    Internal administrative expenses
    Risk, safety & claims staffing
    HR workload
  • 90. Direct and Indirect Burden of Illness Study
    Institute of Health and Productivity, Cornell University
    Using The Medstat Group’s database
    The study included 374,799 employees from 1997 to 1999
    Reported on the financial consequences of the top 10 most costly and prevalent conditions
  • 91. Direct and indirect burden of illness, by condition and service area (using $23.15/hour wage estimate).JOEM, Volume 46, Number 4, April 2004
  • 92. Cost of Excess Risk
  • 93. Excess Risk Impact on Profits
  • 94. 10% Improvement
  • 95. 20% Improvement
  • 96. “The problem is that no entity in the current U.S. health care system makes any money until people get sick.”
    • Dee W. Edington, PhD
    Health Management Research Center, University of Michigan
    HR Magazine, June 2009
  • 97. Thank you.
    Steve HeussnerPresident & CEO214-420-7101steve@acbg.net
    www.acbg.net