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

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    5. 5. 5Confidential, unpublished property of CIGNA.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