By: Paul Cantwell – President of HealthCorp Solutions
There is a significant disconnection between how companies view the risk of providing a good health benefit program to their employees and how companies view other corporate risks like Property, Casualty, Liability and Workers Compensation.
Companies use many different forms of risk control and loss mitigation practices to minimize Property and Casualty, Liability and Workers Compensation risks. On the other hand the typical benefits management team does not understand or practice true loss control when it comes to the risk of unhealthy plan members, resulting in increased health plan costs. The typical practice is to minimize the cost after the loss has occurred with methods like provider network discounts, large case management or pay dearly and transfer all the risk to an insurance company.
40% or more of health costs are associated with modifiable health risks, according to the Kaiser Family Foundation. 50% of all prescription drugs can be attributed to life style choices. 115 hours of productivity per year per employee is lost due to health conditions according to the Journal of Occupational and Environmental Medicine.
Morale is markedly improved when employees are healthier and less stressed. Employers must consider the total value of health to the organization and not the narrow view of simply health care (or sick care) cost.
The total value of health includes such things as: the cost of sickness (health claims), the cost of daily absence and temporary worker replacement, the cost of Presenteeism and decline in productivity, the cost of disability or extended absence, the cost of worker’s compensation claims and funding, the cost of recruitment and retention, and the cost of loss of business efficiencies and the ability to compete. All these costs combined are several times more expensive than the cost of the health benefits alone according to Ron Z. Goetzel, research professor and director of the Emory University Institute for Health and Productivity Studies cited in the Journal of Occupational and Environmental Medicine.
rnIt is in the employer’s best interest to help everyone, not just the sick or injured. Some participants are healthy and need help to simply not get worse. The objective with the best Return on Investment (ROI) is keeping healthy employees who are currently low cost at the same low cost level.
Among other things, employers can look deeper into the risk pool of their own population by improving the analysis of their own data to determine their cost drivers then develop customized strategies to minimize those cost drivers. To combat health risks and cultivate better health, effective programs include individual stratification of risk. Individual stratification of risk means combining the impact of multiple health risks on a single individual for a more accurate picture of overall health.
Effective programs to address health risks include promoting resources to engage participants, increase knowledge and improve care. Employers must also improve employee education and communication, introduce and/or expand consumerism, develop disease management and wellness programs to manage their risk.
Biometric screenings can help plan members acknowledge and identify their health risks. Health coaching sessions can help plan members deal with their health risks and answer subsequent member questions. Health advocates can be utilized to help plan members acquire care in the best path to success.
Employers can then strongly incent employees and participants to improve their health, reward those participants willing to work toward developing healthy lifestyles. The next step is establishing consequences for those that do not try to develop healthier lifestyles. It is important to include measurement at regular intervals to continually identify health status changes and to reward improvements.
The point is to start small and build – this has taken years and will take time to reverse the trend. The cost of doing nothing is tremendous! These concepts are basic to all businesses: Changes in costs follow changes in Risks. Changes in risks follow improvements to analysis, management and engagement practices.
Will we continue to be able to compete in the Local and Global Economy? More and more employers are interested in the issue of health as a strategic advantage to increasing productivity. There is a need for an integrated and sustainable approach to the problem.
This issue is way beyond the annual health care rate shopping exercise. The fatal disconnection and ignoring true loss control is the problem. Health and Productivity Management is the answer.
About Paul CantwellrnPaul Cantwell has led HealthCorp Solutions since its inception. As President and Chief Risk Officer, he leads a crop of highly trained Risk Consultants in creating low-risk, high yield customized solutions for clients resulting in significant profit impact and savings, not only in cost, but in time and effort. For more information look for the HealthCorp Solutions Results Statement and HealthCorp Solutions Advisor Comparison links at
http://www.healthcorpsolutions.com/pages/sitemap.htmlrnOr to request a copy, go to
http://www.healthcorpsolutions.com/pages/contact%20page.html rnMake sure to include the words RESULTS STATEMENT or ADVISOR COMPARISON.
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