HEALTH AND PRODUCTIVITY MANAGEMENT

HEALTH AND PRODUCTIVITY MANAGEMENT H P M THINK GLOBALLY! BY: BRIAN D. HARRISON, MD DATE:9/28/04

The PerfectSTORM?????

Or the Perfect Opportunity???

COST OF CARE = COST OF PREMIUM • Insurers don’t originate the money, they just pass on the bills. • Insurers are a conduit for cash, not a source. • Those who pay the premiums are the source of the money. • Every insured person pays for every other person (including those needing medical miracles).

WHY ECONOMIC SOLUTIONS FAIL TO SOLVE THE PROBLEM: It’s not an economic problem It’s a HEALTH problem!

2003 HEALTH COSTS Specialty Pharmaceuticals ______________________________ 30 Billion ____________ 30% Annual Growth Pharmacy Services _______________________________ 200 Billion __________ 12% Annual Growth Chronic Disease Treatment __________________________________ 700 Billion ___________ 10% Annual Growth Total Health Spending ____________________________________ 1.7 Trillion ___________ 7% Annual Growth

(CHANGING DEMAND-cont.) HOW MUCH CORONARY DISEASE CAN BE PREVENTED WITH 2 BILLION DOLLARS PER YEAR?

YOU GET WHAT YOU PAY FOR THERE ARE 8,000 SEPARATE BILLING CODES FOR CARE, NONE FOR PREVENTING A DISEASE

Health Insurance is a ________? • Benefit – a gift you buy to make someone happy; you shop for the best value • Commodity – something you buy from the lowest bidder; you buy as little as you must have • Investment – considered purchase based on ROI, including risk and return; if it’s good, you want a lot

Improve Health Status Employer/ Purchaser Employee/ Patient Optimize Productivity/ Job Performance Reduce Unnecessary Lost Work Time Provider Improve Organizational Health Health Plan/ Delivery System Productivity Model • Final OutcomeIntermediate OutcomeAccountability

Productivity Model - Three Parts Disease Management Health Management Demand Management

Relationship Between Cost and Wellness Score Annual Medical Costs Wellness Score Figure 10

Change in Cost Associated with Change in Risk Risks Increased Risks Reduced

HOW TO “THINK GLOBALLY” • Learn lessons from research and mega trends. • Do “Global Accounting”of profits and losses associated with human capital.

GLOBAL ACCOUNTINGrequiresAN INTEGRATED DATABASE • Medical and Pharmaceutical claims • Health Risk Appraisal scores • Absence data • Short & Long-Term Disability (STD/LTD) • Worker Comp • Turnover • Direct production data or performance eval

BECAUSE YOU CAN’T MANAGE WHAT YOU CAN’T MEASURE

Measure the prevalence of diseases and risk factors (HEALTH INDICATORS) Correlate with cost of losses from absence, STD/LTD, Worker Comp, turnover, presenteeism (PRODUCTIVITY INDICATORS) Health and ProductivityMeasurement….

Intervene to improve a Health Indicator Measure (or at least calculate) the effect on a Productivity Indicator . . . . enables Health and Productivity MANAGEMENT

THIS SETS THE STAGE FOR A VALUE-BASED HEALTH CARE MODEL • Employer needs it for productivity, profit, and competitiveness reasons. • Employee needs it for cost, comfort, maintenance of health reasons.

CREATING WISE CONSUMERS • People need information about self care/self treatment. • People need information about quality of health care providers and institutions.

WHY EMPLOYEES CARE NOW MORE THAN EVER • Threat of unemployment • Quality of life reasons • Out of pocket costs

HEALTH AND PRODUCTIVITY MANAGEMENT