New Gallup Poll: The Cost of Absenteeism Adds Up

Absenteeism costs employers $24.2 billion in lost productivity, according to a Gallup poll released on May 7. The polling organization counted unhealthy days by asking survey takers about how often poor health kept them from doing usual activities and going to work. Of the 14 types of occupations Gallup surveyed, 77 percent of workers were either above normal weight or had been diagnosed with at least one chronic condition. Transportation workers were the most likely to be overweight or have a chronic condition, while physicians were the least likely.

Gallup calculated unhealthy days using respondents' answers to the question, "During the past 30 days, for about how many days did poor health keep you from doing your usual activities?" and "How many actual work days in the last month did you not work due to poor health?" As employers increasingly engage in improving the health of their workers, substantial potential savings remain on the table from getting more employees to work each day as their health improves over time.

Early bird rate ends Friday for IBI/NBCH Forum

The early bird rate for the 2013 IBI/NBCH Health and Productivity Forum ends this Friday, January 25.

This year's conference will be in Dallas, February 25-27. Additional details can be found here.

Population Health, Value-Based Care Drive Health Information Exchanges

The pursuit of population health and value-based care "may be reviving the business case for organizations to join health information exchanges," according to a HealthLeaders magazine article. Now more than ever, providers need accurate and complete patient data to effectively manage chronic care populations and earn incentives or shared savings; they need their own data as well as that of their affiliates and competitors. Bringing down costs in the health care system as a whole depends on sharing data. Nevertheless, although preliminary results suggest HIEs can help health care organizations save money, some are still reluctant to participate.

An HIE is an organized regional network that enables hospitals, physicians, and other care providers to upload and access patient health information. HIEs connect data for organizations—from affiliates to competitors—to share clinical data that can improve a patient's overall care. The HIE is generally connected through a provider portal, giving easy access to clinical applications that allow caregivers to see all of the patient's clinical information in real time while restricting access to any claims data or other financial information. Early data indicates the HIE can reduce costs for participants. But one of the main barriers to participation may be issues associated with costs; and not just the actual dollar amounts required to make the investment, but who makes the investment and who controls the flow of capital. Whether to participate in HIE is a strategic conversation, but all the participants have to be willing put aside their individual issues and agenda and to work toward a solution that's best for the patient.

Although the American Recovery and Reinvestment Act (ARRA) allotted grants to encourage the establishment of HIEs, participating in an HIE still doesn't come free. Participants must have an EHR in place, and most HIEs ask participants to pay a fee to connect; that price can vary depending on an organization's size and the degree and complexity of the connectivity needed. Employers have a unique role to play as purchasers in the encouragement of HIE establishment because employers all need employees whose health conditions are well-managed. HIE establishment presents a unique opportunity for employers to partner with and work directly with providers.

Study: When Health Insurance Costs Rise, Productivity Drops

As health insurance premiums steadily increase, employers have increasingly shifted costs onto workers. Employees’ shares of monthly premiums have gone up, as has cost-sharing for various services.

The whole idea is to save money, and reduce the employer’s health spending burden. It might, however, comes with a hidden cost: A new paper (fee required for download) from Truven Healthcare’s Teresa Gibson, Harvard’s Michael Chernew and the University of Michigan’s A. Mark Fendrick find that as co-payments go up, productivity drops — most likely as a result of employees skipping out on care altogether.

The team focused on those with chronic pain such as arthritis. They then looked at how much employees had to pay for prescription medication under their various benefit structures. Previous research has shown that as the cost of health-care services increases, usage decreases — workers simply don’t fill as many prescriptions when prices get higher.

On average, employees with chronic pain had 76.7 hours absent from work. But with every $5 increase in cost-sharing for pain medications, they saw an increase in absenteeism somewhere in the ballpark of 1.3 to 3.1 percent.

That may seem small, but as the researchers explain, the consequences could be quite large, enough to offset any savings the higher co-payments generate for that employee:

"If we assume that a $5 increase in cost-sharing (20%) is associated with a 1 hour increase in absence (~1.3%) this would be valued at $42/hour fully loaded with fringe benefits (workers in private industry, large establishments) (BLS 2012). Alternatively, the average hourly earnings for Americans overall is about $31 loaded. The $31-$42/hr in absence-related costs would offset any employer savings associated with raising copayments."

Keep in mind, these are the costs for one individual and not a full analysis of the pros and cons of increased cost-sharing. A company may be generating savings with the higher co-pays among other, healthier beneficiaries. It does, however, suggest that raising cost-sharing in health insurance is not necessarily just about saving — it’s also about spending.

Poor health costs employers $576 billion

Publications including The Washington Post, Forbes and Business Insurance recently reported on the estimate calculated by the Integrated Benefits Institute finding that poor health and its impact on productivity costs the U.S. economy $576 billion per year.

In addition to showing the entire financial burden of poor health, IBI researchers found that 39 percent—or $227 billion—is due to lost productivity associated with poor health. Lost productivity results when employees are absent due to illness or when they are underperforming due to poor health (“presenteeism”—when employees are at work but not performing at their peak).

“There’s a reason that everyone in the U.S. is worried about the economy and health care,” said Thomas Parry, PhD, IBI president. “These are two fundamental issues that are tightly coupled through health’s impact on productivity, and shape our standards of living. Since this election is weighing heavily on how the candidates tackle these issues, it’s important that we recognize how they are connected. Illness costs this country hundreds of billions of dollars, and this should serve as a wake-up call for both candidates and employers to invest in the health of workers, for the sake of the people and the benefit of U.S. business."

The estimate for total U.S. health costs is calculated using the IBI Full Cost Estimator (FCE), a proprietary tool that calculates the full costs of health and productivity based on five large databases. The tool can be used to show the full health and productivity costs for a specific industry, or even an individual company. In this case, the FCE was used to calculate the costs to the entire U.S. economy.

HDMS Releases Worker Productivity Reporting Module that Quantifies the Cost of Absenteeism and Presenteeism on a Business’ Bottom Line

HDMS announces the release of its Worker Productivity Reporting Module, a new health data solution that allows companies to analyze the indirect costs that employees’ medical care has on overall productivity. Research indicates that each sick day results in varying degrees of lost workforce productivity, which has a substantial effect on both an employer’s efficiency and the bottom line. HDMS is working with its health plan partners to leverage industry-standard productivity metrics to demonstrate the true value that increased prevention and wellness programs can have on a given population of health plan members.

By using medical data to analyze worker productivity, HDMS' worker productivity reporting solution demonstrates what the tangible results of a healthier population are to a business’ bottom line. Better education, a focus on wellness, and improved medical management results in fewer sick days or time that employees spend recovering from an illness while at work – both of which result in lost productivity. The new module looks at worker absenteeism and presenteeism as well as chronic care management.

Employers Debate Use and Efficacy of Wellness Incentives

When it comes to wellness, employers are moving toward cash incentives as a way to motivate employees, but it's still unclear whether positive or negative reinforcement works best -- and whether such efforts are seen by workers as encouragement or intimidation. A Human Resource Executive article examines the questions employers face when offering wellness incentives, including:

• How much financial incentive is enough?
• Is negative reinforcement OK?
• Who should be targeted: the well, the at-risk or the sick?
• Do financial incentives distract from what some experts say is the ultimate incentive, the employee's intrinsic desire for health?

The article mentions the Health & Productivity conference held this past February in San Francisco, and co-hosted by NBCH and the Integrated Benefits Institute.

HC21 featured in IBI's Pub: Workforce Health and Productivity: How Employers Measure, Benchmark and Use Productivity Outcomes

Interest in health and productivity evolved from a pilot program that HC21 was offering to its members. Called the Chronic Care Network, it is dedicated to the management of major chronic diseases and risk factors that have a high impact on productivity. The HC21 Data Cooperative provided the data integration and analysis required to launch its health and productivity initiative, which allows employer members of all sizes to extend their analytical capabilities. It’s an important step in understanding the connection between employee health and performance. Read more...

'A healthy work force is a more productive work force'

With help from her employer, Deerfield resident Leah Molay has gone from walking a mile and a half a day to walking about 10 and has lowered her blood pressure and cholesterol and dropped 105 pounds.

She’s among 13,000 — nearly 40 percent — of Allstate employees who signed up for a new walking-focused, technology-driven wellness program that includes competitions with awards.

Free karate and yoga classes; biggest-loser weight reduction contests with prizes, and incentives to encourage employees to go to the doctor are among creative initiatives that have emerged in wellness programs at small and large employers. These programs are expanding and increasingly making use of technology. Read the full article...

Worksite wellness proves to be a cost-effective recruitment, retention tool

The key to great perks is to make them exciting and keep them on-brand. Below, you’ll find how six brands — from small startups to larger companies — reward their employees and maintain happy and efficient workers. While they aren’t all tech or digital companies, they all excel in the digital and social media space, and other startups (and large corporations) could learn a thing or two from them. Read the full article...

Medication Adherence, Co-morbidities and Health Risk Impacts on Workforce Absence and Job

New partner research from IBI, ACOEM and Alere, and funded by the National Pharmaceutical Council, examines the impacts of medication adherence, co-morbidities and health risks on workforce absence and job performance (presenteeism).