BY WILLIAM P. MOLMEN, GENERAL COUNSEL, INTEGRATED BENEFITS INSTITUTE
At least one major goal for employers in establishing consumer-driven health care for their employees is to help reduce medical cost trends over the long term. Benchmarking and measuring these savings are key components of your health benefits planning and implementation.
A recent surveyi of 42 large companies offering consumer-directed high deductible health plans (CDHP) finds that 59 percent of executive human resources respondents cited cost control as their principal goal-the highest rated goal by far. The study also noted, however, that -Üemployees accustomed to fixed co-pays and modest out-of-pocket expenses were often confused and apprehensive about the new plans with high deductibles...and they were wary of taking on more financial risk."
Employers´ Full-impact Measurement Opportunity
Take, for example, drug co-pays. Recent researchii by the Integrated Benefits Institute (IBI) shows that increasing employee drug co-pays reduces possession of needed medications. Unfortunately, IBI found that employees without those drugs suffer more disability and lost productivity. This added loss occurs because employee health management largely looks at costs and savings results only within the health benefits silo. Instead, such indicators should include both the medical costs
and savings as well as the offsetting -Üfull impact" increases in lost productivity from absence, disability and presenteeism (lost time at work from health-related conditions). Fortunately, effective measurement tools are available today that allow employers to assess changes in healthrelated disability/absence and in productivity from interventions. These tools help employers develop an accurate needs assessment, build a business case for appropriate initiatives and monitor the full range of results from those interventions.
A Variety of Measurement Options
A range of tools is necessary to meet employers´ various needs, resources -including available data availability, and budgets. At a minimum, employers must assess baseline costs in order to determine the cost of making no changes, and then monitor the broader costs and other effects of such interventions as high-deductible health plans, prevention, wellness, and disease and disability management. Fortunately, several types of measurement tools are available to look past medical costs and savings to the absence, presenteeism and lost productivity that may more than offset any medical savings as unintended consequences of health interventions. Here´s how these various tools can work for your company.
Modeling health and productivity
The best way to determine what ill health among your employees may cost your company today, even without having data about your work force, is to base estimates upon what other employers have found. Simply put, you can put ballpark parameters around the full impact of the costs of employees´ ill health for your company by reviewing the literature for conditions that you believe affect your company and your work force. To help employers estimate costs with this strategy, IBI and the American College on Occupational and Environmental Medicine developed a one day training program designed to acquaint employers with research on the full impact of ill health, show them how to adapt that research to their own workforce and help them model results for their own company.
This simple, but effective method surprises many employers when they learn the magnitude of what is at risk, both now and in the future, as their work force ages and its health deteriorates. The technique is something employers can use independently, as well. Fortunately, effective measurement tools are available today that allow employers to build a business case for appropriate initiatives and to monitor the full range of results from those interventions. As a next step an employer may ask, -ÜWhat´s the experience for companies like ours?" Modeling tools can develop typical results for your company by adjusting multi-employer databases and extrapolating the data to your company´s own demographics. (Multi-employer databases have been developed by academics doing broader research.) Such an approach:
s Requires minimal demographic and business indicators;
s Can estimate lost productivity as well as the impact of medical conditions on work force lost time; and
s Is inexpensive.
A health and productivity modeling tool that creates a ballpark baseline and presents validated data in a straightforward manner-but without the academic detail-can help you to make the financial, clinical and cultural business case for investing in health care wisely.
IBI´s Health & Productivity Snapshot develops modeled results for individual companies from a large database developed by Dr. Ron Kessler of Harvard Medical School. The modeling adjusts for the age, gender and occupation of your work force to show typical treated and untreated medical conditions likely to affect the work force, resulting absence and presenteeism, and the lost productivity impact in terms of your company´s net income and wages and benefits.
Employee self reports
Medical claims databases offer little information about the full impact of employee health on your work force. For your own company, employee self-report surveys may be the best source of absence and presenteeism insights. A number of employee self-report tools have arisen in recent years that ask employees about the medical conditions that affect them and their resulting absence and presenteeism from those conditions. These tools have been validated against objective measures in call centers, and the results have been published in peer-reviewed journals. Properly crafted, such tools can:
s Report workers´ medical conditions and related absence, presenteeism and lost productivity;
s Be short and focused to attract employee participation; and/or
s Show clear relevance to employers and employees.
Employee self-report tools often are developed in academia, however, and can be long, cumbersome and overly broad. To create a more useable tool for employers, IBI is working with Kessler and the Midwest Business Group on Health to deliver a tool called the HPQSelect that meets all the above criteria in a short, focused application.
The new tool will present the same types of information presented by the Health & Productivity Snapshot, but focused on your own company and work force. In addition, it will identify the effects of multiple, interdependent medical conditions and will help prioritize the conditions for you to focus on based upon the prevalence of the medical conditions affecting your work force, the extent to which those conditions are untreated, and the amount of absence and presenteeism they drive for your employees.
Absence/disability benchmarking
Your company may have disability data but need industry comparisons of cost, durations and performance drivers to identify opportunities to better-manage your programs. An effective benchmarking program must:
s Have a robust comparative database for multiple industries;
s Base results on national, standardized data; and
s Be inexpensive.
Experience teaches that relatively few employers are able or willing to submit aggregate benchmarking data, so industry comparison groups, based on submitted aggregate data, are likely to be too small to promote robust comparisons. IBI solved this problem by gathering comparative data-more than 29,500 employer program units this year, comprising more than 3.1 million claims-from a member consortium of disability insurers and third-party administrators. This robust, standardized database allows comparisons to broad industry performance for workers´ compensation, short- and longterm disability, and family and medical leave programs. IBI´s benchmarking reports also model your company´s absence-related lost productivity and its bottom-line impact in the context of your own financial results.
Health Management Requires Effective Measurement
As the principle payor for the U.S. health care system, employers should insist that the health-related benefits and services they furnish serve both the health and productivity needs of their work force and their own bottom-line goals. The key to knowing how to achieve those goals is access to the measurement tools necessary to look across programs and assess the full impact of existing and proposed health-related interventions.
As employers seek ways to promote health and minimize waste without burdening employees, focused baseline, design and performance data must play a role in driving informed decisions to create a win both for employers and employees.
William P. Molmen is cofounder of the Integrated Benefits Institute, a national, nonprofit organization created in 1995. IBI provides measurement tools and databases across benefits programs, research and analysis, and a discussion and education forum. For more information about effective measurement solutions, visit www.benefitsintelligence.org and www.ibiweb.org, or contact Molmen at wmolmen [at]ibiweb.org or 415-222-7283.
Roland D. McDevitt, Ryan Lore, Melinda Beeuwkes Buntin, Cheryl Damberg and Hayoung Park.
i. Research Brief: The CDHP Implementation Experience with Large
ii. Employers, Watson Wyatt Worldwide and The RAND Corporation. July 2007.A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, May 2007.