Today, FusionSouth adapted an article from the Mayo Clinic Health Solutions Panel on large population health management, published in 2008, and taken from the NASA website. It has been edited for length and content, although the article can be seen here in its entirety. All the applicable links, footnotes, and sources are listed on the original document, as well.

Enjoy this shocking and eye-opening article, and take note of how costly – in both dollars and time – poor health can be for companies both large and small. The statistics that follow are absolutely shocking in some cases. Be Well!
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In 2005, health care expenditures in the United States reached nearly $2 trillion, with U.S. employers shouldering the majority of this burden. In 2007, health care costs for U.S. employers increased another 7 percent, despite vigorous attempts to control health care spending. In dollar terms, that translates into an average hike of $575 per employee, for an average total cost of $8,796 per employee. It’s no secret that these mounting costs are eroding profit margins, and in some cases, threatening the survival of U.S. companies.

Over the years, employers have relied on benefit plan design, coverage limitations and cost-shifting to help control health care costs, but these approaches have shown limited results. Making matters worse, researchers have identified another, even more significant business cost of unhealthy employees — the cost of lost productivity from absent workers (absenteeism) and present workers who can’t perform because of health-related impairments (presenteeism).

In fact, presenteeism now costs employers two to three times more than direct medical care, such as insurance premiums and pharmacy costs. But there is good news: researchers have also identified a direct link between all of these health care costs and individual health risk.

This gives employers a compelling business imperative to control health care costs through individual risk reduction and behavior change programs. This means helping every person in your population maintain healthy behaviors, modify high-risk behaviors and control chronic conditions. A comprehensive population health management program that addresses these issues is an investment in a present, productive work force, which confers a strategic business advantage.
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The Business Case For Population Health Management
To gauge the business case for population health management, it’s critical to fully identify and enumerate all of the health-related costs associated with unhealthy employees. These include:

• Direct costs, such as outpatient care, pharmacy charges, inpatient care and emergency room visits.
• Indirect costs, including short-term disability, workers’ compensation, turnover, absenteeism and presenteeism.

For most employers, direct health care costs are well documented and well understood. However, many organizations currently don’t pay enough attention to the hidden costs of avoidable sickdays and presenteeism — the cost of employees who are on the job but not fully functioning because of real illnesses and medical conditions, including asthma, seasonal allergies, arthritis, migraines, depression, back pain, gastrointestinal disorders and diabetes.

For employers, these common conditions represent fewer direct costs than high-expense diseases, such as cancer and heart disease, but they represent higher indirect costs, because they are so prevalent.

• Depression costs U.S. employers more than $35 billion a year in reduced performance at work.
• On-the-job pain (including back pain, headaches and arthritis) costs employers nearly $47 billion a year in productivity loss.
• In one study, chronic conditions alone were estimated to cost The Dow Chemical Company more than $100 million annually in lost productivity for its U.S. work force — the equivalent of 6.8 percent of total lab costs for the company in 2002.
• One research team calculated the total cost of presenteeism in the United States to be greater than $150 billion per year. For employers, the hidden costs of presenteeism present a frightening and motivating prospect. These costs also represent a substantial argument for a consumer-driven approach to health care that engages employees in better managing these lifestyle risks and common chronic conditions.

A growing body of research shows that common, modifiable health risks (such as tobacco use, obesity, poor nutrition, stress and lack of exercise) significantly impact direct and indirect health costs to employers, including medical claims, pharmaceutical expenditures, time away from work, workers’ compensation costs and productivity at work:

• Obesity-related medical claims account for 2.8 percent of all medical costs for adults ages 19 to 64 years old.
• Among overweight and obese adults, each one-unit increase in body mass index (BMI) yields an additional $119.70 in medical costs and $82.60 in drug costs.
• Medical care charges for employees with no days of physical activity are approximately 4.7 percent higher than are charges for those who were active one day a week.
• Medical charges for smokers are 18.1 percent higher than are charges for nonsmokers. Plus, smokers cost their employers $4,430/year in lost productivity costs, due to missed days and hours of work, compared with $2,623/year for non-smokers.

Additionally, there is a direct relationship between the number of individual health risks and health costs. More health risks simply mean more health costs:

• High-risk employees (5+ health risks), on average, incur an extra $3,321 in annual medical costs above baseline. High-risk employees are also 12.2 percent less productive than are low-risk employees (0-2 health risks).
• Each additional risk factor is associated with an average annual increase in pharmacy claims costs of $76 per employee.

What Is A Risk Factor?
A risk factor is anything that increases a person’s chance of getting a particular disease, such as diabetes, heart disease or cancer. Having one or more risk factors for a certain condition isn’t a guaranteed path to illness. But having a risk factor means that you’re more likely to develop that disease at some point in your life. And the more risk factors you have, the greater your risk.

Some risk factors, such as age, sex, genetics and family history, can’t be changed. However, there are many known risk factors that can be controlled, including tobacco use, alcohol use, poor diet, obesity, lack of exercise and sun exposure. By addressing these modifiable lifestyle risk factors, serious costly diseases such as cancer and diabetes can be prevented.
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Improved health can happen at home or the local gym. But the workplace is an ideal place for health promotion programs for a variety of reasons:

• Employees spend more than half of their waking hours at work. This makes employees a captive audience for health promotion messages. Plus, employees may be more likely to attend a health screening or educational Lunch and Learn session if they don’t have to spend more time away from home to do it.
• Incentives to encourage program participation work extremely well in the workplace. Mayo Clinic Health Solutions’ experience shows that a relatively small incentive, such as a $100 gift card or $240 health premium reduction, can drive high participation in health promotion programs (75 percent and 87 percent respectively), such as a health risk assessment.
• Existing company systems can help facilitate health programs. Information, communication and program analysis can usually be accomplished within the existing systems and organizational structure of the work site.
• Company culture and camaraderie can help drive program success. Group initiatives, such as a populationwide walking campaign or a health risk assessment drive, can be very effective in the workplace, because friendly competition between departments or cooperation among colleagues can help drive engagement and participation.
• Health promotion programs support a consumer-driven approach to health care. Health promotion programs reinforce a consumerism health care strategy, by encouraging (and sometimes rewarding) employees for taking charge of their health. They are a natural fit with health savings accounts and other consumer-driven health plans.

A Healthy Bottom Line Depends On Healthy People
Most employers view their employees as one of their greatest business assets. Realizing this, health promotion programs must be viewed as an economic business investment, no different from investing in new technology or new supplies. Arguably, health promotion programs are actually an investment in your company’s productivity and creativity and resourcefulness and ingenuity. What is a better investment than that?