Michael Klachefsky Health care reform and its connection to absencedisability management What is productivity How does productivity get lost Absence Presenteeism What can employers do about it ID: 932494
Download Presentation The PPT/PDF document "Connecting Health Risk, Absence & L..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Connecting Health Risk, Absence & Lost Productivity
Michael Klachefsky
Slide2Health care reform and its connection to absence/disability management
What is productivity?
How does productivity get lost?AbsencePresenteeismWhat can employers do about it?
Agenda
4/18/2012
2
Slide3Health Care Reform and Absence/Disability Management
Slide4As health care reform is implemented, employer sponsored health care is certain to change
Regardless of the strategy employers choose, there is no way to avoid the impact of workforce health on company costs
Employees with high health care costs drive increases in absenceHigh rates of absence result in high income replacement benefit costs, e.g.,
Disability plansSick leave
Salary continuanceFor some employers, the direct and indirect costs of absence may rival health care costsDropping employer-sponsored health care in 2014 and beyond doesn’t immunize a company from health care costs
Health Care Reform
Changing the role of employers
4/18/2012
4
Slide5Connecting Health Risk and Absence
Health risks impact absence and productivity
4/18/2012
Percentage of time lost
due to health problems
Source: Boles et al. (2004)
5
Slide6What is Productivity?
Slide7Rate at which goods and services are produced with targeted high or acceptable quality
Definition of Productivity
4/18/2012
7
Slide8How Does Productivity Get Lost?
8
4/18/2012
Slide99
1
2
Iceberg
of Full costs
from poor health
Productivity Costs
Absenteeism Short term Disability
Long term Disability
Presenteeism
Overtime
Turnover
Temporary Staffing
Administrative Costs
Replacement Training
Off-Site Travel for Care
Customer Dissatisfaction
Variable Product Quality
70%
(2,3):
Loeppke
, R., et al., "Health and Productivity as a Business Strategy: A Multi-Employer Study", JOEM.2009; 51(4):411-428. and Edington DW, Burton WN. Health and Productivity. In McCunney RJ, Editor. A Practical Approach to Occupational and Environmental Medicine.3rd edition. Philadelphia, PA. Lippincott, Williams and Wilkens; 2003: 40-152s
Personal Health Costs
Medical CarePharmaceutical costs
30%
70%
Productivity Costs
Short term disability Long term disabilityPresenteeismAbsenteeism Overtime Turnover Temporary staffing Working slow Late deliveries Replacement training Customer dissatisfaction Variable product quality
Iceberg of full costs from pooremployee health
Loeppke, R., et al., "Health and Productivity as a Business Strategy: A Multi-Employer Study", JOEM.2009; 51(4):411-428. 140-152
Slide10Annual Costs: Top 10 Health Conditions*
4/18/2012
*Health and Productivity as a business strategy: A multiemployer study, Journal of Occupational and Environmental Medicine, Volume 51, No.4, April 2009
10
Slide11Productivity Loss Through Absence/Disability
4/18/2012
11
Slide12The Direct Cost of Absence
4/18/2012
Source:
Kronos/Mercer survey report on
The Total Financial Impact of Employee Absences, 2010
11.7%
12.0%
12.4%
13.3%
13.2%
12
Slide13The Indirect Cost of Absence
4/18/2012
Source:
Kronos/Mercer survey report on
The Total Financial Impact of Employee Absences, 2010
25%
22%
17%
24%
27%
13
Slide14The Total Cost of Absence
4/18/2012
Source:
Kronos/Mercer survey report on
The Total Financial Impact of Employee Absences, 2010
38%
35%
29%
36%
39%
14
Slide15Higher Cost & Lower Productivity = Lost Profit
15
Kronos/Mercer Survey on The Total Financial Impact of Employee Absences, 2010
Jane at work
Regular production
c
ost
Value
of goods produced
Production cost 15% higher
Production cost 44% higher
Gross profit
$100
$200
50%
Jane absent:
Extended disability absence:
This is where Workplace Possibilities has most effect
$115
$158
27%
21% production loss
$144
9%
29% production loss
$115
$142
19%
$144
-1.4%
Jane absent:
Unplanned incidental absence
Slide16Productivity Loss Through Presenteeism
4/18/2012
16
Slide17What is Presenteeism
?
Definition: Decreased on-the-job performance due to the presence of health problems
Measures:The decrease in productivity for the much larger group of employees whose health problems have not necessarily led to absenteeism
The decrease in productivity for the disabled group before and after the absence period*
Research is less advanced than research on absenteeism & health management
*Schultz, A. B.,
Edington
, D. W., (2007)
Presenteeism
A Systematic Review, Journal of Occupational Rehabilitation, 17:547-579
4/18/2012
17
Slide18Big Picture C
ost
EstimatesCosts American businesses $150 billion in decreased productivity* On the job losses from presenteeism are 60% of the total cost of worker
illnesses**
……..exceeds what companies are spending on medical, disability, and absenteeismAmerican businesses lose 1,228 days/100 full-time equivalents to presenteeism for employees with two to five chronic health conditions***
Survey of 29,000 workers: p
resenteeism
accounted for 1.32 hours/week (66%) of lost time……absenteeism accounted for the
rest
****
*Zengerle, J. (2004, December 12) Presenteeism, The New York Times
**(2004, April 20) Economists Coin New Word, ”Presenteeism” to Describe Worker Slowdowns That Account for Up to 60% of Employer Health Costs,
Cornell University Press
***Parry, T. (2008, August), Diseases vs. Populations, The Impact of Chronic Conditions,
IBI Research Insights
****Stewart,
W.F.,et
al, (2003), Lost productive work time costs from health conditions in the United States: Results from the American Productivity audit,
Journal of Occupational and Environmental Medicine, 45, 1234-1246
4/18/2012
18
Slide19Cost of Presenteeism
– Health RisksFor employees with at least one health risk (high biometric, smoking and alcohol, emotional health):0.73 to1.65 lost days/employee/year*
For employees with two or more chronic conditions:
12 to 14 lost work days/employee/year** For employees with single condition clusters (socio-emotional, metabolic, arthritis, headache, digestive, heart, pulmonary, cancer):0.6 to 9.6 lost days/employee/year, depending on
cluster***
*
Goetzel
, R., et al, (2009) The Relationship Between Modifiable Health Risk Factors and Medical Expenditures, Absenteeism, Short Term Disability, and Presenteeism Among Employees at Novartis,
Journal of Occupational and Environmental Medicine, p. 495
**Parry, T., (2008) Diseases vs. Population – The Impact of Chronic Conditions, IBI Research Insights***2009, The Impact of Chronic Conditions and Co-Morbidity on Lost Work Time,
IBI Quick Study
4/18/2012
19
Slide20The Cost of
P
resenteeism – Behavioral Health Conditions
Socio-emotional (depression, anxiety, fatigue, sleeping problems, etc.):9.6 lost
days/employee/year*For employees with treated or untreated depression:7.5 lost days/employee/year
63% of total lost productivity from depression is from
presenteeism
**
For employees with mental illness:
$247.11/employee/year***
*(2009) The Impact of Chronic Conditions and Co-Morbidity on Lost Work time,
IBI Quick Study
**Gifford, B., et al (2009), Full Costs of Depression in the Workforce,
Research by the Integrated Benefits Institute (IBI), p.15
***
Goetzel
, et al, (2006) Estimating Money at Risk,
American College of Occupational and Environmental Medicine, Health and Productivity Tool Kit, p. 35
4/18/2012
20
Slide21What Can Brokers, Consultants and their Clients Do?
Slide22Advise your clients that focusing on only health care/pharmacy only addresses part of the problem.
Help clients understand that merely obtaining disability policies, does not automatically solve workplace problems
Advise your clients that issues of absence and presenteeism require a pro-active disability management providerAbsence and presenteeism are best addressed through:
RTWStay at work
Integration with health management programsWhat Should Brokers & Consultants Do?
22
Slide23Partner with Carriers Who Offer:
On-site assistance
Education to employees on health to ensure proper diagnoses and treatment:Wellness programs
Disease managementImproved
pharmacy programs:Decrease employee cost for drugsResearch demonstrates significant improvements in productivity with appropriate drug treatments
*
Target both high risk and low-medium risk workers for health management
programs
Disability management programs that feature RTW, absence/disability prevention, integration with health management
*Schultz, A. B.,
Eddington, D. W., (2007), Employee Health and Presenteeism; A Systematic Review,
Journal of Occupational Rehabilitation, 17: 547-579
4/18/2012
23