health and productivity management
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HEALTH AND PRODUCTIVITY MANAGEMENT. H P M THINK GLOBALLY! BY: BRIAN D. HARRISON, MD DATE:9/28/04. The Perfect STORM ?????. Or the Perfect Opportunity???. COST OF CARE = COST OF PREMIUM. Insurers don’t originate the money, they just pass on the bills. - PowerPoint PPT PresentationTRANSCRIPT
HEALTH AND HEALTH AND PRODUCTIVITY PRODUCTIVITY MANAGEMENTMANAGEMENT
H P MH P MTHINK GLOBALLY!
BY: BRIAN D. HARRISON, MDDATE:9/28/04
The PerfectSTORM?????
Or the Perfect Opportunity???
Increase in Cost of Health Care Increase in Cost of Health Care (Based on Average Annual 7.3% Increase)(Based on Average Annual 7.3% Increase)
$ $
0.7
3.1
1.4
0
0.5
1
1.5
2
2.5
3
3.5
1990-Actual 2001-Actual 2012-Estimate
$ In
crea
ses i
n Tr
illio
ns
Source: Center for Medicare and Medicaid Services, Office of the Actuary – Feb. 2003
$
$
$4,924
$4,430
$4,097
$3,817$3,594
$3,703
$3,653
$5,616
$3,000
$3,500
$4,000
$4,500
$5,000
$5,500
$6,000
1995 1996 1997 1998 1999 2000 2001 2002
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
Total Health Spending
____________________________________
1.7 Trillion___________
7% Annual Growth
ChronicDisease
Treatment__________________________________
700 Billion___________
10% Annual Growth
Pharmacy Services
_______________________________
200 Billion__________
12% Annual Growth
SpecialtyPharmaceuticals
______________________________
30 Billion____________
30% Annual Growth
(CHANGING DEMAND-cont)
DEMAND FOR MIRACLES WILL CONTINUE, AND MIRACLES ARE
EXPENSIVEEXAMPLE –Intracoronary Stents didn’t exist 10 years ago• Now the total market is 2 billion dollars per year.• Very effective at reducing risk of a second heart attack
(80-90% of the time).• However 10-20% clog within the first 6 months. Now,
even more expensive stents (drug eluting) have been developed that may clog less. These will become standard and further increase the cost.
• The genie won’t go back in the bottle!
(CHANGING DEMAND-cont.)(CHANGING DEMAND-cont.)
HOW MUCH CORONARY DISEASE CAN BE
PREVENTED WITH 2 BILLION DOLLARS
PER YEAR?
YOU GET WHAT YOU PAY YOU GET WHAT YOU PAY FOR FOR
THERE ARE 8,000 SEPARATE BILLING CODES
FOR CARE, NONE FOR PREVENTING
A DISEASE
HERO 2003 www.the-HERO.org
A ProblemA Problem
• The $1.9 trillion “Health Care” system has little to do with achieving or maintaining optimal health.
• In reality, it is a $1.9 trillion “Diagnosis and Treatment” system.
HERO 2003 www.The-HERO.org
HERO 2003 www.the-HERO.org
A Window of OpportunityA Window of Opportunity• The cost of health care is beyond what
employers can afford and will increase exponentially over the next decade.
• Employers don’t know what to do.
• An unprecedented opportunity to establish the importance and effectiveness of optimal health as an investment in human capital.
HERO 2003 www.The-HERO.org
Health Insurance is a ________?
Benefit – a gift you buy to make someone happy; you shop for the best valueCommodity – something you buy from the lowest bidder; you buy as little as you must haveInvestment – considered purchase based on ROI, including risk and return; if it’s good, you want a lot
8
Human Capital—Perspectives Over Time
PrePre--IndustrialIndustrial IndustrialIndustrial PostPost--IndustrialIndustrial
“My men can work harder than your men.”
“My machines are bigger, faster, more powerful than your
machines.”
“My people are smarter, more creative, more customer service-oriented, more productive than yours.”
Productivity Model Final Outcome Intermediate Outcome
AccountabilityImprove HealthStatus
OptimizeProductivity/
Job Performance
ReduceUnnecessaryLost Work
Time
Employer/Purchaser
Employee/Patient
Provider
Health Plan/Delivery System
ImproveOrganizational
Health
Productivity Model - Three Parts
Disease
Management
Health Management
Demand
Management
C o s t s I n c r e a s e W it h R is k & A g eC o s t s I n c r e a s e W it h R is k & A g eM e d ic a l C o s t s b y H e a l t h R i s k L e v e ls a n d A g e
1 9 9 7 - 1 9 9 9 A v e r a g e A n n u a l P a id A m o u n t s
$3,432$4,130
$6,664
$9,221$10,095
$2,025 $2,741$3,601
$5,445
$7,268
$1,247 $1,515 $1,920$3,366
$4,319
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
<35 35-44 45-54 55-64 65+
0-2 Risks3-4 Risks
5+ Risks
H E R O R e s e a r c h : S tu d y # 1H E R O R e s e a r c h : S tu d y # 1Im p a c t o n In d i v id u a l H e a l t h C a r e C o s t s :
H ig h - R is k v s . L o w e r - R is k E m p lo y e e s70.2%
46.3%34.8%
21.4% 19.7% 14.5% 11.7% 10.4%
-50%
-25%
0%
25%
50%
75%
100%
Dep
ress
ion
Stre
ss
Glu
cose
Wei
ght
Toba
cco-
Past
Toba
cco
Blo
odPr
essu
re
Exer
cise
Perc
ent
S o u rc e : In te g r a te d B e n e fi ts In s t itu te (2 0 0 1 )
HERO 2003 www.the-HERO.org
Does It Work?
" There have been over 125 health enhancement research studies peer reviewed and published showing positive clinical, behavioral and/or ROI results..
HERO 2003 www.The-HERO.org
Relationship Between Cost and Wellness Score
Figure 10
2817
25082369
2087
1643
2638
2,970
1415
1800
2818
$1,200
$1,600
$2,000
$2,400
$2,800
$3,200
50 55 60 65 70 75 80 85 90 95
Annual Medical Costs
Wellness Score
-$1,000
-$500
$0
$500
$1,000
$1,500
$2,000
5+ 4 3 2 1 0 1 2 3 4 5+
Change in Cost Associated with Change in Risk
Risks Reduced Risks Increased
HOW TO “THINK GLOBALLY”
Learn lessons from research and mega trends.Do “Global Accounting”of profits and losses associated with human capital.
GLOBAL ACCOUNTINGrequires
AN INTEGRATED DATABASEMedical and Pharmaceutical claimsHealth Risk Appraisal scoresAbsence dataShort & Long-Term Disability (STD/LTD)Worker CompTurnoverDirect production data or performance eval
BECAUSE YOU CAN’T MANAGE
WHAT YOU CAN’T MEASURE
Health and ProductivityMeasurement….
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)
. . . . enables Health and Productivity MANAGEMENT
Intervene to improve a Health Indicator
Measure (or at least calculate) the effect on a Productivity Indicator
THIS SETS THE STAGE FOR A VALUE-BASED HEALTH
CARE MODELEmployer needs it for productivity, profit, and competitiveness reasons.Employee needs it for cost, comfort, maintenance of health reasons.
CREATING WISE CONSUMERSCREATING 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 EVERThreat of unemployment Quality of life reasonsOut of pocket costs