Making the Wellness Case to the CFO
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This document discusses connecting health to business outcomes. It summarizes research from the Integrated Benefits Institute showing that measuring workforce health requires considering total costs, including medical claims, pharmacy costs, lost productivity from absenteeism, and lost productivity from presenteeism. It notes that chief financial officers increasingly see workforce health as important to business priorities like productivity and financial performance. The document advocates that improving workforce health requires credible data and metrics across multiple dimensions over time, from leading health risk factors to lagging outcomes of costs and productivity.
Making the Wellness Case to the CFO
- 1. Connecting Health to Business Thomas Parry, Ph.D. President Integrated Benefits Institute
- 2. About IBI National, not-for-profit corporation 700+ corporate sponsors Employers: 90% of IBIs members Liberty Mutual IBI Board member IBIs mission. Demonstrate the business value of a healthy workforce through: Independent HPM research Measurement and modeling tools Forum for sharing ideas and experience
- 3. New Employer Realities Show the C-suite the value of improved workforce health Healthcare reform: the value of a healthy workforce or the cost of healthcare? Dead end: attempting to control claims costs in separate program silos Looking for best strategies to improve workforce health, reduce lost time and enhance productivity Limited data, time and dollars
- 4. Whats at Risk for Employers?
- 5. The Full Costs of EE Health -- Auto Manufacturers Estimates based on IBIs new FCE modeling tool 171,250 employees Employer-paid claims costs only Published as IBI Quick Study in February 2011
- 6. Health Costs The Traditional View Medical $500 Total = $509 MM $400 $300 $200 $100 $0 Medical (EE) Medical (family)
- 7. Health Costs Adding Pharmacy Medical Pharmacy $500 Total = $623 MM $400 $300 $200 $100 $0 Medical (EE) Medical (family)
- 8. Health Costs Adding Lost-Time Pay Medical Pharmacy Wage replacements $500 Total = $824 MM $400 $300 $200 $100 $0 Medical (EE) Medical (family) Time-loss pay
- 9. Health Costs Adding Absence Impact Medical Pharmacy Wage replacements Absence LP $500 Total = $923 MM $400 $300 $200 $100 $0 Medical (EE) Medical (family) Time-loss pay Lost productivity
- 10. Health Costs Adding Performance Impact Medical Pharmacy Wage replacements Absence LP Performance LP $500 Total = $1.29 B $400 $300 $200 $100 $0 Medical (EE) Medical (family) Time-loss pay Lost productivity
- 11. Full Cost Components 28% 48% 8% 16% Medical Wage replacements Absence LP Performance LP
- 12. Quantifying Financial Lost Productivity* Lost productivity the financial impact on a company when employees are not at work and fully functioning Two components: absence and decrements in job performance (presenteeism) The Financial Impact of Absence Wage replacement payments Opportunity costs of ERs response The Financial Impact of Presenteeism Wage and benefit overpayments Opportunity costs of resulting lost time *Source: Sean Nicholson, Mark Pauly, et al., "Measuring the Effects of Work Loss on Productivity with Team Production," Health Economics 15: 111-123 (2006).
- 13. Full Costs Medical, Pharmacy, Absence and Presenteeism $400,000 $350,000 $300,000 Cost per 1000 EEs $250,000 $200,000 $150,000 $100,000 $50,000 $0 Medical Pharmacy Absence lost prod Presenteeism lost prod
- 14. Co-Morbidity and Lost Time Absence lost time Presenteeism lost time 40 35 30 Lost days 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9 10+ # of chronic conditions
- 15. The View from the C-Suite
- 16. Making Health the CFOs Business Thomas Parry, Ph.D. President Integrated Benefits Institute
- 17. Key Research Questions How do CFOs view workforce health as a priority in their business? Whats the relationship between health of EEs and health of the company? What types and sources of information are considered credible? How do CFOs see VBBD? What kind of information is needed?
- 18. Health as a corporate priority 8% 8% 6% 19% 24% 24% 49% 56% 48% 69% 68% 75% 20% 20% 19% Promoting healthy A culture of health is a key Comprehensive health behaviors is a company company goal coverage is important to priority company financial strategy Strongly Agree Agree Neither Agree Nor Disagree Disagree or strongly disagree
- 19. Leaders and Non-Leaders H+P Leaders The uninitiated 29% 53% 18% The ambivalent
- 20. Workforce productivity as "one of the most important factors" for 62% 45% 8% Ability to respond to Financial performance Reputation w/ customer/market needs lenders/investors
- 21. Very important to workforce productivity Maintaining skilled 75% workforce Controlling staff size 61% Increasing EE satisfaction 51% Controlling turnover 48% Providing EE training 42% Making capital 37% investments Health Improving EE health 30% Other 22%
- 22. % CFOs that say EE health is "very important" to workforce productivity 48% 23% H+P Leaders Other CFOs
- 23. The Importance of Information
- 24. Improving workforce health: information credibility Company's claims costs 70% 28% 2% EE surveys 31% 62% 8% Company's information 22% 70% 8% Outside information 21% 75% 3% Modeled estimates 15% 74% 12% Supplier recos 14% 76% 10% Very Credible Somewhat Credible Not Credible
- 25. Usefulness of Information 100% 96% 91% 90% 90% 89% 88% 83% 82% 80% 60% 40% 20% 0% Helpful Not helpful
- 26. Availability of Helpful Information 100% 80% 60% 79% 75% 40% 54% 51% 20% 37% 36% 24% 15% 0% Available Unavailable
- 27. Lessons
- 28. Lessons for CFOs Credible information and methods for measuring impact are available in market Partner with colleagues in your organization who measure/manage lost time Make your financial goals well known within your organization and with key supplier partners
- 29. And if youre working with CFOS... Access the solid business case info that is available Advocate a culture of health Start with maximizing available internal information Learn CFOs strategic financial goals and focus there Whats the current culture of health? Are you working with an H+P Leader?
- 30. Employers and Data
- 31. Key Dimensions of Population Health Financial Preventive care Program Chronic participation conditions Biometric Lost worktime screening Lost productivity Health risks Employee Utilization engagement
- 32. The Temporal Dimension Leading indicators Health risks Biometric screening Chronic condition prevalence Treatment indicators Preventive care EE engagement Health services utilization Program participation Lagging indicators Financial Lost worktime Lost productivity
- 33. Dimensions & Dashboard Metrics Dimension Summary Metric Financial Program cost/EE Program participation EEs participating/All EEs Biometric screening EEs reaching target/All EEs Health risks # of health risks/EE Utilization # EEs getting care/All EEs Preventive care # EEs getting screened/All EEs Chronic conditions # EEs w/ chronic conditions/All EEs Lost worktime # of lost workdays/EE Lost productivity Lost productivity $/EE Employee engagement Engagement score/EE
- 34. Thinking about Metrics as Hierarchies Dashboard metrics Component metrics Contributing metrics
- 35. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics Metrics Lost worktime
- 36. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics Metrics Lost worktime # of lost days/EE
- 37. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics Metrics Lost worktime # of lost days/EE Incidental absence days/EE LTD lost days/EE WC lost days/EE Reduced performance days/EE STD lost days/EE
- 38. Dimension: Lost Work Time Dimension Dashboard Component Metrics Contributing Metrics Metrics Lost worktime # of lost days/EE Incidental absence days/EE LTD lost days/EE WC lost days/EE Reduced performance days/EE STD lost days/EE Incidence/100 EEs Ave. duration/claim Median duration/claim
- 39. Contact IBI Thomas Parry, Ph.D., President tparry@ibiweb.org www.ibiweb.org