Download - HEALTH AND PRODUCTIVITY MANAGEMENT
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HEALTH AND HEALTH AND PRODUCTIVITY PRODUCTIVITY MANAGEMENTMANAGEMENT
H P MH P MTHINK GLOBALLY!
BY: BRIAN D. HARRISON, MDDATE:9/28/04
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The PerfectSTORM?????
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Or the Perfect Opportunity???
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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
$
$
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$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
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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).
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WHY ECONOMIC SOLUTIONS FAIL TO SOLVE
THE PROBLEM:It’s not an economic problem
It’s a HEALTH problem!
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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
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(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!
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(CHANGING DEMAND-cont.)(CHANGING DEMAND-cont.)
HOW MUCH CORONARY DISEASE CAN BE
PREVENTED WITH 2 BILLION DOLLARS
PER YEAR?
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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
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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
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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
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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
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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.”
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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
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Productivity Model - Three Parts
Disease
Management
Health Management
Demand
Management
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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
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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
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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 )
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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
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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
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-$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
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HOW TO “THINK GLOBALLY”
Learn lessons from research and mega trends.Do “Global Accounting”of profits and losses associated with human capital.
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GLOBAL ACCOUNTINGrequires
AN INTEGRATED DATABASEMedical and Pharmaceutical claimsHealth Risk Appraisal scoresAbsence dataShort & Long-Term Disability (STD/LTD)Worker CompTurnoverDirect production data or performance eval
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BECAUSE YOU CAN’T MANAGE
WHAT YOU CAN’T MEASURE
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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)
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. . . . enables Health and Productivity MANAGEMENT
Intervene to improve a Health Indicator
Measure (or at least calculate) the effect on a Productivity Indicator
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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.
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CREATING WISE CONSUMERSCREATING WISE CONSUMERS
People need information about self care/self treatment.People need information about quality of health care providers and institutions.
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WHY EMPLOYEES CARE NOW MORE THAN EVERThreat of unemployment Quality of life reasonsOut of pocket costs