health and productivity management: investing in national health and competitiveness

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Health and Productivity Management: Investing in National Health and Competitiveness. Healthy Lifestyle Forum | Moscow , Russia | 9 December 2013. Sean Sullivan, JD President & CEO Institute for Health and Productivity Management. Productivity – the Driving Force in Economic Progress . - PowerPoint PPT Presentation

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Health and Productivity Management: Investing in National Health and Competitiveness

Healthy Lifestyle Forum | Moscow, Russia | 9 December 2013Sean Sullivan, JD President & CEOInstitute for Health and Productivity ManagementProductivity the Driving Force in Economic Progress Productivity drives the wealth, competitiveness and living standards of nationsKeys to national, corporate and individual productivity are:investment in developing a nations key resourcesallocation of those resources to their most productive useseffective management of those resources to produce competitive goods and services most efficientlyEvolution of Productivity and Economic ProgressEconomics historically identifies three kinds of resources behind productivityLand/Labor/CapitalLand and Labor were most important in the Agricultural Era Industrial Era made Capital the most important resource for productivityFinancial capital to develop large industrial enterprisesPhysical capital of factories and machinery to produce goods Mass production made individual labor less valuable Evolution of Productivity (Cont)Now the leading nations economies are moving into the Post-Industrial Era or what Peter Drucker called the age of the knowledge workerFinancial and physical capital remain important (and so does land in rich natural resource economies like Russia) But the value of financial and physical capital is in the form of new and improved technologies of innovation Development and application of new technologies depends heavily on relatively scarce, highly skilled labor now seen as human capital New Era of Human Capital Economists have identified the components of human capital value Knowledge and skills intellectual capitalTools physical capital to work withMotivation psychological capitalBut an additional component that affects the productivity of all the others has been neglected until now -- and that is HEALTHPeople can be highly trained and skilled, equipped with the best tools, and strongly motivated But unless they are healthy or well they will not be productiveHealth is Wealth the New Economic ImperativeManagement of human capital assets including health is a key to business and national economic performance Training and education, new technologies and financial incentives and rewards remain importantBut investing in better worker health is the new competitive advantage for companies and nationsHealth and Productivity Management HPM is the new model for systematically improving worker health to improve productivityNew tools enable us to measure the return on investments in healthHPM the New Economic Value Model for HealthManagement requires measurement you cannot manage what you cannot measure (Peter Drucker)Health and Productivity Management includes:Collecting data on all health-related costs medical spending as well as the economic cost of lost productivityTargeting health investments on the most important health issues Reducing current costs of illness with disease managementControlling future costs by avoiding them with workplace wellness and prevention programsWorker Health is an Asset Not a CostIssue is not the cost of keeping workers healthy real issue is the cost of having unhealthy workers This cost is 2 to 3 times greater than the cost of medical care in lost work time, but even more in the cost of presenteeism or lost productivity while at work Physically/Mentally/SociallyLandmark study from The Dow Chemical Company shows this cost of presenteeism to be enormous 2/3 of the total cost burden of chronic disease and about 7 percent of total labor costs9Medical, absence and work impairment costs associated with self-reported primary chronic conditions among Dow employeesTOTAL COST OF CHRONIC HEALTH CONDITIONS AT DOW CHEMICAL

Source: J. Collins, C. Baase, et al.. Journal for Occupational and Environmental Medicine, 6/05 9We have now quantitated Direct vs Indirect costs Se.Presenteeism costs represent approximately of the pie and the vast majorityOf costs to the corporation.The Impact of Lifestyle on HealthMajority of chronic disease or NCDs as defined by the World Health Organization is preventable through healthy lifestyle behavior changeFive major behaviors affecting health Physical activity Nutrition Sleep Smoking Substance abuse#1 health issue related to lifestyle behaviors globally is the metabolic syndrome of risk factors connected with Type 2 Diabetes, obesity and cardiovascular diseaseWorksite Wellness and the Metabolic SyndromeWorksite wellness programs have shown success in reducing the health risk factors of the metabolic syndrome preventing future disease and reducing the lost productivity cost of presenteeismInstitute for Health and Productivity Management has conducted multiple pilot programs that have done this for populations of workers by focusing onPhysical activityNutritionMotivationPeer supportRisk Factor ReductionCity of PhoenixEliminated risk factors65% (212 / 328)2.08 risk factors eliminated per participantImproved risk factors (not to goal)32% (107 / 328)3.84 risk factors improved but not to goalEliminating 2 risk factors saves between $2300 and $2800 in medical costs annually13Productivity Gain THE CITY OF PHOENIX

All valid participants who took both WLQ surveys, regardless of risk factor changes24.1%13.3%25.9%28.2%6.8%18.6%10.5%11.1%14.1%3.7%0.0%5.0%10.0%15.0%20.0%25.0%30.0%Time ScalePhysical ScaleOutput ScaleMental-InterpersonalScaleWLQ Productivity LossScoreBefore MHIAfter MHIHPM Model for National Health and CompetitivenessWorker health is a key component of human capital for national growth and competitiveness in the global economyHealth as human capital has an economic asset value and is a driver of productivity gains in the work forceHealth can be systematically improved at the work site and prevent future chronic diseaseProven model for doing this is Health and Productivity Management a national strategy for health, economic growth and competitiveness The HPM Value ChainDesign benefitsand programs

To provide incentivesTo change behaviorTo reduce risksTo improvehealthWhich will impact medical costs and disabilities

And improvefunctionalityWhich translatesinto enhancedworkerproductivityOUTCOMEImproved corporate financial performanceMeasurement

15Sean Sullivan, JDPresident & CEOInstitute for Health and Productivity Management

P: (00)480-305-2100E: sean@ihpm.org

THANK YOU

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