1.1 What is Health and Productivity Management? Wayne Burton, M.D.

Objectives Define Health & Productivity Management (HPM) History of HPM Basic Principles of HPM

Definition of HPM HPM is a systematic approach designed to quantify, evaluate and optimize a company’s investment in its workforce Employee health is an investment rather than a cost of doing business Total Worker Health : Integration of health, safety and wellbeing ( U.S. National Institutes for Occupational Safety and Health) What is HPM – it is the systematic approach to quantifying, evaluating, and optimizing a company’s investment in its workforce. It is comprised of 3 elements: Quantify (you need to know the costs to know how big the problem is --Efforts are made to quantify the total economic impact of health, including direct medical and pharmacy costs of health care as well as indirect productivity-related costs such as absenteeism and presenteeism Evaluate (you must know where these costs are coming from and where you might have opportunities to address them --Organizational resources are aligned to support an integrated approach to strategically investing in worker health and performance), and Optimize (you need to determine the most cost effective ways to improve health and ultimately productivity –HPM assists in Directing employer investments into interventions that improve health and organizational performance

What is health & productivity ? The integrated management of health and injury risks, chronic illness, acute illness and disability to reduce employer’s total health-related costs, including medical expenditures, unnecessary absence from work and decreased on the job productivity.

History of HPM

The maladies that afflict the clerks afore said arise from three causes:  First, constant sitting, secondly the incessant movement of the hand and always in the same direction, thirdly the strain on the mind from the effort not to disfigure the books by errors or cause loss to their employers when they add, subtract or do other sums of arithmetic.....  In a word, they lack the benefits of moderate exercise..... Bernardo Ramazzini Diseases of Scribes and Notaries, 1700

Early attempts to document worker health impact on productivity 1970: Absenteeism and “Presenteeism” in Industry (Arch Environ Health) First mention of “presenteeism” – “ the state of being present” 1979: Iron deficiency and productivity in Indonesia rubber plantation workers 1979: Iron deficiency and productivity in tea pickers in Sri Lanka 1997: Anemia and productivity in jute factory workers in Indonesia

Why HPM ? Increasing medical costs globally Role of Prevention in managing direct and indirect costs Linkage of health and safety

Why HPM Strategies Emerged Rise in Health Care Costs 1/3 healthcare costs in the US not needed Prevention Opportunities 30%-50% of illness drive by avoidable lifestyle Healthcare Safety and Quality of Care issues >100,000 deaths in US associated with errors Business Value of Health as a Corporate Priority Linkages between worker health and business profits

Personal Health Behaviors are the main Causes of Death Mokdad AH, et.al. Actual Causes of death in the United States, 2000. JAMA. 2004; 291:1238-1245.

80% of Global Illness Costs 8 Risk Behaviors Drive 15 Chronic Conditions Accounting for 80% of Total Costs of Chronic Illnesses Worldwide 80% of Global Illness Costs Poor Diet Inactivity Smoking Lack of Health Screening Poor Stress Management Poor Standard of Care Insufficient Sleep Excessive Alcohol Consumption 2010 World Economic Forum

Where are the Opportunities for Population Health Management? Medical & Care Management Opportunity Condition Management Opportunity Health Promotion Opportunity Medical and Drug Costs only

Iceberg of Full Costs from Poor Health Total Costs of Employee Health Direct Costs 30% Medical/Health Care Costs Pharmaceutical Costs Indirect Costs Iceberg of Full Costs from Poor Health Absenteeism Short-term Disability Long-term Disability Workers’ Compensation 70% Presenteeism Overtime Turnover Temporary Staffing Administrative Costs Replacement Training Off-Site Travel for Care Customer Dissatisfaction Variable Product Quality This HPBS study showed the broader presenteeism and absenteeism costs of poor health to employers were $2.30 for every $1.00 spent on medical/pharmacy costs, and did not even include the additional costs of the following: Workers’ Compensation Costs Short-term Disability Long-term Disability Overtime Turnover Temporary Staffing Administrative Costs Replacement Training Off-Site Travel for Care Customer Dissatisfaction Variable Product Quality 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: 40-152

Indirect Costs (Lost Productivity) Absenteeism Leads to Substitute/temp workers Overtime Co-worker challenges Presenteeism Sub-optimal on-the-job performance Employee turnover Team morale Absenteeism can be covered by: Workers' compensation: Workers’ comp law is governed by statutes in every state. Specific laws vary with each jurisdiction, but key features are consistent. An employee is automatically entitled to receive certain benefits when she suffers an occupational disease or accidental personal injury arising out of and in the course of employment. Such benefits may include cash or wage-loss benefits, medical and career rehabilitation benefits, and in the case of accidental death of an employee, benefits to dependents. The negligence and fault of either the employer or the employee usually are immaterial. Short Term Disability: Provides non-occupational disability benefits and is payable when an employee becomes disabled due to accident, sickness or pregnancy and is under the regular care of a medical provider. The benefit amount, the day benefits begin, and the maximum period for which benefits are payable are chosen by the employer. Long Term Disability: a private disability insurance policy that pays when people are unable to work for a "long" period (usually more than three to six months). Sickness/incidental absence: Unscheduled absence from work of one to five days. Family Medical and Leave Act: A federal law that allows an individual up to 12 weeks leave based on medical necessity for self, child, spouse or parents. Unpaid leave or permanent loss to the workforce. PRESENTEEISM is being at work and not perfoming at maximum level. Presenteeism encompasses On-the-job performance Time not on task Quality of work Quantity of work Employee turnover Team morale

Drivers of HPM Increasing healthcare costs Chronic diseases (eg diabetes,etc.) Health risks (eg metabolic syndrome, smoking, etc.) Aging workforce in many countries Linkage between employee health and safety : Total Worker Health The same trends that shape America’s future workforce, its health and its healthcare needs. Also are fueling the move to a health and productivity management philosophy. Read four trends in slide. Keeping American workers healthy and at work can dramatically increase the productivity of the current workforce (see Module 2 for the risk of doing nothing).

(Med + RX + Absenteeism + Presenteeism) Costs/1000 FT Health and Productivity as a Business Strategy: A Multi-employer Research Study (Med + RX + Absenteeism + Presenteeism) Costs/1000 FT Loeppke, R., et al., "Health and Productivity as a Business Strategy. JOEM. 2007;49(7):712-721.

Employees with chronic diseases Account for 75% of US healthcare costs Majority of Americans have at least 1 chronic disease Lack of investment in lifestyle health risk factors which lead to chronic disease (eg obesity leading to diabetes/ metabolic syndrome)

Costliest Chronic Diseases 10 Costliest Diseases 2016 HEALTH CONDITION COSTS 1.Heart Disease $193.4 billion 2.Diabetes $176 billion 3.Dementia $159 billion 4.Cancer $157 billion 5.Obesity $147 billion 6.COPD & Asthma $ 79.6 billion 7.Arthritis $ 74.4 billion 8.Mental Disorders $ 57.5 billion 9.Kidney Disease $ 38.1 billion 10.Hyperlipedemia $ 34.5 billion 11.HIV/AIDS $ 24 billion http://www.msn.com/en-us/money/healthcare/11-costliest-diseases-in-the-us/ss-BBnOzYV#image=3 1/04/2016; accessed 6/9/2016.

Days Lost Due to Chronic Conditions Source: Kessler’s HPQ – Adjusted to Workforce

5 Factors that can mitigate chronic disease Physical Activity : moderate: 150 minutes / week (30 minutes/day) Healthy eating Smoking cessation Drinking alcohol in moderation Weight Loss (eg 5-10%); waist size less than half of your height. If 75% of Americans had these health factors up to $1 Billion could be saved per year in healthcare and disability costs.

Health Risks and Productivity Costs % of Workplace Presenteeism Work days lost / Person / Year (Absenteeism) 26.9% 12.6 Days 20.9% 9.3 Days 14.7% 6.4 Days 0-2 risks 3-4 risks 5+ risks 1 risk 3 risks 4+ risks 13.1 Days STD Days / Year 2.4 Days 5.3 Days Sources: Burton, et al, JOEM: Vol. 47. No. 8, August, 2005; Wayne Burton, MD, IHPM North American Summit Meeting 2000; also Tsai, et al. JOEM: Vol. 47, No. 8, August, 2005 0-1 risks 2- 3 risks 4+ risks 21

Aging Workforce: Graying Tsumani Demographics are changing with the boomers. Increasing numbers of employees in their late 50s and 60s will remain in the workforce Employers will need to prepare for the challenges of significantly increased prevalence of chronic conditions in the workforce Also, the potential for reduced productivity from health-related issues.

Aging Workforce: Health Promotion & Safety More chronic conditions More disabling conditions Higher risk of on the job injury More difficult and costly to treat Loeppke RR, et al. Advancing Workplace Health Protection and Promotion for an Aging Workforce. J Occup Environ Med. 2013;55(5):500-506.

Healthcare Costs: Which Matters More, Age or Health Risk? Annual Medical Costs Low Med Risk High Age Range Edington DW. Zero Trends: Health As a Serious Economic Strategy. Health Management Research Center, University of Michigan. 2009. Edington, American Journal of Health Promotion. 15(5):341-349, 2001

Increasing chronic diseases with aging The prevalence of multiple chronic conditions increases with age. A major jump in prevalence occurs at the 45 – 64 and 65+ age groups, coinciding with the fastest growing age groups in the workforce (slide 20). Source: Medical Expenditure Panel Survey, 2001 Johns Hopkins University, Partnership for Solutions

Summary Health risks can be improved through workplace health programs Reductions of health risks can lead to reductions in health costs The workplace offers a unique advantage for implementing HPM

Discussion