Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 1 Health-Related Work Productivity: How is it defined and measured? Presented to the ISPOR Student Network November 8, 2007 Laura Pizzi, PharmD, MPH Research Associate Professor Division Director, Pharmacoeconomics and Outcomes Research Department of Health Policy Jefferson Medical College Philadelphia, PA

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 2 Overview Who’s interested in productivity? Productivity as a measure of employee health Introduction to Productivity Theory Human capital approach Friction cost method Data sources Self-reported: survey instruments Administrative data sets Case Study on using retrospective database to estimate productivity loss

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 3 Productivity Loss An indirect cost

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 4 Who’s interested in productivity? Do patients care? Do clinicians care? Do insurers care? Do employers care?

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 5 Rationale for Research Interest in Productivity U.S.: Employer-sponsored healthcare Everywhere: Cost of illness studies; CEA input

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 6 How do employers define productivity loss? *Source: Pizzi LT and Lofland JH. Concepts and measurement of health-related work productivity: Results of a qualitative telephone survey, 2002.

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 7 What are the determinants of Health- Related Work Productivity (HRWP)? Individual Factors  Health status (physical and cognitive ability to work)  Ability to do the job (knowledge, skills, training)  Interpersonal abilities  Motivation level Organizational Factors  Job satisfaction  Culture of the work environment  Availability of necessary resources  Job structure (job is well- defined)  Job support (employees receive the guidance that they need)

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 8 Who should measure HRWP? *Source: Pizzi LT and Lofland JH. Concepts and measurement of health-related work productivity: Results of a qualitative telephone survey, 2002.

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 9 Criteria for Determining Productivity Impact of Specific Conditions Chronicity and/or recurrence tendency of the disease Prevalence of the disease on the working age population Symptoms occur when and where work impact is likely to be the greatest Economic impact of the disease on the working age population (indirect and direct costs) Disability level is such that affected individuals can remain in the workforce Conditions for which there are opportunities for functional improvement Training and replacement costs associated with replacing experienced workers with new workers (also referred to as “friction costs”)

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 10 Economic Theory Human Capital Approach Friction Cost Method

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 11 Human Capital Approach (HCA) All costs, other than direct, can be estimated by calculating expected earnings of work productivity foregone because of disease Assumes that an employee’s lost workplace productivity is a function of income One hour of lost productivity is valued as one hour of an individual’s salary

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 12 Elements of Productivity Loss Under HCA Absenteeism + Presenteeism Allocates a $0 to individuals who work outside the labor force Homemakers Elderly

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 13 HCA: Advantages Credible-- founded in economic theory Most established / popular method Easier method to apply Intuitive from employer perspective

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 14 HCA: Disadvantages Working-age, higher earning potential are valued over the old, young Men White Educated May over-estimate real production losses Assumes earnings reflect productivity Excludes social impact of productivity loss

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 15 Friction Cost Method (FC) Introduced by Koopmanschap Estimating the productivity costs by calculating the value of production losses during the friction period (i.e. between start of absences of work and replacement) Concept New or existing workers make up for production losses

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 16 FC Method, continued Concept: Amount of production lost due to disease depends on the time-span organizations need to restore the initial production level Example: costs of replacing a disabled worker Friction costs: Recruitment of new employees Training of new employees Loss of production during the friction period

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 17 FC Method: Information Requirements 1.Can the work be completed by a sick employee? Bus driver vs. lawyer 2.Frequency of the friction periods 3.Economic cost of lost production Cost per day ($) x length of friction period(s)

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 18 FC: Advantages and Disadvantages Advantages More accurate measure of lost productivity because not measuring potential loss Disadvantages Assume perfect market for supply of workers Does every occupation have a friction period? Does every disease/illness cause friction in the workplace?

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 19 Question: What about the social impact of disease on work productivity?

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 20 How do we research HRWP? Productivity Instruments Databases

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 21 Productivity Instruments Used for prospective or cross-sectional studies Typically based on HCA: Most incorporate absenteeism & presenteeism Some also include questions on the social impact of reduced productivity Conceptually related to quality of life Most are generic; some are disease- specific

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 22 Measuring HRWP Using Databases Used for retrospective studies Databases must include elements of health: Diseases Medications Healthcare services Must also include elements of productivity: Absences Disability (short- vs. long-term) Worker’s compensation Presenteeism and social impact of disease on productivity generally not available

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 23 Methodological Challenges in Measuring HRWP What to do about part-time workers or contracted employees? What about teenagers? Home-makers? Students? What’s the importance of “wages lost” due to a given disease/condition? White collar workers vs. blue collar workers Unique to databases: Eligibility Employer shift towards “banking” of personal time

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 24 HRWP Challenges, cont. Dealing with Employers Does the organizational culture embrace HRWP measurement? Is there a “champion” of HRWP? Is there an influence from labor unions? Are the data siloed? Who should be involved? Do the people involved have the right expertise? OHSA concerns Employee’s right to confidentiality How do healthcare interventions really effect “the bottom line”?

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 25 Examples of Productivity Databases Medstat Inc. MarketScan Health and Productivity Management Ingenix Medical Expenditure Survey (MEPS) Others– mostly employer and/or health plan-specific

Laura Pizzi, PharmD, MPH Jefferson Medical College Slide # 26 Questions?