1. Workforce Health -- From Cost to Value -- Thomas Parry, Ph.D. President Integrated Benefits Institute Michigan Purchasers Health Alliance September, 2006

2. Today’s Discussion What’s the issue? Does senior management get it? What are the real costs of health? Emerging ER strategies to manage health and productivity

3. What’s the Real Issue?

4. This?

5. National Healthcare Expenditures Source: CMS, Office of the Actuary, National Health Statistics Group. Actual Projected

6. Plan Design Healthcare Costs Then, The Solution

7. Or This?

8. Leveraging Human Capital Company

9. Demonstrating Healthcare Value Health Status Business Impacts Black Box

10. About IBI National, non-profit 400+ corporate sponsors Programs – Research – Health & productivity measurement – Benchmarking – Education

11. Can Senior Management be Change Agents? IBI’s CFO Research

12. Linking Health, Productivity & the Bottom Line

13. The Impact of Ill-Health 96% 90% 86% 84% 71% 47%

14. How Much Absence?

15. How Much Presenteeism?

16. Lost Worktime Criticality

17. CFO’s Role in Benefit Decisions

18. Measuring the Impact Absence –Overtime pay –Lost revenue –Temporary help –Quality lapses –Wage replacement Presenteeism –Overtime pay –Temporary help –Quality lapses –Lost revenue –Additional staff

19. Are CFOs Being Informed? Absence –44% never get reports on occurrence –72% never get reports on financial impact Presenteeism –83% never get reports on occurrence –84% never get reports on financial impact

20. Healthcare Management Objectives for Next Two Years

21. Quantifying Health-Related Lost Productivity

22. Translating to the Business

23. How CFOs Would Use Productivity Information

24. Then, the Solution Health Status AbsencePresenteeism Healthcare Costs Lost Productivity Business Impacts

25. The Real Costs of Health

26. Perceived Costs/Program 2002 Benefit Data $3,090 $172 $762 $6 * Mid-point of lost productivity estimate used $435 $387

27. What is the real cost of people being away from work? The Opportunity Cost of Absence

28. Responding to Work Absence Employer Strategy Lost Revenue Staffing Costs Do Nothing X Temp Help/ Overtime XX Additional Staff X

29. The Range of Lost Productivity Costs 2002 Benefit Data

30. Full Costs/Program 2002 Benefit Data $3,090 $675 $1,890 $178 $2,621 $418

31. Top 15 Health Conditions

32. Top 15 Causes of Lost Work Time

33. How are Employers Responding?

34. Employers Abandoning Silos 21% 44% 17% 18% IBI 2004 Employer Survey

35. “Most Important” Strategies Today IBI 2004 Employer Survey

36. Be Careful of This

37. Managing the Economic Burden of Ill Health IBI 2004 Employer Survey

38. Approaches to Offering Health Benefits Longer Term IBI 2004 Employer Survey

39. The Health-Related Data Solution IBI 2004 Employer Survey

40. For More Information www.ibiweb.org tparry@ibiweb.org