he increasing cost of health care continues to challenge companies to use all
means at their disposal to purchase health care in the U.S. effectively and efficiently.
Now many leading-edge companies are going beyond managing health care to managing
their population’s health.
This change in perspective is ushering in a new era of measurement.
The way of measuring investments in health improvement is no longer gauging whether
cost has been avoided. Businesses now want to know whether their health care investments
are bringing them greater organizational productivity.
Businesses are facing global competition for talent, productivity
and profitability as a result of an aging workforce and a shortage of skilled talent.
To succeed in such an environment, they must have a clear line of sight to the health
improvements they can make in order to create an optimally healthy workforce.
To meet this requirement, it is essential that the measures
they use are meaningful and integrated, and that they impose a radical shift in
focus to the individual level—first evaluating the health of the employee and then
the health of that worker’s dependents.
Employers are primarily using financial metrics, such as changes
in annual overall benefit costs, pharmacy costs, health care utilization and purchase
price to drive their program assessment efforts, according to Hewitt Associates’
recent survey "The
Road Ahead: Driving Productivity by Investing in Health 2008."
Of course, focusing on costs is a necessary and appropriate
part of management. However, mitigating the cost impact of health care delivery
is only one element of success. Likewise, the health care system itself is only
one factor that factors into the health of an employer’s population.
Health risk is becoming a more important factor in driving
health-improvement investments. A variety of factors contribute to that risk, such
as genetics, current state of health and health behaviors. Health-risk influencers
include demographic, behavioral, cultural, environmental and social factors. Evaluating,
monitoring and addressing all modifiable health-risk factors will be critical to
directing a company’s investments and evaluating the return and value of this investment.
With the shift from a cost perspective to an investment perspective
comes the requirement to modify the cost-measurement approach that employers have
been successfully employing. An evaluation of program success must include measuring
the health of the population and changes in that health over time, and determining
the contribution that health investments make on productivity and company profitability.
In "Two
Roads Diverged: Hewitt’s Annual Health Care Survey 2008," an overwhelming majority
of employers (88 percent) indicated a growing desire to focus on long-term solutions
that target the health and productivity of their workforce. More than two-thirds
of employers in that survey recognized the need for utilizing health care data and
measurement to drive their long-term strategy.
At the same time, though, 58 percent of employers participating
in Hewitt’s "Investing in Health" survey said they do not receive the comprehensive
reports and analytics necessary to support their health and productivity initiatives.
Clear objectives are essential to an effective measurement
strategy, but such objectives can be defined only with a solid understanding of
the health of the population and of the areas in which an impact can be made. Collecting
and aggregating a variety of data to establish a baseline and understand the characteristics
of the population are important first steps to developing meaningful metrics. Evidence-based
objectives support the establishment of measures that can demonstrate to leadership
that health is a sound business investment.
With a full understanding of the current state of health within
your population, it is important to focus actions on the key health drivers. Establishing
targeted health improvement initiatives will address the key characteristics of
your population that contribute to improving health, productivity and profitability.
A measurement strategy must allow you to answer the critical
questions that determine whether the steps you have taken are making an impact and
meeting your strategic objectives:
-
What are our key health risks?
-
How healthy is my population overall and how healthy are various
segments of the population?
-
Is the health improving or deteriorating over time?
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What segments of the population are vital to our business
sustainability and growth?
-
What health-improvement investments offer the most potential
for business return?
-
What initiatives have demonstrated change in level of risk,
either as a whole or individually?
-
How are my vendor partners performing in terms of delivering
integrated results?
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Are there barriers to health improvement?
-
How have corporate productivity and profitability improved
as a result of all of our actions?
If your existing measurement approach does not allow you to
answer these questions, then it is imperative to re-evaluate your strategy.
How do you shift from evaluating costs to measuring health
and productivity? The best way to do this is to start where you are today. Begin
with putting the pieces together—demographics, health behaviors, health care utilization,
wellness participation rates, prevention activities, workplace environment (lost
time, workplace injuries/deaths) and clinical outcomes.
Draw on a variety of data elements to paint the picture of
your population’s health. Looking at these elements independently is important,
but is not as effective as looking at how each independent factor contributes to
the overall picture of health. It’s challenging but necessary to turn these segmented
data elements into specific measures tied directly to business results.
Here are just a few examples of the types of metrics that
measure the impact of health initiatives on productivity and business profitability:
level of customer satisfaction, production output, accuracy and safety goals, changes
in health risk and employee costs as a percentage of payroll.
As employers noted in the "Investing in Health" survey, obtaining
the "right" data is difficult, but essential to their long-term, shifting perspectives.
Employers must have access to detailed employee utilization data that is current,
reliable and flexible. Use of a data warehouse is but one step toward achieving
this goal, and holding vendors accountable for data coordination is a key contracting
requirement.
However, of utmost importance is a solid analytical structure
that allows you to compile the pieces of data into meaningful metrics that demonstrate
this critical point: Investing in health contributes to company profitability by
fostering productive, at-work employees.
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