Scott MacStravic, PhD
The main reason for healthcare organizations being interested in employee health management (EHM) should surely be for their own use. Many HCOs are already investing, including Mayo Clinic, Duke University Health System, Fairview Health Services, etc. The should also be extending their awareness of what EHM can accomplish past the obvious and easily measured medical care, WC and disability costs to include at least absence and presenteeism effects on productivity. At the outside, they should add effects such as employee tenure, clinical and service quality, customer satisfaction and loyalty, and the revenue impacts that can also be gained.
But while they stretch their vision to these wider effects, they might also consider EHM as a revenue-generating option for themselves. The capital costs of keeping up with sickness care technology are enormously greater than the relatively simple and inexpensive approaches to EHM that are available. And employers seem very willing to pay good money for good results.
A recent survey, reported at the 2006 Annual Conference of the Society for Human Resources Management, found that the brokers and consultants that advise employers are fairly bullish on EHM. 85% of them said their clients were interested in purchasing services to improve employee health and productivity. And virtually all reported their clients would pay for effective solutions, knowing they want the potential realized, but that they are not the best source of EHM.
Employers would surely meet employee concerns and some distrust, for example, if they collected all the information needed about individual employee health and productivity. How many employees could be fully open and honest in reporting health effects on their productivity, for example? And without total honesty and comprehensive information on employees’ motivations and readiness to change, for example, EHM efforts cannot be fully effective.
Moreover, employers seem willing to pay a decent price for effective solutions. Over 50% of respondents in the survey agreed that their clients would pay up to $30 per pay period, and 42% said their clients would pay up to $40. Even it the “pay period” is biweekly or twice a month, this means potential annual payments of $720 at least, up to $1040, though that will surely require getting returns that justify that much payment. [“Ceridian Survey Finds Employers Want Better, More Ways to Improve their Employees’ Health and Productivity” Ceridian.com June 26, 2006]
At a minimum, these figures should suggest what kinds of results employees expect, and therefore what kinds of savings HCOs, themselves might expect from EHM investments with their own employees. Reports by HCOs of actual results they have achieved are rare, and often are limited to reductions in sickness care costs, which would greatly understate the potential. And at best, HCOs should be able to devise or use their own EHM programs to achieve results that will make employers happy to pay more than their costs. Surely, a new profitable revenue source would be welcome.
