HFMA VIEWS

Scott MacStravic, Ph.D.

There is a growing development in employee relations for which hospitals should perhaps be the leaders, or at least among the foremost proponents and examples – evidence-based Total Benefit Management. Just as with medicine, the idea of the evidence-based approach is that employers should base their benefit decisions on hard data and rigorous science related to whether they will and do gain desired results from their TBM investments. [Assessing Quality-Based Benefit Design California HealthCare Foundation April 2006 (www.chcf.org)]

TBM, itself, means two things, the first being the foundation and reason for doing it in the first place. It only makes sense when and because employers think of and treat their employees as valuable assets, where different levels and types of investment in their acquisition, retention and development will make significant differences to the performance of the organization. For employers who think of and treat employees as replaceable cogs in their production, selling and service “machines”, as sources of costs, rather than ROI, it makes no sense.

The second meaning focuses on the “total” dimension, treating all elements in human resources and employee relations as part of the total investment, to be integrated and evaluated based on their ROI. For health care organizations, it is the health-related dimensions of this ROI that should be of most interest, though all their employee-focused investments should be included, as well. [R. McCarthy “The New Direction in Disability Management: Putting It All Together” Business & Health 17:6 June 1999 25-30]

The proponents and practitioners of TBM today, such as Pitney Bowes, Dell, etc. treat their health-related investments as having expected, measurable, and significant returns in the area of productivity and labor costs. When Dow Chemical Co. analyzed its health-related performance impacts, for example, it found that sickness in all its dimensions created significant costs. But only about 20% of these costs were direct medical expenditures, 8% were absence-related, while 72% were the effects of reduced productivity among employees who were at work but handicapped by some sickness. [“Total Value/Total ReturnTM Tells the Pitney Bowes Esperience: Healthier Employees Translate into a Healthier Bottom Line” PRNewswire.com Apr 17, 2006]

With the threatened pandemic of bird flu a constant threat, and the known impacts of having sick employees on the job threatening to spread their sickness to others, the impact of “presenteeism” becomes even greater. And hospitals, as large employers, are as much if not more at risk for reduced productivity among employees who are present on the job as any employers. But they are also far more able to do something about it, and even to market their expertise and experience to other employers. [S. Sullivan “Presenteeism, Cost and the Opportunity for Better Health” Effective Disease Management: Reduce Costs and Improve Productivity” Employee Health Care Conference San Diego, CA Mar 1, 2005 (www.americanhealthways.com) 1-3]

Proactive health management efforts, from worksite wellness to risky behavior and pre-disease, and particularly disease management, hospitals could be “model employers” demonstrating and benefiting from the productivity impacts of creating healthier employees. Certainly, with labor shortages apparently a permanent challenge in health care, anything that can significantly improve the productivity of employees at work, along with the proportion who are actually on the job can help in that challenge.

And hospitals that become masters at proactively managing their employees' health, along with their other benefits as part of evidence-based TBM, will be in a position to market their services to employers in their markets. And this could open up new non-managed-care revenue markets as well as create closer and mutually beneficial relationships with employers – on top of the internal performance benefits to hospitals, themselves.