Scott MacStravic, Ph.D.
[The Measurement Challenge, cont'd]
The estimation of productivity is almost always necessary, because measuring actual productivity of every employee every day would be prohibitively expensive. Unless employees have explicit output measures, such as with piecework, their productivity is usually estimated based on employee self-reports. These are subject to both limits of perception of one’s personal productivity and a natural tendency for employees to never make their productivity levels look too bad, lest they be fired.
Fortunately, there have been a number of productivity/presenteeism measuring devices developed and tested in recent years. These include the Stanford Presenteeism Scale. Once providers and employers agree upon the measurement device or system to be used, and both accept the results based on such estimates, the evaluation of the total benefits of HPM can go forward, and fair payment or sharing of total value gains can be achieved.
Of course, whether corporate clients and providers accept the same results as attributable outcomes and benefits of HPM efforts will depend on mutual trust and past experience. Providers will have to ensure that they are viewed as “benevolent” rather than “opportunistic”, as being client advocates, rather than seeking only to exploit their customers in their own interest. The consumer advocacy scale can be used to track clients’ perceived trust, and likelihood of remaining a client.
On the other hand, rather than rely on clients’ expressed satisfaction with past results and current trust, it may prove better to at least include asking clients about their expectation of future gains from remaining clients of the same HPM provider, and their anticipation of any loss should that relationship end. This combination of expected benefits and anticipated loss has been shown to better predict customer persistence in a real relationship than is true for satisfaction with past benefits alone. [K. Lemon et al. “Dynamic Customer Relationship Management: Incorporating Future Considerations into the Service Retention Decision” Journal of Marketing 66:1 Jan 2002 pp. 1-14]
There is a blue ocean out there, but one that remains blue primarily because of the combination of the difficulty of gauging the productivity and total performance impacts of HPM, and the skepticism of employers over results that represent combinations of estimates and predictions, rather than “hard evidence”. This means that providers that can master the challenge of delivering credible evaluations, along with delightful results will be able to enjoy the blue ocean advantages that much longer, since their rivals will face precisely the same barrier.
Appendix
Dow Chemical Co. – Table of Labor and Medical Costs
Disease (Abs/Pres x %Emp = Subtl) + (Medical x %Emp = Subtl) = Total
|
Allergy |
$7763 |
18.9 |
$1467 |
$1442 |
18.9 |
$273 |
$1740 |
|
Depression/Anxiety, etc. |
$23,754 |
4.3 |
$1021 |
$2017 |
4.3 |
$88 |
$1109 |
|
Arthritis |
$9246 |
9.0 |
$829 |
$2623 |
9.0 |
$236 |
$1065 |
|
Back/neck |
$10,882 |
7.0 |
$762 |
$2249 |
7.0 |
$157 |
$919 |
|
Heart/Circ |
$9616 |
7.1 |
$683 |
$2531 |
7.1 |
$180 |
$863 |
|
Stom/Bo |
$10,702 |
3.4 |
$364 |
$2585 |
3.4 |
$88 |
$452 |
|
Migraine |
$10,643 |
3.1 |
$330 |
$1689 |
3.1 |
$52 |
$381 |
|
Diabetes |
$8358 |
2.4 |
$201 |
$3663 |
2.4 |
$52 |
$289 |
|
Breathing |
$14523 |
1.5 |
$218 |
$2900 |
1.5 |
$33 |
$251 |
|
Asthma |
$8522 |
1.3 |
$111 |
$1782 |
1.3 |
$23 |
$134 |
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
$5986
|
|
|
$1218
|
$7204 |
Table is based on published research, including J. Collins, et al. “The Assessment of Chronic Health Conditions on Work Performance, Absence and Total Economic Impact for Employers” JOEM (Journal of Occupational and Environmental Medicine June 2005 547-557; and S. Nicholson, et al. “How to Present The Business Case for Health Care Quality to Employers” Applied Health Economics and Health Policy 4:4 2005 209-218 I calculated the costs per employee by multiplying the costs of each condition times the proportion of employees who had each condition, then summed all of the ten conditions’ costs to yield the total costs per employee.
1. Abs/Pres reflects the total estimated negative cost/revenue impact of both absenteeism and presenteeism for each disease condition; %Emp = the percentage of employees who identified each disease condition as their primary chronic illness; Subtl = subtotals for each of the separate absence/presence vs. medical cost components of each disease category’s costs to Dow Chemical
2. Disease conditions are: Allergies; Depression/Anxiety/Emotional Disorders; Arthritis and Joint Pain/Stiffness; Back and Neck Pain; Heart and Circulatory Disorders; Stomach and Bowel Disorders; Migraine and Other Chronic Headache; Diabetes; Breathing Disorders other than Asthma, such as COPD, Emphysema, etc.; Asthma. All are listed in order of greater total costs per employee – Cancer was not included in the study, even though it is a common and expensive chronic condition for its survivors, and adds substantially to total costs. Nor were risk conditions such as overweight/obesity, which have been found to have significant labor costs of their own, as do risk behaviors such as smoking independent of their effects in promoting chronic conditions. So the above data are surely conservative.
Read Part 1 of this post.
Read Part 2 of this post.
Read Part 3 of this post.
