Total Health paradigm offers significant savings
December 1, 1997 3 minutes read
Total Health paradigm offers significant savings
Model integrates medical, disability management
How would you like to slash 15% or more from your company’s medical and disability costs? Well, you can, says Jenny Emery, principal and head of the total health and disability practice at New York-based Towers Perrin, a management consulting firm.
Her formula? Transform your benefit plan into a total health management effort, which focuses on productivity. Emery defines total health management as delivering the most effective, efficient health care services to keep people healthy and/or return them to a productive lifestyle.
This requires the integration of your medical and disability programs. "This is not merely a vendor selection exercise nor a product-based solution," Emery emphasizes. "The days of designing medical and disability plans and selecting workers’ compensation and other benefit vendors and providers in isolation from each other and from the workplace must change. In the same way that operating divisions have increased productivity and quality through integrated teams, human resource, financial and risk management executives can improve employee health and disability management through integrated and coordinated strategies."
This approach requires looking at your benefits package through new eyes, explains Emery. "This goes beyond managed care, beyond managed disability, and beyond workers’ comp," she says. "We’re talking about fundamentally rethinking the ways we deliver health care and what the objectives of that delivery are."
As managed care was developed, notes Emery, cost, quality, and access were the major goals. "Certainly, this has been effective when it comes to medical costs," she says. "But if you broaden the definition of health care to mean a healthy workplace and healthy workers, maybe the cost measure you should be interested in goes beyond direct care to productivity. Linking the control of health care costs to productivity has never been part of the managed care model."
"There is nothing inherently wrong with managed care," Emery says. "It’s not even at odds with measuring the employee’s return to functionality. It just doesn’t focus on it."
The total health approach could also impact providers. "Through capitation, the managed care organizations have tried to align the financial incentives of physicians with their medical cost management goals," Emery explains. "If this is expanded to include enhanced productivity, it may make changes in the financial structure for physicians."
The four key components of this paradigm shift, says Emery, are:
• Organizational effectiveness: How you manage employees in the workplace, as it relates to absence and communication.
• Benefit plan design: "The way we pay people not to come to work is antiquated," says Emery. "We need to rethink the how and when, and whys, because it has a huge impact on use."
• Delivery systems: How to motivate physicians to get employees back to work sooner.
• Rethink fundamental performance measures: Try to link total health management measures with business measures.
One of the greatest challenges for the total health concept, Emery admits, is demonstrating improved productivity. "In simplest terms, if through the improved health of the workforce you can produce more with same number of people, or the same amount with fewer people, you have improved bottom-line business results through health-related productivity," she observes.
Towers Perrin is currently conducting research to try to explicitly define the link between health and productivity. "People know it is there," she says, "but most cost-justification of wellness tends to be focused on medical costs and that’s not big enough. For example: How many people on any given day are out of work because of a health-related problem? What’s the average duration of health related problems or disorders? Workers’ comp has always focused on this linkage they consider claims with both medical costs and lost productivity attached to them."
The focus on productivity also offers exciting opportunities for wellness professionals, says Emery. "If we redefine the measure of quality health care, we may be able for the first time to draw a direct line of sight between prevention and bottom-line business results," she says.
How will this new paradigm increase productivity and decrease costs? "Let’s look at chronic care, for example," Emery says. "In the long run, if we return employees to some sort of functional lifestyle, that may help decrease direct costs. Also, you will realize administrative efficiencies; you’re layering on new elements, as opposed to changing the focus from managed health care plans altogether."
[Editor’s Note: For more information on total health management, contact: Jenny Emery, Towers Perrin, 175 Powder Forest Drive, Weatogue, CT 06089. Telephone: (860) 843-7029. Fax: (860) 843-7001.]
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