Connecting Health, Productivity and Business Thomas Parry, Ph.D. President

1. Connecting Health, Productivity and Business Thomas Parry, Ph.D. President Integrated Benefits Institute

2. About IBI • National, not-for-profit corporation • 674 corporate sponsors • Employers: 90% of IBI’s members • IBI’s mission. Demonstrate the business value of a healthy workforce through: • Independent HPM research • Measurement and modeling tools • Forum for sharing ideas and experience • Visit www.ibiweb.org

3. “The healthcare issue that connects employers all over the world – regardless of how the healthcare system is financed in their country – is time loss from work and resulting lost productivity.”

4. New Employer Realities • Unprecedented economic challenges • Show the C-suite the value of improved workforce health • Dead end: attempting to control claims costs in separate program silos • Looking for best strategies to improve workforce health, reduce lost time and enhance productivity • Limited data, time and dollars

5. What’s at Risk for Employers?Even in the US, health-related lost productivity is a big deal

6. The Full Costs of EE Health-- Auto Manufacturers • Estimates based on IBI’s new FCE modeling tool • 171,250 employees • Employer-paid claims costs only • Published as IBI Quick Study in February 2011

7. Full Cost Components 28% 48% 16%

8. A View of the Canadian Workforce

9. Prevalence of Chronic Disease

10. Changing Importance of Top 10

11. Treatment of Chronic Disease

12. Prevalence of Co-Morbidity

13. The View from the C-Suite

14. Linking Health, Productivity & the Bottom Line CFO Survey, IBI, 2002

15. Effect of Benefits Programs on Financial Performance A big deal for only 25% Source: On the Brink of Change – How CFOs View Investments in Health and Productivity. Integrated Benefits Institute. 2002.

16. The Impact of Ill-Health 96% 90% 86% 84% 71% 47% Source: The Business Value of Health: Linking CFOs to Health and Productivity, IBI, 2006

17. Are CFOs Getting Information? • Absence • 51% ever get reports on occurrence • 22% get reports on financial impact • Presenteeism • 22% ever get reports on occurrence • 8% get reports on financial impact Source: The Business Value of Health: Linking CFOs to Health and Productivity, IBI, 2006

18. Quantifying Financial Lost Productivity* • Lost productivity – “the financial impact on a company when employees are not at work and fully functioning” • Two components: absence and decrements in job performance (“presenteeism”) • The Financial Impact of Absence • Wage replacement payments • “Opportunity costs” of ER’s response • The Financial Impact of Presenteeism • Wage and benefit “overpayments” • Opportunity costs of resulting lost time *Source: Sean Nicholson, Mark Pauly, et al., "Measuring the Effects of Work Loss on Productivity with Team Production," Health Economics 15: 111-123 (2006).

19. Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

20. RA Study Population • 5,483 employees with RA • Ave. age: 51 years (14% under 40 and 14% over 60) • 41% Male; 59% female

21. Impact of Out-of-Pocket Cost-- on medication adherence -- Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

22. Impact of Out-of-Pocket Cost-- on medication adherence -- Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

23. Impact of Out-of-Pocket Cost-- on medication adherence -- Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

24. Impact of Out-of-Pocket Cost-- on medication adherence -- Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

25. Impact of Out-of-Pocket Cost-- on medication adherence -- Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

26. Impact of Out-of-Pocket Cost-- on medication adherence -- Adherence reduced 38% by $20 copay increase Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

27. Savings in Lost Productivity Costs-- For No-Script Group -- -26% Source: A Broader Reach for Pharmacy Plan Design, Integrated Benefits Institute, 2007

28. New Report: Linking VBBD and Productivity

30. Health Risks & Job Performance

31. Co-Morbidity and Absence

33. Prevalence across broad condition clusters among those with at least one chronic condition

34. Annual Absence DaysSingle vs. Co-Morbid Condition Clusters

35. Annual Presenteeism DaysSingle vs. Co-Morbid Condition Clusters

36. Annual Lost DaysAbsence and Presenteeism

37. Transitioning from ROI to Value of Investment

38. Key Health Dimensions • Financial • Program participation • Biometric screening • Health risks • Utilization • Preventive care • Chronic conditions • Lost worktime • Lost productivity • Employee engagement

39. The Temporal Dimension • Leading indicators • Health risks • Preventive care • Biometric screening • Chronic conditions • EE engagement • Treatment indicators • Utilization • Program participation • Lagging indicators • Financial • Lost worktime • Lost productivity

40. Dimensions & Dashboard Metrics

41. Thinking about Metrics as Hierarchies Dashboard metrics Component metrics Contributing metrics

42. Contact IBI Thomas Parry, Ph.D., President tparry@ibiweb.org www.ibiweb.org