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Calculator Estimates Cost of Employee Health Problems

January 2, 2008
Related Topics: Medical Benefits Law, Health and Wellness, Workforce Planning, Latest News
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Many of today’s corporate executives want more than promises that wellness and preventive health-care programs will lower medical insurance premiums and other costs related to workplace illnesses.

C-suite executives want hard data, say corporate health experts touting a new tool that helps make clearer the connection between wellness and savings.

The more information, the better, is the thought behind Blueprint for Health, a free online tool now being used by companies small and large to estimate how illnesses among workers affect medical costs, employee absences and productivity.

Developed by several organizations, the tool—essentially an online calculator—takes into account an array of information specific to a company, including gender, age, geographic location, salary and marital status, to produce estimates on the number of absences per employee, per-employee doctor visits and prescription costs, and percentage of employees who will be impaired during the workday.

According to John Riedel, president of the Denver-based Riedel & Associates Consultants, who also helped build the Blueprint for Health, the estimates are based on more than 1 million data points from several large employers.

“We loaded input variables, looking at absence data, [employee] impairment data and... we created estimators on these large company data points,” he says. “In essence, we created algorithms in that database to gather estimates, creating a very robust tool for estimates.”

In addition to work by Riedel & Associates, a health and productivity management consulting firm, other organizations involved in building the tool include the Health as Human Capital Foundation, the American College of Occupational and Environmental Medicine and the National Business Coalition on Health. In addition, Bridgewater, New Jersey-based pharmaceutical maker Sanofi-Aventis U.S. supported the effort with a grant and a national advisory committee of corporate medical directors and benefits experts also helped steer the project.

Riedel says the tool is an easy way for employers to learn about their employees and the costs related to keeping a healthy workforce.

Once an employer fills in the online questionnaire, reports are generated providing estimates of costs for all employees, including those likely to have chronic conditions such as diabetes, high blood pressure, high cholesterol, hypertension, insomnia, as well as obesity and heart-related conditions, among others. A summary, charts and bar graphs provide employers with total estimates.

Riedel says more than 700 companies have used the free estimator since its inception in early 2006.

“The tool is pretty good if you are going to be using it for estimates specific to your organization,” says Laurel Pickering, executive director of the New York Business Group on Health. “When [statistics] say, ‘Diabetes costs the workplace X amount of dollars a year,’ it’s really not specific to one organization. [Companies] really need the specifics for their organization and the Blueprint for Health allows them to do that.”

Pickering, whose organization provides guidance for companies in the arena of health and welfare, says some employers have used the tool to justify their wellness programs, including everything from exercise incentives to smoking cessation program.

For example, Peoria, Illinois-based Caterpillar used Blueprint for Health to help executive officers better understand the need for a wellness program now in development, says Dr. Steve Goldman, Caterpillar’s medical director, who also served on the Blueprint for Health’s advisory committee.

“This tool helps us see the cost of medical care and realize why employees’ health is a lot more affordable when you take care of them before they get sick,” he says.

Dr. Goldman says the Blueprint for Health is the first tool he’s seen that looks at the relationship between sickness and productivity. “We see that [the cost of] medical care is only the tip of the iceberg. A lot of [the productivity] costs are hidden and difficult to get to.”

The Blueprint for Health is available at blueprint.hhcfoundation.org and features five applications: How to estimate total health-related costs including absences and presenteeism; understanding the skewed distribution of health-care cost, absence and presenteeism; estimating the cost of various health conditions; understanding salary level and salary equivalence on productivity loss; and understanding the dynamics of the migration of employees from year to year between the various cost levels.

Filed by Louise Esola of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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