Employers Are Focusing on Improving Health Outcomes

Employers across the nation increasingly recognize that one of the best ways to improve productivity is to ensure the health and well-being of their employees. That’s why leading edge employers are focusing their attention on health outcomes, rather than individual health care service costs, in order to ensure they will get the most employee health, and associated productivity gains, out of the health care dollars they spend.

Simply adding up medical and pharmacy claims costs for specific medical conditions doesn’t provide a true picture of the full impact of poor health on the much greater costs of lost productivity in the workforce. In fact, according to an NPC-funded study, employers who focus only on medical and pharmacy costs in creating employee health strategies may be missing the mark by misidentifying the health conditions that most impact the productivity of their employees and underestimating the impact of other factors.

According to the same study, there are high costs associated with lost productivity: on average, every $1 of medical and pharmacy costs is matched to $2.30 of health-related productivity costs. And when considering medical and drug costs alone, the top five conditions driving costs are cancer (other than skin cancer), back/neck pain, coronary heart disease, chronic pain, and high cholesterol. But when health-related productivity costs are measured along with medical and pharmacy costs, the top five chronic health conditions driving these overall health costs shift significantly, to depression, obesity, arthritis, back/neck pain and anxiety.

When employers know which conditions are impacting their workers, they can take meaningful steps to address those issues through health and wellness programs, modified health care plan designs, and other focused tactics. One approach that is growing in popularity has been value-based insurance design, or VBID. VBID takes into account the bigger picture, beyond just medical and pharmacy costs, and uses approaches that recognize the full benefit of having healthy employees and the full costs of having unhealthy employees. VBID builds specific consumer incentives into plan design, benefits or premium contribution structures to steer consumers to make high-value decisions. Incentives often encourage the use of those interventions that have been shown to have a positive impact on health outcomes, such as specific medical services or medications, adoption of healthy lifestyles, or use of high-performance providers.

Medication compliance, sometimes referred to as adherence, is a key element to achieving health goals and is often an intrinsic part of VBID. Following a medicine treatment plan developed by an individual’s health care provider, filling prescriptions, and taking medications as prescribed are foundational to reaping the benefit of therapy. According to a recent survey sponsored by NPC, 89% of employers acknowledge that medication compliance is a top health management objective, and a large percentage of those surveyed are taking steps to analyze health data and implement compliance programs.

This recognition that compliance can stave off more serious and costly health consequences has led employers to drive the creation of VBID programs that lower barriers to necessary and high-impact medications that help employees manage chronic and costly conditions. With the right approach, employers can incent the right utilization for the right reasons, and promote value and better health and productivity in their employees.