The Value of OnSite Occupational Health Services

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The Value of On-Site Occupational Health Services

• Cheryl Flanagan, RN, COHN, COSS
• June 2007
• VPPPA Conference
• Orlando, Florida

2
Objectives

• Review brief evolution of Occupational Health
• Identify motivations in health care trends
• Core Competency Industry
• Core Competency of Occupational Health Services
• Estimate the return on investment
• Considerations for YOUR situation
• Summary
• Q A

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An evolution in Occupational Health
Born out of necessity to care for the wounded
during war to fighting the rising cost of
healthcare
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The Motivation

• COST MATTERS!
• GM spends about 1500 on health care for every
  vehicle it produces more than they spend on
  STEEL!
• Starbucks spends more on healthcare then it does
  on COFFEE BEANS!
• Source Katie Strong, Director of Congressional
  Public Affairs, US Chamber of Commerce
  11/29/2006

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more motivation

• Work injuries cost industries
• Medical
• Indemnity
• Legal
• Hidden costs re-allocating resources,
  re-training, loss of intellectual horsepower,
  talent, quality, productivity
• More hidden costs administrative, case
  management, EMR elevation contributing to higher
  W/C insurance rates

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even more motivation
Lower premiums but higher deductibles and co-pays
Source Kaiser/HRET survey of employer sponsored
health benefits Bureau of Labor and
Statistics Consumer Price Index (US City Average
Inflation)
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Core Competency

• Primary revenue generator
• Make something
• Sell something
• Product
• Service
• Primary Goal of business
• To maximize return on shareholder equity
• Compete in the marketplace

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Core Competency

• Whats needed to generate revenue with the core
  competency?
• Place to conduct business
• Parts
• Machines in good operating order
• Humans IN GOOD OPERATING ORDER
• But- keeping a workforce healthy is
• NOT typically a core competency

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Benefits of workers in good operating order

• Less absenteeism
• Fewer injuries
• If injured, recover faster
• Typically higher morale
• Lower medical benefit costs
• Lower costs operating business
• Less turnover
• Higher quality output
• Higher productivity

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Workforce Health ServiceCore Competency

• Injury Management
• Immediate and appropriate care
• Understands Recordable criteria and uses
  conservative care when appropriate
• Follow-up treatment
• Adherence to Doctors orders
• Availability for complications (conveniently
  located in-house)
• Establish causal connection
• Return to work safely
• Track progress/report to company

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Potential Disconnect

• Industry speaks Productionese
• Healthcare professionals speak Medical

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Communication
What's going on with Ralph?
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Communication
"Well, he has a vishevlic in his skanectigazoid"
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Communication
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Communication

• What he is REALLY asking.
• How long will he/she be off work?
• What are the restrictions?
• How long will restrictions last?
• How often will he miss work for future treatment?
• How long will it take before hes better?
• Whats the worst case scenerio so we can prepare
  for production?

Occupational Health staff anticipate the
questions a manager will ask and have the answer
ready, or give an educated guess to help the
manager plan.
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Workforce Health ServiceCore Competency

• Coordination of care with community providers
• True case MANAGING vs. case monitoring
• Guide care to most efficient route
• Provide necessary information for physicians to
  make most informed decisions
• Communications between Doctor, patient, and
  company

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Workforce Health ServiceCore Competency

• Emergency response
• First Responder Training
• CPR/First Aid, AED
• Drill participation and planning with the company

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Workforce Health ServiceCore Competency

• Personal illness care (minor)
• Reduces time away from work
• Opportunity for patient education
• Appropriate referrals
• HIPPA appropriate communications to the company

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Workforce Health ServiceCore Competency

• Federal, State, and local regulatory compliance
• OSHA log accuracy
• First Report of Injury to State (C20)
• For those sites offering an insurance plan with
  certain incentives (CDHP), IRS 2004 and Medicare
  Prescription Drug, Improvement, and Modernization
  Act of 2003 may apply
• Employers cannot provide both an HSA and free
  work site health care treatment services for
  employees enrolled in the plan. (Occupational
  Health Services are NOT restricted, however).
  discounted care may be an option
• Health Savings accounts (HSA) contributions
  from both an employer and employee (pre-tax
  dollars) that belongs to the employee and is
  transferable.
• Health Reimbursement Arrangement (HRA) Totally
  employer funded, employer controlled and is
  forfeited upon leaving employment with the
  employer.

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Workforce Health ServiceCore Competency

• Prevention
• Ergonomics
• JSA
• Engineering intervention
• Health Risk Assessments
• BMI
• History
• Physical/ fitness
• Lifestyle Recommendations
• Activity
• Smoking cessation programs
• Group participation

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Workforce Health ServiceCore Competency

• Reliable educational resource
• Pandemic preparation
• Travel health concerns
• Self care (When to call the doctor)
• Disease management (like diabetes)
• Nutritional counseling
• Weight management
• Smoking cessation

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Return on Investment

• Hard dollars
• Insurance premiums
• Wage replacement
• Medical costs
• Legal costs
• Third Party processing fees

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ROI calculation OV

• Assumption Manufacturing plant of 3500
  employees 24/7 operation, 50 weeks/year
• Assumption 2007 Average Office visit 84.63,
  2007 Average Drs service 133.30.
• Assumption Average number of visits to the
  clinic 20/day (less than one per hour)
• The annual cost for OUTSIDE service almost 3/4
  MILLION!

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Return on Investment

• Soft dollars (time is money)
• Cost of retraining another person
• Loss of productivity with a less experienced
  employee
• Time a manager takes to arrange a replacement
• Administrative time to process claim

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ROI calculation (time)

• Assumption Manufacturing plant of 3500 employees
  24/7 operation, 50 weeks/year
• Assumption Employee wage 35/hour
• Assumption travel and time at office 2.5
  hours,
• Assumption 20 visits per day (less than 1 per
  hour)
• Cost of nearly ½ Million per year!
• Soft savings of an onsite health service makes up
  about 40 of the total ROI. Dont forget other
  hidden costs.

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ROI for Employee Health Programs

• May take up to 3 years
• Nearly all companies see a positive ROI
• For every dollar invested
• Coors returned 6.15
• Citibank returned 4.56
• General Mills returned 3.90
• Motorola returned 3.15
• PepsiCo returned 3.00

Source HR Magazine, Sept. 2005 Employee
Health Promotions Programs What is the Return
on Investment?
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Where to Start

• Look at some indicators
• Injury/Illness rate
• Lost time rate
• Absenteeism rate
• Comparisons to the Occupational Disability
  Guidelines
• Turnover rates
• Healthcare cost trends
• EMR
• Workers Compensation cost trends

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Outcome Oriented Results
Define
Measure
Control
Analyze
Improve
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Obstacles

• Scope Creep
• Avoid adding to the original scope
• If necessary, shelf the addition for the next
  project
• Too much, too soon
• Obtain a realistic snapshot in time, like an
  annual amount vs. one month
• Tackle the vital few and leave the trivial
  many
• One man band
• Include diversified team from HR, Finance, EHS,
  Operations
• Committees can distribute some of the leg work

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Even Small Efforts Pay Off

• Why Should We Provide Flu Shots to Our Employees?
• 114,000 people are hospitalized every year in the
  U.S. due to complications of the flu
• 36,000 people die each year in the U.S. due to
  complications of the flu
• vaccination results in 32-45 decrease in
  absenteeism
• average sick day costs 200 in lost productivity
  per employee
• vaccination is the most effective way to prevent
  flu and the spread of infection

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Flu Costs

• The average loss in productivity for an employee
  infected with the flu is 575-1000/week.
• Add to that the additional losses in salary and
  benefits for a sick employee, and the flu shot
  becomes a valuable tool for enhancing your
  company's bottom line.
• (Source New England Journal of Medicine, October
  1995,2000, CDC and various Human Resources
  executives)

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Cost effective flu shot Clinics

• Student nurses
• Local Red Cross
• Nurses associations
• Doctors office
• Partner with other businesses

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Access Freebies

• Sponsor a Health Fair and invite local providers
• Conduct lunch and learns addressing topics that
  drive your costs-
• Skin Cancer avoidance
• Breast Cancer awareness brochures
• Blood Pressure Screening
• Advertise health and wellness tips
• Partner with weight management organizations
• Start group walking activities

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The wave of the future

• Poorer health higher insurance
  premiums/deductables, lower productivity
• Incentives for positive reinforcement
• Quit smoking
• Right BMI
• Fitness participation
• Illness Prevention/early intervention
• Nutrition counseling
• Screening programs
• Health Risk Assessments (HRA)

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Summary

• On-site Health Services provides a cost effective
  approach to helping companies gain a competitive
  edge and enhance profit
• Partnering with an Occupational Health Service
  produces a positive return on investment.
• Well employees are productive employees
• On-site Health Services bridges communication
  with the company, employee and community health
  care services.
• On-site workforce health services contribute to
  long term benefits for the company
• On-site health services can be customized to the
  needs of the company

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QA

• Whats for lunch?