The Health

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The Health Productivity of the Aging American
Workforce The Politics of Incapacity
Kenneth Mitchell, Ph.D..Chattanooga, TN
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The Collision of Competing Self Interests
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Set a Course for the Aging Workforce
The Reality Economic, Demographic and Labor
Market Issues
The Health, Productivity Disability
Connection
Productive Aging A Program Blueprint

Productive Aging A New Life Stage
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The Reality

• Economic Demographic Influences
• Summary Points

• The Age Tsunami
• Social Security Solvency
• Medicare/Healthcare Impact
• Disability Risk Patterns
• Pension Program Metamorphosis

New Reality
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The Age Tsunami
4.5
The Boom Years 1946-1964
4.0
3.5
Birth in Millions
3.0
2.5
2.0
Source U.S. Census
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Social Security and Medicares Cash Deficits
Billions of 2005 dollars
Social Securitycash deficit 2017
Medicare HIcash deficit2004
Note Projections based on the intermediate
assumptions of the 2005 Trustees
Reports. Source GAO analysis based on data from
the Office of the Chief Actuary, Social Security
Administration and Office of the Actuary, Centers
for Medicare and Medicaid Services.
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Long Term Challenges of the Social Security
System
Date Event
2009 Social Security cash surplus begins to decline
2017 Annual benefit costs exceed cash revenue from taxes
2027 Trust fund ceases to grow because even taxes plus interest fall short of benefits
2041 (SSA) 2052 (CBO) Trust fund exhausted, annual revenues sufficient to pay about 74 78 of promised benefits
Sources Social Security Administration, The 2005
Annual Report of the Board of Trustees of the
Federal Old-Age and Survivors Insurance and
Disability Insurance Trust Funds. Washington, DC,
March 2005. Congressional Budget Office, The
Outlook for Social Security Potential Range of
Social Security Outlays and Revenues Under
Current Law. Washington, DC, June 2004 (updated
April 2005).
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Healthcare Cost Pressures

• Demographics (1 annually)
• An aging population/work force with greater
  longevity
• Emerging Technologies ( 2 annually)
• New diagnostics and treatment, new devices, new
  medications
• Change in Status of Drugs ( -0.5 annually)
• Generic and OTC applications
• Mandated Benefits (0.5 annually)
• Legislation affecting medical costs (e.g. .
  Colorado move from no fault auto insurance to
  tort system 2.0
• Medical Price Inflation ( 6.0 annually)
• 2.5 general inflation plus Medical inflation _at_
  3.5
• Baseline Utilization (2.0 annually)
• Changes in patient behavior Changes in provider
  behavior
• Benefit Plan Changes (-2 annually)
• Risk and cost transfer to patient

Reported by the American Academy of Actuaries,
2005 Rising healthcare cost Briefing
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Private Pension Forces
IBM United Airlines Verizon General Motors Delta
Airlines
Long Term Trend? Leaders? Survivors? A New
Paradigm? Ultimate Impact?
Change in Employer Pension Philosophy Employee
Retirement A Personal Responsibility Defined
Benefit vs. Defined Contribution Increasing
Number of Defaults PBGC Deficits
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Labor Market Dynamics
Changing Work Force Dynamics are Redefining Work
Options Opportunities Summary Points

• Work Force Growth
• Shortage of Workers in the US
• Changes in Future Growth Patterns
• Older Worker Industries
• New Verbs Out Source Off Shore

An Employer Paradox
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A Growing Shortage of Workers in the US
Expected Labor Force and Labor Force Demand
Palpable by the End of This Decade
Millions of People
Source Employment Policy Foundation analysis
and projections of Census/BLS and BEA data.
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Dramatically Different Patterns of Growth by Age
Percent Growth in U.S. Population by Age
2000-2010

• Declining number of mid-career workers
• Few younger workers entering the work force
• Rapid growth in the over-55 workforce

Age of Workers
Source US Census Bureau International Data Base
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. . . Continuing for Our Working Lives!
Percent Growth in U.S. Workforce by Age 2000-2020
Age of Workers
Source US Census Bureau International Data Base
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Median age of Employed Population
Selected Industries
Source 2003 Current Population Survey, U.S.
Department of Labor
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Disability Dynamics
Aging, Disability and Healthcare Cost
Connections Summary Points

• Presenteeism is the First Indicator
• Healthcare Costs Risk Factors
• LTD dominated by older workers
• Musculoskeletal/Chronic Pain
• STD Durations Extended with Age

Challenges or Opportunities
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Medical Conditions Productivity Connections
Prevalence of ees reporting condition
Ambiguous Impairments
High Scores
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Short (STD) and Long (LTD) Term Disability
Distribution by age
Source UnumProvident Disability Database,
2002-2004.
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STD Lost Days by Selected Impairments
Source UnumProvident Disability Database,
2002-2004.
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Top 4 STD impairments with the Greatest Lost
Time
Workers over the age 40
Source UnumProvident Disability Database,
2002-2004.
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Productive Aging The Impact of A New Life Stage

• Age is not a Disability - Aging is not a
  Disease
• Summary Focus

• Funding for Longevity
• Retirement Productivity Expectations
• Benefits Entitlements Trends
• Productivity Barriers Enhancers
• Productive Aging Building Blocks

A New Way of Thinking
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Retirement Expectations
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Time for.Expected Years Spent in Retirement
30 25 20 15 10 5 0
30
20-25
Years
19.4
13.6
1.2
Source Age Wave, based on U.S. data, and The
Concours Group
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Productive Aging A New Life Stage
Prospectively aligning work demands with worker
capacities to achieve continuous productivity
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A Productive Aging Benefit Blueprint Key Themes

• Targeted Benefits
• Create a capped or limited LTD period (e.g. 5 -
  7 years)
• Shared Risk
• Share lost time risk to employee combined with
  stay at work Incentives
• Combine Benefits
• Shared healthcare coverage (private/public/part
  time) with access to focused healthcare services
  to reduce the impact of chronic disease and
  protect functional capacity
• Unique Linkages
• Align life balance programs (dependent long term
  care, elder care etc.) with need for employee to
  support family members.
• Retire Retirement
• Support career/ retirement transitions,
  work/learning/leisure cycles, flex work,
  mentoring, research, education, training,
  application of new technologies

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Where When Can an Employer Make a Difference?
Disability Management
Disease/Condition Management
Leave Management
Health Promotion
Risk Reduction
Reduce impairment Reduce medical/ pharmacy
costs Reduce Presenteeism
Increase fitness of workers Protect work
capacity Create HP culture
Increase compliance with law Track monitor
absences Reduce admin burden
Reduce onset of chronic disease Reduce sudden
death in workforce Reduce work related
injuries
Reduce STD Incidence duration Reduce LTD
incidence duration Reduce WC med Indty costs
Working but Productivity Impaired
Intermittent Cyclic Lost time
Lost Time lt 3 - 5days
Lost Time lt 26 weeks
Full work Productivity
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The Intangibles Here in Lies the Rub
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Productive Aging Target ROI

• Qualitative
• Fully engaged employee
• Appropriate utilization of corporate human
  capital
• Improved functional capacity of older workers who
  do leave the work place
• Quantitative
• Reduced lost time
• Reduced healthcare costs
• Continued contribution to the organization

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Summary Trends

• Greater Employee Responsibility
• Reduced Employer Funding
• Longer EPs for disability
• Implement Higher co-pays if unmanaged
• Greater Need for support services to control work
  disruptions and presenteeism
• Greater Need to manage the organizations human
  capital assets held by the older worker group

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This Can Happen to You!
If we do not protect the productivity options of
the boomer generation, we will have roaming bands
of bored, annoyed, grumpy, unemployed but
physically fit elders leading to social upheaval
and mayhem