Issues 

• Dr. Mark Fendrick, co-director of the University of Michigan’s Center for Value-based Insurance Design;
• Mr. Andrew Webber, President and CEO of the National Business Coalition on Health;
• Dr. Irene Fraser, Director of the Center for Delivery, Organization and Markets at the Agency for Healthcare Research and Quality;
• Dr. Robert Kritzler, CMO of Johns Hopkins Health Plan; and
• Ms. Jennifer Boehm, Principal, Health Management, Hewitt Associates, shared her perspective on how her client employers are considering and evaluating value based designs. 

This guide, produced by the National Business Group on Health’s Pharmaceutical Council, is designed to educate employers on pharmaceutical benefit design – to deepen understanding and simplify decision making, helping benefits professionals keep up with a rapidly evolving pharmaceutical industry and maintain fair and affordable benefits.

Results from the first in a series of studies among multiple employers aims to quantify the true value of employee health. The study, published in the July issue of Journal of Occupational and Environmental Medicine (JOEM), found that health-related productivity costs were four times greater than medical and pharmacy costs, and the costliest conditions may not be the ones that employers are focusing on. The authors suggest investing in healthy employees can yield substantial economic benefits for companies.

Related Materials

• Slide presentation: Health and Productivity as a Business Strategy - A Multi-employer Research Study.

Depression is a leading cause of absenteeism and low productivity in the workforce. It affects almost every company to some degree, and its costs are high. The Productivity Impact Model can help employers determine the incidence of depression an organization, predict the expected number of days each year employees will be absent or suffer low productivity due to depression, estimate the costs associated with this lost productivity, and project the net savings that will accrue with treatment of employees suffering from depression.

As companies struggle to rein in health care costs, most overlook what may be a $150 billion problem: the nearly invisible drain on worker productivity caused by such common ailments as hay fever, headaches, and even heartburn. However, a handful of companies are recognizing the problem of presenteeism and trying to do something about it.

Employers are becoming increasingly aware of the productivity-related cost burden associated with certain health conditions. This study synthesizes the total cost of health, absence, short-term disability, and productivity loss for 10 conditions. The overall economic burden of illness was highest for hypertension, heart disease, depression and other mental illnesses, and arthritis. Presenteeism costs were higher than medical costs in most cases, and represented 18-60% of all costs for the 10 conditions.

Many chronic illnesses that affect the working population can cause losses in productivity. The evidence is very good for about a dozen drug classes that pharmaceuticals reduce productivity losses caused by respiratory illnesses (i.e. asthma, allergic disorders, bronchitis, upper respiratory infections, and influenza), diabetes, depression, dysmenorrhea, and migraine. This article should be helpful to occupational physicians who are increasingly providing recommendations on employer benefit plan designs and pharmaceutical benefits.

Annotated PowerPoint slides related to this article are available.

This article identifies the top 10 most costly physical and mental health conditions faced by six large employers in their health benefits programs. The research identifies costs associated with each condition including direct medical costs and the indirect costs associated with days absent from the job and short-term disability costs.