Viewpoint: Healthy Links 2013
July and August are the months when many of us take vacation. We spend time at home or away. During our travels many of us also experience, even briefly, a different way of living. Sometimes this makes us re-evaluate and reassess.
I have the opportunity to regularly witness those who have chosen a different path in life other than the hectic, urban world most of us now live in. In my travels, I regularly pass field after field of crops destined for our tables – golden flowing wheat, corn stalks reaching for the sky, bushy beans, flowering potato plants, and, just recently, a messy field with plastic baskets of juicy Ontario garlic bulbs. I find these rural landscapes calming, strangely satisfying, and reassuring, but also reminders that the early season investments in planting made by farmers on cool spring days take just a few months to yield crops that will feed many rural and urban families.
Promise Of Growth
So what is my point? Thinking about farming and the promise of growth led me to consider why and how we go about doing business in our industry. How can we help our clients grow and be successful? What investments are we prepared to make to get there? Are those of us working in the employee health and benefits field working towards being the best at our piece of the pie and contributing to better health outcomes and sustainability of private healthcare? Or are we more concerned about reaching short-term objectives and the short-term bottom line for our organizations?
Let’s consider today’s environment:
- Creating complex formularies and other barriers to access may appear to be meeting the demand to manage costs, but they are not always the best tools to manage health outcomes or save on overall healthcare costs. In fact, in 2007, Pitney Bowes found that over the course of several years, by removing barriers to access while supporting employees with chronic conditions through disease management and education, they realized an estimated annual total cost offset or avoidance of $39.8 million on a cost base of around $150 million. While results are from their U.S. operations, the breakdown of initiatives undertaken that include removing restrictions on access to medications, clearly demonstrate opportunities for Canadian employers to realize savings and frankly, to do better than the status quo.
- Many benefit consultants still talk bottom line costs this year either to secure new business or for fear of losing existing business. This is an old and outdated approach. A fresh approach, and one gaining ground, is to educate plan sponsors on the benefits of managing health that will yield costs benefits in the future. With the benefits of minor inflationary trends in healthcare costs in recent years, there has been no better time for investing in wellness, which requires a nominal investment compared to the overall benefits budget and can produce a significant return on investment. Not convinced? Run some numbers through our predictive modeling calculator using potential savings from actual best practice research.
- The pharmaceutical industry delivers new therapies at incredibly high risk to themselves because of the cost of research and development and is naturally concerned about ensuring open access to medications in the private and public systems to recoup their investment. The pharmaceutical industry needs to demonstrate their value in terms of patient outcomes and overall healthcare costs, but they have been largely unsuccessful at delivering this message in a way that is convincing and meaningful to plan sponsors and their advisors.
- Then there is health and wellness. This is my business and I can honestly say that there are significant opportunities for growth, but that this will only come when providers improve the quality of offerings available to plan sponsors. Many who purport to offer wellness solutions have neither the skills nor resources to guide their clients through a best practice approach. This is confusing for plan sponsors and their benefit advisors.
Plan sponsors are not without opportunities to do better either. Three-quarters of plan sponsors surveyed in the Buffett National Wellness Survey may declare they have one or more wellness programs, but barely one per cent have invested in a targeted and measured approach to employee health based on best practices. Why?
One contributor may be that CEO tenure is short term and becoming shorter. (According to Canadian Business “the average lifespan of a CEO is shrinking.” In 2010, the average CEO tenure was 6.6 years, 18 months shorter than in 2000.) Incentives for senior levels executives are largely based on short-term results. Since developing and demonstrating tangible results from employee health strategies can take years and CEO buy in is essential for a successful strategy, this poses some difficulty. If tenure is short and becoming shorter, then decisions made by senior executives can result in a very short-sighted approach to corporate success. Is this really what we want?
Most of us invest in the market to save for retirement and want long-term sustainable growth. A short-term approach can jeopardize investments in employee health, resulting in higher long-term costs, poor corporate culture, and reductions in employee performance. Plus it can also impede overall corporate performance, future growth, and return for investors. This does not make sense at any level.
When plan sponsors invest in their people, they are also investing in the long-term success of their organizations. Limiting or removing smart investments in employee health is not conducive to growth at any level. It is time for all of us to review our motivations, ask ourselves ‘why are we in this business’ and commit to a renewed sense of purpose to meet opportunities to improve employee health and grow our bottom line!
Denise Balch is president of Connex Health.