Poorer Health, Higher Spending: Dealing with the Hospital Employee Health Crisis

AMN Healthcare 09.25.2011

By Debra Wood, RN, Contributor

Employees of hospitals spend 10 percent more on medical services and pharmaceuticals and suffer from more chronic medical conditions than workers in other industries, according to a recent study from the healthcare business of Thomson Reuters. In addition, the cost of health plans for hospitals is higher than for other key industries, according to HighRoads.

“There could be a number of reasons why the cost is higher, such as greater access to care and the way hospitals pay themselves when their own employees use their facilities,” said Eric Parmenter, vice president of consulting for HighRoads, a human resources and benefits management consulting firm in Woburn, Mass., and a joint developer of the Thomson Reuters study. “When you begin to peel the layers of the onion back and look at the real drivers, our research and Thomson Reuters’ research found higher incidences of chronic diseases.”

What’s driving higher costs

A HighRoads report shows that health plan costs are as high as $13,313 per employee per year. The driver, Parmenter said, is higher levels of diabetes, heart disease, COPD, asthma, even higher levels of obesity and smoking among hospital workers. It seems counterintuitive that the people the public depends on for medical care and prevention advice would be less healthy themselves, but it’s true.

“It’s almost like the cobbler’s children have no shoes,” Permenter said. “It’s almost like we are so busy taking care of everyone else, we are not taking care of ourselves: what I call caregiver fatigue.”

Nurses may feel too tired after working a 12-hour shift to eat a healthy meal and go out for a run or other exercise, he suggested. Why hospital employees’ health is worse than other industries is not clear, but he said the theories are that stress, long hours and the heavy responsibility for patients’ lives leave little energy left over to focus on one’s own health.

Raymond Fabius, M.D, chief medical officer for the healthcare business of Thomson Reuters in Ann Arbor, Mich., added in a written statement, “Ideally, the healthcare workforce would be a model for healthy behaviors and the appropriate use of medical resources. Unfortunately, our data suggests that the opposite is true today.”
The Thomson Reuters research team analyzed the health risk and healthcare utilization of 1.1 million hospital workers and their dependents and compared that with 17.8 million health-plan members in all industries for the year ending with the third quarter of 2010. They found the average annual cost of healthcare for hospital employees and their dependents was $4,662, compared with $4,124 for the general population. Interestingly, hospital employees used the emergency department more and primary care office visits less than other workers.

“It’s not they are using everything more,” Permanter said. “They are using services inappropriately, probably because they can walk down the hall to the emergency room, which is more expensive than an office visit.”
Craig Keyes, M.D., chief medical officer at Alere Health, a national health and wellness company based in Atlanta, said hospital workers are often in denial about their own health and delay accessing services.
“Healthcare workers feel health knowledge gives a special insurance against becoming ill, because they feel they will see it coming,” Keyes said. “When they acknowledge a problem, they know more about what might work, and they get it all: more services.”

The tendency to overspend on medical care is not because medical insurance costs hospital workers less. The hospital employee cost share is equal to or in some cases even higher than other industries, Parmenter said. Hospital employee premiums are typically higher than in other industries.
HighRoads surveyed benefit program information from hospital industry employers, representing approximately 760 facilities and more than 485,000 full-time equivalent employees. It found that hospital employees paid 19 percent toward the premium or budgeted medical/prescription rate in 2011, but when out-of-pocket costs are included, employees paid approximately 26 percent of the total cost of healthcare.

In addition to higher cost, the HighRoads survey showed a decrease in productivity associated with poorer hospital employee health.

Clark Lagemann, vice president of Health Options Worldwide in Princeton, N.J., explained productivity involves absenteeism and “presenteeism,” when employees are physically present but not as efficient in the workplace.
The need to address hospital employee health At a time when hospitals are dealing with changes associated with healthcare reform, accountable care organizations and reimbursement concerns, they are faced with what Parmenter called an employee health crisis, adding that addressing those costs will be key to organizations fulfilling their missions.

“Hospitals and health systems are so focused on patient care, often they find it difficult to make employee wellness a top priority,” said Kreg Sherbine, consulting manager at Thomson Reuters in a written statement. “However, recent research clearly shows health system employees are more in need of intervention than the average worker in the United States.”

Lagemann said that 86 percent of hospitals have a wellness program, compared to 93 percent of Fortune 500 companies. Although it is unclear how active the hospital programs are, he reported the return on investment for comprehensive wellness and disease management programs in general is 3 to 1.

Alere analyzes employee populations–drawing from an array of data including claims, a health risk assessment and laboratory results–to determine who is at high risk for chronic diseases and then provides case management. Keyes said clients often position their wellness programs as a technique to improve the hospital’s ability to serve the community.

Carolinas HealthCare System in Charlotte, N.C., aims to position itself as an organization that takes care of its employees, said Lucy G. Thompson, MS, RD, LDN, assistant vice president of LiveWELL Carolinas!, its employee wellness program. It offers educational sessions and resources to help staff members change behaviors and earn a credit toward their health premiums.

“Healthcare employees take great care of other people, but we want to make sure they are taking care of themselves, not just for productivity at work but so they lead a better life at home,” said Thompson, who said she feels the response from employees is positive.

Parmenter advised hospitals to focus on population health management, such as disease and case management, and wellness programs tied to an incentive with a financial component strong enough to change behavior. For instance, employees participating in an array of healthy activities would pay less than other workers. But he said the financial difference, such as lower premiums or money deposited into a health spending account, must be at least $300 to change behavior.

Keyes said healthcare workers will respond better to positive incentives and reinforcement.
“Data shows [incentives] will contribute to reduced healthcare costs, improved health for the employee and increased productivity,” said Lagemann, adding that the Affordable Care Act will allow incentives applied to health care premiums to increase from 20 percent to 30 percent or 50 percent.
“It’s a nice trend that this is a growing concern and there should be measures in place to help reduce those costs and improve efficiency,” Lagemann said.

Change is possible

Three years ago Baptist Health System in Birmingham, Ala., recognized it needed to address rising employee health costs, which were escalating by 8 percent to 10 percent annually, and help its workers adopt healthier habits.

“We identified the primary culprits for the increases were higher utilization, high dollar claims and treatment for chronic conditions,” said Alan Bradford, chief human resource officer for Baptist Health. “Using tools provided by our partner, Aegis Health Group, we gathered pertinent health information, conducted biometric screenings. We then analyzed the results to identify opportunities to improve employee health and reduce health-related costs. Armed with this insight, we targeted three primary areas for improvement: tobacco use, exercise frequency and preventative medical care.”

Aegis helped Baptist Health implement a wellness initiative for its more than 4,000 employees. Participation among Baptist’s employees increased from 74 percent in 2008 to 89 percent in 2010. The health system has realized a $600,000 reduction in claims with a direct correlation to wellness. Tobacco use declined from 14.7 percent to 12.3 percent, desirable cholesterol levels rose from 68.1 percent to 71.2 percent, hypertension decreased 1.4 percent and medication compliance increased by 3.4 percent.

“By implementing Aegis’ workforce health initiative with its own employees, Baptist is setting a great example for businesses and organizations throughout their market to emulate,” said Pearson Talbert, president of Aegis Health Group. “Baptist is demonstrating that they ‘walk the talk’ and is positioned as the ‘go to’ expert in population health management.”

HealthONE in Denver recently launched the incentaHEALTH wellness program, and 3,200 employees and dependents have enrolled. Participants receive daily emails and education with weight-loss suggestions and then check in at a proprietary kiosk, with a camera and scale, every 90 days. Incentives range from $15 to $50, depending on how much weight is lost or maintained in the quarter. The average participant loses about 12 pounds. Todd McGuire, chief technology officer, said the employer receives on average a 3 to 1 return on investment.

“Healthcare reform is expected to ask hospitals to do more with less across the board,” Parmenter said.
Employee wellness and health management programs could help them do that. Yet when it comes to employee health costs, Parmenter said, hospitals “are asleep at the wheel.” Only one-third of the hospitals in the HighRoads survey said that they were concerned about employee health costs. Permenter said, “We think that needs to change.”

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