Healthcare costs keep employers up at night. Yet considering some of the costs employers face, it’s easy to understand why.
Average healthcare costs were projected to be $11,304 per employee in 2015 by an Aon-Hewitt analysis, for example. For 2016, employers anticipate a 6.4 percent cost increase.
To combat rising costs plus improve employee health, a proactive strategy is needed—one that focuses on keeping “at-risk” employees from developing costly chronic conditions.
Understanding the Risks
“There are three key risk factors that every employer should be aware of—tobacco use, body mass index (BMI) and high blood pressure,” says Dr. Geraldine Darroca, Medical Director at Indiana University Health Business Solutions. The reason why is simple: These risks are precursors to the top four chronic conditions leading to morbidity and mortality—cancer, diabetes, cardiovascular disease and respiratory illnesses. Take a look at the tremendous impact they can have on employee health and costs:
Tobacco use – This contributes to lung and cardiovascular disease because it effects oxygenation of the blood and impacts the cholesterol profile, explains Dr. Darroca. The CDC reports that tobacco use remains the single largest preventable cause of death and disease.
BMI – Having a BMI over 30 can lead to cardiovascular disease, multiple cancers, obesity, diabetes, back pain and osteoarthritis. Osteoarthritis often leads to knee replacement surgery, which is one of the highest claims costs for many employers.
Blood pressure – High blood pressure (<150 over 90) contributes to heart disease and stroke. Roughly one in three people have it. With no warning signs, it’s often referred to as the “silent killer.”
The Link to Chronic Disease
These three risk factors are important to monitor since they can lead to costly chronic conditions. People with chronic conditions are the most frequent users of healthcare services, according to the Robert Wood Johnson Foundation, accounting for:
81 percent of hospital admissions
91 percent of all prescriptions filled
76 percent of all physician visits
As a result, 84 percent of healthcare expenditures are attributed to chronic conditions, totaling more than $1 trillion annually in the U.S.
Why Population Health is the Solution
With high costs and people’s health at stake, it makes sense for employers to consider a population health strategy focused on risk reduction. After all, many chronic conditions are preventable or could be managed through behavior and lifestyle modifications.
For example, increasing physical activity by just 2.5 hours each week can help individuals lose 5-7 percent of their weight and reduce the risk for diabetes by 58 percent, reports the U.S. Surgeon General.
In a population health program, an employer’s workforce is segmented into categories through screenings and data analytics. Employees fall into either a “well/healthy,” “at-risk” or “chronically ill” category. Then, support services such as wellness or care management are applied to help maintain health, reduce risks and minimize disease progression.
As a result, employers typically see improved health and reduced costs—illustrated by the fact that 87 percent of employers plan to continue to focus on wellness and care management, according to a recent Price Waterhouse Coopers survey.
To learn more about cost-saving population health strategies, read our latest white paper, Boost Profits by Reducing Smoking, Obesity & Hypertension.