Well being

What Does Your Employee Health Balance Sheet Look Like?

By DrScott – Posted on January 21, 2014 on www.compassphs.com

What is the most expensive item on your statement of revenue and expenses every month? Employee payroll tops the list for almost every company, with health benefits landing in the second or third position depending on whether you are in manufacturing (raw materials often in second place), or a service industry.

Now, how carefully do you manage employee costs? Cost of raw materials? What about health costs? When I ask this question of most CEOs and CFOs the answer is consistent – on employees and raw materials they are meticulous, but they don’t feel like there is much they can do when it comes to health benefits.

Really? As we have examined in these blogs, there is A LOT that they can do. In fact, given the high cost of health benefits it would not surprise me if soon companies will not have to add “Employee Health & Wellbeing” to their Balance Sheet. How? Well, disease doesn’t appear in a person overnight – it takes years, and if detected early it can be cured or slowed dramatically. Why don’t we slow or prevent disease progression?

The “I Feel Fine” Syndrome lulls us into a false sense of security (as we discussed in the last 4 blogs). But this is not inevitable – identified and handled properly, costs stay down, employees stay at work, and families keep their mothers and fathers.

Smart venture capital firms like Blackstone have already figured this out and established companies like Equity Health to get control of this issue. Imagine buying a company, putting in place proactive solutions, and dropping the cost of your number 2 or 3 spend by 10 – 30% in the first 36 months consistently. Regardless of how much the rest of the company performs, you already have created significant shareholder value.

So what will the Balance Sheet say? No one knows exactly, but an educated guess includes:

Assets:

Employee Health (Assets = lower costs relative to average employee of $X)

  • % of Employees

Healthy Employees : $3,000/employee

  • 15%

Employees with Chronic Conditions well managed : $1,400/employee

  • 8%

Liabilities:

Employee health (Liabilities = higher costs relative to average employee)

  • % of Employees

Employees with poor physical fitness <$500/employee>

  • Unknown

Employee with unknown health status <$1,400/employee>

  • 57%

Employees with uncontrolled Chronic Conditions <$3,200/employee>

  • 14%

Employees with Serious Illness <$19,000/employee>

  • 6%

So let’s take a company with 1000 employees paying on average $5000 per year for health benefits. This calculation would be a net negative of <$798,000> on the balance sheet. Getting biometrics, age and gender screenings along with active primary care involvement would shift this from a net negative on the balance sheet to a break even on the balance sheet. It would also reduce health care costs by over $60,000 per month. This approach is logical and attractive both from a financial and employee well-being standpoint. However, it takes experience and competent systems to achieve.

Tremendous opportunity to make very significant differences for your employee’s health and well-being exists. Designing systems that help your employees keep their Seven Numbers at goal will add years to their life and life to their years. Thank you for following this series. Please let us know if you have thoughts or stories of how you are accomplishing this in your companies.

How Regularly Are You Exercising? 2014 May Be The Time To Start

To stay up to date on the latest information I listen to the Massachusetts Medical Society Journal Watch.  They say medical knowledge doubles every 9 months these days so it is important to stay on it! 

I thought you might enjoy this summary on exercise;

Robust midlife cardiovascular fitness is associated with lower heart related disease, but what about death? To answer that question, researchers evaluated the associations between fitness and several chronic conditions (namely, ischemic heart disease, congestive heart failure, stroke, diabetes, chronic obstructive pulmonary disease, chronic kidney disease, Alzheimer disease, and lung or colon cancer) in older patients by linking a preventive medicine registry to Medicare data. Nearly 20,000 patients got full baseline fitness and medical evaluations and were stratified into five groups based on their fitness level (the patients’ average age at study entry was 49; most were men). A good number of the patients had relatively favorable cardiovascular risk profiles at study entry. Findings appear in the September 24 Archives of Internal Medicine (http://viajwat.ch/WhxcCO).

During a median follow-up of 26 years, the patients who were most physically fit had about half of the prevalence of chronic conditions than did those who were least physically fit. In adjusted analyses, each Met (metabolic equivalent) increase in baseline fitness was associated with a roughly 6% reduction in risk for developing a chronic condition.

Although these results on midlife cardiovascular fitness being a predictor of healthy aging are not surprising, they add another motivation for encouraging midlife fitness: This approach can lower the risk for frailty and comorbidities while improving quality of life for older people. 

Here is to aerobic exercise at least every 48 hours in 2014!  Happy New Year.  SC

It’s time to rethink the way we eat

One of the joys of my life is teaching Weight Loss The Jabez Way at local churches. The first line of the Prayer of Jabez is “And Jabez Cried out to the God of Israel” 1 Chronicles verse 4:10. Note, he didn’t ask, request, suggest or inquire – he CRIED OUT! When have you cried out in your life? When you are desperate, frustrated beyond belief, or hopeless? What are you willing to do at this point? To try something new?

With our weight if we knew how to fix it we would.. So the fact we are struggling means we need to be open to a new way, we don’t know what to do, and it is time to change and be a learner (as opposed to a knower).

Here is a must read article that suggests that what we have taught in the past may not work for everyone, and in fact may be harmful. Please take a moment to read it at: http://io9.com/5979523/why-you-should-starve-yourself-a-little-bit-each-day ” Starve Yourself!>