Healthcare Cost & Productivity: Where Next?

To realize this vision we focus specifically on health outcomes, prevention, patient-centered primary care, activism and engagement by everyone involved, technology enablement and affordability for our workforce and for IBM.

With this emphasis, IBM is willing to invest in health advancement and healthcare to help realize the potential of our people to innovate and succeed. We can do that by creating a people-centric environment that attracts energetic and creative talent to IBM.

We take a holistic view of individuals and our business environment as we allocate resources and intervene in health, because our investment capacity has limits. Further, we take great care to align employee wellbeing with IBM policies, practices, physical work environment, work organization, flexibility and commitment to leadership.

IBM’s framework is based in part on the quantitative knowledge that people at the company are distributed across a health status continuum and that their health status is not static. For some, there is a dynamic movement between well, at-risk, pre-clinical illness, acute/chronic disease, complex and catastrophic care (Figure 1). This perspective enables us to keep people in the healthy, low-cost category and enabling others in the unhealthy, higher cost categories to migrate out —and to stay out.

We can map the components of our strategy to different states of health status:

• Investment in employee wellness and prevention programs with our Wellness for Life strategy, which reduces health risks and maintains low-risk status.
• Healthy Living Rebates for physical activity, smoking cessation and preventive care
• Free coverage of routine preventive services in-network, deductible-free primary care, comprehensive care coordination, disease management and behavioral health care advocacy and coordination.

IBM understands that lowering health risks among employees results in lower health care costs and higher productivity. In the highly competitive information technology business, productivity and innovation among people are every bit as important as healthcare labor cost. Perhaps even more so. Specific evaluations of IBM programs to promote physical activity, weight management and smoking cessation have shown that such programs definitely lower health risks and health care costs. For example, in a recent evaluation of the physical activity component of the IBM healthy living rebate program (Virtual Fitness Center), savings in medical costs followed improvements in risk status (Table 1).

Looking outside the workplace

Despite the successes that IBM and other employers have had with wellness, prevention, employee engagement and care/condition-related initiatives, we recognize that health care delivery reform is needed. It is essential if we are to capitalize on employer innovations in sustaining the behavioral and clinical gains of our people. Business and government need to innovate and create a more efficient and outcomes-driven, integrated health care delivery system with wellness, prevention, and patient-centered primary care at its core. Health care reform should include the rejuvenation and transformation of our primary health care delivery system, which will allow for more efficient delivery of many of the health-related interventions that suffer from the fragmented system that exists today.

People today face a complex care delivery system without a primary care physician interceding on their behalf and without a ‘medical home’. They can then and suffer adverse outcomes as a consequence. This health system reality limits the value of current employer-sponsored interventions like wellness and disease management programs. However, efforts are underway with the primary care physician associations in family practice, internal medicine, pediatrics and osteopathic medicine to create new practice environments for personalized care. The goal is to provide technology-enabled care and decision support for care providers and better access for patients. This can take the form of online and same day appointments, improved communications such as web visits, coaching and counseling, care coordination and chronic disease management.

Hope for the future

Innovative and progressive-thinking employers and other organizations that purchase health care can be a major force in shaping health care reform. They can advance the ‘medical home’ concept that emphasizes wellbeing, prevention and advocacy of care. A strong primary care system where patients have meaningful relationships with their care provider results in a trusting environment where both medical concerns and wellness issues can be addressed. Primary care results in healthier people and lowers health care cost through better adherence to recommended preventive care. It also reduces emergency room visits and ambulatory care-sensitive hospitalization, leading to better coordination and access to specialty care professionals.

Indeed, if the primary care system is adequately reimbursed and transformed, many services now addressed through workplace and private vendors can be integrated effectively in the primary health care setting. Consider Denmark, which spends approximately nine percent of its gross domestic product on health care, compared to nearly 17 percent in the United States. Denmark has designed its health-care system to support the relationship between patients and their personal physicians. Practices are set up to handle same day appointments and walk-ins. Off-hours care is readily available and primary care doctors are reimbursed accordingly. An online infrastructure makes electronic medical records available to physicians and hospitals throughout the country. Because of these practices, health outcomes are better in Denmark, patient satisfaction with care is much higher and per capita medical costs are much lower.

More employers are demanding strategic changes in health care delivery so that business investments in employee health continue to return dividends in productivity and affordability of health care coverage. Studies have long shown that communities or countries where primary care is accessible have better health and higher life expectancy, as well as lower death rates for infants and for conditions like cancer and heart disease. A recent study found that an increase of just one primary care physician per 10,000 of population, a 12.6 percent increase over the current supply, would save just more than 126,000 lives in the United States every year.

Employers have been at the forefront of paving the road to better health for their workforces for many years. Our success at delivery system reform, particularly in providing patient-centered primary care and ‘medical homes’, will determine whether these advances in the workplace can be sustained.