Visit for the best HSA offerings

December 2008 return to the table of contents

Economic Downturn Puts Health at a Premium

There’s a new epidemic sweeping across America, and for once it isn’t caused by the latest exotic flu virus or bacterium du jour. In every corner of the country, people who have been hit hard by hard times are foregoing healthcare because they don’t have the money. Even those who have health insurance are passing on necessary medical care to divert their funds to more pressing needs like food and shelter. In short: the economic downturn is taking people’s health with it.
The numbers speak for themselves. According to a Kaiser Family Foundation poll released in October, the number of respondents who said they or a family member have put off needed care climbed to 36 percent in October 2008, up from 29 percent just six months earlier. Nearly one-third had passed on a recommended test or treatment, up from 24 percent that same period. In both instances, one-fifth said their condition worsened as a result. A July 2008 survey conducted by the National Association of Insurance Commissioners found that 11 percent of Americans had either limited the number of prescription medications they take or cut the dosage in some way, such as cutting their pills in half. Such behaviors are truly prescriptions for disaster.
And ultimately, the costs of this new trend could be staggering. When people defer needed medical care, conditions invariably worsen. It’s far better—and cheaper—to catch health issues such as hypertension and diabetes early on, before they turn into a heart attack, stroke or an amputation. For employers, who often have to bear the expense of covering these conditions, it becomes a dollars and cents issue. In today’s economic environment, it’s never been more prudent for businesses to keep their workforce as healthy as possible—and that has made worksite health management programs more pertinent than ever.
Healthcare providers also have a vested interest in keeping their community healthy. Hospitals nationwide have long been the last thread in the safety net for the uninsured or underinsured to access needed medical care. With the U.S. unemployment rate jumping from 4.7 percent to 6.1 percent over the past year, many newly jobless people have lost their health insurance. As a result, hospitals are reporting an increase in emergency room visits and conditions that could have been treated elsewhere. That impacts the care provided to those patients with insurance through longer ER wait times, limited inpatient bed availability, and care providers who are stretched far too thin.
So what better time for hospitals and their neighboring employers to join together to keep the local workforce healthy? Such health management collaborations have long been in place, but they have never been more critical. They typically begin with a comprehensive health assessment of the business’ employees to “flag” conditions that put an employee more at risk for developing a serious health problem. Once at-risk employees are identified, they are linked with healthcare services and programs designed to help them avoid developing a serious health problem. Weight management programs; smoking-cessation classes; nutrition education; and screenings for high blood pressure, cholesterol and glucose are relatively low-cost in comparison with treating the health crises that can result when bad lifestyle habits go unchecked.

Current industry statistics support the viability of this concept from the employer’s point of view. Highmark Inc., the Pittsburgh-based insurer, found that for every dollar spent on wellness-related programs, employers saved $1.65 in healthcare expenses. At Johnson & Johnson, a four-year wellness program involving more than 18,000 workers showed that the corporation saved $8.5 million a year through reduced healthcare costs. Citibank realized a return of $4.56 for every dollar spent on its health-management program. And the Towers Perrin 2008 Healthcare Cost Survey found that companies with aggressive strategies in place to drive improvements in employees’ overall health had a 16 percent lower cost than companies without such programs – $8,532 vs. $10,200 per active employee.
With the current economic environment, health management collaborations have never been more important for helping to prevent workers from developing costly medical conditions. These programs have also been shown to decrease absenteeism while maintaining or enhancing productivity. In a time when businesses large and small are struggling, health management programs are a logical prescription for a healthier bottom line.

Article by Craig Smith, senior vice president of Aegis Health Group, a healthcare business-development company based in Brentwood, TN.


Tell a friend about this article

Click here to subscribe to the free
Managing Your Healthcare
email newsletter