The Burden of Chronic Disease on Business and U.S. Competitiveness

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1 The Burde of Chroic Disease o Busiess ad U.S. Competitiveess Excerpt from the 2009 Almaac of Chroic Disease 20 Almaac of Chroic Disease U.s. workplace welless alliace 09

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3 foreword Our curret ecoomic reality remids us that ow more tha ever, we eed to ivest i the backboe of our ecoomy: the America workforce. Without questio, the sigle biggest force threateig U.S. workforce productivity, as well as health care affordability ad quality of life, is the rise i chroic coditios. As the largest providers of health isurace i the Uited States, America s busiesses are uiquely situated to help provide leadership i fidig solutios to reduce chroic diseases ad their cotributio to risig health care costs. Chroic diseases are sigificat drivers of health care costs. The majority of America employees have at least oe chroic coditio. Rapidly risig health care costs are makig it more difficult for busiesses to cotiue to offer health beefits. I fact, the total cost of health coverage doubled betwee 1999 ad 2008, ad health care costs are predicted to cotiue to icrease rapidly. While high costs ca also be drive by uavoidable factors, the health crisis we curretly face i this coutry is prevetable. May compaies are takig active steps to prevet ad reduce chroic diseases ad improve employee health, icludig implemetig workplace welless programs. Well-desiged health maagemet iitiatives, icludig worksite welless programs, ca help cotrol costs throughout the health care system by maagig existig cases ad prevetig millios of ew cases of chroic disease. These programs also help employees live healthier lives. The Partership to Fight Chroic Disease (PFCD) ad the Uited States Workplace Welless Alliace (USWWA) both broad-based, atioal coalitios with diverse memberships are committed to fidig cosesus-based solutios to reform the health care system. We believe that by icetivizig chroic disease prevetio ad maagemet withi the system, we ca create a healthier Uited States: Oe that ca, i the cotext of busiess, produce a stroger ad fiscally healthier U.S. ecoomy poised to compete i the global marketplace. Keeth E. Thorpe, Ph.D., Executive Director, Partership to Fight Chroic Disease Athoy C. Wisiewski, Executive Director of Health Policy, U.S. Chamber of Commerce, Co-Chair, U.S. Workplace Welless Alliace Garry M. Lidsay, Maagig Seior Program Officer, Partership for Prevetio, Co-Chair, U.S. Workplace Welless Alliace 2009 Almaac of Chroic Disease 1

4 40 Employers provide the majority of health isurace for o-elderly adults i the Uited States. (Chart 1) I 2007, millio Americas received employer-based coverage. Over the past decade, employer ad employee cotributios for health isurace have icreased sigificatly. (Chart 2) The total cost of coverage doubled betwee 1999 ad 2008, with I millios Chart 1 Number of No-Elderly U.S. Adult Covered i employer cotributios icreasig from $154 to $332 ad employee cotributios icreasig from $35 to $60. Medically related beefits make up early oe-third of all beefits costs ad average approximately 10 percet of gross payroll Employmet-based coverage 17.9 Source: The Employee Beefits Research Istitute Idividual coverage Public coverage No health isurace Source: U.S. Chamber of Commerce At the same time busiesses are strugglig to avoid layoffs, pay cuts, ad beefit reductios, employee health care costs are skyrocketig. Without a ivestmet i health reform, employers may be forced to reduce or elimiate beefits or may be drive out of busiess because of their iability to compete i the global marketplace Almaac of Chroic Disease Athoy C. Wisiewski, Executive Director of Health Policy, U.S. Chamber of Commerce, Fouder ad Co-Chair, U.S. Workplace 2 Welless Alliace $400 $350 $300 $250 $200 $150 $100 $50 $0 Chart 2 Mothly Cost of Idividual Isurace $ $202 $ $ Source: The Kaiser Family Foudatio $ $ $ $354 $ $ Employer Cotributio for Idividual Coverage Employee Cotributio for Idividual Coverage

5 Chart 3 Firms Offerig Health Isurace Small Firms 65% 62% (less tha 200 employees Large Firms 99% 99% (200 or more employees) All firms 66% 63% Source: The McKisey Quarterly I 2005, Starbucks aouced it was spedig more o employee health beefits tha coffee. I 2009, rather tha cut health beefits, Starbucks aouced it would lay off 6,000 employees ad close 300 stores. Source: Associated Press Approximately two-thirds of employers cotiue to offer health beefits to their employees, but the overall rate has slightly decreased as health costs have icreased. (Chart 3) I a 2008 survey, 48 percet of small firms with less tha 200 workers listed high premiums as the most importat reaso for ot offerig health beefits. Source: The Kaiser Family Foudatio Health Research Educatio Trust The urget challege facig all Americas to fid a healthier lifestyle demads a fudametally ew ad aggressive social respose. Idividually, each of us must take resposibility ad help our childre ad families take resposibility for healthy livig. Collectively, all sectors of our commuities ad atio must come together to advace a commo strategy to remove the barriers ad icrease the opportuities for healthy lifestyles for idividuals ad families. Neil Nicoll, Presidet & CEO, YMCA of the USA 2009 Almaac of Chroic Disease 3

6 The U.S. has a higher hourly cost of health beefits i the maufacturig idustry tha other developed coutries. (Chart 4) U.S. hourly health beefits costs were $2.38 per worker per hour i the maufacturig idustry cosiderably higher tha the foreig trade weighted average of $.96 per worker per hour. Source: The Heritage Foudatio I dollars Chart 4 Hourly Cost of Health Beefits $ $ $1.5 $ $ For the Uited States to cotiue to be a ecoomic leader worldwide, supported by a healthy ad productive workforce, more attetio eeds to be directed toward health promotio ad disease prevetio. Take from Health Affairs, Do Prevetio Or Treatmet Services Save Moey? The Wrog Debate by Ro Goetzel, Ph.D. Professor ad Director of the Istitute for Health ad Productivity Studies, Emory Uiversity $0.0 Uited States Frace Germay Caada Japa Uited Kigdom Source: USA Today GM, Ford, ad Chrysler sped more o employee 2.5 health expeses tha o the steel they use to make cars. The cost of providig health 2.0 care added $1,100 to $1,500 to the cost of each of the 4.65 millio vehicles GM sold i 2004, accordig 1.5 to various calculatios. 1.0 Source: USA Today Almaac of Chroic Disease 4 0.0

7 Chart 5 Chroic Disease Prevalece Amog America Workers, 2007 America workers experiece high rates of chroic disease. (Chart 5) Almost 80 percet of workers have at least oe chroic coditio. Four 8% Five or more 19% Three 12% Two 16% Noe 23% Oe 22% 55 percet of workers have more tha oe chroic coditio. Overweight workers icur larger medical costs ad miss more days of work tha ormal weight coworkers. (Chart 6) Severely obese wome are abset more tha twice as ofte as ormal weight wome. Severely obese workers have greater rates of workers compesatio claims tha workers who weigh i at the recommeded weight. Source: Archives of Iteral Medicie Source: Newsweek Web Exclusive Chart 6 Additioal Health Cost of Overweight Employees $600 $ $400 $300 $ $100 I today s ecoomically challegig times, ivestmet i disease prevetio makes eve more sese tha ever before. The health outcomes aloe are compellig whe people are empowered ad educated to make healthy choices at home, at work, i all schools, withi our health systems, ad i commuities. Jeifer Cabe, M.A., Executive Director, Cayo Rach Istitute $0 Males Females Source: Health Affairs Almaac of Chroic Disease 5

8 Worker productivity losses from missed workdays (abseteeism) ad reduced effectiveess at work due to illess (preseteeism) are closely liked to problems with chroic illess. (Chart 7) Preseteeism is resposible for the largest share of lost ecoomic Chart 7 Lost Ecoomic Output Associated with Seve Commo Chroic Health Problems* Total = ~$1 trillio Lost Workdays Idividual $127 billio output associated with chroic health problems. May employees report goig to work despite beig sick ad most say they are ot as productive. 21 percet of workers report that they have goe to work despite Preseteeism Idividual $828 billio Preseteeism Caregiver $80 billio Lost Workdays Caregiver $11 billio beig sick or dealig with a o-work issue six or more days i the last six moths. Whe asked, employers list chroic coditios as the biggest reaso for preseteeism. Source: America Istitute of Certified Public Accoutats *This study evaluated the burde of seve of the most commo chroic diseases/coditios (cacer, diabetes, heart disease, hypertesio, metal disorders, pulmoary coditios, ad stroke). Source: The Milke Istitute Abseteeism is defied as work missed due to sick days. Preseteeism is defied as the lost productivity that occurs whe employees come to work but perform below par due to ay kid of illess Almaac of Chroic Disease 6 We are called by our missio to help all Americas lead healthier lives. Sixty-four millio U.S. households live withi three miles of a YMCA, makig us a powerful force to advace creative ad collaborative efforts to tur the tide of America s growig health crisis. Neil Nicoll, Presidet & CEO, YMCA of the USA

9 Chart 8 Productivity Losses for Certai Chroic Coditios Depressio is the greatest cause of productivity loss amog workers. (Chart 8) Depressio 33% Workers with chroic coditios are more likely to miss work tha Obesity 20% peers without a chroic disease. (Chart 9) Older workers with more tha oe chroic coditio o average Chroic Pai Diabetes 11% 13% miss 1.5 times more work days tha youger workers who also have more tha oe chroic coditio. 0% 5% 10% 15% 20% 25% 30% 35% Source: Kaiser Permaete Chart 9 Average Aual Days Lost by Workers with Chroic Coditios Ages Ages We have both a moral ad fiscal resposibility to get chroic illesses ad the costs associated with them uder cotrol. Moreover, we have a body of growig evidece that demostrates ways to provide better family-cetered care ad prevet chroic illesses Pat Ford-Roeger, MSW, RN, FAAN CEO, America Academy of Nursig 0 No chroic coditio Oe chroic coditio More tha oe chroic coditio Source: U.S. Chamber of Commerce ad Partership for Prevetio 2009 Almaac of Chroic Disease 7

10 Certai chroic illesses are particularly costly to busiess. (Chart 10) The most expesive coditios i terms of preseteeism are arthritis, hypertesio ad depressio. Metal illess ca worse the burde of chroic disease at the workplace (Chart 11) Whe a worker with a chroic illess also has a metal health disorder, they are more likely to miss work tha peers who do ot. It is true that ew ad re-emergig health threats such as SARS, avia flu, HIV/AIDS, terrorism, bioterrorism ad climate chage are dramatic ad emotive. However, it is prevetable chroic disease states that will sed health systems ad ecoomies to the wall. Stig Prammig, Executive Director, Oxford Health Alliace at 5th Aual Oxford Health Alliace Coferece Cost per Employee with Coditio $300 $250 $200 $150 $100 $50 $ Chart 10 Estimated Average Aual Cost of Preseteeism Per Employee with Coditio Arthritis Hypertesio 222 Depressio/Sadess Metal Illess Allergy Source: America Hospital Associatio Migraie/ Headache Diabetes Ay Cacer Asthma Heart Disease 33 Respiratory Disorders Chart 11 Productivity Loss Whe Metal Illess is Comorbid with Other Chroic Coditios Number of 30-day role impairmet days associated with pure ad comorbid* chroic illesses (Role impairmet = sickess absece days plus work cut-back days) Chroic Disease Chroic Disease ad Metal Illess 2009 Almaac of Chroic Disease 8 0 Hypertesio Arthritis Asthma Ulcers Source: Joural of Occupatioal & Evirometal Medicie

11 Chart 12 Family Members Provide Most Care for Chroically Ill Americas Family caregivers are a critical support structure for Americas with chroic illesses, ad the U.S. health care system. (Chart 12) Family caregivers provide 80 percet of all log-term care services for chroically ill patiets. I ay give year, more tha 50 millio Americas fid themselves i a caregivig role Family caregivers provide the vast majority (80%) of all log-term care services for those with a chroic illess or disability Source: Agecy for Healthcare Research ad Quality (AHRQ) Chart 13 Adults Carig for a Adult Over 50 Source: Agecy for Healthcare Research ad Quality (AHRQ) Employers are also affected whe workers are the primary caregivers for family members with chroic coditios. (Chart 13) Employers ca lose as much as $33 billio each year due to employees eed to care for loved oes age 50 or older. Source: Metlife Mature Market Istitute ad Natioal Alliace of Caregivig Workig adults 60% No-workig adults 40% The combiatio of the agig U.S. workforce, chroic disease ad the market crisis led to a situatio where health care costs must be addressed immediately to avoid icreased taxes, reduced beefits, or draiig other vital programs to pay for health care. Source: Metlife Mature Market Istitute ad Natioal Alliace for Caregivig Athoy C. Wisiewski, Executive Director of Health Policy, U.S. Chamber of Commerce, Fouder ad Co-Chair, U.S. Workplace Welless Alliace 2009 Almaac of Chroic Disease 9

12 80% Chart 14 Chage i Percet of Employers Trackig Chroic Coditios Amog Employees, 2006 ad % 60% 57 Not Trackig Trackig 50% 40% 43 30% 20% 23 10% 0% Source: Hewitt Associates Compaies are icreasigly lookig to address chroic disease as a meas of improvig the health of their employees ad reducig health care costs. (Chart 14) I just oe year ( ), the percetage of compaies trackig the chroic health coditios prevalet i their workforce icreased from 43 percet to 77 percet, amog a sample of employers tracked by Hewitt Associates Almaac of Chroic Disease Our efforts at reform must iclude a ew focus o prevetio, welless ad chroic disease. Health care should be about fosterig good health, ot just treatig illess. We are gaiig kowledge about how to prevet ad maage diseases. If we expad ad apply that kowledge, we ca improve health outcomes ad decrease the cost of health care. Take from hearig statemet of Se. Max Baucus, D-Mot., Jue 3,

13 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Chart 15 Percet of Employers Thikig Welless Programs are Effective at Improvig Health or Reducig Costs Improvig health Reducig cost Small firms Large firms All firms May employers thik that usig welless programs will be effective at both improvig health ad reducig costs. (Chart 15) Overall, 64 percet of firms thik welless programs will be effective at improvig health ad 44 percet of firms thik they will be effective at reducig costs. U.S. employers are drive by differet goals tha global firms whe it comes to primary reasos for offerig welless programs. (Chart 16) U.S. employers, whe compared to employers from Caada, Europe ad Asia/Africa/South America, were the oly group to cite reducig costs as their primary reaso for offerig welless programs. Source: The Kaiser Family Foudatio ad Health Research Educatio Trust Chart 16 Relative Importace of Welless Program Objectives By Geography* US Caada Europe Asia-Pacific/Africa/ S south America Improvig workforce morale Improvig worker productivity Reducig employee abseces due to sickess or disability Attractig ad retaiig employees Reducig health care costs Improvig workplace safety Promotig corporate image o brad Fulfillig social resposibility * Rakig determied from Importat ad Very Importat resposes Source: Buck Cosultats 2009 Almaac of Chroic Disease 11

14 80% Chart 17 Percet of Firms Offerig Certai Types of Welless Programs 70% 69 60% 50% 40% 30% 20% 10% Small firms (3-199) Large firms (200+) 0% Gym Membership Discout or O-site Exercise Facilities Smokig Cessatio Programs Web-based Resources for Heathly Livig Welless Newsletter Weight Loss Programs Persoal Health Coachig Classes i Nutritio or Healthy Livig Source: Health Affairs 54 percet of firms that offer health beefits offer at least oe type of welless program. (Chart 17) The most commo welless programs offered are gym memberships or discouts o exercise facilities ad web-based resources for healthy livig Almaac of Chroic Disease 12 PhRMA, ad may of our member compaies, support iovative workplace welless programs across the coutry. I additio, we are makig ivestmets i programs for our ow employees. Good compaies are focused o the well-beig of their employees ad profitability of their compay. Billy Tauzi, Presidet & CEO, Pharmaceutical Research ad Maufacturers of America (PhRMA)

15 100% Chart 18 Percet of Employees Supportig Certai Types of Employer-Based Weight Maagemet Programs The majority of employees support employer-based weight maagemet programs, particularly the policy of favorable tax treatmet for providig exercise facilities. (Chart 18) 90% 85 80% 70% 60% Favorable tax treatmet providig exercise facilities Requirig health isurers to provide obesity treatmet ad prevetio Source: The Kaiser Family Foudatio ad Health Research Educatio Trust 73 Providig discouts to people who maitai or lose weight Certai idicators suggest that employer iterest i welless programs has icreased cosiderably withi the last year. Membership i the U.S. Workplace Welless Alliace, a orgaizatio dedicated to creatig a healthier U.S. workforce to allow for competitio i the global marketplace, has more tha tripled sice May The growig prevalece of chroic disease atioally is especially hard o our atio s employers, who eed timely ad relevat iformatio about strategies to improve workforce health ad to lower health care costs. Employee health ad health beefits 100should be a fudametal part of every employer s strategic busiess model 80 ot just a uavoidable cost to maage. Employers recogize the eed 60 for busiess strategies that respod to icreasig 40 health costs associated with chroically ill employees ad depedets. 20 Tracey Moorhead, Presidet & CEO, DMAA: The Care Cotiuum Alliace Almaac of Chroic Disease 13

16 Sources Chart 1 Source: Frosti, P. Sources of Health Isurace ad Characteristics of the Uisured: Aalysis of the March 2008 Curret Populatio Survey. The Employee Beefits Research Istitute. September Full report accessed at: Chart 2 Source: The Employer Health Beefits Aual Survey. The Kaiser Family Foudatio Health Research Educatio Trust Accessed at: pdf/7790.pdf. Page 2 Bullet Source: Employee Beefits Study U.S. Chamber of Commerce. February Accessed at: Chart 3 Source: Will Health Beefits Eclipse Profits?. The McKisey Quarterly. September Accessed at: Page 3 Bullet Source: Schultz H, CEO Starbucks. A Message from Howard Difficult Decisios i a Time of Ucertaity. Jauary 28, Accessed at com/aboutus/pressdesc.asp?id=982. Also, Associated Press. Health Care Takes its Toll o Starbucks. MSNBC. September 14, Accessed at: com/id/ /. Page 3 Bullet Source: The Employer Health Beefits Aual Survey. The Kaiser Family Foudatio Health Research Educatio Trust Accessed at: pdf/7790.pdf. Chart 4 Source: Nichols L, Axee S. Employer Health Costs i a Global Ecoomy: A Competitive Disadvatage for U.S. Firms. The New America Foudatio Page 4 Bullet Source: Sherk J. UAW Workers Actually Cost the Big Three Automakers $70 a Hour. The Heritage Foudatio. December Accessed at: org/research/ecoomy/wm2162.cfm. Page 4 Bullet Source: Appleby J, Carty S. Ailig GM Looks to Scale Back Geerous Health Beefits. USA Today. Jue 23, Accessed at: autos/ gm-healthcare-usat_x.htm. Chart 5 Source: Diseases vs. Populatios: The Impact of Chroic Coditios. Itegrated Beefits Istitute. August Also, Peg T. Five Fiacial Costs of America Obesity. Newsweek Web Exclusive. August 15, Accessed at: Chart 6 Source & Bullets: Gabel J, Whitmore H., et al. Obesity ad the Workplace: Curret Programs ad Attitudes Amog Employers ad Employees. Health Affairs 28, o. 1 (2009): Ostbye T, Demet J, et al. Obesity ad Workers Compesatio: Results from the Duke Health Safety ad Surveillace System. Archives of Iteral Medicie 167, o. 8 (2007): Chart 7 Source: DeVol, R, Bedroussia, A, et al. A Uhealthy America: The Ecoomic Burde of Chroic Disease. The Milke Istitute. October Full report ad methodology accessed at: 14

17 Page 6 Bullet Source: Mitra S. Maagig Abseteeism ad Preseteeism i the Workplace. America Istitute of Certified Public Accoutats. Jauary 17, Accessed at: (discussig the 2007 CCH Uscheduled Absece Survey). Also, The 2008 Health Leadership Series: Abseteeism ad Preseteeism: The New Productivity Gap?. The Segmetatio Compay (prepared for CIGNA). May Accessed at: Chart 8 Source: Kaiser Permaete BrokerNet. Preseteeism: The Challege Accessed at: Chart 9 Leadig by Example: Leadig Practices for Employee Health Maagemet. U.S. Chamber of Commerce ad Partership for Prevetio Accessed at: Chart 10 Source: Goetzel R, Log S, et al. Health, Absece, Disability, ad Preseteeism Cost Estimates of Certai Physical ad Metal Health Coditios Affectig U.S. Employers. Joural of Occupatioal ad Evirometal Medicie 46, o. 4, (2004): Take from: Tredwatch. America Hospital Associatio. Summer Accessed at: Chart 11 Source: Kessler, R, Ormel, J, et al. Comorbid Metal Disorders Accout for the Role Impairmet of Commoly Occurrig Chroic Physical Disorders: Results From the Natioal Comorbidity Survey. Joural of Occupatioal & Evirometal Medicie 45, o. 12 (2003): Chart 12 Source: Thompso L., Log-term care: Support for family caregivers [Issue Brief]. Washigto, DC: Georgetow Uiversity, 2004 ad U.S. Agecy for Healthcare Research ad Quality. Log-Term Care Fiacig Project, Log-term Care Users Rage i Age ad Most Do Not Live i Nursig Homes. November 8, Chart 13 Source: The MetLife Caregivig Cost Study: Productivity Losses to U.S. Busiesses. Metlife Mature Market Istitute ad Natioal Alliace for Caregivig. July Accessed at: Chart 14 Source: Hewitt Study Shows Compaies Pla to Ivest More i the Health of Their Employees. (Press Release). Hewitt Associates. April 19, Accessed at: Chart 15 Source: The Employer Health Beefits 2008 Aual Survey. The Kaiser Family Foudatio Health Research Educatio Trust Accessed at: pdf/7790.pdf. Chart 16 Source: Workig Well: A Global Survey of Health Promotio ad Workplace Welless Strategies. Buck Cosultats. October Chart 17 & 18 Source: Gabel J, Whitmore H., et al. Obesity ad the Workplace: Curret Programs ad Attitudes Amog Employers ad Employees. Health Affairs 28, o. 1 (2009): Also, The Employer Health Beefits 2008 Aual Survey. The Kaiser Family Foudatio Health Research Educatio Trust Accessed at: org/pdf/7790.pdf Almaac of Chroic Disease 15

18 parters About The Partership to Fight Chroic Disease The Partership to Fight Chroic Disease (PFCD) is a atioal coalitio of patiets, providers, commuity orgaizatios, busiess ad labor groups ad health policy experts committed to raisig awareess of the umber oe cause of death, disability, ad risig health care costs i the Uited States: chroic disease. The PFCD s missio is to: Challege policymakers to make the issue of chroic disease a top priority ad articulate how they will address the issue through their health care proposals Educate the public about chroic disease ad potetial solutios for About the Uited States Workplace Welless Alliace The Uited States Workplace Welless Alliace is a broad-based, atioal orgaizatio of busiesses, health care advocates, ad oprofit orgaizatios dedicated to the visio that a healthier U.S. workforce produces a stroger ad fiscally healthier U.S. ecoomy poised to compete i the global marketplace. The Uited States Workplace Welless Alliace s missio is to improve the health status of the U.S. workforce by icreasig the umber of U.S. busiesses that icorporate soud employee health maagemet iitiatives that iclude worksite health promotio/welless programs ito their corporate ad health care strategies. idividuals, commuities, ad the atio Mobilize Americas to call for chage i how policymakers, govermets, employers, health istitutios, ad other etities approach chroic disease For more iformatio about the PFCD ad its parter orgaizatios, please visit: 16

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20 For more iformatio about the Partership to Fight Chroic Disease, please visit