Report: Manage Employee Health—Not Just Benefits

By SHRM Online staff Feb 18, 2011

To save money on their health benefits, businesses must invest proactively in their employees' health—and not just shop around for a good insurance deal, according to a report from the Healthcare Performance Management (HPM) Institute, a research and advisory firm.

"Some executives think that the only way to cut health expenditures is to trim benefit packages or force employees to pay for a greater share of their insurance plans," said George Pantos, the institute's executive director. "That's a mistake. Workers in poor health don't just saddle companies with higher medical costs; they undermine overall performance."

The report, The Last Mile: The Role of HPM in Rounding Out the Enterprise Human Resource Management Mission, calls on companies to incorporate workforce health into their overall strategy for protecting and developing their employees. It outlines a roadmap for managing employee health built on seven steps:

  1. An organizational vision of health.
  2. Senior management participation and commitment.
  3. Workplace policies and the work environment.
  4. Diagnostics, informatics and health metrics.
  5. Health goals and program elements.
  6. v​alue-based plan design.
  7. Patient-centered medical home and chronic-care management.

“Executives who achieve the greatest success begin with a vision of health for their entire employee population,” the report stated. “They focus on achieving measurable outcomes—health management outcomes and business outcomes—in a defined time frame." Doing so, the report recommended, begins with the following steps:

Establish a three-year vision.

Assess the status on each of the seven roadmap elements.

Set 12-month goals to improve performance on those elements deemed to be most critical.

Include continuing review of progress on the roadmap in the strategic planning process.

New Tools

In addition, the report notes how HR teams are deploying health care performance management technology to improve employee health and productivity, such as software-enabled processes that monitor and manage the changing health care picture of an organization. "Annual, or even semiannual, assessments of an organization’s health care spending are not good enough. What is required is a frequent—if not constant or real-time—window into the health of an organization’s workforce and dependents covered by a plan," the report stated.

"Historically, executives have viewed their human resource departments as cost sinks," said Pantos. "But with the help of innovative health care performance management technology that allows employers to measure and manage their benefits programs, business leaders can instead look to their HR teams for savings."

Related Articles:

Data Mining Claims: The Benefits of Digging Deeper, SHRM Online Benefits Discipline, July 2010

Design Levers Used to Promote Healthy, Cost-Effective Behaviors SHRM Online, Benefits Discipline, June 2010

Managing Disability Time Off Costs: Wellness, Prevention and Data Integration, SHRM Online Benefits Discipline, July 2007

value-Based Insurance Design Sparks Increased Interest, SHRM Online Benefits Discipline, February 2009

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform Resource Page

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