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Use Telehealth to Zap the Cost of Sick Days

 |  By kminich-pourshadi@healthleadersmedia.com  
   August 06, 2012

Next time you hear an obviously ill employee sneeze, grab the tissues—then use them to dry your own tears, because your bottom line is about to take a hit. Sick days and chronic illnesses cost your hospital or health system productivity and benefits dollars. But there is the potential for relief from a simple addition to your wellness program, in the form of telehealth.

The Centers for Disease Control reports that cardiovascular diseases and stroke account for $39.1 billion in lost productivity due to sickness or disability. An addition $122.4 billion in productivity is lost due to premature death. Asthma alone cost U.S. businesses $5 billion in 2011.

Chronic health issues have staggering financial consequences nationally. For instance, "full-time workers in the U.S. who are overweight or obese and have other chronic health conditions miss an estimated 450 million additional days of work each year compared with healthy workers—resulting in an estimated cost of more than $153 billion in lost productivity annually," according to the 2011 Gallup-Healthways Well-Being Index.

Do you know how your organization's employee wellness (or lack thereof) affects your bottom line? The American College of Occupational and Environmental Medicine says there is no precise formula for measuring the actual cost of losses in productivity from illness. However, the final cost must be based on how loss of production influences the bottom line by department or service line. Other losses to calculate include idle assets and benefits paid to absent workers, according to the ACOEM.

In hospitals and health systems, illnesses can leave holes in schedules that force clinical staff leaders to turn to expensive agency providers. "One of the challenges that [nursing leaders] struggle with is the cost of overtime to an organization. But you have to staff for the forecasted census, you have to have the right number of nurses," remarks Polly Davenport, RN, CEO at Ochsner Medical Center–North Shore, a 165-bed acute care hospital on the north shore of Lake Pontchartrain in Slidell, LA, with who I spoke to earlier this year about controlling nurse labor costs.

One way to cut healthcare expenses is through telemedicine, aka telehealth. Virtual office visits and virtual rounding have been shown to lower healthcare costs by reducing avoidable hospital admissions and providing regular access to care in remote parts of states. Telemedicine is just plain more convenient for everyone in this busy world. To learn more about how hospitals can reap the financial rewards of telehealth with their patients, check out my article in the July edition of HealthLeaders magazine.

But telemedicine doesn't have to be limited to patients. Georgia Partnership for TeleHealth (GPT), a nonprofit provider working with more than 350 partners and 175 specialists across the state, has handled some 40,000 patient encounters as of 2011.

A study by Children's Healthcare of Atlanta, a 500-bed pediatric hospital that participates in the GPT, reviewed 609 telemedicine appointments conducted over a nine-month period and noted that approximately 86% of patients would have missed school and more than 80% of parents would have missed a full day of work to go to the city for an in-office visit. GPT CEO Paula Guy says a random sample of 40,009 telehealth visits that her organization tracked showed an average savings of patient travel time of 124 miles per encounter and nearly $762,027 in fuel alone.

Dan Ruggeri, a partner at Employee Benefits Design, LLC in Springfield, MO, says his organization was looking to incorporate telemedicine into its company's client offering, so it opted to first test it with its 25 employees. They received access to Consult A Doctor, a telemedicine service that provides patients with 24-hour access 7 days a week to a network of U.S. board-certified physicians via phone, secure email, video, and mobile applications. The benefit was encouraged by EBD's insurer and paid for as part of the employee benefit plan. In fact, all the major plans in Missouri provide an employer credit for the cost of this service, which comes out of the employers' monthly premium.

Ruggeri notes that with many employees nationwide on high deductible health plans, copays for unnecessary trips to the doctor's office can add up. There's a double whammy when employers must pay for claims for the unnecessary visits. What's more, some employees may forgo necessary treatment for themselves or a family member in order to save money, which later can lead to a worse illness or outcome.

But getting employees to stop using their physicians' offices as their first stop for illness isn't easy. To encourage employees to try telemedicine, Ruggieri says, the employer needs to pay the fee for the program and offer it as a free benefit to employees.

"If it doesn't cost the employee anything, then that's a heavy incentive to use this first, before going to the doctor's office and using a high-deductible plan. And if we can reduce our [employee] claims costs, it saves us, the employer, money," he says.

As financial leaders know, metrics are the keys to managing margin. Ruggieri says it's essential that long-term goals and metrics be established to track the effectiveness of telemedicine. For instance, financial leaders should request quarterly reports on:

  • The number of touch points with the telemedicine provider
  • A reduction in the number of provider visits, use of specialists, and claims
  • Overall employee health improvement
  • Disease outcomes

"We know how costly it is to us when an employee sees a physician. So, if we just calculate what we save in productivity by them not going to a doctor and staying at work, it's a four-to-one rate of return. Plus then we also don't have those claims hitting our loss ratio. As a small employer, we found [telehealth] was an employee benefit that more than paid for itself," Ruggeri says.

Hospitals and health systems are incurring sizable financial losses due to employee illness every day. Healthcare staff—perhaps more than in any other industry—are more likely to be exposed to germs, as well as high levels of physical and mental stress, and a host of other factors that can lead to chronic illness. That means healthcare organizations must provide even more opportunities for their employees stay in top health. Adding a telehealth program to the benefits package can help employees without costing the organization significantly, potentially saving millions in your insurance loss ratio and in regained productivity.

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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