How to Control the Cost of Chronic Conditions in Your Company

Brace yourself for the following. More than four out of five workers in America are overweight or have at least one chronic medical condition. Obesity and related chronic diseases cost employers up to $93 billion per year in health insurance claims. Worse still, chronic conditions affect absenteeism, costing companies more than $153 billion per year in lost productivity.

No doubt your company is also being affected by this trend. Addressing its impact starts by understanding its cause.

Key Contributors to Chronic Conditions

Aon Hewitt notes the relationship between health risks and behaviors, chronic conditions, and associated costs quite simply:

8 risks and behaviors contribute to 15 chronic conditions accounting for 80% of total costs for all chronic illnesses worldwide.

The following graphic puts names to the numbers. Some of these risks or behaviors may be particularly prevalent in your industry or workforce.

Risks & BehaviorsChronic ConditionsAssociated Costs
  • Poor stress management
  • Insufficient sleep
  • Smoking
  • Excessive alcohol consumption
  • Poor diet
  • Physical inactivity
  • Poor standard-of-care choice
  • Lack of health screening
  • Allergies
  • Arthritis
  • Asthma
  • Back pain
  • Cancer
  • Congestive heart failure
  • Coronary artery disease
  • Depression
  • Diabetes
  • High cholesterol
  • Hypertension
  • Kidney disease
  • Lung disease
  • 80% of total costs for all chronic illnesses worldwide

Chronic condition management

It’s one thing to be aware of the behaviors leading to chronic disease. It’s quite another to change them. The most difficult health-related challenge companies have? Motivating their employees to change behavior as it relates to their well-being—70 percent of employers surveyed by Aon Hewitt in 2013 agree.

That’s why it’s so very important for companies to offer health plans that provide for chronic disease management. There may not be cures for these conditions, but there are ways to mitigate their effects. For instance, Kaiser Permanente (formerly Group Health) offers complex care management, health coaching, and chronic condition workshops. All to help your employees cope with their conditions, avoiding costly and debilitating complications. We also incorporate value-based benefits. Two of the most popular are no cost shares for maintenance drugs for conditions such as diabetes and heart disease. And no cost shares for needed medical supplies such as diabetes monitors, asthma spacers, and blood pressure cuffs.

Why disease management is a must have for your bottom line

The better you can help your employees manage their conditions, the more the health of your bottom line improves. Health plan rates are based on the health of your workforce. Initial rates are determined based on average health care need—and associated costs—that correspond to the age, gender, and risk factor breakdowns of your covered population. For each subsequent year, rates are adjusted up or down based in part on how often or how little your workers required doctor visits, hospital care, prescriptions, and other health services.

By helping your employees with chronic conditions manage their health better, you also help reduce the need for care, including hospitalization and emergency care. Your employee absenteeism should lessen and productivity improve. Over time, you should see a positive trend in both your direct and indirect health care costs.

 

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All plans offered and underwritten by Kaiser Foundation Health Plan of Washington or Kaiser Foundation Health Plan of Washington Options, Inc.