How to present the business case for healthcare quality to employers

¹Mercer Human Resources Consulting, as cited in the Wall Street Journal, 20 October 2004.[14]

²Companies that are not able to raise enough money to finance all projects with a positive NPV will generally rank projects and pursue those with the largest NPV.

³Dow employees based in the US were surveyed in the summer of 2002.[21] The employees missed 1.1% of workdays because of a health condition, on average. Sixty-five percent of the workers reported having a chronic health condition and these employees reported that their productivity while at work was 11.5% lower than usual over the previous 4 weeks because of their health condition. The average hourly wage among the Dow workforce in 2002 was $US31.90.

⁴Villagra and Ahmed[22]estimate that a diabetes disease management programme reduced medical expenditures by 8%. Although Fireman and colleagues[23] report that medical expenditures increased 9 percentage points less over a 4-year period among enrolees with chronic conditions that were targeted by Kaiser Permanente’s disease management programmes relative to enrolees without a chronic condition, the authors caution that the programmes may not have been responsible for the cost savings. Goetzel et al.[24] report mixed evidence for 44 disease management programmes targeting five different conditions, with the largest and most consistent cost savings for congestive heart failure programmes and the weakest results for depression programmes. The Congressional Budget Office[25] reviewed the disease management literature and concluded that there is limited evidence that these programmes reduce medical expenditures, in large part because most studies focus on intermediate health outcomes (e.g. blood pressure or cholesterol levels) rather than medical costs. We assume a more modest expenditure reduction of 2%.

⁵Situations where a person is present for work but functioning at less than full productivity are sometimes referred to in the literature as ‘impaired presenteeism’.

⁶The seasonally adjusted national average turnover rate for June–August of 2004 was 2.4% according to a Bureau of Labor Statistics survey.[26]

⁷Pauly et al.[18] show that the cost to a firm when a worker is absent is the worker’s marginal revenue product, which would be equal to the daily wage if workers are never expected to miss work or if they are not paid when they are absent. Observed wages will usually be about 5–10% lower than a worker’s marginal revenue product because most workers are still paid (up to a specified number of days) when they are absent because of illness, vacation or a statutory holiday, and the expected absence rate will be considered when determining the wage per day paid.