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How do you calculate the real cost of health care?

I'm doing some research and was wondering if anyone on Proformative ever calculated the real cost of heath care?

Now we all know the preimums that both the company and the employee pay, but what about the lost productivity to the company as employees take time off (whether part of their sick/vacation benefit or not) while languishing in the providers' office for hours waiting to be seen.

Anyone have any figures or know of any studies?

Thanks

Answers

kadidia cooper
Title: office manager
Company: atchison barisone et al
(office manager, atchison barisone et al) |

I don't know of anyone who has, but if you factor in the hours spent waiting in provider's offices (and often the travel time, if your insurance has no close providers) you also need to factor in what happens if your employees actually come to work sick - they may get even sicker or it may take them longer to get better and during this time their productivity will suffer even if they are at work, they may get co-workers sick. So having them languish in a doctor's office or take a day off, may work out a lot better in the end.

Topic Expert
Barrett Peterson
Title: Senior Manager, Actg Stnds & Analysis
Company: TTX
(Senior Manager, Actg Stnds & Analysis, TTX) |

I do not know of any studies and am not particularly a fan of those calculations as most of the studies have a goal - to make the number big - for no other apparent use. Lost work days can have multiple causes, including health, and not all those with an official "health" excuse are...some may be golf days. I am a fan or reducing lost time, from whatever reason.

Topic Expert
Randy Miller
Title: Partner
Company: CFO Edge
(Partner, CFO Edge) |

I agree. The agenda for most of these studies is usually not to provide useful information for business, but to provide fodder for some other ideology.

From a business standpoint this really is a two part issue: 1) How is time off affecting my productivity?; 2) Is my health care plan really working?

It sounds callous, but as a business, I am less concerned about the time my employees wait in a doctor's office, unless it is so bad that they start avoiding going and end up coming to work sick or staying out of the office for extended periods while sick. Then I need a new health care provider.

More important to the business is the cost of the premiums and the cost of the time out of work. Providing the right healthcare/wellness plan will help minimize the lost productivity. (But I don't think you can ever eliminate those spring and summer "mental health" days.)

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Randy,

Thursday & Friday of this week were partial mental health days.... Sometimes the best money one can spend :)

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

I guess partly you are asking how much do inefficient doctors cost? I did not find any studies other than a PWC research report, "The Price of Excess" which touches your question but does not answer it. But there are a bunch of press stories that may help. Following are two I liked --

Baltimore Sun, "The High Cost of Waiting" - http://articles.baltimoresun.com/2012-05-31/news/bs-ed-health-costs-20120531_1_health-care-productivity-of-american-workers-medicaid-services

New York Times, "A Hidden Cost of Health Care: Patient Time - http://economix.blogs.nytimes.com/2009/02/09/a-hidden-cost-of-health-care-patient-time/

Hope this info helps. Interesting question.

Harold D. Tamayo
Title: Vice President of Finance
Company: MHA Inc., a Roper Technologies Company
LinkedIn Profile
(Vice President of Finance, MHA Inc., a Roper Technologies Company) |

At a macro level there aren’t any deep reliable studies done because the study would be too complex. As some have point out, there are some segments that have been measured in terms of costs. However, in specific therapy areas there are many segments that have been tracked and analyzed. Pharma and Managed Care organizations focus on this areas to sell their value proposition through outcomes research or health economics. ISPOR would be a good source to reach out to. Also, I am going to assume your question is in relation to the US healthcare system.

Paul Shillam
Title: Controller
Company: Pacific Medical Centers
(Controller, Pacific Medical Centers) |

One of the best resources for this type of information is the Kaiser Family Foundation, specifically their analysis of costs at http://www.kff.org/insurance/7670.cfm.

Anonymous
(Product Marketing Manager) |

I know this is off-topic but I'd like to know the higher macro-economic cost in terms of how many people have made the decision to not start their own businesses for fear of losing healthcare for themselves and their families. Has this played into the continued sluggishness of the recovery as these businesses aren't created and therefore do not create jobs?

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Wayne
In the spirit of offering a variety of lenses thru which to view your question, what about the cost of people making bad lifestyle choices (diet and exercise) that are the root cause of many health care visits/treatments? Wellness companies may have some studies on this, as they tend to offer incentives to employees (like lower premiums) who improve their lifestyle and thus reduce the negative impact on their work place.
Regards
Len

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Len -

That certainly is a factor, but then hereditary diseases, accidental (that could have been prevented) injuries, and all sorts of somewhat preventable, not preventable, curable, non-curable filters can be created.

I was looking for what the costs were similar to the two studies Regis came up with, that in effect a large aspect of the cost is the inefficient, self-righteous approach healthcare takes in respecting the cost of customer time.

Thanks

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