Many corporate leaders who promote a culture of health and well-being in their organizations face challenges relating their work to tangible economic outcomes. Fortunately, research shows that as the corporate culture of health assessment scores improves, healthcare cost trends moderate.
HealthNEXT executive leaders Dr. Ray Fabius, Dixon Thayer, David Kirshenbaum, and Jim Reynolds, along with Sharon Glave Frazee, Ph.D., MPH, demonstrated a direct linear relationship between a culture of health assessment score (CHAS) and healthcare cost trends. In fact, using the HealthNEXT scoring system on a 1000-point scale; for every 50 points of improvement, there was a 1% reduction in medical trend. This research suggests that there is an immediate and sustainable impact as a company moves from getting started in this pursuit to the point of reaching a best practice score of between 700 and 750.
Read the full study, The Correlation of a Corporate Culture of Health Assessment and Health Care Cost Trend, to learn:
- How corporate health assessments can contribute to lower annual healthcare cost trends
- Examples of corporate health assessment tools
- What is an organizational culture of health
- What specific elements contribute to a healthy corporate culture
Why this study matters
Employers are challenged by what Warren Buffet has called the true corporate tax. For the last few decades, the healthcare costs of their workforce have been trending at an alarming rate of two to three times general inflation, making it difficult to provide salary raises as well as health benefits coverage.
Moreover, according to the Centers for Disease Control, chronic health conditions and unhealthy behaviors reduce worker productivity. Five chronic diseases or risk factors—high blood pressure, diabetes, smoking, physical inactivity, and obesity—cost US employers $36.4 billion a year because of employees missing days of work.
Alternatively, healthy corporate cultures have a workforce with less illness and fewer unhealthy behaviors. As a result, employers with cultures of health and well-being spend less on health care without needing to reduce benefit services or shift more costs to their employees.
Purpose of the study
This study aims to determine the relationship between a corporate culture of health assessment score and annual healthcare cost trend by comparing organizations that scored higher versus those scoring lower on the culture of the health continuum.
Methods
HealthNEXT developed, validated, and implemented the Employer Health Opportunity Assessment (EHOA) and the Employer Assessment 50 (EA50) proprietary tools to score a large or mid-sized organization’s culture of health and well-being against the benchmark culture of health employers. Benchmark employers have flattened their health cost inflationary trend over many years. Using this score, the team then measured the correlation between CHAS and trends in healthcare expenditures.
EHOA and EA50 are proprietary tools that assess cultural health and well-being by analyzing data from a document review, workplace observation, and interviews with senior management, management, and employees to determine elements that contribute to a culture of health.
Study Sample
Data for this study were collected from 21 sets of annual organizational CHAS and healthcare cost trend data points from 12 unique companies.
A total increase year-over-year in total costs was measured for all monies paid to healthcare providers for the organizations’ covered population by both employers and employees. This included medical, prescription drug costs, deductibles, copayments, and coinsurance.
The team identified 21 health score assessments completed between 2011 and 2016 for organizations with available healthcare cost claim data for the same period. Data shows the average score was 459 out of a possible 1000, and the average healthcare cost trend was 5.0%
Analysis
The correlation of CHAS scores with the total healthcare cost trend was strong, and increasing CHAS scores demonstrated lower healthcare cost inflation. In 2015, U.S. healthcare spending for private health insurance increased by 7.2% per person and was projected to increase by 6.8% annually from 2017 to 2025 at the time the article was written. By just modestly improving the culture of health by 50 points out of 1000, the 1% decrease in annual healthcare trends would produce a per-member decrease in healthcare costs of $3999 over a ten-year period.
By implementing best practices, this research implies that it is now possible for employers, large and mid-sized, to control their medical spending and reduce the aggregate health risks and illness burden of their most important asset – their people. Additionally, it is worth noting that other studies referenced in this article calculate that for every dollar saved in direct health care costs, employers save an extra $2.30 in improved performance or productivity.
