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Health and Productivity Management

  • ID: 42710
  • Report
  • June 2000
  • 78 pages
  • American Productivity & Quality Center, APQC
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HPM is an emerging business strategy, based on integrated information, aimed at improving the total value of human resource investments. HPM has become an important focus area for organizations seeking to meet strategic business objectives and manage total employment costs. HPM guides a company’s health and human resource practices and allows organizations to:
- identify factors that influence an employee’s health and well-being, regardless of the programs the employee may access;
- measure and manage the performance of company-sponsored programs in
aggregate, addressing cross-program relationships and the overall impact on costs and the company as a whole; and
- coordinate, prioritize, and justify targeted management interventions aimed at individuals, providers, conditions, plans, and locations ... not just programs.

Why is this so important? First of all, direct health and disability costs are just the “tip of the iceberg.” Include all the indirect costs (replacement worker wages, productivity losses, routine over-staffing and/or overtime premiums, etc.), and the impact on organizational performance becomes even more significant. Secondly, these programs impact each other since the same individuals often access and are served by multiple programs. Organizations have started to recognize the synergies among the various programs and the associated benefits of coordinated management.

HPM provides a vision and the tools necessary for coordinated management across
programs. Total employee health is measured and evaluated based on an individual’s costs, utilization, and clinical profile across multiple programs. In addition, analyses by job type, location, and program-specific experience provide the information needed to identify the root causes of excessive employee health costs and productivity loss. Information is used to develop program enhancements and administrative changes that:
- increase employee productivity and attendance;
- reduce costs in high-impact areas without simply shifting costs to other programs;
- improve management focus, effectiveness, and efficiency, thus reducing resources and effort required to manage programs; and
- create comprehensive business cases for management interventions related to
employee health and productivity.

The HPM consortium benchmarking study began in April 1997 and consisted of
two phases.

Phase I: Quantitative Analysis
The MEDSTAT Group led this phase of the study, which consisted of a quantitative survey. Respondents supplied data reflecting their actual experiences in key health and productivity management areas. Each company’s experience was compared with norms and benchmarks (both internal and external), potential areas for improvement were identified, and estimates of savings were calculated. The results of this study were reported to all
sponsoring companies, and overall results were presented and distributed in September/ October 1997. Some of these results are presented in the Appendix of this report.

Phase II: Qualitative Analysis
This phase began with an organizing meeting held in September 1997 at which the
APQC/MEDSTAT study team and the sponsor companies agreed upon the study
scope. The team developed specific discussion items to be addressed during site visits with best-practice organizations for each of the following study areas:
- organizational enablers,
- implementation strategy, and
- evaluation methods.

KEY FINDINGS OVERVIEW

Key findings were identified throughout this study in three areas: HPM organizational enablers, HPM implementation strategy, and HPM evaluation methods. The key findings, presented below, will be explored in detail throughout the remainder of the report. HPM Organizational Enablers

1. The move to HPM must be positioned as a business strategy rather than a human resources initiative and aligned with the overall business strategy of the organization.

2. HPM must be viewed as a way to improve the quality of work life—not just a
means for cutting costs.

3. Mechanisms for funding HPM must be clearly understood and well established.

HPM Implementation Strategy

4. Communication, first of early successes and then updates and performance results, is critical to the successful implementation of HPM initiatives.

5. Interdisciplinary teams and shared decision making ensure that HPM initiatives meet the needs of the entire organization.

6. Change-oriented organizations experience the least resistance to HPM innovation.

7. The need for more sophisticated evaluation increases as HPM programs mature
and expand.

8. HPM data come from a variety of sources and are combined to gain a crossprogram view of performance.
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- Sponsor and Partner Companies

A complete listing of the sponsor companies in this study, as well as the best-practice (“partner”) companies that were benchmarked for their innovation and
advancement in health and productivity management.

- Executive Summary

A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.

- Foundations for Success

A look at six critical success factors for health and productivity management initiatives.

- Key Findings

An in-depth look at the eight key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the partner companies.

- Partner Company Profiles

Background information on the partner companies, as well as their innovative health and productivity management processes.

- Appendix

Metric data about participants’ health and productivity management programs.

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