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Health Issues: a Rising Economic Threat

Heart disease, lung cancer and other non-contagious health issues, many of which are at least partially avoidable through changes in lifestyle, are costing the economy hundreds of billions of dollars every year. Today, non–communicable diseases (NCDs) are already responsible for half of all deaths worldwide – and this figure is projected to increase by 17% over the next decade.

Of particular concern for businesses: More than half of those affected by NCDs are of working age. This is why this isn’t just a human tragedy, it’s an economic one — which is why combating the rise of NCDs should not only concern public health authorities.

It could even be a sensible investment for encouraging future economic growth: The World Economic Forum estimates that costs related to NCDs will account for as much as 4% of annual global GDP by 2030. That is a staggering $47 trillion.

Perhaps surprisingly, these silent illnesses are affecting more people in the developing world than in the developed. The greatest increase, 27%, is projected in Africa, with sub-Saharan countries stuck with the worst predictions. In lower-income countries, it is primarily respiratory diseases that are the biggest killer, often linked to smoking and poor air quality, while heart disease and stroke, associated with sedentary lifestyles, are the biggest killers in richer countries, according to WHO data.

The rise of NCDs is increasingly undermining the productivity of workers all over the world and has devastating effects on the economic potential of the poorest of nations. Boosting the health levels of employees and participating in public-private partnerships to reduce the impact of NCDs in wider society should be seen as a profitable strategy, not a burden.

In Depth

Two myths surround non-communicable diseases: that they primarily affect people in wealthy countries and that they are a disease of the old.

Historically, that was the case. Cancer, diabetes, respiratory or heart diseases were an illness of the developed world, largely caused by risk behaviors such as smoking, drinking, living a sedentary lifestyle and having a bad diet. Today, of the 38 million people who die each year from NCDs, 28 million live in developing countries. That is a 40% increase since 1990.

“While it may seem easy for businesses to ignore this trend, especially in markets with government-centric health systems,” says Jim Winkler, chief innovation officer of Aon Health, “organizations need to focus on the adverse impact poor health has in the ability for working people to do their jobs effectively.”

Business leaders are beginning to take notice. The World Economic Forum’s Global Competitiveness Report shows that about half of all business leaders worry that at least one of the four biggest NCDs (heart disease, cancer, diabetes and lung disease) will hit their company’s bottom line, especially where the quality of local healthcare is poor.

A disproportionate 80% of deaths from NCDs are premature, taking the lives of people during their most economically productive years. The WHO says that 23% of Indonesian people between the ages of 30 and 70 are expected to die from NCDs. In the U.S., this figure is 14%.

“Chronic and complex diseases such as heart disease, diabetes and other obesity-related conditions lead to declines in physical output, mental acuity and emotional resiliency,” Winkler warns. All of these will affect productivity — which is why this is a growing crisis not just for people’s health but also for the global economy.

The Economic Burden of NCDs

Hundreds of studies have linked individual NCDs with economic losses. The World Economic Forum and the Harvard School of Public Health estimate that people dying of heart disease in India (26% of all deaths) will cost the economy $2.7 trillion from 2012 to 2030. Along with other NCDs and mental illnesses, the total economic loss — measured by taking into account money spent by health providers on treatment and the reduction in the number of working people due to deaths — will be two and a half times the country’s GDP in that period.

Productivity losses for businesses due to NCDs can be measured by calculating the cost of Disability Adjusted Life Years (DALYs), sick leave, unemployment and days lost by caregivers. In Nigeria, more than half of stroke survivors take a year and a half to return to work. A comprehensive study by the European Journal of Epidemiology found that the workplace productivity of stroke victims’ caregivers also continues to fall one to two years after they become carers. The same study found that, in the U.S., absenteeism one year after a cancer diagnosis costs the economy $20.9 billion annually. Aon’s European Sick Leave Index report, meanwhile, found the average direct cost per individual sick leave day was at least €160.

How Can Business Help?

The WHO has put combatting NCDs at the forefront of its agenda, with businesses playing an important role in helping stop the spread of the epidemic. The 2013–20 Global Action Plan for the prevention and control of NCDs calls for a collaboration between states, NGOs and the private sector to develop affordable strategies that would help prevent the continued rise of these diseases.

The cost of inaction far outweighs the potential economic benefit of taking action on NCDs. The WHO calculates that implementing its Global Action Plan proposals would come in at just $1.20 per person per year.

Business leaders are increasingly aware of the benefits that health programs bring to the organization. Aon’s 2015 Health Care Survey found that the top change U.S. employers want to implement in their rewards system to appeal to the 2020 workforce is “more opportunities and support to connect health and wealth.”

The spread of NCDs is a trend that businesses should not ignore. They are increasingly taking the lives of people during their most productive years and have a huge impact on productivity before, during and after their development. The question is not whether businesses should act upon this global epidemic, but how.

These initiatives not only save lives but help businesses reduce healthcare costs and productivity losses. For instance, Johnson & Johnson’s health and wellness program saved the company $250 million on health care costs over 10 years. The return on investment was $2.71 per dollar spent on tackling smoking and physical inactivity.

To tackle this growing global crisis, targeting the risk behaviors that increase the chances of dying from NCDs is key. This is where businesses can have a significant impact — by improving availability of healthy food, promoting physical activity, setting up programs to help employees quit smoking and giving better access to preventative healthcare.

Talking Points

“The challenge… goes beyond health ministries… Non-communicable diseases undermine productivity and result in the loss of capital and labor. These costs are unbearable and clearly call for innovative solutions and an all-of-society approach, with strong partnerships between government, the private sector and civil society.” – David Bloom, member of the World Economic Forum Global Health Advisory Board and professor at the Harvard School of Public Health

“Creating an effective, collaborative response against NCDs requires cross-sector and cross-industry action – it can’t be achieved by any one business, nor one sector alone.” – Dr. Fiona Adshead, chief wellbeing and public health officer at Bupa

“We should encourage individuals to make the smart choices that will protect their health.  Exercise, eat well, limit alcohol consumption and stop smoking. We can do more than heal individuals — we can safeguard our very future.” – Ban Ki-moon, secretary-general of the United Nations

This article originally appeared on TheOneBrief.com, Aon’s weekly guide to the most important issues affecting business, the economy and people’s lives in the world today.”

Further Reading

5 Apps That May Transform Healthcare

Talk about being in a room with a lot of smart people! Wow!

HITLAB, a healthcare innovation technology and teaching lab based in New York, just sponsored its second annual World Cup event at Columbia University for aspiring healthcare technology entrepreneurs and start-ups. The HITLAB staff, who blew me away with their creative energy, brought together the best and the brightest in academia, the business world, the insurance industry and the healthcare technology sector for this two-day event.

Out of 192 applicants, five finalists were selected to present potentially revolutionary technology and ideas on a wide range of global public health problems that have been around since the time Moses wore short pants and that someday soon may have the kind of impact Louis Pasteur and Steve Jobs did.

The beauty of these five finalists is that their solutions are so simple that even someone from Jersey City like me can easily understand. The health insurance industry and the malpractice insurance industry should stand up and take notice.

Noninvasix — Keeping Babies Safe

For starters, what if we could reduce brain injuries in newborns by 90%? That is what the CEO of Noninvasix (www.noninvasix.com ), Graham Randall, PhD, MBA, based in Houston, is working on.  The technology is designed to monitor the levels of oxygen molecules in the brains of infants; lack of oxygen causes many permanent brain injuries. This technology was originally funded by the Department of Defense and the NIH, among others, to address traumatic brain injuries in wounded veterans and other adults. Randall’s colleagues discovered a way to use this technology, known as an optoacoustic oxygenation monitor, to detect brain oxygenation levels in babies during active labor.

Gary Hankins, MD, who is the vice chair of the American College of Obstetrics and Gynecology Task Force on Neonatal Encephalopathy and Cerebral Palsy, said, “This technology has the potential to eliminate up to 90% of cases of hypoxic ischemic encephalopathy and subsequent permanent injuries such as cerebral palsy.” The problem with simply using current technology such as a fetal heart monitor-which dates back 40 years-is that it does not accurately measure the levels of oxygen in the brain. In fact, 80% of results are indeterminate or unknown. The new technology can help prevent brain hypoxia (or lack of sufficient oxygen) at birth, which is responsible for 23% of neonatal mortality in the world.

This technology may also help revolutionize obstetrics. OB-GYN physicians have the highest rate of malpractice insurance, with reported annual premiums as high as $200,000 in some states. More than 75% of OB/GYN physicians have been sued for malpractice, with an average of 2.7 lawsuits per physician. Most lawsuits relate to neurologically impaired infants, whose issues get blamed on the doctor during delivery. It has been reported that as many as 50% of OB-GYN physicians have cut back on their practice because of the fear of malpractice claims. Many have moved their practices to states that have less expensive premiums because of legislative caps on liability.

Hospitals, healthcare systems and health insurers should also take notice because the rate of unnecessary surgery has been widely believed to be too high since I walked the hallowed halls of Columbia University 34 years ago. C-section rates have, in fact, nearly doubled over the past 10 years from 17% to 34% of all births in the U.S. The World Health Organization (WHO) recommends C-section rates in the range of 10-15%. The Joint Commission on the Accreditation of Hospitals now requires hospitals to report C-section rates, and many health insurers now pay a bundled rate for deliveries and not a separate, higher rate for C-sections. Many health researchers believe the high rate of unnecessary C-sections is because of the fear of malpractice lawsuits, and Graham Randall believes that false positives from fetal heart monitors also play a huge role. C-sections are the most common surgery in the U.S., with 1.2 million performed each year, and they carry risks such as blood clots and surgical infections to both mother and baby.

Ceeable — Preventing Blindness

Chris Adams, the CEO of Ceeable, based in Somerville, Mass. (www.ceeable.com), won this year’s World Cup competition. “I am here to prevent blindness,” he said. Ceeable was formed in 2014 to commercialize a mobile digital eye exam platform that was co-invented with Dr. Wolfgang Fink at Caltech with assistance from scientists at NASA, the University of Arizona, the Doheny Eye Institute at UCLA and the Jet Propulsion Laboratory in Pasadena.

This mobile field test is a perfect example of the potential for telemedicine. Current technology, used by ophthalmologists, optometrists and eye care clinics in strip malls across America and around the world are expensive, and not very mobile. Today’s eye exams are tedious. (Bats have much better eyesight than I do, so I have experience with tests.) The equipment typically costs $35,000 and weighs roughly 100 pounds.  By contrast, Ceeable only needs a tablet with a touch screen and the Internet to perform a 3-D early detection for glaucoma, muscular degeneration disease, other causes of vision problems and the actual onset of blindness.

The test is user-friendly and can be performed anywhere in the world. The test can even be performed at home, which is brilliant. Although health insurers pay for eye exams at no cost under the ACA, patients are typically limited to two visits per year. With this inexpensive mobile device, people at risk can perform tests as often as they like.

More than 285 million people worldwide suffer from diseases that cause blindness, such as diabetic retinopathy, glaucoma and age-related macular degeneration. The Ceeable technology is now deployed in vision clinics in the U.S., Mexico and Russia and will soon be available in developing countries.

Rubitection — Managing Bedsores

Sanna Gaspard, the CEO and founder of Rubitection, based in Pittsburgh, received her PhD from Carnegie Mellon University, and her start-up has developed a handheld diagnostic device and software system to modernize the detection and management of bedsores. Rubitection has been part of Project Olympus at the Carnegie Mellon incubator program.

When I met her, I interrupted her within 60 seconds and said, “I get it.” My mother ended up in a nursing home when she was overcome with organic dementia. She became so fragile from old age that the nurses could hardly touch her skin without it turning black and blue. They also had to check her frequently for bedsores. 

Turns out I didn’t get it about bedsores at all. What I didn’t know, until Gaspard told me, is that bedsores can be life-threatening. Complications from bedsores, such as infections, kill 60,000 people every year in the U.S. The average cost to treat bedsores in acute cases is $43,000 each and may reach $70,000; there are more than 2.3 million bedsore cases a year in the U.S., costing $11 billion in total.

Medical expenses resulting from bedsores are not reimbursable under Medicare if they developed after someone was admitted to a facility. The facility has to eat the costs.

Current technology that monitors for bedsores is very expensive and difficult to use. The current standard of care is typically a manual skin palpitation and visual inspection. The Rubitech Assessment System (RAS) provides a reliable early detection handheld device for patients at risk with bedsores, helping to address a global public health problem that I didn’t even know existed beyond discomfort and pain for the patient. Rubitection www.rubitection.com came in a well-deserved second place.

Now I get it.

Homeward — Getting the Medication Right

Joe Gough, president and CEO of Homeward Healthcare in Toledo, Ohio www.homewardhc.com, told how his six-year-old son was misdiagnosed at a hospital emergency room and was sent home with the wrong medication. All his vital signs crashed. Luckily, his life was saved upon readmission, and today he is a healthy young man. Many others are not so fortunate.

Again, I immediately could relate to misdiagnosis and incorrect medications. My dad was diagnosed with congestive heart failure, and his cardiologist told me he had two months to two years to live. Several months later, I got a call: “You have to come home because your father is in the hospital, and we need to amputate both his legs because he is not getting enough blood circulation down there. We need you to tell him.”

I hopped on the next flight. When I told my dad the situation, he had the perfect answer: “Throw me out the window now.”

Turns out he was on all the wrong medications, and the poor circulation in his legs was actually more because of blockage in his carotid artery. The plan to amputate his legs would have done nothing to save his life. I got him admitted to a new hospital with a new cardiologist. My dad got to live a couple more years before he finally took his first day off from work, at his funeral. We buried him with both his legs.

So, I get misdiagnosis, wrong medications and poor discharge planning.

Gough and the researchers at Homeward Healthcare have created interactive software for hospitals, patients and payers that the patient can control on a touchscreen tablet from her bedside. Multimedia, real-time discharge planning that includes a patient dashboard will produce better outcomes, free staff time and resources and vastly improve communications.

Gough had begun his presentation by telling us that most people toss their discharge instructions as they walk out the hospital door — but no more. His technology has great potential to reduce hospital readmissions. A key component is a psychosocial assessment to determine who is at risk of not following the discharge plan.

There are also reminders about the correct use of proper medications, and I get the need for that, too. Patients must own their care plan. My oldest brother, upon release from a hospital a few years ago, was told he needed to lose weight and stop smoking. The first thing he did when he got home was have a large bowl of ice cream and a cigarette. I threw his discharge plan in the waste basket.

It is estimated that $26 billion is spent annually from readmissions. The reduction of readmission rates is now a major initiative under both Obamacare and the Joint Commission on Accreditation of Hospitals. The Homeward Healthcare technology is now being used in 23 hospitals, and I am told nurses doing discharge planning just love it.

Ristcall — a Mobile, Smart Watch Nursing Station

Srinath Vaddepally, the CEO and founder of Ristcall, with offices in both Philadelphia and Pittsburgh, has designed a wireless, wearable smart device for both hospital patients and nurses. I like to think of it as a mobile smart watch nursing station.

The idea for this technology, designed with researchers from Carnegie Mellon, came about when, as a hospital patient, Vaddepally fell in his hospital room and could not reach the call button on the bed. Turns out 70% of all patient falls in a hospital occur in the patient’s room, with 40% occurring while walking to the bathroom. The average cost to a hospital for a patient fall is $20,000 per case, and the annual reduction in Medicare reimbursements can reach $200,000.

Ristcall (www.ristcall.com) has a great point. How do you call a nursing station if you are lying on a floor and can’t reach the call button? In addition, how can you reach a nurse who is busy caring for multiple patients and is not at the nursing station?  Even when you ring the traditional call button, the nurse has no idea why you are calling; he has to walk to your room to find out.

As I told Dr. Michelle Odlum, a postdoctoral research scientist at the Columbia School of Nursing, nurses rock! They are the heart and soul of our healthcare system, but they are often overworked, and they don’t have eyes in the back of their heads.

Now, with the help of Project Olympus-which provided incubator space at Carnegie Mellon-nurses can soon have a real-time alert for all traditional patient requests. Nurses will be able to rock even more.

If you are a healthcare technology entrepreneur, I highly recommend applying for this award or sponsoring next year’s HITLAB World Cup Summit. It will be held once again at Lehner Hall at Columbia University in New York, from Nov. 28 to Dec. 2, 2016.

For more information, visit www.hitlab.org.

It was a real pleasure to meet these outstanding World Cup finalists and the HITLAB staff. I learned a great deal and made friends I feel I will now have for a lifetime.

Would a Formulary Help in California?

Introducing a closed pharmaceutical formulary into California workers’ compensation could produce two main benefits. The first is to further lower the cost of pharmaceuticals by either restricting or eliminating certain medications. The second is to reduce the possibility of drug addiction.

An October 2014 California Workers’ Compensation Institute (“CWCI”) report titled, “Are Formularies a Viable Solution for Controlling Prescription Drug Utilization and Cost in California Workers’ Compensation” states that pharmaceutical costs could be reduced by 12%, or $124 million, by introducing the Texas workers’ compensation pharmaceutical formulary.

To achieve the second benefit, an assembly member introduced AB1124 to establish an evidence-based medication formulary and wrote, “The central purpose of our workers’ comp system is to ensure injured workers regain health and get back to work. When workers get addicted to dangerous medications, goals of the program are not met. An evidence-based formulary has proven to be an effective tool in other states and should be considered in California.”

To confirm whether these benefits could be achieved through the introduction of the Texas formulary, a review of the CWCI study and the opioid medications available under the Texas formulary was conducted. The findings, summarized below, suggest that the answer is no.

Although California does not restrict or limit medications in treating injured workers, it does limit the prices paid and provides an opportunity to question prescribed medications that appear to be out of the ordinary. Medi-Cal prices (California’s Medicaid health care program) are used for establishing the maximum prices for workers’ compensation medications, in contrast to states such as Texas, which use the average wholesale price (AWP).

A review of two cost-saving examples that referenced specific medications calculated projected savings based on CWCI’s ICIS payment data for prescriptions paid between Jan. 1, 2012 and June 30, 2013.

The first example compared 50mg Tramadol prices from five different suppliers. The highest was $190, followed by $23, $18, $12 and $8 per script. Here, CWCI suggested that the manufacturer of the highest-priced script be removed from the California formulary. From mid 2009 through 2013, however, the unit price for 50mg Tramadol from the supplier of brand name Ultram and at least 10 other suppliers in California was nine cents, so the AWP for a script was $2. So, overpaying for medications is an issue even if the $190 supplier is removed.

The Workers’ Compensation Research Institute (WCRI) also reported that California claims administrators paid a unit price of 35 cents for 5mg Cyclobenzaprine and 70 cents for 10mg while the unit price from Californian suppliers was 10 cents for 10mg and 15 cents for 5mg. Again, the prices suggest that California claims administrators were paying more than the maximum prices.

Based on randomly selected manufacturers and strengths of the top 20 medications identified in the 2013 NCCI prescription drug study, California’s prices were on average 20% lower than the AWP and in some cases as little as 1/24th the cost. California prices were found to be at the lowest retail price range compared with those published on goodrx.com. Pharmacies located in Los Angeles, Miami and Dallas were used for comparison. Findings suggested employers in California workers’ compensation are paying no more than the general public for medications, whereas in Texas employers are paying more by using the AWP.

The second example compared script prices of seven opioid agonists, including Tramadol and Oxymorphone. Oxymorphone was the highest-priced script at $600 and Tramadol the lowest at $60 per script, suggesting a saving of as much as $540 if Tramadol were to be prescribed instead of Oxymorphone.

But prescribing oxymorphone when tramadol could suffice or vice versa could be regarded as an act of gross negligence by the physician. On the World Health Organization (WHO) analgesic ladder, tramadol and codeine are weak opioids regarded as “step two” while acetaminophen and NSAIDs are “step one.” “Step three” opioids include medications such as morphine, oxycodone and oxymorphone, which all differ in their pharmacodynamics and pharmacokinetics, so choosing one or more to treat pain becomes a balance between possible adverse effects and the desired analgesic effect. Oxymorphone (stronger than morphine or oxycodone) is recommended for use only when a person has not responded to or cannot tolerate morphine or other analgesics to control their pain.

A list of opioid medications published by Purdue Pharma was used to identify which opioids were excluded from the Texas formulary. The list of more than 1,000 opioid analgesics was prepared by Purdue to comply with the state of Vermont law 33 V.S.A. section 2005a, requiring pharmaceutical manufacturers to provide physicians with a list of all drugs available in the same therapeutic class. Being in the same class, however, does not necessarily mean they are interchangeable or have the same efficacy or safety.

The list showed available strengths and included (1) immediate and extended release, (2) agonists such as fentanyl, oxycodone, hydrocodone, oxymorphone, tramadol, codeine, hydromorphone, methadone, morphine, tapentadol and levorphanol and (3) combinations such as acetaminophen with codeine, oxycodone with acetaminophen, oxycodone with asprin, oxycodone with ibuprofen, hydrocodone with acetaminophen, hydrocodone with ibuprofen, acetaminophen-caffeine with dihydrocodeine, aspirin-caffeine with dihydrocodeine and tramadol with acetaminophen.

It appears that extended-release medications used for around-the-clock treatment of severe chronic pain have been excluded or are not listed in the Texas formulary, with a few exceptions. For example, 80mg OxyContin (Oxycodone) ER 12 hour (AWP $18, Medi-Cal $15) is excluded. 120mg Hysingla (Hydrocodone) ER 24 hour (AWP $41, Medi-Cal $34) is not listed. However, 200mg MS Contin (Morphine) ER 12 hour (AWP $31, Medi-Cal $26) and 100mcg Fentanyl 72 hour transdermal patch in both brand name and generic forms are approved under the Texas formulary. Immediate-release generic medications such as oxycodone, hydromorphone and hydrocodone with acetaminophen in all strengths are approved, but immediate-release hydrocodone with ibuprofen and oxymorphone in either immediate or extended release are excluded.

Would the objective of AB1124 be achieved by utilizing the Texas formulary? The above review suggests it would not. All the opioid medications available through the Texas formulary have the potential to cause addiction and be abused, possibly leading to death either accidentally or intentionally. As an example, the executive director of the Medical Board of California has filed accusations against Dr. Henri Eugene Montandon for unprofessional conduct including gross negligence. His patient was found dead with three 100mcg fentanyl patches on his upper chest. The autopsy revealed he potentially had toxic levels of fentanyl, codeine and morphine in his bloodstream at time of death. These three opioids are available under the Texas formulary.

An article published on the website www.startribune.com described the challenges in treating returning soldiers from combat duty. The article discusses Zach Williams, decorated with two Purple Hearts who was found dead in his home from a fatal combination of fentanyl and venlafaxine, an antidepressant. Venlafaxine in both immediate- and extended-release form is approved in the Texas formulary. In addition, the following statement was made in a 2011 CWCI study into fentanyl: “Of the schedule II opioids included in the Institute’s study, the most potent is fentanyl, which is 75 to 100 times more powerful than oral morphine.”

The top 20 medications identified by the 2013 NCCI prescription drug study were also compared with the Texas formulary, and six medications were found to be excluded, including three extended-release opioids, OxyContin (Oxycodone), Opana ER (Oxymorphone) and the once-daily Kadian ER (Morphine). The twice-daily, extended-release morphine MS Contin, however, was approved. Flector, a non-steroidal anti-inflammatory transdermal patch used for acute pain from minor strains and sprains, was excluded, as was carisoprodol a muscle relaxant classified by the DEA as a Schedule IV medication (the same as Tramadol). The Lidocaine transdermal patch, which is a local anesthetic available in both brand name and generic. was also excluded. Lidocaine patches have been found to assist in controlling pain associated with carpal tunnel syndrome, lower back pain and sore muscles. Apart from carisoprodol, it would appear the remaining five were excluded from the Texas formulary because of their high price rather than concerns regarding their safety or potential for abuse.

The U.S. Food and Drug Administration (FDA) is responsible for the approval of all medications in the U.S. Its approved list is the U.S. pharmacy formulary (or closed formulary). California workers’ compensation uses this list for treatment and the Medi-Cal formulary for medication pricing. In comparison, Texas workers’ compensation uses its own formulary, which is a restricted list of FDA-approved medications, and pays a higher price for approved medications than California’s system does.

Implementing an evidence-based formulary, such as in Texas, may result in an injured worker’s not having the same choice of medications as a patient being treated for pain under California’s Medicaid healthcare program. How can this be morally justified? Will we see injured workers paying out-of-pocket to receive the medications necessary to control their pain?

Claims administrators can greatly reduce pharmaceutical costs through their own initiatives by (1) ensuring that they pay no more than the Department of Industrial Relations (DIR) published price for a medication, (2) ensuring that physicians within their medical provider network (MPN) treat pain using the established pharmacological frameworks such as the WHO analgesic ladder, (3) ensuring that quantities and medication strengths are monitored, along with how a person has responded to analgesics, (4) ensuring that, when controlling pain with opioids, there is a heightened awareness for potential abuse, misuse and addiction, (5) establishing a multimodal pain management regimen including non-pharmacological therapies such as acupuncture, aerobics, pilates, chiropractic and physical therapy tailored to a person’s medical condition and, (6) for chronic pain, considering introducing an Internet-delivered pain management program based on the principles of cognitive behavioral therapy.

The progress of many of these initiatives can be automatically monitored through a claims administrator’s technology solution, where a yellow or red flag is raised when prices paid exceed the legislated maximum amounts, when a pharmacological step therapy or progressive plan has been breached or when non-pharmacological therapy goals have not been achieved.

Using these initiatives, as opposed to restricting specific manufacturers or medications through a closed formulary, will undoubtedly yield a far better outcome for the injured worker and lower the cost to the employer, benefiting all involved.

Why Invest in Suicide Prevention?

While no detailed and independent data exists on the cost of suicide and suicidal behavior to the Australian economy, every death does have a financial impact. A cost estimate produced by Mendoza and Rosenberg in 2010 proposed a plausible estimate to the Australian economy of $17.5 billion per year. This figure included estimated productivity costs.

Research conducted by SuperFriend and IFS Insurance Solutions estimated that, in 2012, death claims paid out in Australia by group life insurers in superannuation where suicide was the “known” cause of death amounted to more than $100 million. For some SuperFriend partner funds, suicide death claims account for more than 20% of their total death claims administered.

There is a relationship between stress and work-related suicide. While suicidal behavior is an extreme outcome of stress, significant productivity gains are to be had by managing workplace stress. Medibank private-commissioned research found that stress-related “presenteeism” (showing up at work but at far less than 100% capacity) and absenteeism cost the Australian economy $14.8 billion a year, with 3.2 days per worker lost each year because of stress.

Work-related mental stress claims are the most expensive form of workers’ compensation claim, as they are often associated with long periods of absence from work. Given that only 70% of workers who report that they have experienced work-related mental stress actually apply for workers’ compensation, the potential cost of worker stress is much higher.

Measures taken to reduce or eliminate work stressors will contribute to suicide prevention while providing the additional benefit of lowering costs.

Suicide in Australia

Suicide prevention is a substantial issue for Australian society. Official figures put the lives lost from suicide at about 2,300 people each year in Australia (population: 23 million); the true figure is more likely around 3,000 deaths each year. About 75% of these deaths are among males. Each death gravely affects families, friends and communities.

Suicide becomes more prevalent in adolescence and rises with age, peaking at around 45 years old in men and 40 in women, then declines, before becoming more prevalent again in those over 80. Most deaths by suicide in Australia are in people of working age (data is not routinely collected on employment status at the time of death).

It is estimated that approximately 2.1 million adults in Australia have had serious thoughts about ending their lives, and 500,000 adults have made a suicide attempt. Approximately 65,000 suicide attempts occur every year.

Work and Mental Health

Nationally, about 12.3 million people are in the labor force, with 11.6 million employed at December 2012. Roughly speaking, a third of these will be self-employed or working in small businesses of fewer than 20 people, a third will be working in medium-sized businesses of 20–199 people, and a third will be working in large businesses of 200 people or more.

The World Health Organization (WHO) estimates that adults spend a third of their waking hours at work. The workplace provides a unique opportunity to reach working age adults and provide key health information and intervention.

The impact of mental health problems on work functioning and performance is at least comparable to the impact of physical injury.

Mental health problems in the workplace typically manifest themselves as performance issues, such as:

  • Increased absenteeism
  • Reduced productivity
  • Increased employee turnover
  • Increase in short- and long-term disability days
  • Increased disability claims

Employers are increasingly recognizing that mentally healthy staff are more productive and that there are cost benefits to addressing mental health issues in the workplace.

The Daily Grind Is Good for the Mind

The human brain thrives on what work gives us: activity, routine, social contact and identity.

The act of working gives employees far more than just the benefit of earned income. The World Health Organization names it as a health factor that, when present, contributes to health and, when absent, can increase the chances of ill health. This is particularly relevant in the discussion about mental health. What is it about work that contributes to mental health, and why should employers and insurers consider the health benefits of work?

Activity

When human beings are engaged in doing things, areas of the brain related to attentiveness are stimulated. When someone is off work, it is harder to find regular daily activity—it is not as easy to find the many everyday behaviors we do when we are working. Work provides a structure that tells us what to do. We then engage in hundreds of behaviors every day. Being in the act of doing these behaviors keeps us healthy. When we are not working, it can be hard to answer the question: “So what did you do today?” This absence of activity can have a profound impact on a person’s sense of accomplishment and purpose, which has an impact on mental health.

Routine

Work forces us into a rhythm and regular behavioral patterns that are actually good for us, even if sometimes we may resent the structure. Our bodies and brains enjoy the routine and benefit from the repeated predictable patterns of behavior. If we don’t have something to get out of bed for, it can be difficult to get out of bed. When someone is off work for any reason, the lack of daily direction can have a significant impact on well-being.

Social contact

We spend more waking hours with the people we work with (when we are working full-time hours) than with the people we love and live with. Human beings as mammals are social creatures and seek and thrive on social contact. Neural activity related to social contact is crucial to mental health, and social isolation is a risk factor for mental illness. We are connected to our co-workers because we are social beings who are genetically programmed to monitor and build social connections. We rely on the hundreds of exchanges inside the social context at work to meet our needs for belonging and connection. When people are off work, they lose this continuing social contact, and the isolation has a significant impact on well-being.

Identity

Work gives us identity. When we work we have a title, a position, a clearly defined set of tasks and a label that provides information to the world about who we are, this informs us about who we are in relation to others, and in how we view ourselves. Loss of this identifier has a significant negative impact on self-esteem and self-worth, with a predictable risk to mental health. When employees are off work, it is hard for them to answer the common question: “So, what do you do?”

Any person facing unemployment experiences changes in all of these factors and is at risk for developing mental health issues. A person who already is experiencing mental health challenges, and then goes off work, may find it difficult to build steady recovery, because the essential health need of work is not present.

Many disability plans have an all-or-nothing approach to an employee’s ability to work. If employees are off work, they are deemed not able to work. If employees wish to find regular daily activity to help build their recovery, they may put their claim at risk. This approach to disability management may actually be making employees stay off work longer. The longer an employee is off work, the harder it is to return to work. Systems that do not allow employees who are on a disability claim to work, even to perform volunteer work, are preventing employees from tapping into the health benefits of working and may be contributing to needless work disability.

Employers may also have the mindset that an employee who is sick should be off work. When it comes to mental health issues, it is not best practice to use this all-or-nothing approach. The key here is for employers to have the capacity to address individual employee needs as they return to work or, better yet, have flexible processes and structures that allow employees to stay at work. Staying at work during early days of recovery could be part-time, with the disability benefit covering the balance of an employee’s income from salary.

Continuing activity, routine, social contact and identity build employee recovery and can reduce the cost of the disability claim. There is less work disruption, and continuity can be maintained for the employee and the family, the work team and the organization. This contributes to increased employee health. And healthy employees are productive and engaged employees.