How to Present the Business Case for Healthcare Quality to Employers

Sean Nicholson, Mark Pauly, Daniel Polsky, Catherine Baase, Gary Billotti, Ronald Ozminkowski, Marc Berger and Claire Sharda
Additional contact information
Mark Pauly: University of Pennsylvania, Philadelphia, Pennsylvania, USA
Daniel Polsky: University of Pennsylvania, Philadelphia, Pennsylvania, USA
Catherine Baase: The Dow Chemical Company, Midland, Michigan, USA
Gary Billotti: The Dow Chemical Company, Midland, Michigan, USA
Ronald Ozminkowski: Thomson Medstat, Ann Arbor, Michigan, USA
Marc Berger: Merck & Co., Inc., West Point, Pennsylvania, USA
Claire Sharda: Merck & Co., Inc., West Point, Pennsylvania, USA

Applied Health Economics and Health Policy, 2005, vol. 4, issue 4, pages 209-218

Abstract: Many employers in the US are investing in new programmes to improve the quality of medical care and simultaneously shifting more of the healthcare costs to their employees without understanding the implications on the amount and type of care their employees will receive. These seemingly contradictory actions reflect an inability by employers to accurately assess how their health benefit decisions affect their profits. This paper proposes a practical method that employers can use to determine how much they should invest in the health of their workers and to identify the best benefit designs to encourage appropriate healthcare delivery and use. This method could also be of value to employers in other countries who are considering implementing programmes to improve employee health. The method allows a programme that improves workers' health to generate four financial benefits for an employer - reduced medical costs, reduced absences, improved on-the-job productivity, and reduced turnover - and uses accurate estimates of the benefits of reducing absences and improving productivity.

Keywords: Health-economics; Indirect-costs; Workplace (search for similar items in EconPapers)
JEL-codes: C D I Z I1 I19 I18 I11 (search for similar items in EconPapers)
Date: 2005

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