Checking Up On Health: October 2, 2012


Benita Dodd, Vice President, Georgia Public Policy Foundation

Health Policy Briefs
Compiled by Benita M. Dodd

“Presenteeism”? Sick workers cost the nation $576 billion in lost productivity every year, Joanne Sammer reports in, citing the non-profit Integrated Benefits Institute. There’s $117 billion for wage replacement, including incidental absence due to illness, workers’ compensation, short-term disability and long-term disability. There’s another $232 billion for medical and pharmacy costs, including workers’ compensation, employee group health medical treatments, employee group health pharmacy treatments. And there’s $227 billion in lost productivity from absence due to illness and presenteeism (being at work but not performing at the usual level because of illness or poor health).

Wellness programs paying off for employers: Of the 79 percent of large companies and 44 percent of mid-size companies that offer their employees wellness programs, the majority (53 percent of mid-size companies and 60 percent of large companies) declare that their programs have exceeded expectations when it comes to reducing overall health care costs, even though not all of those companies gauge the return on investment (ROI), reports. And reports that one study finds that although only 19 percent of the employers studied have analyzed the financial impact of their wellness programs, those that have are seeing health care costs decline by $1.00 to $3.00 for every dollar spent on wellness. Moreover, these employers are seeing improvements in higher employee morale, increased productivity and reduced instances of employee disability. Two factors separate the employers that have achieved ROI from wellness from those that have not, according to the report: the use of incentives for participation and result and strong communication to support the programs.

High-cost drugs:  Did you know that specialty drugs, also called biologics, that treat serious and complex conditions such as cancer and rheumatoid arthritis, make up about 17 percent of employers’ total drug costs even though just 1 percent of the workforce takes them? Total costs are expected to grow to 40 percent by 2017.

A recent report put the average monthly price tag for a specialty drug at $2,000 – 10 times greater than that for non-specialty medication. Among the reason for the high cost is that specialty medications are derived from living organisms and have no substitute, unlike most drugs that are made chemically. Many biologics, such as chemotherapy drugs, must be administered in a doctor’s office and require extensive monitoring, further driving up costs. Pharmacy costs alone for an employee who takes Enbrel, Humira or Remicade to treat rheumatoid arthritis are around $14,500 annually. To help employers understand and navigate pharmacy benefits and biologics, the Midwest Business Group on Health is launching a toolkit on the Web site of the Chicago-based employer’s coalition at the end of the month. The group will also conduct educational seminars around the country. Source:

Investment in biotech increase: Venture capital is back in play in the USA, according to Reuters. Last year, venture backers invested $4.82 billion in biotechnology, up 24 percent from 2010. Medical-devices venture investment rose 17 percent last year, and health care services rose 41 percent. A handful of big acquisitions, new U.S. laws that could speed up drug approval in key areas, and a broader definition of what investors think belongs in those funds are helping to breathe life into the highly cyclical sector, investors say.

“As long as you’re living under my insurance … “ Carrying your children on your insurance up to age 26 under the 2010 federal health law known as ObamaCare could challenge those young adults’ privacy, Michelle Andrews writes in her Kaiser Health News consumer column. Since the law passed, more than 3 million young adults have gained coverage. Federal health privacy rules (HIPAA), which took effect a decade ago, generally prohibits the unauthorized disclosure of individuals’ medical records and other health information. Health-care providers and insurers can generally use such information, however, when trying to secure payment for treatment or other services. Read her column.

Unintended consequences: In May, the Atlanta-based Centers for Disease Control and Prevention cut in half the amount of lead that should trigger medical monitoring and other actions in children younger than 6. The CDC’s action came after its scientific advisory board decided that even small amounts of lead exposure are associated with reduced IQs, attention problems and poor academic achievement. In one fell swoop, the number of children at risk of lead poisoning went from 77,000 to 450,000. The problem is that most local health departments say they can’t afford to offer to monitor all the children who meet the CDC’s new standard. Congress cut the CDC budget for lead poisoning prevention programs by 94 percent, from $29 million in fiscal year 2011 to $2 million for 2012. Source: USA Today 

Quote of Note: “We are entering the age of personalized medicine, where the therapy that’s best for you will be based on your physiology and genetic makeup — and may not be right for any other patient. Yet standing in the way of this boundless potential is an Obama administration whose entire approach to health reform revolves around the idea that patients are not unique and that bureaucrats can develop standardized treatments that will apply to almost everybody with a given condition.” – John Goodman, National Center for Policy Analysis

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