Kentucky is a beautiful state with abundant natural resources that make it an attractive location for business investment. But in Kentucky and across the United States, we run the risk of losing our competitive edge if we don’t act now to address the challenge of improving the health of our workforce. We can do that – and avoid running the Bluegrass State health-care budget into the red – by investing wisely in three key efforts: prevention, appropriate intervention and medical innovation.
Today’s most costly health care problems are chronic conditions – such as diabetes, asthma, and heart disease – that require ongoing management. These diseases are increasingly preventable, and largely treatable, yet they account for the vast majority of health care spending. In fact, $3 of every $4 spent on health care in the United States goes toward treating the 45 percent of Americans with at least one chronic disease. In 2003, Kentucky saw 219,000 cases of diabetes – that’s nearly 6 percent of the state’s population – and chronic diseases cost the state $21.6 billion, including treatment costs and lost productivity.
On its current path, Kentucky will see a sharp rise in chronic diseases in the next 20 years. But it doesn’t have to be that way.
According to the Milken Institute, by making reasonable improvements in preventing and managing chronic diseases, Kentucky can avoid 638,000 cases of chronic diseases in 2023. These prevention and disease management efforts could reduce future economic costs of disease in Kentucky by $17.8 billion in 2023.
Prevention begins with individuals managing their own health – and works even better when employers support their efforts. New ways of designing health management benefits that encourage healthy living and proper disease management are critical to developing a healthier, more competitive workforce.
One such company that made a major change was Pitney Bowes. It found that three chronic diseases – diabetes, asthma and hypertension – were major health care cost drivers for the company. Hospital stays and emergency room visits were up, and many people were not taking their medications. The company decided to lower coinsurance for all medications within selected chronic disease groups rather than raise the out-of-pocket costs for employees.
The results? A net savings of $1 million in 2004 – and continued overall health care savings. The success of Pitney Bowes has influenced many companies – including Procter & Gamble, Quad Graphics and Toyota – to adopt similar benefit strategies.
Prevention and intervention are the first two steps in reducing the prevalence and costs of chronic diseases. We must also continue the search for new cures and better treatments that will save lives, improve health, and reduce healthcare costs.
Current health care spending places a tremendous strain on employers, employees, dependents and the system overall. Unless decisive, strategic efforts are taken, the projected increase in the prevalence of chronic diseases and associated costs will overwhelm the system.
Clearly, good health is good business. Let’s continue to invest in it.
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