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Health and productivity management programs provide savings spark to employers

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By Bruce Shutan
May 1, 2009

With attendance declining 5% at Walt Disney Co. theme parks in the U.S. last year, these properties may not exactly be the happiest place on earth for C-suite executives.

But for more than 20,000 employees with about 1,300 occupational titles toiling away in two Disney theme parks, three hotels and retail outlets in Anaheim, Calif., some encouragement can be gleaned from Right Fit, an occupational health and safety program built on function-based testing to enhance clinical and return-to-work outcomes.

“We work where you play, which means a lot of our jobs also have to look good,” said Manny Kiesser, manager, cast health services for Disneyland Resort.

The Right Fit program’s aim is to guarantee a magical experience for visitors to the Disneyland and California Adventure theme parks, creating unique job-design challenges from the standpoint of material selection, structural issues and ergonomics in unusual settings.

Functional descriptions are now in place for more than 500 jobs. One such example is a bakery cashier, who on occasion may need to frost cinnamon rolls, lift a bucket, pinch a spatula and grip tongs. About 22 athletic trainers have been used to train employees and help return injured employees to work.

The Right Fit process has been completed for about three-fourths of the Disney Resort roles, with impressive first-year results having been reported. For covered roles, musculoskeletal injury claims have been reduced by 8%, with a 23% reduction in lost workdays and 22% reduction in restricted workdays.

HPM helps auto suppliers start their engines

Perhaps no sector has been hit harder than the U.S. auto industry, including marquee suppliers like Delphi in Troy, Mich., and the Goodyear Tire and Rubber Company in Akron, Ohio.

Delphi was forced to file for Chapter 11 bankruptcy protection more than three years ago and recently won court approval to terminate health care benefits for about 15,000 retired salaried employees in hopes of erasing $1 billion in liabilities and $70 million in annual cash costs.

Goodyear, meanwhile, plans to follow 4,000 job cuts from the second half of last year with another 5,000, as well as freeze salaries, sell assets and tighten inventory in response to a market slump that has seen raw material and production costs rise.

The cornerstone of Delphi’s program is a comprehensive leave management, employee safety and efficiency improvement software system with free updates to improve operational efficiency and provide real-time management of workforce health and productivity management for all 32 U.S. plants.

Named “pihms,” the novel technology platform has reduced absenteeism costs in Fortune 500 companies, midsize and governmental organizations by 5% to 25%. It replaces legacy mainframe systems that were in place when the company was owned by its largest customer, General Motors Corp., which used to own Delphi before it was spun off in 1999 as an independent parts supplier. GM recently approached Delphi about the prospect of reacquiring some plants that produce key parts for its vehicles.

Diane Hopwood, divisional nursing supervisor for Delphi, noted that the amount of time floor supervisors saved was “phenomenal” — just one hour a week instead of nearly a dozen. Prior to pihms, claims took anywhere from eight to 12 hours to handle, compared with just 20 minutes when factoring in the system’s integration, and five minutes, when incorporating Delphi’s third-party administrator interface. Moreover, an internal OSHA audit used to last about two days and required outside reports. Nurses can now do it in just two hours.

Of the nearly $9.7 million in annual savings recorded since January 2006, which excluded overtime and nonwork-related factors, the lion’s share was financial — $7.3 million resulting from a reduction in lost workdays, and $120,000 by eliminating the equivalent of 1.5 claims investigators. The remainder of those savings was traced to workflow efficiencies — almost $1.9 million in improved supervisor productivity, and $397,000 in better productivity from medical personnel.

Impressive return-to-work outcomes resulted in a 44% decline in the lost workday caseload and 40% reduction in days per restricted work cases. Delphi’s TPA provided data showing a potential savings in workers’ comp medical costs of 17% to 33%.

Joseph Fortuna, M.D., who used to be medical director at two Delphi divisions and now co-chairs the Automotive Industry Action Group’s health steering committee, reported the fact that pihms has held people accountable for their behavior has generated considerable hostility on the plant floor. “It’s a really important part of any package that tracks employee absences,” he said.

At Goodyear, an onsite medical clinic has proven to be a strategic investment, according to Bruce Sherman, M.D., the company’s medical director, global services. The key is to understand where cost-drivers lie and which services will be considered most valuable. Fostering close relationships between patients and providers can go a long way toward helping increase patient understanding of their care and identifying areas for improvement.

Goodyear research shows that employees who used the company’s clinic had a significant reduction in ER visits, as well as absenteeism and presenteeism, with an annual cost reduction nearing $2 million. A key component of these services is that they promote patient engagement much better than telephonic support and can improve adherence to prescription drug regimens.

Making it ‘worthwhile’

Another firm that has been banking on an HPM dividend from its onsite medical clinic in difficult times is Vectren Corporation in Evansville, Ind., whose net income last year fell to $129 million, or $1.65 per share, compared to $143.1 million, or $1.89 per share, in 2007, because of lower performance by its nonutility group.

The company was able to reduce to about 30 minutes the three-hour time it used to take employees for doctor-office visits. About 600 of the firm’s 1,800 employees are being served — a number that’s expected to reach 950 once a second clinic opens. The clinic’s hard-dollar savings include 62% on the average discounted doctor-office visits, 49% on the cost of prescription drugs and 59% on discounted laboratory costs.

Taking time off from work isn’t a realistic option for many employees who live paycheck to paycheck, explained Holly Joseforsky, Vectren’s manager of health and welfare plans.

“One woman was struggling with weight and lost about 50 pounds, and she always gives me a hug when I see her,” she recalled. “It’s stories like these that make it worthwhile.” —E.B.N.

Bruce Shutan, former managing editor of Employee Benefit News, is a freelance writer based in Los Angeles.

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