Recently, I was invited to participate in a focus group hosted by a local hospital organization to identify improvement opportunities in the delivery of occupational health services. The attendees represented a cross-section of small and mid-sized employers from manufacturing and service industries that were using some or all of the services offered by the hospital group.

I expected to hear the company representatives discuss obstacles they face in managing the cost of delivering health benefits to employees. Instead, I spent 90 minutes listening to much more tactical issues such as inconsistent procedural approaches in emergency rooms, after-hours availability of drug screenings and the merits of return-to-work programs.

There were just a few comments about wellness initiatives.

Reality check

It was enlightening, but I was disappointed that I didn't have the opportunity to engage the attendees in a discussion about my favorite subject: integrated health improvement programs as a means of managing health care cost.

However, I realized that what I was witnessing was "reality" for the majority of HR folks in small and mid-sized businesses.

These committed HR/benefits professionals are going to work every day to put out fires. They're tasked with ensuring that employees undergo required physical testing, participate in drug screenings, and provide the correct doctor's notes after an illness.

They're also the primary go-to people for arranging physician evaluations for work-related injuries and ensuring that employees get back to work as soon as possible after a worker's compensation or short-term disability case.

These duties are in addition to the hundreds of other tasks that eat away at their days - and prevent them from addressing the big picture.

For the most part, these dedicated professionals are so busy that they can only deal with the crisis of the moment. In effect, they spend most of their time fishing people out of the river rather than preventing people from jumping in it in the first place.

Fundamentally flawed

Unfortunately, that analogy serves well to highlight the standard method of health care delivery in this country, a fact that many of the HR professionals in that focus group understand because they work so closely with health-related matters.

It's a sad state of affairs, and one that professor Dee Edington of the University of Michigan illustrates in his book, Zero Trends. "In many communities," writes Edington, "the largest employers are hospitals . . . Their success depends upon full occupancy of hospital beds, operating rooms and clinics. The health care system has no economic incentive to help people avoid illness. It's to their advantage to wait for sickness to strike and then make money by treating it."

Edington expands this theory to show that this do-nothing strategy is by no means limited to hospitals and physicians. Medical and pharmaceutical research in this country is so focused on treatment and cures that it, for the most part, ignores prevention.

Simply put, focusing on treatments rather than prevention is an inefficient model for the delivery of health care.

Uncovering health risks

Sickness does not usually just happen to people. Most illnesses develop over time, and often result from existing health risks.

Research conducted by the University of Michigan has repeatedly documented that the cost of health care is directly related to the number of health risks an individual has. An increase in health risks increases the burden on the health care system and therefore the cost of treating them and the illnesses they create.

If health risks are eliminated or reduced, costs go down (although at a much slower rate than at which they went up).

However, with the exception of body mass index, many health risks are effectively invisible without screening procedures.

There is no visible red flag that pops up when somebody develops another health risk. This makes it more difficult to apply effective preventative care on a large scale because companies and health care providers are often unwilling to actively go looking for those silent killers.

Today's medical system is overburdened already, leaving little time or resources for people who "just" want to stay fit.

Health equals money

For your clients, this is bad news. Keeping healthy people healthy is the most effective way to reap the financial benefits of cost avoidance.

The positive results gained from health plans that focus on prevention cannot be duplicated by practicing reactive health management.

Many companies and individuals overlook the fact that not only does prevention of illness drastically reduce the health care cost of chronic conditions and catastrophic claims, it also directly affects an employee's ability to remain productive.

Loss of productivity negatively impacts profits. Health equals money.

Several decades ago, the introduction of computers in the workplace enabled forward-thinking companies to distinguish themselves from their competitors. Fast forward to 2010 and attitudes have taken a 180-degree turn.

Computerization, the Internet and worldwide connectivity have homogenized most industries to the point where companies are struggling to differentiate themselves from their competition.

With a few exceptions, products and services have grown more and more similar, markets have become flooded with competitors, revenues have dropped due to ineffective price wars, corporations once thought invincible have fallen and been replaced by relatively young upstarts.

Competitive advantage

So how does a modern company propel itself into the future? What single component can increase a company's efficiency, define its brand, and literally revolutionize the general public's opinion of it? Human capital.

Unfortunately, that same human capital is currently locked into an ineffective health care delivery system that is, by necessity of its own creation, almost exclusively focusing on the treatment of the sick rather than preventative self-care.

In such a system, how can those healthy employees hope to maintain their well-being and high levels of productivity?

The good health of our employees has become, unannounced to many, a competitive advantage for individual companies.

On a larger scale, this dynamic could be a lifesaver for the U.S. economy at large if enough companies - your clients - look out for their own best interest and take responsibility for effectively managing the health and well-being of their employees.

Puck is the benefits practice leader for a global defense, security and aerospace company, author of Healthcare Cost Management - The High Road, and founder of 8020wellness.com.

Insurers still bleeding jobs

Cautious optimism, a term that seems to be bandied about with alarming frequency these days, is in play again when looking at the insurance job market. Last month, a survey from GreatInsuranceJobs.com found that the job market for the insurance industry is still grim, but slowly bouncing back. And for a second consecutive month, the U.S. Bureau of Labor Statistics' jobs report confirmed this, showing insurance industry employment to still be sliding while the overall national numbers have begun to bounce back.

According to the BLS, insurers reduced their ranks by 5,900 in April. But this represents an improvement over March, which saw a significant loss of 7,900 jobs. Carriers' seasonally adjusted insurance employment total was 2.189 million in April. According to BLS statistics, insurers have seen a 3.2% drop in jobs, which is far worse than the 1% decline seen in non-farm jobs nationwide.

March 2010 data indicates that health insurers are still the only insurance sector to realize year-to-year growth in employment. Health jobs rose by 5,100 (1.2%) since March 2009 to 440,400. The BLS found that only P&C companies showed a month-to-month gain in March, rising 200 jobs to 465,500, despite an overall decline of 3.9% over the past year.

As for the other sectors, life insurers have dropped 4.2% from 2009 to 2010, to 343,000; title insurers were down 3% to 66,900; reinsurers declined 9.4% to 25,200; agents and brokers fell 3.4% to 632,000; claims adjusters plummeted 16% to 43,700; and third-party administrators dropped 3.5% to 126,100.

-By Alex Vorro

Vorro is a senior editor of Insurance Networking News, a SourceMedia publication.

Podcast

The IRS is launching a program to audit the payroll tax records of 6,000 employers. Listen in at eba.benefitnews.com/podcasts to hear tax attorney Kevin Johnson explain all about it.