The Business Case for Prevention:
Why Investing in Prevention is Good for Business

Overview
The Impact of Chronic Disease
The Value of Prevention
Prioritizing Preventive Services
Employer Action Steps

Overview

Prevention makes good business sense. By preventing illness and disability, employers can help ensure a healthy, productive and engaged workforce.

Each year, millions of Americans are diagnosed with chronic diseases that are preventable through modifiable behaviors and appropriate medical care.

Preventable health problems result in substantial direct and indirect costs for employers including:
  • increased medical expenses,
  • increased disability,
  • lost productivity,
  • absenteeism; and
  • increased turnover.
By emphasizing prevention, purchasers can curb the caseload and costs of chronic conditions. Read the National Business Group on Health's policy position on prevention.

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The Impact of Chronic Disease

Chronic diseases result in a significant amount of preventable morbidity and mortality in the United States. The U.S. Department of Health and Human Services estimates that approximately 33% of all deaths in the United States are attributable to just three modifiable health behaviors: Chronic diseases are the primary drivers of direct healthcare costs. In fact, researchers estimate that 75% of all healthcare costs directly stem from preventable chronic health conditions such as type 2 diabetes, hypertension, and obesity.2,3

Chronic diseases are also a major cause of lost productivity and disability. For example:
  • Each year, an estimated 39 million work days are lost to obesity-related illnesses.4
  • Influenza-attributable illness for adults aged 18 to 64 years accounts for $5.6 billion in lost productivity resulting from 17 million missed workdays.2
  • Depression is estimated to cause 200 million lost workdays each year at a cost to employers of $17 to $44 billion.5
  • Hypertension complications are a major cause of preventable absenteeism, reduced productivity and disability, making it one of the most expensive health conditions for employers.6
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The Value of Prevention

Like any investment aimed at keeping a workforce healthy and productive, clinical preventive services offer value.
  • The business case analyses of the value of clinical preventive services estimate the financial return-on-investment (ROI) to individual employers, healthcare plans or providers.
  • The value of a preventive service is determined by its ability to prevent a significant amount of morbidity and mortality in relation to the cost of the service.
The economic value of clinical preventive services is described below.
Term Definition
Cost Saving Cost saving refers to a reduction in healthcare costs resulting from the intervention or program that exceeds the money required to develop, implement and maintain the respective intervention or program.

A health intervention is cost saving when the intervention is:
  • effective and;
  • costs less in the long run than the cost of not intervening.

For example, the cost of vaccinating all children against measles in a given population is less than the cost of treating the children who would contract measles without the population-wide protection of immunization.
Cost-Effective A medical intervention is considered cost-effective when the net cost per unit of health generated is favorable relative to other health services.

Cost-effectiveness boils down to a concept called willingness-to-pay — how much is an individual, an employer, or a society willing to pay to extend the life of one individual for one year?
High-Value Many preventive services are considered to be high-value, meaning they are both:
  • cost-effective (they cost a "reasonable" amount of money for the added quality of life or life years gained) and;
  • prevent a substantial proportion of disease or injury when delivered appropriately.
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Prioritizing Clinical Preventive Services

Employers face the challenge of offering both effective and appropriate clinical preventive services within their benefits plans. In order to promote effective and appropriate preventive service use, employers need to prioritize preventive services based on evidence of effectiveness to get the most value out of their benefit offerings.

Employers expanding their medical benefit plan should be careful to first select preventive services with evidence of effectiveness and strategically implement those of highest priority.

There are multiple ways to prioritize the clinical preventive services recommended in the Purchaser's Guide, including:
  • Health and economic value
  • Demographic needs
  • Beneficiary risk
Each method has its own strengths and weaknesses and employers may want to consider combining multiple approaches.

For more information on prioritizing, please visit our Preventive Services Prioritization Interactive Tool or The Prioritization of Clinical Preventive Services in a Strategic Implementation Plan.

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Employer Action Steps

Employers can reduce their total healthcare costs and improve the health of their beneficiaries through the implementation and promotion of clinical preventive service benefits. Employers should use these steps to:
  • Assess where they are in their preventive service efforts and;
  • Guide them in determining prevention efforts next steps.

Employer Action Steps
  1. Offer a structured set of clinical preventive service benefits through their health plan(s).
  2. Inform employees, dependents and retirees about the availability of clinical preventive service benefits and promote the consistent and appropriate use of recommended clinical preventive services.
  3. Educate employees, dependents and retirees about the importance of preventive services and healthy lifestyles.
  4. Implement programs that promote healthy lifestyles and provide opportunities for employees to engage in disease prevention and health promotion outside of the clinical setting (e.g., health promotion or wellness programs, disease prevention programs, employee assistance programs).
  5. Support community-based and worksite-based preventive service interventions.

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References:

1 U.S. Department of Health and Human Services. U.S. Surgeon General. The power of prevention, steps to a healthier US: A program and policy perspective. Washington, DC: U.S. Department of Health and Human Services; 2003. Available at: http://www.healthierus.gov/steps/summit/prevportfolio/power/index.html. Accessed May 13, 2009.
2 Center for Medicare & Medicaid Services. National health expenditures and selected economic indicators, levels and average annual percent change: Selected calendar years 1990-2013. Washington, DC: Center for Medicare & Medicaid Services, Office of the Actuary; 2004.
3 Institute of Medicine. The future of the public's health in the 21st century. Washington, DC: National Academy Press; 2002.
4 Thorpe KE, Florence CS, Howard DH, Joski P. The impact of obesity on rising medical spending. Health Aff. 2004;W4:480-6.
5 Leopold RS. A year in the life of a million American workers. New York, New York: MetLife Disability Group; 2001.
6 Goetzel RZ, Hawkins K, Ozminkowski RJ, Wang S. Top 10 physical conditions and related medical costs to employers. J Occup Environ Med. 2003;45:5-14.