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New, Free Tool Puts Dollar Figure on Cost of Poor Health Care

A free, interactive, online tool from the National Committee for Quality Assurance demonstrates how choosing a higher-quality health plan can help an employer reduce the sick days and sick wages associated with various illnesses.

This cold-and-flu season has been particularly tough, with employees missing as much as a week of work at a time. And national statistics show that as much as 15 percent of the adult population of the United States suffers from asthma, which contributes to high rates of sick days as well.

If you or your employer has ever wondered just how those sick days add up in terms of lost production, health care costs and other factors, and how the company''s healthcare plan might be affecting those numbers, then the National Committee for Quality Assurance (NCQA) has a new tool for you. The committee has released the final version of its Quality Dividend Calculator (QDC) (patent pending), a free, interactive, online tool that demonstrates how choosing a higher-quality health plan can help an employer reduce the sick days and sick wages associated with various illnesses.

The tool also shows employers how many of their employees are likely to have one or more of eight key health conditions such as asthma, diabetes or heart disease. Users have the option of comparing different categories of plans: those in the top 10 percent, the average NCQA-Accredited plan and a non-accredited plan.

"The Quality Dividend Calculator shows how the business case for quality and the patient''s case for quality are different sides of the same coin," said NCQA President Margaret E. O''Kane. "Employers are seeking value for their health care dollar, and consumers want the plans that will keep them healthy. When you''re talking about reducing sick days, you''re addressing both issues."

The indirect cost savings figures generated by the QDC are based in part on average Health Plan Employer Data and Information Set (HEDIS) scores. HEDIS is used to measure performance on various clinical issues such as controlling heart attack patients'' blood pressure and cholesterol. Generally, says O''Kane, plans with higher HEDIS scores do a better job of keeping workers and their families healthy, thus reducing sick days and sick wages.

"The Quality Dividend Calculator addresses a question that all employers ought to be asking when they shop for health care: ''What will I get for my money?''" said Helen Darling, president, Washington

Business Group on Health. "If chronic conditions aren''t managed well, employees either end up at home or working less effectively. Health plans that show real productivity gains will help employers deal with today''s most urgent health benefits problem - the rising costs of health care."

Even for a midsize employer, the productivity gains of good health care can be substantial. For example, a manufacturing company with

1,000 employees would see savings of about 381 working days - a combination of fewer sick days (224 days) and higher productivity (157 days) - by opting to contract with a top-performing plan as opposed to a non-accredited health plan. The same company would save about $50,000 in worker replacement costs and gain about $166,000 in increased revenue.

"There are few business decisions worse than buying poor quality health care, because the indirect costs of poor care go beyond just the premiums," said James P. Bradley, CEO, RxHub. "First, you pay the premium, then you pay to replace workers when they get sick, and then you pay a third time when productivity drops."

To determine potential savings, the QDC weighs such factors as how many health plan enrollees are likely to be diagnosed with a given condition and the relative quality of treatment members are likely to receive from "top 10 percent" accredited and non-accredited plans.

The QDC''s calculations also reflect an employer''s location (as specified by the user) since prevalence rates for the illnesses considered by the QDC vary substantially from one part of the country to another. Industry type is also weighed as a factor, since the work force of different types of employers tends to vary considerably.

Users can select from among the general, manufacturing, retail or finance industries. The QDC includes the following health conditions, each of which has a substantial "indirect cost" when poorly treated: asthma, chicken pox (varicella), depression, diabetes, hypertension and smoking.

NCQA is investigating other enhancements to the tool, including the possibility of using the QDC to consider the direct costs of illness, such as costs of treatment, and to enable users to enter a particular health plan''s HEDIS performance results. The latter option would allow for specific plan-to-plan comparisons.

The Quality Dividend Calculator is available at NCQA''s Web site,

NCQA is a private, non-profit organization dedicated to improving health care quality.

by Sandy Smith ([email protected])

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