Reprinted from January 2010 www.constructionbusinessowner.com

State of theIndustry 2010Executives from Manufacturing, Technology and Professional Service Companies Provide Insight Into the Challenging Year Ahead

Executives from Manufacturing, Technology and Professional Service Companies Provide Insight Into the Challenging Year Ahead

2 Construction Business Owner n Reprinted from January 2010

State of the Industry

Critical IssuesThe declining health and productivity of an aging con-struction workforce is a critical issue facing the industry today and into the foreseeable future. The recent economic downturn has only magnified the problem. As contractors tighten their belts and pare down their workforces, it is generally the younger, healthier and less experienced employees who are laid off. The remaining risk pool is con-centrated with aging workers whose health is generally in decline.

Companies who in the past have experienced 8 to 10 percent average annual increases in their healthcare costs will see 12 to 20 percent increases going forward. This will put extreme pressure on profits at the worst possible time when profit margins are thin at best.

The solution is to invest proactively in the health and productivity of your workforce. Ninety-eight percent of companies in the United States provide a “sickcare plan” for their employees. Your employees get sick, the company throws money at the claims and they call this a “benefit.”

Best PracticesThe most successful companies are working diligently to create a culture of health and productivity and are using it to their competitive advantage.

There are a variety of technologies entering the mar-ketplace that help companies gather data and evaluate the health risk that exists in their workforce. Numerous stud-ies show that 70 percent of chronic disease is preventable or reversible. Studies also show that there is a direct cor-relation between the number of health risks that a person has (i.e., high blood pressure, high cholesterol, being over-weight, etc.) and their medical bills.

The most successful companies have learned how to identify and mitigate risk through constant measurement, analysis, education and training.

It is a fact that each year 5 percent of the covered people on your medical plan produce 50 percent of your medical claims. The problem is that a different group of people make up the 5 percent year-after-year.

Our company uses the University of Michigan Health management research center’s Trend Management System. We feed our medical and prescription utilization data, health risk assessment data, etc., to the TMS. The TMS can then tell our health coaching vendor, with 83 percent accu-racy, who the 5 percent is going to be up to three years in advance. Having turned our data into useful information, the TMS allows us to focus our training and education on our highest risks.

It’s just like a safety program. Study the problem, iden-tify the risk and put measures in place to reduce or elimi-nate the risk. The best claim is one that does not happen.

Government ComplianceAs we all know, the government is in the process of trying to take control of our national “sickcare” system. Regardless of the outcome, it is a fact that your medical and prescription costs make up only 25 percent of your company’s total cost of healthcare. The other 75 percent of the cost comes from workers’ comp, disability, lost produc-tivity, absenteeism and presenteeism.

A recent Duke University study* using a sample of 11,728 employees over a seven year period showed that obese employees filed twice as many workers’ comp claims, had seven times higher medical costs from those claims and lost thirteen times more days at work from work injury as did non-obese employees. The solution is to manage the risk. n

*Duke Study Published in the April 13, 2007 Archives of Internal Medicine

AmerIcAn conStructIon BenefItS Group

Steve HeuSSner, CeO

Steve HeussnerPresident & CEOAmerican Construction Benefits Groupwww.acbg.net • steve@acbg.net12222 Merit Drive, Suite 1550, Dallas, TX 75251phone: 214.420.7101 • fax: 214.420.7120