The impact of healthy employees to the bottom line
- Summary:
- SAP's Chief Medical Officer Natalie Lotzmann believes companies need to take more responsibility for employee health, and use big data to do it. Healthy lifestyle benefits also include the corporate bottom line - Lotzmann shares fresh data.
The potential for technology, especially big data, to improve personal healthcare is huge. By 2020, we will have generated 44 zeta bytes of data. A big portion of that data, 30%, will be related to healthcare. Much work is underway to turn the massive amounts of healthcare data into smart data that informs medical decisions or advances research.
By analyzing large data sets across patient and healthy populations, scientists, researchers and clinicians can see patterns in treatment and responses. They can develop more personalized diagnoses and courses of treatment and even predict how diseases will develop or what measures will improve a population’s health.
In parallel to the quality of health going up, analyzing big data has the potential to make the cost of healthcare go down. Costs would drop significantly if diagnoses are more accurate, if therapy times decrease, and if cures are discovered more quickly. Consider the additional cost savings we could realize from reducing ineffective treatments and secondary diseases, as well as increasing the application of prophylactic treatments and preventive conditions and behaviors. We could possibly see worldwide spending on healthcare decreasing, rather than remaining on its steady upswing.
From this big picture of big data and healthcare, I want to shift to a more micro view with an example of healthcare insights that SAP has gained from analyzing big data. Now you will see how my twin interests in healthy workplaces and technology innovation merge.
As employers, corporations have an essential interest in supporting the health and well-being of their employees. I believe companies need to take more responsibility for the health of their employees and dedicate themselves to promoting healthy lifestyles. When corporations show that they value their employees, good things start to happen throughout the workplace. Research supports my view that companies have much to gain when they help their employees stay healthy.
A study by the World Economic Forum revealed that employees in companies that support healthy habits are two-and-a-half times more likely to be high performers, three times more productive, eight times more dedicated, and three-and-a-half times more creative and innovative than employees who did not receive this support from their employers (see report PDF link).
SAP, as well as American Express, Google and Virgin are organizations that promote these values and are dedicated to providing employees with innovative analysis and treatment options to support their health. One example at SAP is the Corporate Oncology Program for Employees (COPE), in which SAP has partnered with biomedical company Molecular Health to help employees diagnosed with cancer. SAP is the first company in the world to make this service available.
The one-year-old program is completely voluntary and free to employees in Germany, the United States and Canada. In the future, the program will be open to employees around the world.
COPE relies on big data to generate a Treatment Map that physicians use to make better, faster and safer cancer treatment decisions. With COPE, physicians gain an understanding of how a patient’s genetic profile and personal medical history can impact the progression and treatment of cancer. Personalized treatments are defined by genetic sequencing and an ultra-fast alignment algorithm that runs on our database platform, and all data is protected and secure.
American Express is another corporate wellness leader with an excellent reputation for promoting healthy living. In fact, the company’s Healthy Living initiative provides employees with on-site medical care, and it works with local farms to serve nutritious, sustainable meals. Giving a nod to preventative care, American Express hosts a health and safety fair for families focused on disease and injury prevention.
While these programs often start within HR departments, their impact is rippling out to the finance department. SAP, for example, is now measuring the positive economic effect of caring for employees’ health by analyzing the effect of COPE and other employee health offerings in our Business Health Culture Index.
SAP created the Business Health Culture Index in 2009 with Price Waterhouse Coopers to measure the impact of changes in the company’s health culture on operating profit. We are essentially integrating our annual financial reporting with reporting of four social and environmental indicators, which is calculated based on the results of regular employee surveys. In 2014, after multiple years of collecting data, SAP was able to show in monetary terms the relationship between employee engagement and health and operating profits.
What we found was striking. The hard data shows how an integrated strategy not only mitigates our environmental impact and enhances the wellbeing of our employees, but also boosts our business success.
A change by one percentage point of the Business Health Culture Index has an impact of €65 to €75 million to SAP’s bottom line. A 1% increase in employee engagement increases operating profit between €35 to €45 million. In 2014, the BHCI rose from 67% to 70% and SAP attributed between €195 and €225 million in operating profits to a healthy people culture. The index has increased 11 percentage points since 2010, corresponding to more than €700 million in cost avoidance at SAP.
We already knew that high quality healthcare was important on a global level. Now we have the business insight that clearly shows that supporting healthcare starts with us and our treatment of employees. What we’ve learned is that a healthy corporate culture is not a nice to have, it’s an economic imperative.
Image credit: Kleiner Jung mit Kraft und Muskeln © drubig-photo - Fotolia.com
