New IBI Research Finds CFOs Play Critical Role in Health Care Benefits Decisions

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Feb 13, 2012, 11:02 ET

C-suite understands the impact of employee health on financial performance and ability to compete in a global economy

SAN FRANCISCO, Feb. 13, 2012 /PRNewswire-USNewswire/ -- According to new research from the non-profit Integrated Benefits Institute, America's CFOs understand the significant impact employee health has on financial performance and are playing an increasing role in health investment decisions. The report offers specific approaches to assist benefits managers and others in addressing CFOs to foster a better understanding of the full potential for health and health interventions as an investment in improved productivity and business performance.

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"So many employers have downsized in this tough economy, that now more than ever, it's important for employers to truly maximize the productivity of their employees," said Thomas Parry, PhD, president of IBI. "This research shows how CFOs crystallize the impact of health on financial performance and on productivity, and particularly focuses on the kinds of information critical to their health-investment decisions."

Key findings of IBI's report, Making Health the CFO's Business, include:

More than two-thirds of CFOs surveyed agree that health is a cultural or financial priority in their organizations. The belief that providing comprehensive health coverage is important for their company's financial strategy is stronger still with 75% responding that they agree. From these results, IBI identified and analyzed characteristics of a Health & Productivity Leader, a subgroup of respondents who were significantly more likely to support the concept of health as a bottom-line investment.
More than 90% of CFOs surveyed believe that improving health is at least a moderately important contributor to workforce productivity.
More than 80% of CFOs report that finance professionals play a role in their organization's health care benefits decisions, usually in collaboration with human resources, executive leadership, and often with operations.
By more than a two-to-one margin, CFOs view as most credible their own company's claims costs.
CFOs say they face substantial deficits of information they would view as helpful in making health-improvement decisions, such as impact of health on work performance or quality and return on investment analysis from health interventions.

"Companies that integrate wellness as part of their culture consider it a competitive advantage in the marketplace," said Andy Hunzeker, CFO, Lincoln Industries. "CFOs at companies with a strong culture of health – and those who receive health and productivity management program results in terms of their firm's strategic financial goals – are more likely than others to recognize that workforce health impacts financial success in more ways than just health care expenses. Also on their radar are sick leave, turnover, and opportunity costs, such as missed revenues or reduced product or service quality."

CFO lessons and recommendations

The research suggests a variety of practical steps for both the CFOs and the benefits professionals who work with them. Credible information and methods for measuring health risks and outcomes beyond medical and pharmacy costs (such as lost time, health-related performance and lost productivity) are critical. It's important that CFOs partner with those in their organization that can provide metrics and sources to help them understand the full impacts of health interventions.

"This research indicates a new paradigm, and when paradigms change, it's generally a small group that leads the way," said David Hoke, Global Wellness manager at Yum! Brands and IBI board member. "These CFOs get it, and they are well-positioned to take a competitive advantage by promoting the health of their workforce."

About the survey

IBI and CFO Research Services, the research arm of CFO Publishing LLC, collaborated to survey 313 CFOs, controllers, directors and VPs of finance and treasurers at firms of a variety of sizes across a range of industries. IBI performed the analysis. Participation by CFO Research Services was funded by Novartis.

About the Integrated Benefits Institute

The Integrated Benefits Institute (IBI) provides employers and their supplier partners with resources for demonstrating the business value of health. As a pioneer, leader and nonprofit supplier of health and productivity research, measurement and benchmarking, IBI is a trusted source for benefits performance analysis, research-based approaches, and forums for information and education. IBI's programs, resources and expert member networks advance understanding about the link between – and the impact of – health-related productivity on corporate America's bottom line. For additional information visit: ibiweb.org.

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Thomas Parry

http://www.profnetconnect.com/thomas_parry

SOURCE Integrated Benefits Institute