In 1998, U.S. health care costs were over $1 trillion, far more than any other nation in the world. Work place injuries, illnesses, and fatalities resulted in 125 million days of lost work and cost more than $120 billion in 1994. Of that, approximately 40 percent relates to the cost of lost time/work, 40 percent to medical costs and 20 percent to legal and related costs. The service and trade industry have emerged as a major safety and health problem and today account for 47 percent (3.1 million) of all work place injuries and illnesses. The average annual health care cost per person in the United States far exceeds $3,000 of which employers paid 30 percent. In a recent report of the Bureau of Labor Statistics, U.S. Department of Labor, injuries which accounted for the most days lost from work included Carpal tunnel syndrome, hernia, amputation, fracture, sprain/strain, cuts/laceration and chemical burns.
Recent studies indicate returns on investment in wellness programs for various companies ranging from $1.91:1 to $5.78:1. General Electric's aircraft engines division, for example, saves $1 million per year through its wellness programs. Traveler's Corporation reported a $3.40 return for every dollar invested in health promotion, yielding total corporate savings of $146 million in benefits costs.
The health of a business is affected by the health of employees. Consider these facts:
Statistically it has been shown that for every 100 employees:
Employees with 4 - 5 health risk factors have four times the medical expenses. Those with six or more have eight times the medical costs.
U.S. Employment/Economic Profile
Important demographic changes are taking place in America that point to the importance of worker productivity in coming decades.
Within the Killeen ZIP codes we have identified 40 major employers with approximately 20,000 total employees. A total of 18 major employers have been identified in the Belton ZIP codes representing 3,390 employees. And, within the Copperas Cove zip codes, 37 major employers have been representing 3,339 employees. Although Workwell will concentrate its initial efforts in the Killeen market, both Belton and Copperas Cove are areas where Workwell should consider expanding its services to. By the end of 2000 it is anticipated that Workwell will expand its service area to cover all employers in Bell, Lampasas and Coryell Counties.
The market for Workwell is not particularly segmented, as potential customers include all Bell, Lampasas and Coryell county employers that offer their employees some type of medical benefits, are experiencing escalating health care costs, and wish to more effectively manage those costs. Workwell, however, segments its services for individual employers. Workwell works with senior management to design and develop personalized health and wellness programs for its employees.
An analysis of Centroplex Occupational Medicine Center's strengths, weaknesses, opportunities and threats concluded the following:
We cannot survive just waiting for the customer to come to us. Instead, we must get better at focusing on the specific market segments whose needs match our offerings. Focusing on targeted segments is the key to our future. We have the components in place to capture and satisfy the identified need.
Therefore, we need to focus our message and our product offerings. We need to develop our message, communicate it, and make it good.
Presently there is no one providing a comprehensive industrial occupational medicine/workers' compensation program in the service area. This can be considered an untapped segment of services that neither Scott & White nor Centroplex Health System, the two main health care systems in this area, have ventured into.
1998 W/C OTJ Injury - Treatment Location
MARKET NEED ANALYSIS
TOTAL LAB. FORCE
PROJ. OTJ'S (10%)
W/C @ COMC
W/C @ CHS E.R.**
MKT% W/C @CHS
**There is a 15%; 30%; 35%; 40%; and 45% per year reduction in E.R visits and added to COMC visits. This is achieved as the E.R and COMC better coordinate their scope of services. Commitment from senior leadership is crucial in making this happen.
Centroplex Health System as a major employer itself will benefit from the services provided through Workwell. In 1998, the 213 OTJs at Centroplex Health System accounted for over $437,000. By implementing an occupational medicine program and promoting its services to employees, the Centroplex hospital will be able to educate its employees on how to prevent OTJ and thus significantly reduce its own workers' compensation costs.
Buying patterns vary by the size of the employer and according to the internal organization.
Companies with 50 to 100 employees may have health care handled by the owner or a key executive. Often it is the responsibility of the Personnel Administrator as an individual (if that function is internal to the company). Also, Personnel Administration may be outsourced, but benefits may not. Sometimes an independent benefits brokerage firm handles all recommendations.
Larger companies from 200 to 500 employees may have Personnel Departments of several people. They might also employ a brokerage or consultant.
Thus, it is imperative that Workwell have flexible programs and sales and marketing efforts that are targeted to a diverse set of potential buying patterns.
Scott and White currently offers an Occupational Medicine program in Temple but it is not considered a strong competitor due to its distance from COMC. Scott and White does pose a threat being that they have clinics in the vicinity of COMC and the Centroplex hospital that could easily duplicate their occupational medicine services currently in Temple. Time is of the essence for developing Workwell.