American Institute for Preventive Medicine

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Achieve an R.O.I. on Your Health Care Dollars
Employee Benefits Journal, Volume 27, Number 1, March, 2002 - The High Cost of Health Care

In 2000, the cost of health care in the United States totaled about $1.3 trillion, representing 13% of the gross domestic product. In addition, companies paid an average of $4,430 per employee for health care costs compared to $4,097 in 1999 (William-Mercer, 2001). This represented a 8.1% increase in costs. 1

This should come as no surprise as over the past 7 decades, the cost of health care has risen at rates that are much higher than the costs for other industries including food, education, defense, and transportation. To give a perspective on this increase, the chart below depicts what the cost of various food products would be today if they had risen at the same rate as medical costs have since the 1930s.

1 dozen eggs $45.83
1 pound apples $6.99
1 pound sugar $7.83
1 roll toilet tissue $13.83
1 dozen oranges $13.83
1 pound butter $58.33
1 pound bananas $9.17
1 pound bacon $69.99
1 pound beef shoulder $24.90
1 pound of coffee $36.67
Total $335.20

Supply Management versus Demand Management
There are 2 major ways to manage health care costs. Supply Management, which is the more traditional way, consists of having providers decide what should be done for patients. One of the goals is to reduce the supply of health care through utilization management and a "gatekeeper". Supply management limits the type of care received and when it is received. Other ways to reduce the supply of health care involve insurance plan strategies, such as increased deductibles and copays, coverage service limitations, and eligibility rules.

Another way to manage health care costs is called Demand Management. With this approach, patients decide what to do for themselves with and without provider assistance. Demand management helps consumers manage their actual and perceived need and demand for health care services. The goal is to produce wiser health care consumers by providing self-care information that empowers people to make informed medical decisions.

What Is Self-Care?
Self-care refers to a decision making process that helps increase efficient and appropriate use of medical services. It consists of a number of skills that include knowing:

  • When a real medical emergency occurs
  • When and when not to see a physician
  • When to treat oneself at home and how
  • When to use outpatient rather than inpatient services
  • When diagnostic tests are appropriate
  • When and how to question a provider's recommendation
The use of self-care is not a new phenomenon. According to the American Pharmaceutical Association, 80% of Americans treat themselves for headache pain, 76% for stomach upsets or heartburn, 73% for colds or coughs, and 71% for fevers. 2

The Economic Case for Self-Care
In 1999, Americans went to hospital emergency rooms 102.8 million times. 3 It has been estimated that 55.4% of emergency room visits or 57 million were for non-urgent conditions, such as headaches, sore throats, and stubbed toes (Centers for Disease Control and Prevention, 1997). 4 Because the cost for the same treatment is about three to four times higher in a hospital emergency room than in a health care provider's office, money is being spent needlessly.

In addition, many people go to the doctor for problems that could be treated at home using self-care. In 1999, there were approximately 757 million visits (about 3 visits per person) to office based physicians. 5 It is estimated that 25% of these visits, or 189 million, were unnecessary. 6 Since the average doctor visit in this country costs $55.00, there is a great cost associated with inappropriate use of these services.

Mental Health and Health Care Utilization
A great deal of demand for medical services is due to underlying mental health issues that some people have. A number of statistics bear this out:

  • Over half of the top 10% of primary care users have a psychiatric illness. 7
  • Sixty-six percent of patients with undiagnosed depression make more than 6 visits per year to physicians for somatic complaints. 7
  • Sixty percent of all depression cases go undiagnosed and untreated. 7
  • Health care costs are 71% higher in patients with depression or anxiety ($398.00 vs $233.00 per patient per month). 8
The Frequency and Cost of Medical Mistakes
Using the health care system can be hazardous to your health. According to a Harris poll, 1 in 3 Americans are affected by serious medical mistakes. Three million medical errors occur in hospitals each year. The chances of being injured increase about 6% for each day of a hospital stay. During a 3 day stay, odds are about 1 in 5 that a mistake will be made that hurts a patient.

The total economic cost of medical errors is approximately $200 billion per year. 9 According to the Institute of Medicine, approximately 98,000 deaths occur each year from medical errors. This is greater than death rates from auto accidents, breast cancer, or AIDS.

The types of medical errors are listed below: 10

Incident % Citing Medical mistakes 42% Misdiagnosis or wrong treatment 40% Medication error 28% Mistakes during medical procedure 22%.

The Benefits of Self-Care There are a number of benefits from teaching employees/members to make better health care decisions. They include:

  • Reduced physician and E.R. visits
  • Reduced health care costs
  • Avoidance of medical errors
  • Reduced absenteeism
  • Increased productivity
  • Saved time
  • Increased patient satisfaction with their care
  • Improved quality of care
  • Increased patient empowerment and sense of control
Women and Self-Care
If your employees/members are mostly male, it is important to make sure your self-care program reaches the female member of each household. This is because women make 75% of health care decisions for themselves and their families. Women also account for 60% of all physician visits and spend approximately 2 out of every 3 health care dollars.

Self-Care Is Ideal for Self-Funded Plans
Since self-funded plans pay out-of-pocket for every health care dollar spent, reducing unnecessary demand can produce a significant cost savings. Plans will save money for every single unnecessary doctor and E.R. visit that is avoided. Thus, medical self-care programs have become quite popular with Taft-Hartley and other unions. A number of funds that offer this type of program include those listed in the chart below.

Unions that Offer Self-Care Publications

Plumbers & Pipefitters Local 219 UFCW Local 1
Plumbers & Pipefitters Local 50 UFCW Local 27
Laborers Local 57 Welfare/Diagnostic Fund UFCW Local 328
Carpenters Council Health & Welfare Trust UFCW Local 342-50
IBEW Local No. 57 UFCW Local 371
IBEW Local 103 UFCW Local 888
IBEW Local 313 UFCW Local 919
IBEW Local 332 UFCW Local 1116
IBEW 701 UFCW Local 1445
Omaha Construction Health & Welfare Trust UFCW Local 1459
District 9 Machinists Upstate Employees Benefit Fund
Sheet Metal Workers Local 40 Denver Grocers Health Benefit Trust
Sheet Metal Workers Local 265
New Jersey Carpenters Fund TRANSPORTATION
Operating Engineers Health Welfare Fund Fleet Owners-Local Union 964 Insurance Fund
Roofers Local 74 Pension & Welfare Teamsters Local 445
Wisconsin Laborers Health Fund Teamsters Tri-State Joint Fund
Heat & Frost Insulators & Asbestos Workers Teamsters Joint Council 43
IUOE Local 4 Massachusetts Transit Bay Authority
Cement Masons & Asphalt Layers
Massachusetts Laborers' Health & Welfare Fund POLICE & FIREMEN
Painters District Council 35 Denver Fire & Police Health Fund
Plumbers Union Local 12 Ohio Police & Fire Pension Fund
Cement Masons Local 633 PSEA Health Trust
St. Paul Electrical Workers
Technical Engineers Local 130 UNITED AUTO WORKERS
Roofers Union Welfare Trust Fund UAW-Ford National Program Center
Sheet Metal Workers Local 265 UAW-DaimlerChrysler National Training Center
Sheet Metal Workers Local 17 UAW-GM National Training Center
UAW Local 180
Imperial County Schools VEBA OTHER UNIONS
Solano County Medical Benefits Plan Association Minnesota Timber Producers Association
Bay Area Schools Insurance Cooperative CWA Local 1180
Specialties & Paper Products Local 527
American Institute of Architects Trust
Iron Workers Local #28

Components of a Successful Self-Care Program

1. Self-Care Guide
The most important part of a self-care program is the use of a self-care publication. They can be in the form of books, booklets, or brochures. The guides answer five basic questions:

  • What is a real medical emergency?
  • When do I need to consult a physician?
  • Can I treat this illness myself?
  • What self-care procedures should I use?
  • Criteria for Selecting a Self-Care Guide
Currency - Most self-care guides have a shelf life of about 3 years. You want to make sure the guide you select is up-to-date so check for when it was last revised.

Proven Cost Effectiveness - Determine if there has been any research to support the effectiveness of the self-care guide. Just because a guide is in print doesn't mean that it can reduce unnecessary utilization. Preferably, 5 or more studies on the publication should have shown favorable results.

Appropriate Reading Level - Twenty-seven million Americans are considered to be illiterate while 45 million are marginally literate. 10 It is important to make sure the publication you select has a reading level that addresses the educational background of your employees/members. Generally, the reading level should be no higher than 7th grade based upon a readability test such as Flesch-Kincaid or Dale-Chall.

Attractive Layout and Design - Most consumers prefer a self-care guide that uses a flow chart format. This design quickly and easily enables the reader to know exactly what course of action to take.

Low Cost - Most self-care guides are inexpensive. In quantity, you can purchase a self-care booklet for approximately $2.00 to $3.00 per copy while a more comprehensive self-care book will cost about $5.00 to $6.00 per copy.

Customization Options - Providers of self-care publications offer numerous customization options including imprinting your name and logo on the front cover, redesigning the entire cover, adding or subtracting topics, printing a letter from the union president on the inside cover, etc.

Credibility - Inquire as to who is responsible for the writing and review of the self-care guide. Most self-care publishers have very strong clinical review teams.

Availability of Other Services - Find out what other services the self-care publisher provides, such as mailing the guides to employees/members' homes, storage of guides until they are needed, etc.

Use of Self-Care Guides
Some organizations considering the distribution of self-care guides are concerned the guides won't be used by their employees/members. While some guide recipients will not read them, research has shown that anywhere from 52 to 76% of consumers will use them at least one time within 6 months. Research has also shown that the savings these "readers" experience more than covers the cost of the entire program. The Return-On-Investment for a self-care program is quite significant as evidenced by the case histories that follow.

2. Self-Care Workshops
Most organizations will mass distribute a self-care guide. Others offer workshops to their employees/members at which time the guide is distributed and discussed and the benefits of medical self-care are presented. There are 4 different ways to provide self-care workshops:
  • Videotape
  • Instructor with overheads
  • Audiocassette tape
  • Online seminar
3. Nurse Advice Line
Another aspect to a self-care program is the use of a nurse advice line. Employees can call a toll-free number 24 hours a day, 365 days a year and speak to a registered nurse. The nurse can address many of the things that are contained in a self-care guide. There is the added assurance, however, of speaking to a health professional. These types of nurse advice lines cost about $10 to $12 per family per year. They do not get the same use a self-care guide does as only about 10% of the people with access to the service will call it.

4. Self-Care Software
We are seeing an increase in the use of self-care software. Self-care information can be put on web sites, company intranets, networks, and workstations. The same type of self-care information that is in a book can be downloaded by employees. An advantage is that it can be updated on a periodic basis.

Some organizations mistakenly think, however, that if they put self-care information online, they will reach all of their employees. Only a small percentage of an employee/union population will go online to access this information. The vast majority of people prefer to receive a self-care publication. Consumers are more likely to go online to find out information about a chronic illness, like diabetes or heart disease, as opposed to an everyday health problem, such as a cold or sore throat. They also won't take the time to boot up their computer in an emergency situation. They would rather go to their bookshelf to read about the problem in a self-care book. To this end, online self-care information should only be used as an adjunct to a paper version.

5. Promotional Materials
It is important to remember that self-care is a process, not an event. It doesn't end with the distribution of a self-care guide or notifying employees about a nurse advice line. A self-care program needs to be reinforced through ongoing communications so that people are constantly reminded that they have a self-care book on their shelves, a toll-free number they can call, or software to download. Communications should consist of monthly or quarterly mailings to the employee or notices at the union hall to constantly reinforce the concept of medical self-care.

Legal Implications of Self-Care
Some unions and corporations are concerned about the legal ramifications of providing a self-care program. They fear that if misinformation is presented, they will be held liable. These fears are unfounded.

Self-care guides have been in existence for over 22 years and are in approximately 21 million homes. To the author's knowledge, there has not been a single lawsuit brought against the publisher of a self-care guide. Even the nurse triage call center area has been virtually free from litigation. These telephonic services have been in existence for about 15 years and cover approximately 25 million lives. As far as is known, only one lawsuit has ever been brought against a nurse advice line. This occurred in 1992.

Self-Care Case Histories
Of all the areas of wellness that have been researched, medical self-care provides the most consistent return on investment (ROI). The American Institute for Preventive Medicine has seen savings of $21 to $89 per member per year in 13 consecutive studies on its self-care publications. A number of case histories are described below.

Dean Health Plan Reduces Doctor and E.R. Visits 14
Dean Health Plan in Madison, WI provided the Health at Home® book to all 60,000 of its member households. After 6 months, surveys were sent to 1,000 members and were returned by 366. The average age of the responders was 37.8 years. Seventy-eight percent were female and the average household consisted of 2.8 persons. The savings received due to decreased physician visits was $44.07 per member while the savings due to reduced E.R. visits was $15.50 per member. This produced a total savings of $59.57 per member. Dean Health Plan determined that the Return-On-Investment of this program was 13:1. They also found that 1.4 members per household had used the guide in the past 6 months and 85% considered it to be a valuable health care benefit.

Audit of Claims Data at Berk-Tek, Inc. Showed 24% Savings 13
A study conducted by Capital BlueCross in Harrisburg, PA on a self-care program it implemented for Berk-Tek Manufacturing, a maker of fiber optic cable, demonstrated significant reductions in health care utilization. The claims data for 371 employees was analyzed over one year time periods both pre- and post-distribution of the HealthyLife® Self-Care Guide. There were no other changes in the company's benefit design during the study period. The data showed that employees who received the guide had decreases in both the frequency and total costs for all types of physician office visits, lab tests, and emergency room visits. The 12 month savings was $39.06 per employee which amounted to a 24.3% decrease in costs. The frequency of physician office visits was reduced by 18.4%, while emergency room visits decreased 19.8%. The Return-On-Investment was 5:1. The study also demonstrated that the benefits of the self-care program carried over to the dependents of employees as they, too, reduced their utilization. An analysis of all 938 members showed a 12 month savings of $21.67 per person. This represented a 17.8% reduction in costs. The frequency of physician and E.R. visits for members decreased 11%. The Return-On-Investment was 7:1.

Self-Care Guides Save Florida Hospital $84.18/Employee 11
In an effort to contain health care costs, Florida Hospital Medical Center in Orlando gave 4,382 employees the HealthyLife® Self-Care Guide. Five months after the guide was distributed, evaluation questionnaires were sent to 1,236 employees and were returned by 365 of them (a 30% response rate). It was determined that these employees had reduced physician office use by 126 visits and emergency room use by 52 visits. Using the hospital's insurance records, it was calculated that the average cost for a physician office visit is $55.00 and the average cost for an emergency room visit is $462.00. This amounted to a savings of $30,954 or $84.81 per employee in the 5 months. In addition, employees were absent from work 72 fewer days. Children's Self-Care Guides Save $122.78 Per Family on Medical Costs10

Florida Hospital Medical Center in Orlando has reported that providing its employees with the HealthyLife® Children's Self-Care Guide produced a savings of $14,366 for 183 families in a 5 month period of time. Evaluation questionnaires were sent to 390 employees and were returned by 183 of them (a 47% response rate). It was determined that these families had 39 fewer pediatrician office visits and 31 fewer emergency room visits. This amounted to a savings of $16,467 or $89.98 per employee in the 5 months.

Seniors' Self-Care Guide Produces $57.00 Per Patient Savings in One Year 15
Wellspan Health System in York, Pennsylvania implemented the Partners for Health Self-Care Program for 268 older Americans. This program consisted of an hour workshop on the benefits of self-care and how to use the HealthyLife® Seniors' Self-Care Guide. One year after the workshop, a questionnaire was sent to the participants to determine the effectiveness of the guide. The data showed that the participants had decreases in both the frequency and total cost for doctor and emergency room visits. The 12 month savings was $57.49 per person for the 197 seniors who returned the questionnaire.

Largest Self-Care Study Ever Conducted Demonstrates Reduction in Utilization 16
In an effort to reduce health care costs amongst its managed care membership, BlueCross BlueShield of Massachusetts provided 338,963 members with the DecisionCare™ Guide developed by the American Institute for Preventive Medicine. The guide was custom designed based on the plan's most frequently used ICD-9 codes. The analysis looked at claims data for 51,021 members who received the DecisionCare™ Guide and an equal number of members who did not for a 9 month time period, both pre- and post-distribution. The two managed care samples were similar with respect to age and gender. The results showed a 3.2% decrease in E.R. visits in the group that received the DecisionCare™ Guide. The results were statistically significant.

Other Self-Care Guide Research Results 17
In a survey of 1,396 recipients of the Health at Home® guide:
  • 99% of employees found the self-care guide to be informative
  • 97% of employees stated the self-care guide is easy to understand
  • 97% of employees thought the self-care guide is a source of good health advice
  • 86% of employees felt the self-care guide is an invaluable employee benefit
  • 63% of employees thought the self-care guide positively affected their families
Self-Care Studies
Savings/Person in Dollars
Dr Visit
ER Visit
Dean Health Plan
Capital Blue Cross
Capital Blue Cross
Florida Hospital
Florida Hospital Children's Guide
York Health System Seniors' Guide

What Readers of Self-Care Guides Say

Here is a sampling of comments from employees/members who have received self-care guides.

A.S., Age 34, Female
"My son contracted a rare blood disorder which at the time we were unaware of. I checked his symptoms in the book first which instructed us to call his doctor."

R.M., Age 30, Male
"I think the self-care guide is a great asset for me. It enabled me to understand my symptoms and assisted me in recovering faster."

C.C., Age 48, Female
"I like the flow chart model. Easy to use, yet does not "talk down" to the consumer. Thanks for providing this addition to my personal reference library."

S.M., Age 43, Female
"I learned a lot of things which I probably would never have thought to ask my doctor."

R.D., Age 75, Female
"When my husband had a high fever, I followed the instructions concerning tepid water sponge bath, etc. to help bring down his fever. Although he still needed to see a doctor, I was able to make him more comfortable. The Guide also gives you some tips which allow you to "do something" to help. This, I feel, alleviates anxiety."

M.A.L., Age 35, Male
"I have used some of the tips in the HealthyLife® Guide to stay healthier. Less colds and sickness. All four of my children had perfect attendance at school for the 94-95 school year and have not missed any days this year either."

Y.B., Age 68, Female
"My children are grown and I have worked in the medical field for several years, but I have referred to the booklet often."

H.D., Age 35, Female
"I keep it in my reference file of health care information - to be used when needed. Very helpful information in a concise, easy-to-understand format."

F.D., Age 38, Male
"I like the articles. Overall, the Guide is very helpful in making me aware of what causes some of the things I experience."

P.P., Age 64, Male
"The booklet helps an individual sort through symptoms and come up with a desirable plan of action. It helps me to feel as though I play a role in my healing rather than someone just being acted upon."

M.G., Age 38, Female
"Thank you very much for the Self-Care Guide. I have worked for the company for over 6 years and the Guide is one of the most beneficial items the company has given me. It's also wonderful in the fact that it has saved me money."

S.J., Age 48, Female
"I found the information to be so useful that I obtained 2 additional copies and sent them to my out-of-state adult children."

It is anticipated that health care costs will once again increase at double digit rates over the coming years. Although there are many ways to manage these costs, medical self-care represents one of the lowest cost, yet most effective ways to do so. Employees/members like it because they save time and money and feel empowered. Organizations like it because they are able to provide a low cost benefit and save a great deal of money simultaneously. Thus medical self-care produces the proverbial "win win" situation. It is a program that every union and corporation should strongly consider.


  1. William-Mercer, 2001
  2. American Pharmaceutical Association, 1997
  3. National Hospital Medical Care Survey, U.S. Dept. of Health and Human Services, 2000
  4. Centers for Disease Control and Prevention, 1997
  5. National Ambulatory Medical Care Survey, U.S. Dept. of Health and Human Services, 2000
  6. Vickery, DM, Kalmer H, Lowry D, et al: Effect of a self-care education program on medical visits. JAMA 1983; 250(21):2952-2956.
  7. Clinical Psychiatry, Vol. 55, 1994
  8. American Journal of Psychiatry, Vol. 152, 1995
  9. National Patient Safety Foundation, 1998
  10. U.S. Census Bureau, 1996
  11. Powell, D.R. & Breedlove-Williams, C. The Evaluation of An Employee Self-Care Program. Health Values 1995; 19, 17-22
  12. Powell, D.R. Demand-Side Management: Characteristics of a Successful Self-Care Program. Health Care Innovations 1996; 6, 22-28
  13. Powell, D.R., Sharp, S.L., Farnell, D.S., and Smith, P.T. Implementing a Self-Care Program: The Effect on Employee Health Care Utilization. AAOHN Journal 1997; 45(5), 247-252
  14. Internal correspondence between Dean Health Plan and the American Institute for Preventive Medicine, August 5th, 1999
  15. Guide Cuts Unnecessary Utilization. Senior Care Management, 1999; 189-92
  16. Lewis, S. Large Self-Care Study Demonstrates Significant Positive Results. Employee Health and Fitness 1998; 20,3:25-28
  17. Survey of 1,396 recipients of Health at Home®, 1999

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