Valley Health Occupational Health Services Seminar

Winchester, Virginia

4 November 2011

John HowardNational Institute for Occupational Safety and Health

U.S. Department of Health and Human ServicesWashington, D.C.

Future of the Workforce

Seven Billion in 2011

Challenges to the Future of Work

• How Safe is It?– Hazards

• Persistent• Emerging

• How Stable is It?– Employment

• Flexible vs. Precarious• Unemployment

The Future of the Workforce

• We do not talk about the state of the workforce itself

• Challenges:– Employers– Workers– Government

• Demographic, health, social, economic

Workforce Challenges

1. Limited Availability All Ages

2. More Chronologically-Gifted

3. Health Challenges for Younger Workers

4. The R-Word & Pension Funding

5. Global Competition for Workers

6. Work Extension & Recareering

7. Aging Productively

Occupational Safety & Health Act 29 U.S.C. 651(b)

• Congress declares it to be its purpose and policy

–To assure as far as possible every

working man and woman in the Nation safe and healthful working conditions, and

–To preserve our human resources

Source: Employment Policy Foundation analysis and projections of Census/BLS and BEA data.

Millions of People

Expected Labor Force and Labor Force Demand

0

50

100

150

200

250

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Labor Needed

Labor Available

Growing Shortage of U.S. Workers

Screeching to a Halt:Growth in the Working-Age Population

Source: Deloitte Research/UN Population Division (http://esa.un.org/unpp/) It’s 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don’t Work, p.6

-50%

0%

50%

100%

150%

200%

Mexico Brazil India China South Australia Canada US Netherlands Spain France UK Russia Italy JapanGermany

Korea

1970-2010

2010-2050

5% 5%

-9%

18%

48%

15%

-20%

0%

20%

40%

60%

80%

16-24 25-34 35-44 45-54 55-64 65+

Age of Workers

Percent Growth in U.S. Population by Age: 2000-2010

Dramatically Different Patterns of Growth by Age

1. Declining number of mid-career workers

2. Few younger workers entering

3. Rapid growth in the over-55 workforce

Source: U.S. Census Bureau. 2000

. . . Continuing Into the Future

Age of Workers

Percent Growth in U.S. Workforce by Age: 2000-2020

7% 8% 7%

-10%

3%

73%

54%

-20%

0%

20%

40%

60%

80%

under 14 15-24 25-34 35-44 45-55 55-64 65+

Source: U.S. Census Bureau

In 2000, A Fairly “Young” World . . .

Under 5% 5% to 12.4% 12.5% to 20% Above 20%

Source: U.S. Census Bureau, 2000

Percent of Population Age 60+ in 2000

. . . Rapidly Aging by 2025

Source: U.S. Census Bureau,. 2000

Under 5% 5% to 12.4% 12.5% to 20% Above 20%

Percent of Population Age 60+ in 2025

Why? “Sudden” Boom in Life Expectancy

Source: U.S. Census Bureau, 2000

Life Expectancy at Birth: 1000 - 2000Age

76.5

47

383635

30

25

0

10

20

30

40

50

60

70

80

1000 1200 1400 1600 1800 1900 2000

And a Dramatic Drop in Birth Rates

Source: Age Wave

Tota

l Fer

tility

Rat

e

3.32.8 2.9

3.6

2.02.5 2.5

4.0

5.9

2.01.7 1.7 1.6 1.4 1.3 1.2

1.8

3.1

0

1

2

3

4

5

6

7

US UK France Canada Japan Germany Italy China India

1960 2000

Total Fertility Rate: 1960 ▀ and 2000 ▀

Why? The Baby Boom Pattern

Source: U.S. Census Bureau International Data Base

1930 1940 1950 1960 1970 1980 1990

4.5

4.0

3.5

3.0

2.5

2.0

Birth

in M

illion

s

The Boom Years: 1946-1964

• to disappear • to go away • to withdraw

Source: Webster's New Twentieth Century Dictionary

Webster's Definition of Retirement

More Years Spent in “Retirement” After First Career

0

5

10

15

20

25

30

35

1900 1980 1990 2000 2010

13.6

19.420-25

1.2

Yea

rs

Source: Age Wave, based on U.S. data, and The Concours Group

30 +

Pension Primer• Bulk of retirement income comes from the government

– Despite insurance label, pension systems are pay-as-you-go systems in which benefits are paid out of current taxes

• Immediate cash cost is not the big problem– Key figure is the support ratio (ratio of workers to pensioners)

• Defined Benefit (DB) – Risk on Employer– Workers promised pensions linked to salaries

• Defined Contribution – Risk on Worker– Pension depends on amount contributed, investment

performance

• Public Sector (States and Cities)– Has underfunded pension schemes for years– Relied on stock market to come to the rescue, but gamble failed

Over to You! Private Sector Bails on DB Plans

Workers Per Medicare Beneficiary

Beneficiaries (Millions) Workers Per Beneficiary

2000 2010 2020 2030

2000 2010 2020 2030

Source: Kaiser Family Foundation, based on 2001 and 2008 Annual Reports of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

The Case of Social Security

• Social Security Act of 1935– In 1935, life expectancy at birth was 62– Retirement benefits started at 65!– Intended to be brief period of assistance for

the hardy few at the sunset of life– Now, life expectancy is causing $$$ strain

• In 2010, SSA ran a cash deficit first time since 1983

• 6 years earlier than expected, due to high unemployment

Taxes Must Rise or Benefits “Cut”• “Cuts” by raising retirement age or increasing # contribution years

• Nations are now banning early retirement & raising eligibility age • France – Raised early retirement age to 62 by 2018 and had strikes• Greece – Raised full benefit retirement age to 63; banned early

retirement at 55 altogether; and had riots• Italy -- From 2015 on, future changes in retirement age will be indexed to the rise in life expectancy• U.S.

– 1983 Amendments phased in a gradual increase in the age for collecting full Social Security retirement benefits. The retirement age will increase from 65 to 67 over a 22-year period, with an 11-year hiatus at which the retirement age will remain at 66.

– 70 for maximum benefits?– Disadvantages workers in physically demanding jobs?

Demographics Summary

• People are living longer; a high proportion of their lives will spent in 21st century in mid-20th century “retirement”

• Large generation is now retiring, but following generations are much smaller in number; as a result, the support ratio is falling, leaving a huge cost burden on pension systems

• Challenge for employers:• How to provide right incentives for work extension?• How to manage a health-challenged workforce?

• Challenge for workers• How to age productively?• How to plan 21st century worklife?

Health-Challenged Young Workers

Childhood Obesity by Country

Diabesity and the Future Workforce

• 39 States with 40% of young adults considered to be overweight or obese in just last decade!– In Kentucky, Alabama and Mississippi, >50% young adults are

overweight

• Medical Consequences:– High Blood Pressure– High Fats in the Blood– Type 2 Diabetes (formerly called adult-onset)– Sleep apnea (too much fat around the upper airway)

• Musculoskeletal Stressors– What workers at all ages have in common!

Too Fat to Fight• Reasons for Rejection:

– Education, criminal record, medical– In 2010, 99% of recruits had HS diploma– Criminal record still an obstacle

• Since 1995, proportion of recruits who failed their physical exams because they were overweight has risen by nearly 70%

• Being overweight is now the leading medical reason for rejection.

Global Competition for Workers from BRICS

• In 1900s, U.S. benefited from immigration of skilled workers from sending countries

• In 2000s, these sending countries are now keeping their workers

BRICS and More• BRICS: Brazil, Russia, India, China, South Africa

– U.S. cannot count on acquiring skilled workers from sending countries

– International labor market may not be that international!• Global competition for talent • Leads to global skilled worker scarcity• Effects on employers?

– New immigration laws in Arizona, Utah, Indiana and Georgia

– Alabama:» Latino pop grew by 145 % to about 185,600» New law allows authorities to question people

suspected of being in the country illegally and hold them without bond. It also lets officials check the immigration status of students in public schools

Aging Productively

Aging: A Balance of Factors

• Limitations?– Physical Capacity– Chronic Medical Conditions– Mental Capacity & Cognitive Limitations

• Compensating Factors?– Attitude– Judgment – Flexibility– Interest in learning new things

Physical Capacity• Physiology Facts

– Maximal strength at 20-30 years

– O2 uptake reduced to 70% (max) by 65 years

– Older adults work closer to capacity!• Decreased Performance, Yes But …

– For physically demanding work only– Work uncommonly demands maximal effort

• Manufacturing to service economy• Robotics

Physical Capacity: Match Worker to Task

• Maintaining musculoskeletal health will be increasingly important

• Workers’ abilities need to be matched to the job– Results in less morbidity– Based on practical ergonomic and accommodation

principles– Need for expertise in providing reasonable

accommodations growing and will grow more– Studies show only 10-20% of workers needing

accommodations are provided accommodations

ADA Amendments Act of 2008• Definition of disability:

– Construed in favor of broad coverage and generally “shall not require extensive analysis”

• Makes it easier for individuals to establish that they have a disability– Many with MSDs are considered individuals with a

disability

• ADA Amendments Act will increase need for reasonable accommodations practice skills– In safety and health professionals

• EEOC issued final rule on March 25, 2011– 76 Federal Register 16,978

Age and Chronic Medical Conditions

Workers with >1 Chronic

Condition by Age (U.S.)

0

10

20

30

40

50

60

70

>1

51-64 65-74 75+ Non-workers

HRS 1998

Mental Capacity• Learning and recall slower, equally successful by age

• Factors other than psychometric cognitive abilities appear important to perform well at work

– How well worker gets along with co-workers

– Worker engagement

– No evidence that older workers are rigid or stifle innovation

What About Mental Retirement? • “Use it or lose It” (in the popular literature)

– Stave off normal cognitive aging or dementia by engaging in cognitively demanding activities

– Converse: Un-demanding environment may fail to impede or even accelerate the process of cognitive decline

• Hypothesis that people can maintain their cognitive abilities through mental exercise is not proven, but suggestive

• 2010 Journal of Economic Perspectives’ paper addresses the question of whether retirement leads to cognitive decline

– Uses cross-national comparable surveys of older persons from US, UK and eleven EU countries in 2004

Mental Retirement

Essential Points About Aging Workforce

• Do aging workers need special accommodations?

– A well-designed workplace benefits everyone– Job tasks need to be matched to the capacity of each worker– Reasonable accommodations at all ages; matching task to worker

• Any specific health and safety concerns related to aging workers?

– No consistent relationship between aging and work performance!

– Older workers have fewer injuries, but when one occurs, that injury tends to be more severe and it takes worker longer to get better.

– Emphasizes the value of return to work policies, programs and practices!

EVALUATION OF WORKSITE HEALTH PROMOTION PROGRAMS — DO THEY WORK?

CDC COMMUNITY GUIDE TO PREVENTIVE SERVICES REVIEW – AJPM, FEBRUARY 2010

49

Employee Wellness Practices: What’s the Evidence?

• Evidence:– More than opinion, anecdote or testimonial

• “…Growing body of empirical evidence*– Large proportion of diseases are preventable (risks are

modifiable)– Risk-dependent diseases are costly & reduce worker

productivity within short time window– Targeting risk can decrease costs/increase productivity– Worksite health promotion and disease prevention

programs save companies money and produce + ROI

* Goetzel & Reuters, Value in Health Care , Institute of Medicine (2010)

HEALTH AFFAIRS ROI LITERATURE REVIEWBaicker K, Cutler D, Song Z. Workplace Wellness Programs Can Generate Savings.

Health Affairs(Millwood). 2010; 29(2).

51

Health Reform Initiative

http://www.metrokc.gov/employees/M_E_Report/

HEALTH CARE ENVIRONMENT

• 13,000 employees

• 30,000 plan members

• Strong Labor Unions

– 92 separate bargaining units

• Dwindling tax base, rising public expectations

• Comprehensive medical, dental, vision

• 2012:

– Health plan costs will double under status quo to $300+ Million

Healthy Incentives Plan Design

Healthy IncentivesSM Program

Group HealthKingCareSM

$600

$400

$200

Hospital Copay* *

$5020%$500/ ind.

$1500/ family Bronze

$3520%$300/ ind.

$900/ family Silver

$2010%$100/ ind.

$300/ familyGold

Office Visit Copay

Co-insurance*

Annual Deductible

*In-network provider** Per inpatient stay

Baseline, Targeted & Actual Employee HC Costs: 2003 - 08

Growth of King County & Employees'/Families' Health Care Costs

2005/2008 Trend Compared to 2003/2004 Trend

$80M

$88M

$109M

$98M

$148M

$134M

$120M

$98M

$109M

$118M

$129M

$140M

$97M

$107M

$113M

$126M

$70M

$80M

$90M

$100M

$110M

$120M

$130M

$140M

$150M

2003 2004 2005 2006 2007 2008 2009

Kin

g C

ou

nty

Cla

ims

+ E

mp

loy

ee

s'/F

am

ilie

s' S

ha

re

Projected Health Care Cost Trend for '03-'04 Pre-HRI: 10.8%

Targeted Medical/Rx Costs Rising at 8.9% after 2006

Actual Health Care Costs

Projected Health Care Cost Trend

Council-approved Health Care Cost Trend Target after 2006: 8.9%

Growth of King County & Employees’/Families’ Health Care Costs

2005/2008 Trend Compared to 2003/2004 Trend

__

FirstWellness

AssessmentHRI

Start-up

NewBronze/Silver/Gold

Incentives

Projected Health Care Cost Trend for ’03-’04 (Pre-HRI): 10.8%

Actual Health Care Cost Trend for ’05-’08 (Post-HRI): 8.8%

Actual Health Care Cost

Source: Naydeck, Pearson, Ozminkowski, Day, Goetzel. The Impact of the Highmark Employee Wellness Programs on Four-Year Healthcare Costs. JOEM, 50:2, February 2008

ANNUAL GROWTH IN NET HEALTH CARE PAYMENTS

0

500

1000

1500

2000

2500

3000

3500

2001 2002 2003 2004 2005

Participants Controls

Sta

rt o

f P

rog

ram

Annual growth in costs, Highmark, Inc.For matched-participants and non-participants over four years

Harvard Business Review

• 6 Pillars of Wellness Program– Multi-level leadership– Alignment with Identity of firm– Scope, relevance and quality– Accessibility– Partnerships– Communications

• “Fruits of Workplace Wellness”– Lower costs

• Claims 1,500K higher in non-participants (H-E-B)• Moving 10% from high/medium risk to low yields ROI estimates of 6 to 1.

– Greater productivity – Lost productivity costs 2.5 x higher than medical costs) Loeppke et al. (2009); Dow Study (2002)

– Higher morale – no data

Berry, Mirabito & Baun, What’s the Hard Return on Employee Wellness Programs? HBR (Dec, 2010)

WHEN EVALUATING EMPLOYEE WELLNESS PROGRAMS

Financial OutcomesFinancial

OutcomesHealth

OutcomesHealth

OutcomesQOL and

Productivity Outcomes

QOL and Productivity Outcomes

Cost savings, return on investment (ROI) and

net present value (NPV).

Where to find savings:• Medical costs• Absenteeism

• Short term disability (STD)• Workers’ comp• Presenteeism

Adherence to evidence based

medicine.Behavior change,

risk reduction, health improvement.

Improvement in quality of life.

Improved “functioning” and

productivity.

WorkLife Extension

• Employee gets more years of wages

• Government receives more in taxes & pays less in benefits

• Economy grows faster as more people work for longer

What’s To Be Done?• Government

– Treat retirement as a process, not as a sudden event– Institute “auto-enrollment” with “opt-out” clauses for

DC plans

• Workers– Under defined contribution plan, contribute sufficient

amount

• Employers– Treat older workers as mentors– Offer different incentives by age– Integrate health protection and promotion

Integrating Promotion & Protection

• Workers’ (modifiable) disease risks increased by exposure to occupational risks

• Workers at highest risk of work hazards are more likely to engage in (modifiable) life risks.

• For workers’ at highest risk, integrating protection and promotion increases wellness participation & program effectiveness

Total Worker Health™

Intramural Program

Research

Demos

Partnerships

Federal

Other

Centers of Excellence

3 Renewals

1 New

Total Worker Health Examples

• Respiratory protection programs that address tobacco use and smoking cessation

• Ergonomics programs that teach joint health and arthritis management

• Stress management classes that seek to diminish workplace stressors, personal stressors and build resiliency

Employment• Global Economy

– Competition for Workers, Products, Services, Knowledge • Benefits Systems

– Rising Health Care Costs – Eroding Distinction Between Work-Related and Non-Work-

Related Conditions • Health, Productivity & Disability Management

– Presenteeism & Absenteeism • Americans with Disabilities Act

– Requirements Related to Wellness & Health Promotion Programs

• Changing Social Policies Related to Retirement– Retirement Age – Benefits

Workers• Older Workers

– Aging Productively – Recareering

• Younger Workers– Health challenges and Skills Deficits

• Groups of Special Concern– Differently abled; military to civilian transition

• Prevalent Chronic Health Conditions– Obesity, Arthritis , Hypertension/CVD, Diabetes , Depression, – Stress, Sleep & Fatigue Issues

• Health Promotion– Smoking Cessation – Diet and Nutrition – Physical Activity – Stress Management & Resiliency

Workplace• Persistent and Emerging Hazards• Environmental Risk Assessment

– Root Cause Analyses – Modify Work to Reduce Risks

• Return to Work Issues– Promote Safe Environment

• Safety Culture • Safety Decision Making • Increased Hazard Recognition

• Promote Health and Wellness Culture– Leadership Support – Worker Involvement – Health in All Decisions

• Improve Organization of Work

Take Home Points• Ida May Fuller

– 1st American to receive a monthly Social Security check

– Ida paid in $24.75 and got out $22,288.92 – She died at 100!

• Winston Churchill– Reached age of 65 with career regarded as a failure– Had he retired then, he would have never become

prime minister, made world-famous speeches, saved Britain from Hitler or topped every poll since of the greatest Britons ever

Thank you for your attention!

Selected References• Americans with Disabilities Act Amendments of 2008. Information available from EEOC

at http://www.eeoc.gov/laws/statutes/adaaa_info.cfm• National Research Council. Health and Safety Needs of Older Workers, National

Academies Press (2004).• Dychtwald K, Erickson T, Morison, B. It’s Time to Retire Retirement, Harvard Business

Review (March 2006).• GAO. Older Workers: Enhanced Communication among Federal Agencies Could Improve

Strategies for Hiring and Retaining Experienced Workers. GAO-09-206 (February 24, 2009).

• GAO. Older Workers: Some Best Practices and Strategies for Engaging and Retaining Older Workers. GAO-07-433T (February 28, 2007).

• James, J. B., McKechnie, S., & Swanberg, J. (2011). Predicting employee engagement in an age-diverse retail workforce. Journal of Organizational Behavior, 32(2), 173-196

• Johnson, Richard et al. Older Workers on the Move: Recareering in Later Life (2009), AARP Public Policy Institute

• National Institute on Aging. Growing Older in America: The Health and Retirement Study. Available at http://www.nia.nih.gov/ResearchInformation/ExtramuralPrograms/BehavioralAndSocialResearch/HRS.htm

• Report of the Taskforce on the Aging of the American Workforce (2008). Available at http://www.aging.senate.gov/letters/agingworkforcetaskforcereport.pdf

• Rohwedder S. & Willis RJ. Mental retirement. Jo Econ Perspectives 2010;24(1):119.• RW Johnson et al. Work Impediments at Older Ages (2006). Available at

http://www.urban.org/UploadedPDF/311313_work_impediments.pdf• Saveri, A. Future of Work, Institute for the Future • Solving the Problem of Childhood Obesity Within a Generation (2010) Available at

http://www.letsmove.gov/tfco_fullreport_may2010.pdf