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CCH® BENEFITS — 05/06/09

Workers’ Poor Health Costlier To Employers Than Direct Costs Of Medical Care

from Spencer’s Benefits Reports: Poor health among workers is far costlier to U.S. employers than they realize, affecting their profitability and undercutting overall productivity nationally, according to a study published recently in the Journal of Occupational and Environmental Medicine.

The multiyear study of ten organizations employing more than 150,000 workers indicates that employers that focus only on medical and pharmacy costs in creating employee health strategies might misidentify the health conditions that most affect their employees’ productivity, while underestimating the impact of other factors.

One such factor, “presenteeism,” occurs when employees with health conditions are present at their jobs but are unable to perform at full capacity. The study closely examined the effects of presenteeism, concluding that impaired employee performance typically creates a greater drain on a company’s productivity than employee absence–a finding that could come as a surprise to some employers.

The study also found that when considering medical and drug costs alone, the top five conditions driving costs are cancer (other than skin cancer), back/neck pain, coronary heart disease, chronic pain, and high cholesterol. However, when health-related productivity costs are measured along with medical and pharmacy costs, the top five chronic health conditions driving these overall health care costs shift significantly, to depression, obesity, arthritis, back/neck pain, and anxiety.

The study suggests that many employers miss an opportunity to improve productivity and their bottom-line results by failing to recognize and prioritize these health conditions when they develop integrated employee health strategies and related interventions.

The study was coordinated by the American College of Occupational and Environmental Medicine, the Integrated Benefits Institute, and Alere LLC (a health and wellness management company). Research was conducted via the Alere Center for Health Intelligence with funding from the National Pharmaceutical Council.

Other highlights of the study include the following:

• Health-related productivity costs are significantly greater than medical and pharmacy costs alone—on average, health-related productivity costs $2.30 for every $1 of medical and pharmacy costs, but even more for some health conditions.
• Employees with multiple chronic health conditions (or comorbidities) have the largest effect on productivity loss. The study calls for further research to better evaluate the effect of comorbidities by conditions and combinations of conditions.
• Poor health affects productivity at all levels of a business, including at the executive/manager level.

For further information, visit http://www.ibiweb.org.

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