Breakthrough Study: Health of Workforce Linked to Health of Bottom Line
Results from the largest multi-employer study to date confirm that the health of the workforce is inextricably linked to the productivity of the workforce and, therefore, to the health of the bottom line. In the study, productivity losses from absenteeism and presenteeism combined with direct medical costs amounted to four times the direct medical costs alone.
Researchers published highlights from the ongoing study in the July 2007 issue of the nationally recognized Journal of Occupational and Environmental Medicine. The article, “Health and Productivity as a Business Strategy,” provides an overview of results from the first four out of 10 participating employers in the study. Researchers include experts from Alere, the American College of Occupational and Environmental Medicine, the Integrated Benefits Institute and Harvard Medical School.
What these early results clearly demonstrate is that by measuring productivity losses from absenteeism and presenteeism caused by chronic illnesses, employers and health plans have a chance to identify the health conditions responsible for these losses and add them to their health enhancement program to significantly improve their overall health cost savings.
In this study, conditions commonly associated with productivity losses, such as depression, fatigue, back pain and sleeping disorders, took on new significance in driving total health-related costs. For instance, the study found that the top 10 health conditions calculated from measuring medical and pharmacy costs alone differed significantly from the top 10 conditions identified from a combination of productivity and direct medical costs.
After merging these costs, the top 10 conditions for medical and pharmacy costs alone shifted from cancer, back/neck pain, coronary heart disease, chronic pain, high cholesterol, GERD, diabetes, sleeping problems, hypertension and arthritis, to musculoskeletal conditions, depression, fatigue, chronic pain, sleeping problems, high cholesterol, arthritis, hypertension, obesity and anxiety.
What the study demonstrates is that the burden of illness and poor health risks of unhealthy employees endangers companies more than rising medical costs and that managing claims costs alone has not adequately addressed the broader cost of health conditions.
Case Study Results
- Health-related productivity costs are four times higher than medical and pharmacy costs.
- Focusing on medical/pharmacy costs without including productivity costs disregards significant cost-saving opportunities.
- Health conditions with the highest absenteeism / presenteeism costs are often overlooked because they do not generate the highest medical costs, yet they total health-related costs.