Why safety programs are not enough
A healthier workforce produces substantial financial benefits
There is little doubt that employers’ efforts to promote worksite safety have been good for Workers’ Compensation. The number and rate of occupational illnesses and injuries requiring days away from work has steadily declined. In fact, the number of lost time claims has declined by more than half – 52.1% since 1991, with drops of 6.6 and 6.8 in 2005 and 2006, respectively.
Yet, in many ways, it is the success of safety programs that has transformed Workers’ Compensation into a health care delivery system that must be viewed quite differently than an injury prevention system. While the number of injuries has declined, the cost and the severity of the claims have increased – doubling in cost since 1993. Furthermore, the share represented by medical costs continues to grow – representing 58% of losses.
Add to this the growing prevalence of chronic health problems among employees as well as latent disease developing in workers years after they complete their jobs and there is a need to view Workers’ Compensation in a much broader context. The distinction among the types of lost time, as well as appropriate solutions, begins to blur. Employers who take a narrow, safety and risk management approach to Workers’ Compensation will find it ineffective in addressing the rising costs of injuries and chronic health issues. Employers need to understand that all lost time is connected and that employees who have frequent intermittent absences are more likely to go out on disability and be higher-than-average consumers of group health benefits and Workers’ Compensation.
It’s not unusual for employers to consider absenteeism – whether it is incidental absence, short-term disability, long-term disability, FMLA leave or workers’ compensation – to be part of the cost of doing business. Employers who have stellar safety programs may solely measure the number and cost of accidents, rather than looking at the overall costs and interrelationships of absenteeism.
Lost productivity, reduced profits and low employee morale are all consequences of employee absenteeism. In the paper, “How to Present the Business Case for Healthcare Quality to Employers,” Applied Health Economics and Health Policy, Sean Nicholson found that for many jobs the cost impact is a multiplier of between 1 and 2 applied to the salary cost. Across 35 job types, the mean multiplier was 1.61. The more impact a person has on a team or department, the greater the multiplier. Moreover, the longer the absence, the more morale is adversely affected, causing a domino effect of diminished productivity.
Without measuring the impact of employee absenteeism on lost productivity and reduced profitability, employers might not be allocating their resources to the right programs that meet the needs of their employees.
Each year, 10 common chronic conditions account for an average of more than 10 days of work loss, although some conditions such as depression, cancer and respiratory disorders may account for many more. In addition, these health conditions lead not only to lost work time, but also to reduced productivity while at work (commonly referred to as “presenteeism”). While very difficult to measure, presenteeism has a serious adverse effect on productivity and profitability.
As the incidence of chronic illness increases, it is essential to develop programs that address the problems, just as it was necessary to develop safety programs to prevent injuries. For example, as the number of young Americans who are diagnosed with diabetes increases, the condition is likely to become more commonplace in the workplace. Complications associated with diabetes can lead to increased absenteeism or impaired productivity, yet workers who are able to achieve control of their diabetes are more likely to be productive and miss fewer days at work.
Similarly, routine mammography screening may reduce breast cancer mortality by as much as 30%. Mammograms offered by employers at the worksite benefit both the employer and employee by overcoming the common barriers of cost and inconvenience.
A survey by the Employer Health Coalition, Inc. found that workers in Florida suffering from seasonal allergies lost more than three days of work in a four week period due to impairment from seasonal allergy symptoms or sedation associated with their medication. However, with the proper treatment there is no significant decline in productivity.
Employers have a variety of tools to promote better health and productivity, including on-site clinics, clinic relationships, health promotion and wellness programs, disease management education and training as well as health insurance and sick leave benefits.
According to a report by the American Hospital Association, these programs not only help employees get and stay healthy, they also pay dividends. “A review of 42 published studies of workplace health promotion and wellness programs found an average savings of $5.93 for every $1 spent. This study also found that workplace wellness programs yielded an average reduction in sick leave absenteeism of 28%; in health costs of 26%; and in Workers’ Compensation costs and disability claims management costs of 30%.”