Loss of productivity more costly to employers than health care costs
Poor health among workers is far costlier to U.S. employers than they realize, impacting their profitability and undercutting productivity, according to a major study published in the April 2009 issue of the Journal of Occupational and Environmental Medicine (JOEM). In fact, according to the study, lost productivity costs companies an average of $2.30 for every dollar spent on medical and pharmacy expenses. This productivity loss is seen at all levels in an organization.
Surprisingly, the study concludes that presenteeism (when an employee is working below his or her capacity due to a health condition) actually costs a company more than when an employee is absent. It further suggests that many employers miss an opportunity to improve productivity and their bottom-line by failing to recognize health-related productivity costs when they develop integrated employee-health strategies and related intervention.
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. But when health-related productivity costs are measured along with medical and pharmacy costs, the top five chronic health conditions driving these overall health costs shift significantly, to depression, obesity, arthritis, back/neck pain and anxiety.
A press release from the National Pharmaceutical Council offers the following quotes:
"The wake-up call for U.S .employers is that simply looking at the costs of specific medical conditions by adding up medical and pharmacy claims costs alone won't give a true picture of the full impact of poor health on the much greater costs of lost productivity in the workforce," said Ronald Loeppke, MD, MPH, executive vice president of Health and Productivity Strategy for Alere® and one of the study's lead researchers. In addition to his role at Alere®, Dr. Loeppke serves on the board of directors of both IBI and ACOEM.
"Employers need to move beyond solutions that focus only on specific medical conditions and toward the development of integrated personal health support strategies that deal with multiple health conditions and health risks by focusing on the whole person as well as the whole population," said Thomas Parry, PhD, president of the Integrated Benefits Institute. "This is especially important if American business is to remain competitive in the midst of a dire global economy."