Employers Underestimate Full Costs Of Employee Health On Productivity
Poor health among workers is far costlier to U.S.
employers than they realize, impacting their profitability and
undercutting the nation’s overall productivity, according to
a study by the Alere Center for Health Intelligence.
The study, coordinated by the American College of
Occupational and Environmental Medicine (ACOEM), the Integrated
Benefits Institute (IBI), and Alere LLC (formerly Matria Healthcare
Inc.) is one of the largest of its kind to date. Funding was provided
by the National Pharmaceutical Council.
The multi-year study of 10 organizations employing
more than 150,000 workers indicates that employers who focus only on
medical and pharmacy costs in creating employee health strategies may
misidentify the health conditions that most impact the productivity of
their employees – while underestimating the impact of other
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 which 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.
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
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
"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 Dr. Ronald Loeppke, 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, Loeppke serves on the board of directors of both IBI andACOEM.
"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, president of the IBI.
"This is especially important if American business is to remain
competitive in the midst of a dire global economy."
Other highlights of the study:
- Health-related productivity costs are
significantly greater than medical and pharmacy costs alone. On
average, every $1 of medical and pharmacy costs is matched to $2.3 of
health-related productivity costs – and that figure is much
greater for some conditions.
- Co-morbidities – employees with
multiple chronic health conditions – drive the largest
effects on productivity loss. The study calls for further research to
better evaluate the impacts of co-morbidities by conditions and
combinations of conditions.
- The impact of poor health on productivity
impacts all levels of an enterprise. Executives/managers seem to suffer
high presenteeism productivity-loss related to specific health
conditions along with those in non-managerial jobs.
Researchers analyzed more than 1.1 million medical
and pharmacy claims during the study. The 10 corporations that
participated ranged from an industrial chemical manufacturer and a
computer hardware manufacturer to telecommunications and technology
The study was published in the Journal of
Occupational and Environmental Medicine (JOEM).
Address: Alere LLC, 1850 Parkway Place, Marietta,
GA 30067; (800) 456-4060, www.matria.com.