How employee health impacts company profitability

A sick day here and there doesn't bring the question "what is happening to our profitability?" into the mind of employers, however, it should.Poor health in workers is more expensive to U.S. employers than they are willing to realize. When one person calls in sick, or presentee-ism is in effect, it can cut into the profitability in different ways.Co-workers now have to cover for the missing person or worry about mistakes or passing germs from the co-worker who showed up to work sick.

The Journal of Occupational and Environmental Medicine (JOEM) conducted a multi-year study involving 10 organizations and more than 150,000 employees on employee health and how it impacts a company and its profitability.One part of the study was directed towards presentee-ism.Presentee-ism, as used in this study, is "when an employee comes to work in spite of illness". This employee created a larger strain on the productivity of the company than the employee who called in sick. This finding was surprising to some employers. Poor health impacts all levels of a business.Non-managerial positions, as well as executive and managerial positions are impacted by presentee-ism. An employee who comes to work, despite the illness, may create long-term costs and social problems including the spreading of contagious illnesses to co-workers, causing more sickness. The employee, while requiring the same wages and taxes, may be operating at a fraction of his or her normal capacity. Presentee-ism may result in more long-term health issues

The top five conditions driving costs, medical and drug costs, are cancer, coronary heart disease, high cholesterol, back/neck pain and chronic pain. When researchers added health related productivity costs to the medical and prescription costs, the top five conditions shift to obesity, back/neck pain, anxiety, arthritis and depression. The cost per employee came to $348 to $392. By failing to recognize, prioritize and intervene with these health issues, employers miss an opportunity to improve productivity thus, improving their bottom line.A highlight of the study shows that health-related productivity costs are 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, this figure changes significantly for some conditions.

By measuring medical and pharmacy spending along with lost productivity costs, in relations to absence and presentee-ism, the study assessed costs in a way that employers have not historically done. When examining health-care costs, the company does not always break down the full context of the health- related costs including loss of productivity. Most employers managed single health-cost categories such as medical visits or pharmacy costs through benefit packages.

During this study, researchers compared the pharmacy and medical claims data to the employee absence, presentee-ism and health information collected through the Health and Work Performance Questionnaire (HPQ), developed by Harvard University researcher Ronald Kessler, PhD, and the World Health Organization. Information collected on employer business measures was combined with this database in modeling health-related lost productivity.

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.

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. Research was conducted via the Alere Center for Health Intelligence and funding was provided by the National Pharmaceutical Council.