Most underestimate cost of poor employee health

As a business owner you may realize that poor employee health is not doing anything to improve your bottom line, but most business owners underestimate just how costly poor employee health can be.According to a major study published this week in the Journal of Occupational and Environmental Medicine (JOEM), "poor health among workers is far costlier to U.S. employers than they realize, impacting their profitability and undercutting the nation's overall productivity."This study took place over the course of several years and included more than 150,000 workers as the reference sample. The big eye opener for employers, who were shown the results, was that the costs of employee health were not in medical and pharmacy costs but in health related factors that impacted the productivity of their employees.In fact, health related productivity costs were recorded on an average ratio of 1 to 2.3.Or in other words, for every $1 of medical and pharmacy costs is matched to $2.3 of health-related productivity costs.

The underestimated costs of poor employee health are often difficult to identify because of a factor that those conducting this study referred to as "presenteeism."Employers are able to quantify the number of missed days due to employee illness and injury, but what they fail to measure is work that is done when the employee is present, but unable to work at their full capacity.This study even discovered that employee performance impairment was even more costly than the productivity lost due to employee absence.This finding is definitely surprising as most employers would simply assume that lost days due to absenteeism would far surpass a slower working day due to health concerns.

The study also found the following, "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."Employers are missing the mark when it comes to making health care decisions based on costliness because they fail to realize where the priority should be with these more dominant health concerns.

This study by no means addresses every possible cost of employee health, meaning that there could very easily be additional costs of employee health that have yet to be studied and quantified.For example, it stands to reason that there is quite a range of lost productivity due to workers who are on the job but working below their capacity level because of health related concerns.Employees who suffer from multiple health conditions are more likely to have a greater loss of productivity.However, there are exceptions to every generalization and there could be employees with fewer health concerns, or concerns with a lesser severity, who allow their conditions to affect their work more dramatically.There is a mental component that should definitely be considered in these lose productivity estimates.It is also important to note that the impact of health on productivity is not limited to any one level of the organization.Executives can also suffer a great deal of productivity less due to specific health conditions.

The study being referred to in the above article was coordinated by the American College of Occupational and Environmental Medicine (ACOEM), the Integrated Benefits Institute (IBI), and Alere LLC (formerly Matria Healthcare, Inc.). Research was conducted via the Alere Center for Health Intelligence and funding was provided by the National Pharmaceutical Council.