Workers' Poor Health Impacts Profitability

By Bucky Marcus ---

Results of a study published in the Journal of Occupational and Environmental Medicine (JOEM) conclude that workers’ poor health is costing U.S. employers more than they realize by creating an impact on profitability and undercutting productivity of the nation as a whole.

The study, entitled “Health and Productivity as a Business Strategy,” was a coordinated research effort by the American College of Occupational and Environmental Medicine (ACOEM), the Integrated Benefits Institute (IBI), and Alere, LLC (formerly known as Matria Healthcare, Inc. (MHI)). Conducted over several years, the study involved 10 businesses with a combined total of over 150,000 employees.

What the researchers found is that employee health has a larger impact on a company’s bottom line when direct medical spending and lost productivity costs due to health-related issues are combined. The study found that one factor in particular, “presenteeism,”(which occurs when an employee with a medical condition shows up for work and, because of his illness, cannot perform his job at full capacity ) actually creates a greater strain on the company’s productivity than does employee absenteeism.

Another interesting finding coming out of this study is the fact that when medical and pharmaceutical costs alone are considered, cancer (not including skin cancer), back and neck pain, heart disease, chronic pain, and high cholesterol were the top illnesses driving health costs. Yet, when health-related productivity costs are included alongside the medical and drug costs, there is a shift in what conditions drive the costs from those mentioned above to: obesity, arthritis, depression, and anxiety. The only condition that remains a constant in either case is back and neck pain.

Dr. Ronald Loeppke, one of the lead researchers in the study and executive vice-president of health and product strategy for Alere, states that in order to get a true picture of how employee illness impacts a company’s bottom line, that company must not only look at the costs of medical care and drugs, but must also add on the cost of lost productivity due to poor health in the workplace.

According to Thomas Parry, president of IBI, if American businesses are to remain competitive in today’s global economy, they must develop integrated health support strategies to deal with medical conditions as well as health risks, and must focus on the whole person as well as the whole population.

Rounding out the study were the following findings:

--For every $1 spent on medical and pharmacy costs, $2.3 are spent on health-related productivity costs.

--Employees who suffer from multiple chronic illnesses have the largest effect on loss of productivity.

--Poor health of employees at every level had an impact on productivity and in fact, executives and managers suffered just as high percentages of presenteeism as did their non-managerial counterparts.