Medical, Drug Costs Don't Adequately Gauge Full Impact of Poor Health
It's no secret that the health of the average American worker is in decline. Compound obesity and other emerging risks with a turbulent economy that has ratcheted up levels of depression and anxiety among workers, and many workers' compensation experts believe you have a recipe for disaster. However, according to a recent study published in the Journal of Occupational and Environmental Medicine, many companies are still underestimating the full costs that poor employee health can have on productivity levels and long-term profitability.
Ronald Loeppke, one of the study's lead authors and executive vice president of health and productivity strategy for Alere, said many companies are continuing to focus solely on medical and pharmacy costs when creating employee health plans. However, by only targeting those areas, employers are underestimating the full impact that other health conditions are having on their organizations.
Workers' Compensation Report sat down with Loeppke, who also serves on the board of directors of the American College of Occupational and Environmental Medicine and the Integrated Benefits Institute, to discuss the findings of the study and his recommendations for addressing the hidden employee health concerns that are plaguing U.S. companies.
Workers' Compensation Report: There has been a lot of talk in recent years about wellness programs and the impact poor employee health is having on workers' comp and disability costs. What mistakes are employers making in addressing these concerns?
What we've found is that the health of the workforce is inextricably linked to the productivity of the workforce, and, therefore, the health of the economy and of corporate America. But simply looking at the costs of specific medical conditions by adding up medical and pharmacy claims costs alone is not going to give you a true picture of the impact of poor health.
In the study, we analyzed more than 1 million pharmaceutical and medical claims of 10 different businesses that employ about 150,000 workers. In addition, we examined the responses of 50,000 employee health and productivity questionnaires. What we found was that when factors such as "presenteeism" were measured, the top five conditions driving costs were much different than when only medical and drug expenses were considered.
WCR: How did the leading conditions differ?
Loeppke: When only using medical and pharmacy data, the top five conditions driving costs were cancer, back/neck pain, coronary heart disease, chronic pain, and high cholesterol. However, when health-related productivity costs were measured along with medical and pharmacy costs, the top five chronic conditions shifted to depression, obesity, arthritis, back/neck pain, and anxiety. We found that presenteeism (a term used to describe employees with health conditions who are present at their jobs but unable to perform at full capacity) was a significant factor. On average, for every dollar employers spent on medical and pharmacy costs, they were experiencing $2.30 in health-related productivity costs, largely due to presenteeism and absenteeism.
Medical and drug costs are just the tip of the iceberg. What is more important is what lies beneath the water line. That is potentially the much bigger issue that will sink corporate ships.
WCR: Do you feel these issues are an even greater concern since many employees are under more stress and pressure because of the current financial recession?
Two of the top five cost drivers were anxiety and depression. Given the current economic climate and related pressures, it is apparent that employers need to be paying attention to these issues. Stress may be one of the most chronically toxic exposures that we are dealing with as a society today. We need to start looking at coping skills and interventions that can better monitor these conditions because they are having a very significant impact.
The study also noted that co-morbidities -- employees with multiple chronic health conditions -- drive the largest effects on productivity loss. What can be done to address this issue?
Loeppke: One of the key findings was that people with multiple health conditions are having the most significant impact in driving costs. For example, nearly 50 percent of the cases of absenteeism at the companies studied were coming from only 13 percent of employees, who were identified as individuals with five or more conditions.
What this tells me is that we need to develop integrated solutions and more holistic strategies, rather than focusing on individual health conditions. We know that as people develop certain clusters of health conditions, they might not yet be diagnosed with other ailments, but the train is on the track. Unless they do something to change their lives, they will eventually develop diabetes, cancer, etc.
Successful integrated health enhancement strategies must be built upon well-established principles. They require personal productivity risk assessments prior to the launch of an intervention. This will help you identify a blueprint for action that is population-specific. You can identify your high-risk categories and which conditions are causing the greatest impact on cost, and then you can take that data to develop a tailored program.
June 1, 2009
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