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Unhealthy Employees Cut Productivity, Study Finds

May 1, 2009
Related Topics: Benefit Design and Communication, Health and Wellness, Featured Article, Compensation
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Poor health among U.S. workers costs employers much more in reduced productivity than many realize, according to a multi-year study of 10 employers and more than 150,000 workers.

The study, published this month in the Journal of Occupational and Environmental Medicine, found that presenteeism—when employees are present at their jobs but unable to perform at full capacity—creates a greater drain on company productivity than employee absence, a finding that may come as a surprise to many employers, researchers say.

For every dollar spent on medical costs and pharmaceuticals, there is $2.30 of health-related productivity losses due to absenteeism and presenteeism, according to the study. For certain conditions, such as anxiety, employers lose as much as $20 in productivity for every dollar they spend on medical care and pharmaceuticals.

The study, which researchers say is one of the largest to date on the subject, found that when medical and prescription drug costs are considered alone, the top five conditions driving employer health care costs are cancer, back/neck pain, coronary heart disease, chronic pain and high cholesterol.

However, when medical and drug costs and productivity losses are factored into the equation, the five costliest conditions for employers are depression, obesity, arthritis, back/neck pain and anxiety, researchers say.

"The key thing is that, so often, employers have been focused on medical and pharmacy claims costs, but that really is not the full impact of poor health on the workplace," says Dr. Pamela A. Hymel, senior director of integrated health and corporate medical director at San Jose, California-based Cisco Systems, one of the companies that participated in the study.

"I hope that employers really seize the moment" and use this study to address health-related productivity costs beyond medical and pharmacy costs, she says.

The study would be particularly useful in today’s economy, says Mary Tavarozzi, principal and national practice leader, absence and disability management consulting, at Towers Perrin. The research may help those managers seeking commitments from upper management to implement or maintain health management programs that address employee productivity, she says.

"In these very lean times, where organizations have cut staff, can we afford not to look at the impact on productivity," Tavarozzi says. "Everybody who’s still working has to be as close to 100 percent productive as possible."

Moreover, the size of the population that was studied should give the findings more credibility, says Shelly Wolff, national practice leader of health and productivity at Watson Wyatt Worldwide.

The study, "Health and Productivity as a Business Strategy: A Multiemployer Study," combined medical and pharmacy claims data with self-reported health-related employee absenteeism and presenteeism data culled from the Health and Work Performance Questionnaire, a tool developed by Harvard University researcher Ronald Kessler and the World Health Organization.

The study was conducted in two phases: The first phase used data collected in 2005 and 2006 from four employers with 57,000 employees. In the second phase, from 2007 to 2008, researchers increased the number of employers to 10 and employees to 150,000 and investigated more subtle aspects of the relationship between the 25 targeted health problems and productivity.

More than 1.1 million paid medical and pharmacy claims were included in the combined analysis.

Dr. Ronald Loeppke, a principal author of the study, says another interesting finding was that health-related productivity losses are as pervasive among executives and managers as they are among rank-and-file workers.

"They had a lot of presenteeism impact. They were getting burned out, so the quality of their work suffers," says Loeppke, who is executive vice president of health and productivity for Brentwood, Tennessee-based Alere, which conducted the research with funding provided by the National Pharmaceutical Council. Alere’s Center for Health Intelligence, the San Francisco-based Integrated Benefits Institute and the Elk Grove Village, Illinois-based American College of Occupational and Environmental Medicine coordinated the study.

Dr. Loeppke says the study also found that the more conditions an employee has, the greater the effect on his or her work-related productivity.

"Employees that have multiple health conditions have much greater days of productivity loss per year," he says. The majority of workers that were studied—representing a cross section of the general population—suffered from more than one health condition, he pointed out.

To address the effect of multiple health conditions on worker productivity, Tom Parry, president of the Integrated Benefits Institute, suggests disease management and health promotion programs be more holistic and focus on the person as a whole, rather than on individual medical conditions.

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