Employers who focus only on pharmaceutical and medical costs when creating health strategies for their staff are in danger of missing the conditions that have the most impact on their employees’ productivity, a new US study warns.
On average, every $1 of pharmaceutical and medical costs is matched to $2.30 of health-related productivity costs – and great deal more for some conditions, according to the study, which appears in the current issue of the Journal of Occupational and Environmental Medicine.
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, the study found. But when health-related productivity costs also were measured, the top five chronic health conditions driving overall health costs shift to depression, obesity, arthritis, back/neck pain and anxiety.
Moreover, “presenteeism” – employees who are at work but with health conditions which prevent them from performing at full capacity – works out generally most expensive for employers than having employees absent from work, the researchers add.
“The wake-up call for US 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, executive vice president of health and productivity strategy for health management services provider Alere, and one of the study’s lead researchers.
The researchers also found that employees suffering with co-morbidities (multiple chronic health conditions) drive the largest effects on productivity loss, and they call for further research to better evaluate the impacts of co-morbidities, looking at conditions and combinations of conditions.
The researchers analyzed more than 1.1 million medical and pharmacy claims during the study. To fully gauge health-related productivity costs, they measured medical and pharmacy spending, plus lost-productivity costs related to absence and presenteeism, and compared pharmacy and medical claims data to employee self-reported absence, presenteeism and health information. Their analysis breaks down the silos which are generally used when examining the cost of health care for a company and which can result in serious underestimation of the full impact of a particular condition, without accurately assessing the accompanying costs of lost productivity, said Dr. Loeppke.
“The transformational opportunity for employers is to look beyond healthcare benefits as a cost to be managed and rather to the benefits of good health as an investment to be leveraged,” he added.
Dan Leonard, president of the National Pharmaceutical Council, said the study shows that, for the majority of employers, poor health among their staff is costing them far more than they realise, and he welcomed the study as a landmark which can help them, when designing benefits, to understand the importance of balancing health care costs with quality of care and wellness and prevention initiatives. “A healthy workforce is critical to an employer’s ability to compete in today’s economy,” he said, adding: “by recognizing these issues, employers can take steps toward improving employee health, productivity and retention, as well as spend their health care dollars more effectively.”
