The connection between health and employee productivity

Simple things like taking a break for lunch can have a big effect on employees' health and productivity.

As a small business owner, you know down to a penny exactly what you pay for your employees’ medical and pharmacy costs. And you diligently monitor their impact on your bottom line.

But you’re not getting the full story. In fact, these payments account for less than one-third of your total health-related expenses.

So what’s the culprit dealing these body blows to your profitability? It’s called health-related lost productivity (HRLP), and it affects every business large and small.

In a landmark study published in the Journal of Occupational Environmental Medicine, researchers found that 70 percent of the costs of poor employee health can be attributed to HRLP, which in simple terms is defined as lost productivity on the job due to health problems (presenteeism) and absence from work (absenteeism). Presenteeism can include frequently losing concentration, repeating a job, working more slowly than usual, feeling fatigued or doing nothing at work.

On average, for every $1 employers spend on worker medical or pharmacy costs, they absorb at least $2.30 in HRLP costs in lost work time. Other studies support the contention that lost job productivity as a result of health problems is more costly than medical expenditures. Consider:

  • Duke University research estimated that the cost of obesity among U.S. full-time employees is $73.1 billion.  Presenteeism accounted for as much as 56 percent of the total cost of obesity for women, and 68 percent for men.  Even among those in the normal weight range, the value of lost productivity due to health problems far exceeded the medical costs.
  • Another study found that presenteeism costs an estimated $2,000 a year per employee.
  • As we wrote in an earlier post, research from the Michigan Journal of Public Affairs suggests that most returns on wellness programs investments come from improved productivity rather than lower healthcare utilization rates.

Since nearly one-third of American adults are obese (and nearly two-thirds are overweight), you have a great opportunity to boost the productivity of your business by helping your employees address their health problems.  Eric Finkelstein, the Duke obesity study researcher, recommends that employers:

  • Promote healthy foods in the workplace
  • Encourage a culture of wellness from the CEO on down
  • Provide economic and other incentives to those employees who show clear signs of improving their health through weight loss or by participating in health behavior activities that have a strong correlation with health improvements, such as regular gym attendance.

Other workplace wellness initiatives might include health education and coaching, weight management programs, exercise programs, smoking cessation, nutritional advice and medical help. Studies also show that readily available self-help materials are effective – 75 percent of people who receive a self-care guide will use it at least one time within six months.

If you’d like us to cover a specific wellness topic or have any questions about our Blue Health Connection program, submit your question on Wellness@Work.

About Ken Dallafior

Ken Dallafior is Senior Vice President, Group Business and Corporate Marketing at Blue Cross Blue Shield of Michigan (BCBSM). Dallafior leads BCBSM's group sales force, oversees corporate marketing and product development, and develops and implements key corporate strategies. He also provides leadership to critical sales operations such as agent relations and commissions, sales incentives and complex issue resolution for group customers and sales agents. In addition to working in the insurance industry for nearly two decades, Dallafior played professional football from 1982 to 1992. He is founder and board member of the Detroit Lions Courage House.
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