The way the economy has been the past few years, many office buildings look dinged up, the furniture in the buildings looks dinged up, and, clearly, the minds and bodies of the employees must be dinged up.
Employers have tried to get more work out of fewer employees, in the desperate hope that some of the extra work will generate extra revenue, and, meanwhile, the employers have been shifting to higher health plan deductibles and narrower networks.
At some companies, the workers who are left have a hard time using up their vacation days because the people who once could have filled in for them while they take time off have been let go. Or, the people who could have filled in left voluntarily and were never replaced.
United Benefit Advisors (UBA) and Standard (NYSE:SFG) have come up with a startling statistic to get employers interested in a “health-related lost productivity” (HRLP) webinar they’ll be offering next Thursday: as high as health insurance benefits costs are, absenteeism and presenteeism account for about 70 percent of the total cost of poor employee health.
Ronald Loeppke and other researchers published that HRLP statistic in a paper that appeared in the Journal of Occupational & Environmental Medicine in April 2009.
The researchers came up with the statistic by analyzing medical, claims, pharmacy claims, absence costs and productivity reduction costs for 10 employers with a total of about 52,000 workers.
Loeppke and his colleagues found that some of the same chronic conditions that lead to many disability claims — depression, anxiety, arthritis, back pain and neck pain — also steal productivity away from workers who have shown up to try to work but just aren’t feeling well.
Of course, UBA and Standard want to use HRLP as a hook to rush out to buy disability insurance, absence management services, and that sort of thing, and who knows if 70 percent is really the right number. Maybe absenteeism and presenteeism really account for 12 percent of the cost of poor employee health, or 52.3%.
But I think HRLP is a good buzzword, because it turns the idea of maintaining workers’ productivity into something can and should be measured and improved, not just something that crosses bosses’ minds when an employer drops dead in the office, or wigs out and starts smashing the photocopier.
Adam Smith, the father of capitalism, said production depends on three main factors: land, capital and labor.
We all know that you’re supposed to put fertilizer or let it rest to keep it productive.
We know that you have to give capitalists lattes to keep capitalists productive.
Today, some employers seem to hope that employees will go away quietly on their own, to reduce the pressure to meet payroll Friday. But, to the extent that some of the employees continue to earn their keep, it might make sense to tend to them when they have backaches so bad they can’t walk.
One reason to think about HRLP as a measurable problem is that it give employers, insurers and benefits advisors a tool to use when analyzing efforts to control health insurance costs.
Obviously, we have to reduce health care spending, but we also have to do so in a way that minimizes productivity losses.
Disability insurers tend to think of that in terms of finding doctors who will help workers with severe health problems, such as heart attacks, return to work more quickly.
But I think employers and advisors should also be thinking about how to minize productivity losses for ordinary, generally healthy employees who suffer minor illnesses.
The goal should be to minimize the sum of medical costs and productivity loss costs, not just of medical costs.
Example: increasing workers’ access to urgent care clinics, and encouraging primary care doctors to offer more care during evening hours, might increase primary care costs, but it seems possible as if helping workers get care in the evening will reduce the likelihood that they will have to miss work just to wait three hours in the doctor’s office just to get the doctor to look at a weird, oozing bump.
Similarly, paying for workers who really want to work to have access to drugs that are expensive but help them return to work more quickly than the cheaper drugs would might be a good strategy. Maybe thinking about that in terms of HRLP management will help benefits advisors and productivity advisors help keep the concept of “penny foolish, pound wise” alive in an age of health benefits budget cutting.
Maybe HRLP loss analysis could even be used to persuade researchers to more to stydy health problems such as neck pain that may not kill people but do lead to terrible productivity losses.