Health, absence, disability, and presenteeism cost estimates of certain physical and mental health conditions affecting U.S. employers

Evidence about the total cost of health, absence, short-term disability, and productivity losses was synthesized for 10 health conditions. Cost estimates from a large medical/absence database were combined with findings from several published productivity surveys. Ranges of condition prevalence and associated absenteeism and presenteeism (on-the-job-productivity) losses were used to estimate condition-related costs. Based on average impairment and prevalence estimates, the overall economic burden of illness was highest for hypertension ($392 per eligible employee per year), heart disease ($368), depression and other mental illnesses ($348), and arthritis ($327). Presenteeism costs were higher than medical costs in most cases, and represented 18% to 60% of all costs for the 10 conditions. Caution is advised when interpreting any particular source of data, and the need for standardization in future research is noted.     

The impact of rheumatoid arthritis on medical expenditures, absenteeism, and short-term disability benefits

OBJECTIVES: The objectives of this study were to estimate medical expenditures, absenteeism, and short-term disability costs for workers with rheumatoid arthritis (RA) and to estimate the relative costs of RA over a 12-month period. METHODS: Using data from nine U.S. employers, direct and indirect costs for 8502 workers with RA were compared with costs for a matched group without RA. Regression analyses controlled for factors that were different even after propensity score matching. RESULTS: Average total costs for workers with RA were $4244 (2003 dollars) greater than for workers without RA. RA was the fourth most costly chronic condition per employee compared with cancers, asthma, bipolar disorder, chronic obstructive pulmonary disease, depression, diabetes, heart disease, hypertension, low back disorders, and renal failure. CONCLUSIONS: RA is a costly disorder and merits consideration as interventions are considered to improve workers' health and productivity.     

Report from Massachusetts: employers largely support health care reform, and few signs of crowd-out appear

Based on a 2007 survey of 1,056 randomly selected Massachusetts firms, this paper presents findings about employers' attitudes about, knowledge of, and responses to recently enacted reform legislation. A majority of Massachusetts employers agree that all employers bear some responsibility for providing health benefits, firms not offering benefits should be required to pay a "fair share" contribution up to $295 annually per employee, and employers with ten or fewer employees should not be exempt from this requirement. Only 24 percent of employers with 3-50 workers are familiar with the Connector purchasing pool. About 3 percent of Massachusetts small employers intend to drop coverage, similar to national figures.     

The cost of work-related physical assaults in Minnesota

OBJECTIVE: To describe the long-term productivity costs of occupational assaults. DATA SOURCES/STUDY SETTING: All incidents of physical assaults that resulted in indemnity payments, identified from the Minnesota Department of Labor and Industry (DLI) Workers' Compensation system in 1992. Medical expenditures were obtained from insurers, and data on lost wages, legal fees, and permanency ratings were collected from DLI records. Insurance administrative expenses were estimated. Lost fringe benefits and household production losses were imputed. STUDY DESIGN: The human capital approach was used to describe the long-term costs of occupational assaults. Economic software was used to apply a modified version of Rice, MacKenzie, and Associates' (1989) model for estimating the present value of past losses from 1992 through 1995 for all cases, and the future losses for cases open in 1996. PRINCIPAL FINDINGS: The total costs for 344 nonfatal work-related assaults were estimated at $5,885,448 (1996 dollars). Calculation of injury incidence and average costs per case and per employee identified populations with an elevated risk of assault. An analysis by industry revealed an elevated risk for workers employed in justice and safety (incidence: 198/100,000; $19,251 per case; $38 per employee), social service (incidence: 127/100,000; $24,210 per case; $31 per employee), and health care (incidence: 76/100,000; $13,197 per case; $10 per employee). CONCLUSIONS: Identified subgroups warrant attention for risk factor identification and prevention efforts. Cost estimates can serve as the basis for business calculations on the potential value of risk management interventions.     

Cost of workplace accommodations for individuals with disabilities: with or without personal assistance services

BackgroundThis study compared the expense associated with use of personal assistance services (PAS) for individuals with disabilities to the expense incurred by individuals with disabilities who did not use PAS. The intent of this investigation was to assess the disability accommodation costs and benefits of PAS and non-PAS cases.MethodsThe study uses 1,182 follow-up telephone surveys and 24 telephone interviews of employers who had previously contacted the Job Accommodation Network (JAN) to discuss disability-related accommodations for an employee or potential employee that were conducted from January 2004 through December 2006. The survey included 69 employers who had considered PAS. The surveys were conducted by the University of Iowa's Law, Health Policy, and Disability Center, which contacted employers who had previously contacted JAN for consultation on workplace accommodations. The interviews were conducted by the International Center for Disability Information at West Virginia University.ResultsKey findings point to the costs associated with PAS cases and with cases not involving PAS accommodations. As reported by the employers, the median “one-time cost” of accommodations (not $0) for non-PAS cases was $500. The median “one-time cost” of accommodations (not $0) for PAS cases was $1,850. When $0 cost of accommodations on PAS cases was factored in with “one-time cost” of accommodations for PAS cases, the median cost was $0. For non-PAS cases of accommodations, when $0 cost of accommodations was considered, the outcome was a median cost of $0. The annual cost for PAS accommodations was a median cost of $8,000 in comparison to $2,000 for non-PAS. The median dollar amount estimates of direct benefits were $1,600 for PAS accommodations, similar to $1,500 for non-PAS. The most frequently mentioned benefits from PAS accommodations were (a) increased productivity, (b) increased diversity, (c) retention of a valued employee, (d) improved interactions with co-workers, (e) increased overall company morale, and (f) increased overall company productivity.ConclusionsThe findings heighten awareness of the cost and benefits aspects associated with PAS for people with disabilities. Many non-PAS accommodations cost nothing to the employer (e.g., changing the work schedule, moving the individual to another location). When dollar cost was involved, the costs for PAS accommodations were more than three times greater than non-PAS accommodations.     

Study of U.S. regulations on determination of work-relatedness of mental health disturbance and cerebrovascular and cardiac diseases]

Recently, work-relatedness of mental health disturbance, cerebrovascular and ischemic heart diseases has been generously recognized in the determination of workers' compensation, in administrative or civil suits in Japan. Companies that operate overseas enterprises need to investigate legislature and court opinions in countries and regions in which they operate. In this study, we studied legislative materials concerning mental health, and cerebrovascular and cardiac diseases by reviewing official documents published on homepages provided by governmental and academic bodies in the United States. Our main findings are as follows: 1. In the United States, the state authorities have wide powers. The areas where federal employment statutes are directly applied are limited to the employment conditions of the federal government or some interstate commerce. However, almost all employers in every state are required to record and report occupational injuries and illnesses, based on which, nationwide statistics are maintained. 2.The occupational injury and illness recording criteria are clearly stated in the 2001 revision of Code of Federal Regulations(CFR). During the process of amendment, various opinions were raised concerning mental illnesses. In the final ruling, employers are required to record mental illnesses when "the employee voluntarily provides the employer with an opinion from appropriate health care providers stating that the employee has a mental illness that is work related" (29CFR1904.5(b)(2)(ix)). 3.No specific criteria were found concerning cerebrovascular and ischemic heart disorders, except for the statement that injury or illness is considered if an event or exposure in the work environment significantly aggravates a pre-existing injury or illness(29CFR1904.5(a)). 4.According to the safety and health statistics(2004), around 3,000 cases(0.3 cases per 10,000 full-time workers)of mental disorders were reported in private industry workplaces. On the other hand, less than 500 cases of cerebrovascular and ischemic heart disorders were recorded. In the U.S., where significant numbers of work related mental disorders are reported, the necessity of mental health programs in workplaces is emphasized by state governments. It seems to be necessary to take care not to perform actions which might be considered as disturbance of privacy or discrimination due to disability in carrying out management measures, reflecting peoples' attitudes and legislation concerning these items. Few cases of work related cerebrovascular or ischemic heart disorders are reported in the U.S. However, recently, a reference review was published and a conference was held on this problem. Therefore it might become topical in the near future.     

Economic burden of occupational injury and illness in the United States

Context: The allocation of scarce health care resources requires a knowledge of disease costs. Whereas many studies of a variety of diseases are available, few focus on job‐related injuries and illnesses. This article provides estimates of the national costs of occupational injury and illness among civilians in the United States for 2007. Methods: This study provides estimates of both the incidence of fatal and nonfatal injuries and nonfatal illnesses and the prevalence of fatal diseases as well as both medical and indirect (productivity) costs. To generate the estimates, I combined primary and secondary data sources with parameters from the literature and model assumptions. My primary sources were injury, disease, employment, and inflation data from the U.S. Bureau of Labor Statistics (BLS) and the Centers for Disease Control and Prevention (CDC) as well as costs data from the National Council on Compensation Insurance and the Healthcare Cost and Utilization Project. My secondary sources were the National Academy of Social Insurance, literature estimates of Attributable Fractions (AF) of diseases with occupational components, and national estimates for all health care costs. Critical model assumptions were applied to the underreporting of injuries, wage‐replacement rates, and AFs. Total costs were calculated by multiplying the number of cases by the average cost per case. A sensitivity analysis tested for the effects of the most consequential assumptions. Numerous improvements over earlier studies included reliance on BLS data for government workers and ten specific cancer sites rather than only one broad cancer category. Findings: The number of fatal and nonfatal injuries in 2007 was estimated to be more than 5,600 and almost 8,559,000, respectively, at a cost of $6 billion and $186 billion. The number of fatal and nonfatal illnesses was estimated at more than 53,000 and nearly 427,000, respectively, with cost estimates of $46 billion and $12 billion. For injuries and diseases combined, medical cost estimates were $67 billion (27% of the total), and indirect costs were almost $183 billion (73%). Injuries comprised 77 percent of the total, and diseases accounted for 23 percent. The total estimated costs were approximately $250 billion, compared with the inflation‐adjusted cost of $217 billion for 1992. Conclusions: The medical and indirect costs of occupational injuries and illnesses are sizable, at least as large as the cost of cancer. Workers’ compensation covers less than 25 percent of these costs, so all members of society share the burden. The contributions of job‐related injuries and illnesses to the overall cost of medical care and ill health are greater than generally assumed.     

Developing HIV / AIDS and STD workplace policies

Employers and/or community leaders carry the primary responsibility for setting up workplace HIV/AIDS and STD (sexually transmitted disease) policies. They should include workers from the beginning to help identify policy objectives and content. Major objectives of a workplace policy include ensuring the health and rights of workers, reducing the effects of poor health on workplace productivity, and contributing to the general welfare of the community. Clearly stated principles of workplace policy may encompass freedom from mandatory HIV testing for job applicants and workers, ensuring a safe working environment, supporting treatment of HIV/STD-related illnesses, assuring confidentiality of HIV status, establishing a climate in which HIV-positive workers feel they can tell their employers about their status, and ensuring freedom from discrimination. HIV/AIDS and STD workplace policies are likely to include management and employee training, education and support services, and observance of employee rights. Examples of heeding employee rights are application and promotion procedures that do not require HIV testing, opportunities for HIV-positive workers to do work other than their usual work when their physical condition deteriorates, establishment of and adherence to disciplinary and grievance procedures if confidentiality of HIV status is violated, and treatment for STDs and other illnesses. A few persons should be responsible for monitoring implementation of HIV/AIDS and STD workplace policy. Monitoring may consist of regular meetings to reassess and, if needed, adapt the policy; a system of feedback from employees; assessment of use of support services; and conversations with HIV-positive workers to learn of the success of the workplace program in tending to their concerns and needs.     

Valuing Reductions in Fatal Illness Risks: Implications of Recent Research

The value of mortality risk reductions, conventionally expressed as the value per statistical life, is an important determinant of the net benefits of many government policies. US regulators currently rely primarily on studies of fatal injuries, raising questions about whether different values might be appropriate for risks associated with fatal illnesses. Our review suggests that, despite the substantial expansion of the research base in recent years, few US studies of illness‐related risks meet criteria for quality, and those that do yield similar values to studies of injury‐related risks. Given this result, combining the findings of these few studies with the findings of the more robust literature on injury‐related risks appears to provide a reasonable range of estimates for application in regulatory analysis. Our review yields estimates ranging from about $4.2 million to $13.7 million with a mid‐point of $9.0 million (2013 dollars). Although the studies we identify differ from those that underlie the values currently used by Federal agencies, the resulting estimates are remarkably similar, suggesting that there is substantial consensus emerging on the values applicable to the general US population. Copyright © 2015 John Wiley & Sons, Ltd.     

Health and productivity management: establishing key performance measures, benchmarks, and best practices

Major areas considered under the rubric of health and productivity management (HPM) in American business include absenteeism, employee turnover, and the use of medical, disability, and workers' compensation programs. Until recently, few normative data existed for most HPM areas. To meet the need for normative information in HPM, a series of Consortium Benchmarking Studies were conducted. In the most recent application of the study, 1998 HPM costs, incidence, duration, and other program data were collected from 43 employers on almost one million workers. The median HPM costs for these organizations were $9992 per employee, which were distributed among group health (47%), turnover (37%), unscheduled absence (8%), nonoccupational disability (5%), and workers' compensation programs (3%). Achieving "best-practice" levels of performance (operationally defined as the 25th percentile for program expenditures in each HPM area) would realize savings of $2562 per employee (a 26% reduction). The results indicate substantial opportunities for improvement through effective coordination and management of HPM programs. Examples of best-practice activities collated from on-site visits to "benchmark" organizations are also reviewed.     

The application of two health and productivity instruments at a large employer

We applied two productivity instruments (the Work Productivity Short Inventory and the Work Limitations Questionnaire) to the same employees working at a large telecommunications firm. In this work we note differences in productivity metrics obtained from these instruments and offer reasons for those differences that may be related to their design. Within this sample, average at-work productivity (presenteeism) losses were 4.9% as measured by the WLQ and 6.9% as measured by the WPSI. These translated into losses of approximately $2000 to $2800 per employee per year, respectively. Total productivity losses were usually not associated with demographics or job type but were associated with perceived health status and the existence of particular medical conditions. Both instruments may be useful for employers who want to estimate productivity losses and learn where to focus their energy to help stem those losses.     

Costs of occupational injuries and illnesses in California

OBJECTIVES: The purpose of this study was to estimate the annual incidence, the mortality, and the direct and indirect costs associated with occupational injuries and illnesses in California in 1992. To achieve this, we performed aggregation and analysis of national and California data sets collected by the U.S. Bureau of Labor Statistics, California Workers' Compensation Insurance Rating Bureau, California Division of Industrial Relations, the National Center for Health Statistics, and the U.S. Health Care Financing Administration. METHODS: To assess incidence of and mortality from occupational injuries and illnesses, we reviewed data from state and national surveys and applied an attributable risk proportion method. To assess costs, we used the cost-of-illness, human capital, method that decomposes costs into direct categories such as medical expenses and insurance administration expenses as well as indirect categories such as lost earnings, lost home production, and lost fringe benefits. Some cost estimates were drawn from California data, whereas others were drawn from a national study but were adjusted to reflect California's differences. Cost estimates for injuries were calculated by multiplying average costs by the number of injuries. For the majority of diseases, cost estimates relied on the attributable risk proportion method. RESULTS: Approximately 660 job-related deaths from injury, 1.645 million nonfatal injuries, 7,079 deaths from diseases, and 0.133 million illnesses are estimated to occur annually in the civilian California workforce. The direct ($7.04 billion, 34%) plus indirect ($13.62 billion, 66%) costs were estimated to be $20.7 billion. Injuries cost $17.8 billion (86%) and illnesses $2.9 billion (14%). These estimates are likely to be low because: (1) they ignore costs associated with pain and suffering, (2) they ignore home care provided by family members, and (3) the numbers of occupational injuries and illnesses are likely to be undercounted. CONCLUSION: Occupational injuries and illnesses are a major contributor to the total cost of health care and lost productivity in California. These costs are on a par with those of all cancers combined and only slightly less than the cost of heart disease and stroke in California. Workers' compensation covers less than one-half of the costs of occupational injury and illness.     

How to present the business case for healthcare quality to employers

Many employers in the US are investing in new programmes to improve the quality of medical care and simultaneously shifting more of the healthcare costs to their employees without understanding the implications on the amount and type of care their employees will receive. These seemingly contradictory actions reflect an inability by employers to accurately assess how their health benefit decisions affect their profits. This paper proposes a practical method that employers can use to determine how much they should invest in the health of their workers and to identify the best benefit designs to encourage appropriate healthcare delivery and use. This method could also be of value to employers in other countries who are considering implementing programmes to improve employee health. The method allows a programme that improves workers' health to generate four financial benefits for an employer - reduced medical costs, reduced absences, improved on-the-job productivity, and reduced turnover - and uses accurate estimates of the benefits of reducing absences and improving productivity.     

Employment-based health benefits: recent trends and future outlook

The employment-based health benefits system established its roots many years ago. It was during World War II that many more employers began to offer health benefits. Recently, however, both the percentage of workers with employment-based health benefits and the comprehensiveness of such coverage have been declining. This paper examines recent trends in employment-based health benefits. It also considers the likely future of this important workplace benefit in light of shifts from defined benefit to defined contribution models of employee benefits and with regard to the implementation of health reform.     

The impact of a comprehensive medical benefit cost management program for the city of Birmingham: results at five years

Double digit annual increases in the cost of medical benefits represent one of the major financial challenges for many private and public sector employers. Gaining greater control is a top priority. Since the procurement, administration, and delivery of employee/dependent medical care is a highly complex venture, it is unlikely that any one activity will contain costs effectively. This report examines a comprehensive cost management effort for the municipal government of the city of Birmingham, Alabama, which included health promotion, medical plan redesigning, managed care, and "how to use the medical system" education programs. The $3 million project was funded by the National Institutes of Health and the employer and conducted from 1985 to 1990. In 1985, medical benefits expenses for the 3,586 employees were $2,047 per employee which was about $400 above the state of Alabama per employee average. In 1990, for 4,000 employees, it was $2,075 which was $922 below the state average. While the project design does not permit a precise evaluation of the exact impact of each of the cost containment activities, attempts are made to estimate their impact. Several health promotion activities, which may be unique to this project, including the all-employee medical screen, are presented and evaluated.