According to a study of six employers by Medstat and Cornell University's Institute for Health and Productivity Studies (IHPS), when disability payments and lost productivity are included in the calculation of payments for physical-health conditions for these companies, each employee costs them an average of $3,524 a year.
By far the costliest physical condition is heart disease (angina), with an annual average cost of $236 per employee, followed by high blood pressure at $160 per employee.
It is the first study to take into account the costs of not only medical care and prescription medications but also disability payments and lost productivity due to absenteeism. The researchers analyzed data on 374,799 employees (30 percent female, and about half of the total between the ages of 35 and 54) from six large U.S. employers in 1999. All six companies are self-insured -- that is, they pay health plans to administer their medical benefits but provide the funds to pay a set percentage of employees' medical bills. Most companies with more than 100 employees are self-insured, says Ron Z. Goetzel, director of IHPS.
"While many companies are thinking of getting out of providing medical benefits because of high costs, they need to realize that not managing their employees' health may have serious consequences in terms of lost productivity," says Goetzel. "By staying in the business of providing health-care benefits, businesses have a lot more control over the health care their employees receive. And good health care means more productive employees and improved competitiveness for businesses."
The study was published in the January issue of the Journal of Occupational and Environmental Medicine (2003; Vol. 45, pp. 5-14). The study also found that mental-health problems cost employers $179 per employee annually -- less than 5 percent of the total average annual expenditure for health care. Payouts for mental health include the cost of medical care, medications and -- accounting for almost half the costs -- lost productivity and short-term disability payments. The costliest mental-health conditions were bipolar disorders, or manic depression ($62), and depression ($24).
The researchers also identified other costly physical-health conditions: diabetes ($104 per employee annually), low back pain ($90) and heart attacks, or acute myocardial infarction ($69).
When conditions were ranked by category, cardiovascular disorders, musculoskeletal problems and cancers tended to be the costliest physical-healthcare conditions.
Study co-authors are Kevin Hawkins, Ronald J. Ozminkowski and Shaohung Wang of Medstat, a health-information company in Ann Arbor, Mich., where Goetzel is vice president of consulting and applied research.
IHPS was established in May 2002 in collaboration with Medstat. The institute is part of the Cornell Center for Policy Research (CCPR), Washington, D.C., a collaboration of Cornell's vice provost for research, the New York State College of Human Ecology and the New York State School of Industrial and Labor Relations, both at Cornell. The institute conducts cutting-edge research on the relationship between employee health and well-being and work-related productivity.
The study was supported, in part, by the Integrated Therapeutics subsidiary of Schering-Plough and the National Pharmaceutical Council.
Related World Wide Web sites: The following sites provide additional information on this news release. Some might not be part of the Cornell University community, and Cornell has no control over their content or availability.
o MEDSTAT: http://www.medstat.com
oCornell Center for Policy Research: http://www.ccpr.cornell.edu
Journal
Journal of Occupational and Environmental Medicine