chronic disease workplace wellness

Study Highlights Productivity, Medical Costs to Employers from Chronic Disease

Yesterday we reported on a study from Nashville that addressed the role workplace wellness can play in addressing chronic disease among employees and helping manage health concerns and costs.

The report came out of a request from the Research Center of the Nashville Area Chamber of Commerce to FTI Consulting Inc.’s Center for Healthcare Economics and Policy (“Center”) to collaborate with the Chamber on the development of data and analyses for the Nashville Region Health Competitiveness Initiative.

As The Tennessean reports: “The impacts on productivity from workers with diabetes, hypertension and obesity cost Nashville-area businesses $500 million annually.”

But importantly, the report also provided deeper insights into “Framing the Issues for Moving Forward: Medical and Productivity Costs: Implications of Employee Health for Costs, Competitiveness, and Wellbeing.” These issues are relevant for businesses seeking to understand the business case behind utilizing a well-run workplace wellness program.

Among the highlights:

  • “Poor employee health is costly in terms of both medical cost and quality of life, yet many of the factors that drive poor health are changeable. Poor employee health affects firms through medical costs, absenteeism (employees too ill to work, creating lost output), and presenteeism (employees reporting to work despite illness, not able to perform at 100% output).”
  • “While medical costs associated with poor employee health are substantial, the costs associated with lost productivity due to absenteeism and presenteeism are even greater.”
  • “Several studies including the World Economic Forum (“WEF”) Report: “Workplace Wellness Alliance Report – Making the Right Investment: Employee Health and the Power of Metrics” explore aspects of wellness programs, their ability to drive change, their impact on improved productivity, and how to measure their ROI. These topics are increasingly more relevant as chronic conditions become more prevalent and healthcare costs continue to rise.”
  • ” Businesses are keenly aware of the impact of poor health and concerned about the relationship between employee health, costs, and productivity. Many large employers focus on medical costs associated with poor employee health. However, medical costs alone do not capture the full effect of poor health; the productivity costs in the US related to poor health may account for $260 billion a year in lost economic output.”
  • “Efforts do not necessarily need to be large and expensive to be effective; even a small investment in wellness programs can have a positive impact.”

Bill Purcell is former mayor of Nashville (1999 to 2007) and a member of FTI Consulting’s Center for Healthcare Economics and Policy Advisory Board. He ties the health focus to bottom line cost saves, noting in The Tennessean: “Knowing the cost of our health to our region and our prosperity is an enormous advantage – if we act on that knowledge. When our employers all understand the opportunity they have to impact health, we can uniquely advance our productivity, quality of life, and competitive position. CEOs are focused on bottom-line savings, which is why so many wellness programs have been implemented with an eye to reduce insurance premiums.”