Workplace Wellness: How You Can Minimize the Costs of Employee Illness

May 26, 2018

Learn the most expensive medical conditions impacting your company’s healthcare plan — and bottom line

According to the Centers for Disease Control and Prevention (CDC), sick employees cost U.S. employers billions of dollars each year. Illnesses range from colds, flu, and chronic disease to work-related injuries, stress, and mental health. All of these conditions can lead to increases in overall healthcare costs as well as absenteeism and lost productivity at the office.

Chronic disease, defined as a disease that lasts three months or longer, often has the biggest impact on businesses. In 2015, healthcare spending on chronic disease reached over $3 trillion and it’s expected to grow. In the last 10 years, the number of working aged adults diagnosed with chronic disease increased by 25 percent.

A recent study examined the effect of seven different chronic diseases and their impact on an employer’s indirect costs. Functional limitations caused by cancer, arthritis, diabetes, heart disease, hypertension, lung disease, and stroke costs employers more than 28 million workdays and nearly $5 billion in lost income each year.

 

Top five most expensive illnesses impacting employer health plan costs

In its Workplace Wellness Trends 2017 Survey, the International Foundation of Employee Benefit Plans asked respondents to identify the top three illnesses that drive costs within their business. Here are the top results:

  1. Diabetes. About 29 million Americans have been diagnosed with diabetes and another 86 million have prediabetes. Without proper treatment and maintenance of blood sugar levels, serious complications can arise leading to extended work absence and higher healthcare costs.
  2. Cancer. The CDC predicts that cancer will be the number one cause of death in the U.S. by 2020. Screening can help prevent some forms of cancer and minimize the need for intensive therapies and treatment.
  3. Arthritis. Pain from rheumatoid and other forms of arthritis act as a major source of lost productivity. It can exacerbate poor health and cause disability costs to skyrocket if not properly treated or managed.
  4. Obesity. Obesity-related medical care and costs due to physical inactivity are on the rise. Obesity also increases the risk for other expensive, chronic illnesses including heart disease, diabetes, cancer, and severe arthritis.
  5. Heart Disease. Currently the number one cause of death in the U.S., a proactive approach to heart health could reduce the number of serious cardiac events and minimize treatment costs.

In addition to chronic disease, workplace stress is also taking a toll on worker health and productivity. Short term effects of stress include headaches and muscle pain; long term effects can cause hypertension and heart disease.

 

Prevention and control: What employers can do

Most insurance claims involve preventable conditions. To help control healthcare costs, employers need to promote wellness through workplace programs and benefits awareness. Encourage employees to utilize preventative care benefits such as annual physicals, age-appropriate screenings, and immunizations. The costs of these preventative care activities are relatively inexpensive compared to the much higher direct costs of treatment and the indirect costs of absenteeism and lost productivity.

 

Take a proactive approach to health

According to the CDC, 86% of medical expenses are related to chronic medical conditions. Employers can offer disease management programs to minimize those costs and provide the support employees need to maintain good health. Offer employee education programs to increase health literacy.

By increasing the number of employees that make healthy lifestyle choices and take advantage of preventative care, your business will benefit from a healthier, more productive workforce. Asure’s Human Capital Management solutions simplify HR benefits administration, so you can dedicate more time to developing effective wellness programs.