Scott MacStravic, PhD
Like all employers, healthcare organizations -- including hospitals and large medical groups, as well as systems that combine both – can gain from improving their employee health. A survey by the Integrated Benefits Institute has reported the attitudes of 343 CFOs in varied industries on this subject. It noted that the employee health objectives CFOs have for the next two years include:
Controlling sickness insurance costs (most common – over 80% mentioned)
- Managing all health-related costs (63%)
- Improving the health or their workforce (50%)
- Sharing more costs with employees (40%)
- Improving benefits for employees already covered (25%)
- Quantifying health impact on productivity (25%)
- Expanding benefits to more employees (10%)
[“Linking CFOs to Health and Productivity” Integrated Benefits Institute 2006 (www.ibiweb.org)]
This report also indicated that CFOs are relatively under-informed with respect to the health-productivity connection, with nearly half never having received reports on worker absences, and less than 20% learning of presenteeism levels. Only 22% ever get reports on financial impacts of health-related absences, and only 8% get such reports on presenteeism. They seem to recognize that employee health affects bottom-line business performance, but lack the information that they would need to even begin to plan and manage health-related productivity, much less other financial performance effects, as well.
The respondents to the survey were generally fairly well aware of the many areas that employee health absence and productivity impairment when at work combine to affect, from overtime pay and temporary replacement costs. And 60% identified lost revenue and opportunity costs in addition to these. But almost 40% reported that their organizations have left work undone and deadlines missed, despite the probability that these would produce revenue losses. And over 60% cite rising employee healthcare costs as near or at the top of their concerns, while nearly half said that absenteeism and presenteeism are having a meaningful negative effect on their overall performance.
It is likely to be the breadth of the impact of employee health that is escaping most CFOs, if not in simple awareness thereof, then certainly in their ability to measure and manage this impact. The literature on employee health management has two major flaws in this regard. The first is that it has far more examples of scientifically sound studies that describe the negative effects and costs of employee “unhealth” than those that describe the savings achieved through employee health improvement efforts.
And the second is that the vast majority of studies reporting savings achieved have looked at only one or a few performance impacts, since this makes the study easier to do and the report easier to write, as contrasted to comprehensive reports across the full range of savings and performance impacts. This tendency may be exacerbated by the fact that the “academics” who write the reports can get a large number of articles added to their resume if they focus on one impact at a time, rather than only one if they include all impacts in one article.
I have found literally dozens of employee health impacts on balanced scorecard performance dimensions mentioned in reports, though the majority of these were more on the anecdotal than the scientifically rigorous side, and almost all focused on one or at most a handful of effects, rather than the full range of possible effects. Those about US companies tend to focus on direct and easily measured results related to sickness care, workers compensation, STD and LTD costs – while those from other countries focus much more on productivity, staff turnover, and customer/business revenue effects.
In any case, there are both vastly more dimensions of value that are being positively affected by employee health initiatives than are being measured, and more opportunities for affecting them than are being exploited. The Integrated Benefits Institute, for example, offers to create a “Health and Productivity Snapshot”, based on data submitted by organizations, together with the Harvard Medical School’s “Health & Work Productivity Questionnaire. This snapshot will estimate and predict at least as far as WC, S/LTD, Family Medical Leave, and productivity effects of employee health for an individual HCO, with benchmark comparisons to other organizations. Information on this service may be found at its website www.ibiweb.org.
Many hospitals and other HCOs have been invested in employee health for as much as decades, though none that I know of has approached a comprehensive view of either the health dimensions that might be addressed or the performance effects that can be achieved. But many others have little or no investments in employee health beyond annual flu shots and workplace safety efforts. Given the widespread employee shortages in many professional categories, and the ever-present need to control costs, to say nothing of the fact that health is their business, HCOs should probably be doing a lot more in employee health than almost every other industry, not considerably less.
