It is often said that people are an organization’s most important asset or that the workforce is the engine that drives corporate success. In that sense, human capital is a vital strategic resource—a resource that increases in value as the health and productivity of the workforce increases. It follows that optimizing health and productivity should be a strategic objective of high-performance organizations. However, the conventional approach views health and safety as an obligatory business expense rather than a strategic corporate investment.

This perspective leads to a focus on regulatory compliance and cost containment and, often, a disproportionate emphasis on work-related illness and injury. The aging of the workforce and prolifera-tion of chronic diseases—particularly the emergence of mental illness as a major cost driver for employers—demands a paradigm shift to a more rational, evidence-based approach that more effectively balances financial, health and productivity outcomes.

Cost-effective corporate health management is informed by the integration of multi-source data (administrative claims data, self-reported employee health information and relevant occupational health research findings). When subjected to both actuarial and medical analysis, these data provide a more concise employer-relevant (and, preferably, employer-specific) picture of both direct health-related costs, such as non-insured medical services, pharmaceuticals, health and safety and disability programs, and indirect costs, including productivity losses from presenteeism, absenteeism and turnover. Identification and prioritization of these cost drivers help inform corporate health policy and guide preferential investment in high-impact benefits and programs that contain costs, optimize workforce health and maximize productivity. These data also serve as a baseline for program evaluation and continuous quality improvement.

Based on the evidence, leaders in health and productivity management have made the following conclusions:

  • the employer health burden is composed of both direct healthcare utilization costs and indirect costs from productivity losses;
  • short-term cost-containment strategies (cost-sharing, cost minimization) derived from actuarial trend analysis of direct costs have been unsuccessful in stemming rising employer health costs;
  • productivity losses (particularly presenteeism), and not medical treatment costs, account for the large majority of employer costs related to chronic diseases and mental illnesses;
  • employer costs associated with chronic diseases far outweigh the costs of work-related illness and injury, and employers cannot rely on the primary care system to manage this problem in the short term;
  • mental illness is a leading cause of impairment and disability (and the leading cost driver) in most organizations; and
  • the most effective corporate health initiatives adopt a comprehensive, coordinated and evidence-based approach, which includes integrated health-risk assessment, health coaching, disease management, disability management, vocational rehabili-tation and care co-ordination services.

Progressive employers can use employee health surveys to generate actionable information on employee-reported environmental and behavioural health risks, health status (chronic disease profiles) and productivity implications. These findings—when integrated with existing administrative health claims data and relevant research findings—provide the evidence for more reliable corporate health interventions that will improve financial, health and productivity outcomes.

Dr. T. Larry Myette, MD, MPH, DABPM (Occ Med)Health Horizons, Corporate Health Consulting Inc.

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Copyright © 2020 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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