Data Show Employers How Health Affects Bottom Line

Efforts to show the impact of employees’ health on corporate profits are becoming more sophisticated in the face of escalating health care costs and an uncertain economy.

In April the Center on Drugs and Public Policy of the University of Maryland School of Pharmacy convened health care researchers, corporate consultants, and human resource directors to consider “Healthcare Financing in the 21st Century: Cost Implications for Employers, Insurers, and Policymakers” (Original article: see facing page).

Debra Gold, principal of the Health Care and Group Benefits practice of William M. Mercer Inc., offered an overview of reasons why employers sometimes resist examining how an investment in health affects their profits.

“Health is not our business” is the message she frequently hears from corporate executives. Investments in the “operations” side of a company yield clear and tangible benefits, whereas the results of investments in human resources are “squishy” and hard to measure (Psychiatric News, May 3).

Gold maintained, however, that studies are revealing that common health risk factors can be linked to increased costs for a corporation. She cited data, for example, that showed a smoker, on average, annually costs an employer $7,064 in sick days, cigarette breaks, added cleaning, increased property loss and burn damage, and employer-paid health insurance premiums, compared with $1,977 for a nonsmoker.

Making the Case for Treating Depression

Studies have demonstrated that untreated depression can be particularly costly for employers, according to Gold. She cited a paper in the March 2001 Journal of Occupational and Environmental Medicine showing that 16.5 percent of the working population is affected by major depression. “Days impaired” per 1,000 employees due to major depression are 709, according to the study.

Gold also reported on a study in the May-June 2000 General Hospital Psychiatry that found that recovery from depression is associated with significant reductions in work disability and possible reductions in health care costs.

Further support for this view appears in “The Business Case for Quality Mental Health Services: Why Employers Should Care About the Mental Health and Well-Being of Their Employees” in the April Journal of Occupational and Environmental Medicine. That paper reviews the literature about employee depression and its impact on business.

Lloyd Sederer, M.D., director of APA’s Division of Clinical Services and an author of the paper, told Psychiatric News, “We found growing evidence that productivity improvements occur as a consequence of effective depression treatment, and those improvements may offset the cost of the treatment.”

Ronald Kessler, a professor of health care policy at Harvard Medical School, described strategies for persuading companies to pay for the treatment of depression and other illnesses.

“Employers will be most likely to invest in the treatment of commonly occurring illnesses associated with substantial work impairment,” he said. Kessler cited depression and low back pain as examples.

He added that depression is particularly likely to have ripple effects on other employees. “One employee who is depressed can affect 20 coworkers,” he said.

Kessler cautioned the audience to consider the kind of evidence that is respected by corporate executives. “We need a standard of proof that can be grasped quickly,” he said. For example, companies greatly increased on-site provision of flu shots the year following a severe flu epidemic.

Next Steps for Researchers

Kessler recommended that researchers undertake “low-tech studies in lots of little places” that focus on illnesses, such as depression and allergies, with a high impact on productivity.

He told the audience that the National Institute of Mental Health is in the final stages of consideration of a research proposal to evaluate the impact of outreach and treatment of depression on work behavior in a sample of employed people.

Sederer, who will be an investigator on the project, said, “The proposal is notable because treatment would be provided by psychiatrists and other mental health specialists, rather than by primary care doctors. Treatment would be consistent with APA’s practice guidelines for depression.”

Principal investigator Philip S. Wang, M.D., of the department of medicine at Harvard Medical School, told Psychiatric News, “Other important aspects of the proposal are its use of cost-benefit analysis to estimate the net benefit of the program to employers and its potential to promote rapid and widespread dissemination of good treatment for depression.”

If the results appear beneficial to employers, United Behavioral Health, a partner in the study, would be able to disseminate findings quickly and credibly to its clients. ▪