Disability Insurance Observer: Productivity

The way the economy has been the past few years, many office buildings look dinged up, the furniture in the buildings looks dinged up, and, clearly, the minds and bodies of the employees must be dinged up.

Employers have tried to get more work out of fewer employees, in the desperate hope that some of the extra work will generate extra revenue, and, meanwhile, the employers have been shifting to higher health plan deductibles and narrower networks.

At some companies, the workers who are left have a hard time using up their vacation days because the people who once could have filled in for them while they take time off have been let go. Or, the people who could have filled in left voluntarily and were never replaced.

United Benefit Advisors (UBA) and Standard (NYSE:SFG) have come up with a startling statistic to get employers interested in a “health-related lost productivity” (HRLP) webinar they’ll be offering next Thursday: as high as health insurance benefits costs are, absenteeism and presenteeism account for about 70 percent of the total cost of poor employee health.

Ronald Loeppke and other researchers published that HRLP statistic in a paper that appeared in the Journal of Occupational & Environmental Medicine in April 2009.

The researchers came up with the statistic by analyzing medical, claims, pharmacy claims, absence costs and productivity reduction costs for 10 employers with a total of about 52,000 workers.

Loeppke and his colleagues found that some of the same chronic conditions that lead to many disability claims — depression, anxiety, arthritis, back pain and neck pain — also steal productivity away from workers who have shown up to try to work but just aren’t feeling well.

Of course, UBA and Standard want to use HRLP as a hook to rush out to buy disability insurance, absence management services, and that sort of thing, and who knows if 70 percent is really the right number. Maybe absenteeism and presenteeism really account for 12 percent of the cost of poor employee health, or 52.3%.

But I think HRLP is a good buzzword, because it turns the idea of maintaining workers’ productivity into something can and should be measured and improved, not just something that crosses bosses’ minds when an employer drops dead in the office, or wigs out and starts smashing the photocopier.

Adam Smith, the father of capitalism, said production depends on three main factors: land, capital and labor.

We all know that you’re supposed to put fertilizer or let it rest to keep it productive.