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Productivity and Absenteeism: Hard to Measure, Critical Not to Forget

We recently worked with a large employer to perform an assessment of their costs from employees with chronic illnesses. Our initial focus was on their employees with diabetes (almost all of whom had Type II diabetes). This employer had the strong sense that these employees were costing them a lot of money. This, they felt, was not just because of higher direct health care costs. (Though they were a small employer who utilized a health plan with a large insurer, they knew that these diabetic employees drove higher premiums for their company).
The employer felt that these diabetic employees took higher than average time-off due to illness or physician visits. They felt as well that there was lower productivity from these individuals. But they were unable to quantify these hypotheses – and weren’t sure if quantifying them was worth the effort. The easy part of the answer is that any efforts could be worth it. The research shows that presenteeism and absenteeism are definitely higher in these individuals – contributing real “indirect” costs.

The Facts

The American Diabetes Association in their 2011 Diabetes Facts publication estimated total direct costs of diabetes to equal $116billion while indirect costs (including disability and work loss) equal $58billion. This is not an amount to ignore.
Another example set of research comes from the Health as Human Capital Foundation (a non-profit, non-partisan think tank providing independent information for policy makers). Per their research, all costs for diabetics are higher than for the average employee.
-         Direct health care costs: $10,437 versus $3,833
-         Absence Rates: 12.2 days versus 7.1 days
-         Work impairment: 9% versus 7.5%
Though managing the health of diabetics will, based on the research, lead to savings in these indirect costs, presenteeism and absenteeism are hard to measure. The experience of this employer is typical of virtually all employers: very few employers can consistently measure productivity and absence rates.

Next steps underway…

The decision was made to commit resources to figure out how to get this information in a consistent manner. So, work is now underway to develop systems to measure this data. In later pieces we’ll report on their findings and recommendations.


Rebecca Dubowy, Chief Medical Officer



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