The age of human capital Featured

12:25pm EDT August 30, 2005
Over the past several decades, management has dramatically increased productivity by investing in technology and continuously training employees to keep their skills and knowledge base up-to-date.

At the same time, most employers have largely ignored and even diminished the greatest untapped resources of performance gains and competitive advantages — the health, well-being and functionality of their employees.

There are major challenges to worksite health and productivity. The average age of workers is increasing, and with each year the cost of health care increases by 3 percent. Keeping in mind that at least 25 percent of health care costs are preventable, it only makes sense that program design affects use patterns and costs.

The reality is that productivity costs are much bigger than absenteeism and disability. Presenteeism — being physically present at work but being less than optimally productive — makes up about 20 percent to 60 percent of all costs for 10 leading health conditions, and in many cases costs are higher than medical. The magnitude of the demonstrated loss of productivity time is startling, with a number of medical conditions and lifestyle behaviors contributing to between three and 11 hours of lost work time each week per employee.

A new movement has emerged. Health and productivity management, defined by the Institute for Health and Productivity Management as “the integrated management of health and injury risk, chronic illness and disability to reduce employees’ total health-related costs including direct medical expenditures, unnecessary absence from work and lost performance at work (i.e. presenteeism).”

This model applies a proactive approach to better health for individuals by integrating health-management programs to optimize health care delivery and costs. It is all about maximizing human capital investments and producing the best functional outcomes that lead to productivity gains for employers. There is no question that employee health is a capital investment, not an expense. The following are key elements of health and productivity management.

  • Comprehensive focus
  • Well-integrated interventions
  • Metric-driven refinements
  • Prevention-centric focus
  • Use of active recruitment strategies and techniques
  • Strategic alignment
  • Systems approach to interventions
  • Health as a major strategy for human capital enhancement
  • Strong economic focus

So how do health and well-being issues impact the bottom line? Numerous health risk factors have been associated with an increase in short-term absence, including obesity, stress, physical inactivity, smoking, alcohol consumption and poor sleep. Research suggests the impact of these have upon absence levels range from 15 percent to 23 percent of total absence time, and if addressed, would reduce absenteeism levels by some two to three days per employee per year. With interventions, results show reductions in absenteeism ranging from 14 percent to 30 percent in such organizations as DuPont and Coors.

Below are three ideas for improving employee productivity.

  • Implement a population health management benefit that keeps the majority of employees who are mostly healthy most of the time in that category.
  • Provide targeted disease management to minimize total costs for the increasing numbers of chronically ill workers by keeping them as functional as possible.
  • Engage employees in active management of their own health through tailored behavioral change programs, as well as instruction in medical self-care techniques.

We are in a time when health and productivity management is not just nice to have for organizations, it is an area that has a clear and demonstrable business imperative. The new evidence is that health and performance optimization is the new model for global business competitiveness.

Sally L. Stephens, R.N., is president of Spectrum Health Systems. Stephens founded Spectrum Health Systems, an independent health management company, in 1997 to provide Fortune 100 quality health risk management programs to middle-market employers. Reach her at (317) 573-7600 or