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'Presenteeism' Plagues Firms

Most of the costs businesses bear when employees get sick come from workers showing up — not staying home, a new study finds.

The study by the Institute for Health and Productivity Studies at Cornell University found that up to 60 percent of the total cost of employee illnesses come from so-called "presenteeism" — when people continue to work despite illnesses that reduce their productivity.

In the study, which was supported by the National Pharmaceutical Council, the Cornell institute and a private firm, Medstat, used an insurance database on medical conditions and absences of about 375,000 employees over three years. They combined these with published studies on productivity among workers with certain illnesses, said a university statement.

Researchers estimated that from 49 percent to 89 percent of the total costs caused by headaches were due to reduced on-the-job productivity, rather than absent employees or health care costs. Workers showing with with allergies were responsible for an estimated 55 to 82 percent of allergy costs to businesses. Estimates of on-the-job arthritis costs ranged from 35 to 77 percent.

When researchers added the on-the-job costs of less productive workers to the other costs of illnesses, hypertension, heart disease and mental illness were the biggest burdens, costing from $392 to $348 per employee.

Employers have to consider the costs of sick workers when evaluating health plans, the director of the Cornell institute said, according to the Cornell press release.

"In this day and age where employers are hesitant to hire because of skyrocketing medical care costs, it's important to broaden the view of health costs beyond the cost of patient care," Ron Goetzel said.

"If a company's health plan is poor, for example, disorders may not be well managed," he said. "Workers will come to work and not be as productive. Employers need to weigh the costs of good medical care against the potential for on-the-job productivity losses, which we see are substantial in many cases."

Health care spending in the United States grew to an estimated $1.7 trillion in 2003 — more than $5,800 for every American — and for the first time was projected to make up more than 15 percent of the national economy last year, the federal Centers for Medicare and Medicaid Services said in February.

The pace of growth was slower than in recent years. But health care spending is projected to outpace growth in the rest of the economy for the next 10 years, CMS said. By 2013, annual spending on health is expected to reach $3.4 trillion and be more than 18 percent of gross domestic product.

Partly because of those rising costs — especially the swelling price-tag on prescription drugs — the go-broke date for Medicare has been moved up to 2019, seven years sooner than last year's estimate.

About 75 million Americans lacked health insurance at some point during 2001 or 2002.