Study finds health care costs are high
Second-year findings from a large, ongoing study of worker health and productivity show employers are spending more than $8,000 per employee annually for health care and related costs. Study results are likely to cause more businesses to demand that their managed care plans step up efforts to keep workers healthy, as well as return them to work sooner when they fall ill, say the study’s authors.
The study, conducted by The MEDSTAT Group in Ann Arbor, MI, and the Houston-based American Productivity & Quality Center, a nonprofit benchmarking consulting company, found that total costs among all surveyed employers, who collectively have nearly 600,000 employees, was $4.9 billion. Among the 17 firms surveyed the 1997 median cost for health and productivity was $8,621 per employee. The biggest portion of that expenditure, 58%, was $5,003 for health care expenses. Other annual per employee costs reported include:
• Turnover cost firms $1,897 per employee, or 22%.
• Unscheduled absences cost firms $698, or 8%.
• Non-occupational disabilities cost firms $630, or 7%.
• Workers’ compensation costs accounted for $393, or 5%.
The study’s authors conclude that applying "best practice" strategies such as a comprehensive health management program, employers could reduce their costs by $1,567 per employee, or 18%. The authors also note that the way companies track their health and productivity costs also affects the bottom line. In fact, monitoring costs alone often helps reduce expenditures, they say.
[For more on the study findings, contact Ron Webb at (713) 685-4636. E-mail: [email protected]. Or contact Ron Goetzel at (202) 686-7750. E-mail [email protected].]
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