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Health and Productivity Go Hand in Hand

Labor Day… is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.—The U.S. Department of Labor

Closely tied to the productivity and prosperity of our nation is the health and safety of its workers. Studies have shown that healthier workers are more productive workers, which is why many companies are enacting wellness and medication adherence programs and working to develop innovative total health benefit programs for their employees.

The majority of American workers are still covered through insurance offered by their employer, although that percentage has declined in recent years. Thus, as an integral part of the health care system, employers’ coverage decisions play a key role in ensuring access to health care. In recent years, the National Pharmaceutical Council’s (NPC) research has taken a closer look at some of the factors employers must weigh in making those health care decisions and their impact on health and productivity.

According to a seminal 2011 study, employers who focus only on medical and pharmacy costs in creating employee health strategies may misidentify the health conditions that most impact the productivity of their employees—while underestimating the impact of other factors. The five most costly conditions in terms of productivity—depression, obesity, arthritis, back/neck pain and anxiety—are not necessarily the ones with the highest medical and pharmacy costs. When employers focus on medical and pharmacy costs alone they miss an opportunity to address these potentially much more impactful conditions. On average, every $1 of medical and pharmacy costs is matched to $2.30 of health-related productivity costs—and that figure is much greater for some conditions.

In particular, presenteeism—when employees with health conditions are present at their jobs but are unable to perform at full capacity—often causes a greater drain on a company’s productivity than employee absence.

Understanding these health conditions and other factors that impact their workforce can help employers to design an effective insurance benefit. One model that is being used by employers is value-based insurance design (V-BID), which encourages the use of medically necessary therapies and services and reduces barriers to access for these services. Under a V-BID program, the more clinically beneficial a therapy is for a patient, the lower the patient’s cost share.

Yet with changes to health plans via the Affordable Care Act, some companies are increasing cost sharing for their employees, with differing effects. According to a 2014 survey of large employers, for employees who are healthy, it can be effective to manage their health care through consumer-directed health plans, such as health savings accounts or health reimbursement accounts. For employees who are low income or who have high health care needs, these types of plans impose on them a bigger burden of out-of-pocket costs, causing these employees to reduce their compliance with necessary treatments or avoid care altogether.

Employers recognize the challenges with medication adherencea medicine treatment plan developed by an individual’s health care provider, filling prescriptions, and taking medications as prescribed. That’s because adherence has long been acknowledged as a serious problem for the American health care system, costing billions of dollars in lost productivity, additional doctor visits, preventable hospitalizations and nursing home admissions, and even premature death. To address these challenges, many employers have enacted wellness programs aimed at addressing specific health conditions or lowering or foregoing copayments on certain treatments, among other measures.

And while the costs of chronic health conditions on employee productivity to employers are well documented, methodologies that accurately capture the impact that medicines may have on reducing those costs are limited. A study conducted by Tufts Medical Center and NPC demonstrated a novel approach to estimate productivity, using depression and arthritis as case studies. The study found that therapies to treat depression yielded a 0.9 percent to 2.2 percent improvement in employee productivity. Taking medicine to treat arthritis or other musculoskeletal pains is associated with productivity gains of up to 0.5 percent.

At a time when the economy, the workforce and the nation’s health status are top of mind, it is especially important to recognize how closely health care coverage and productivity are intertwined. In the long-term, workplace benefit strategies aimed at improving the overall health and productivity of workers can have a positive impact on the overall U.S. economy.

We wish you all a safe, healthy and productive Labor Day.