MANAGE WHAT YOU CAN MEASUREThe costly side effect of the unmeasurable

Teresa L. Pacelli AIC, CIC

National Risk Consultant – Workers Compensation Claim Solutions

WOODY ALLEN

“80% of success in life can be attributable to just showing up!”

• Think about days you were limited in the amount or kind of work you could do; days you accomplished less than you would like; or days you could not do your work as carefully as usual?

• How do you quantify them?

WHAT IS EMPLOYEE PRESENTEEISM AND WHAT ARE THE CAUSES?

PRESENTEEISM – WHAT IS IT?

• Everyone knows the impact of employee absenteeism on the workplace. But there is an increasingly common threat that may be even more dangerous to your company culture. It’s called presenteeism.

• Like a slippery, undetected disease invading your office, it slinks through your employee ranks, slowing down work, stealing productivity and sucking up employee happiness.

DEFINITION OF PRESENTEEISM

Generally defined as a loss of personal productivity resulting from health-related or personal issues.

DEFINITION OF PRESENTEEISM

Investopedia defines it further as a:

“loss of workplace productivity resulting from employee health problems and/or personal issues. Even though the employee is physically present at

work, because they are experiencing problems such as arthritis, allergies, family illness or stress, they are unable to fully perform their work duties and are

more likely to make mistakes in the work they do perform.”

DEFINITION OF PRESENTEEISM

• Presenteeism is not to be confused with malingering (pretending to be ill to avoid work) or just slacking off (deliberately putting off duties at work)

• Presenteeism should be considered a particular condition of being unable to perform at the highest level due to real physical or mental health challenges.

• Unlike its close relation, absenteeism, presenteeism is more difficult to identify, and also has insidious, hard-to-track far-reaching consequences for the affected company.

OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION

• Since the passage of the U.S. Occupational Safety and Health Act in 1970, the incidences of workplace-related injuries and illnesses in the U.S. have declined by as much at 67 percent.

LET’S PUT THE “H” BACK IN OSHA

• However, workplace safety and health is no longer just about sending workers home with all of their fingers and toes.

• it’s about protecting them physically and also about supporting them mentally by keeping them healthy and engaged.

US HAS A SHORTAGE OF HEALTH

• US is one of the leading countries for cancer risk

• Coronary heart disease rates are high, diabetes rates and risk factors are increasing largely due to our diet

• High levels of violence-related death are present

• Leading causes of premature death:

• Tobacco

• Diet

• Physical inactivity

• Alcohol

• Motor Vehicle Accidents

• Sexual Behaviors

• Drugs

PREVENTION

“We spend less than .04 cents of every health care dollar on prevention and public health even though 80% of the risk factors

involved in the leading causes of death are behavior-related, lifestyle choices and thus preventable.”

President Barack Obama

ENVIRONMENT

“It is unreasonable to expect people to change their behavior when the social, cultural and physical environments around them fully

conspire against them…”

Sir Michael Marmot/Institute of Medicine Report

HEALTH CONDITIONS MOST FREQUENTLY ASSOCIATED WITH

PRESENTEEISM:

• allergies

• back or neck pain

• hypertension

• obesity

• gastroesophageal reflux disease (GERD)

• arthritis

• asthma

• migraine headaches

• fatigue (sleep disorders)

• depression

NON-HEALTH RELATED CONDITIONS ASSOCIATED WITH PRESENTEEISM

• Personal• Financial Issues

• Aging Parents

• Children

• Romance – good bad or indifferent

• Socio-Economic Issues

• Diet

• Global Issues

• Emotional/Spiritual Issues

• Organizational • Pay

• Sick pay

• Attendance control

• Downsizing

• Permanency of employment

• Job design• Job demands

• Adjustment latitude

• Ease of replacement

• Teamwork (or lack thereof)

WORK-LIFE BALANCE TRUTHS

• Workers will want, need and seek out more flexibility

• Organizing work around people works better than organizing people around work.

• Every workplace policy will have some effect on the health and wellbeing of workers – take steps to make sure it is a positive one

• View every workplace decision through the lens of “The health and wellbeing of the worker”

CAUSES OF PRESENTEEISM• Pain conditions can lead to sleeplessness and distract from focus.

• Medications utilized to control pain, allergies, and multiple others of these conditions similarly influence focus, suggesting an additional value for non-pharmacologic approaches.

• Doctor visits need to be managed. Half-days can be quickly lost.

• Bad attitudes are catching.

• Dollars disappear with each level of poor concentration.

• The productivity losses show up on the employer’s ledgers multiple ways.

• Most knowledgeable employers understand the direct link between employee health and their company’s success and profitability, and remain committed to company programs that support employee health and well-being.

• But how do they know they are focusing their dollars on the “right” things?

• How do you go about making targeted investments in your employees health and wellbeing?

WORKERS’ COMPENSATION CLAIM EXAMPLE

• May 2013

• 47 year old maintenance worker; married

• Leans against a hand railing which breaks

• Worker falls 2 feet; lacerates leg; lower leg fracture; low back contusion; Shoulder strain/contusion

• Estimated disability for 8-12 weeks total disability; 12 weeks temporary disability; estimated return to work full – no restrictions

FINANCIAL IMPACT OF COMORBID CONDITIONS

Reserves WITHOUT Comorbidities

Temporary Total Disability: 615.39 x 6 wks = $3692

Temporary Partial Disability: 615.39 x 50% for 6 weeks: $1846

6 weeks full wage – restricted duty: 0

Medically Stationary within 6 months

PPD Scheduled = $0 - $3500

Medical Reserve: $34,000

Legal: $3500

Return To Work: full duty without restriction

Total cost estimate: $46,538

Reserves WITH Comorbidities

Temporary Total Disability: 78 weeks x 615.39 = $48,000

Temporary Partial Disability: 24 weeks x 615.39 x 50% = $7,385

24 weeks = permanently restricted return to work

Medically Stationary with 2 years

PPD Scheduled: $17,022

PPD Un-Scheduled: $15,761

Medical Reserve: $599,364

Legal: $75,000

No Return to Work = $8,000

Total Cost Estimate: $770,532

THE CONSEQUENCESQuantitative? Or Qualitative?

CONSEQUENCES - COST

• Employees take an average of four days off per year for sick time, but admitted to being unproductive an average of 57.5 days a year.

• corresponds to a person working at 75 percent of their maximum productivity level.

http://ehstoday.com/safety-leadership/presenteeism-costs-business-10-times-more-absenteeism

CONSEQUENCES - COST

• According to the same study, the total annual cost of lost U.S. productivity attributable to health-related conditions exceeds $225 billion, with the cost of presenteeism estimated at more than $150 billion, or two-thirds of the total.

• In a separate study, researchers estimate that employee depression alone costs U.S. companies $35 billion a year in reduced performance.

“Lost Productive Work Time Costs from Health Conditions in the Unites States: Results from the American Productivity Audit,” W. Stewart, et al., Journal of Occupational and Environmental Medicine, Vol. 45, No. 12, December 2003. Web. 18 August 2015. http:// www.nationalpartnership.org/research-library/work-family/psd/lost-productive-work-time-american-productivity-audit.pdf.

“Health and Productivity as a Business Strategy: A Multiemployer Study,” R. Loeppke, MD, et al, Journal of Occupational and Environmental Medicine, Vol. 51, No. 4, April 2009. Web. 18 August 2015. https://www.acoem.org/uploadedFiles/Healthy_Workplaces_Now/HPM%20As%20a%20Business%20Strategy.pdf.

CONSEQUENCES - COST

• Employees are in the office but distracted, sick, or exhausted, they are draining the company’s productivity.

• Presenteeism can be just as costly as a physical injury in the workplace

CONSEQUENCES - MORALE• Employees who are distracted at work by

underlying health conditions are more likely to make mistakes or errors in judgement.

• Less favorable performance evaluations, reduced compensation levels and fewer promotional opportunities.

• Even among highly-committed employees, job disengagement and dissatisfaction are likely to increase.

CONSEQUENCES - MORALE

• Irritability rubs off on co-workers, stirring its own nest of water-cooler chatter and productivity barriers.

• Bad attitudes are catching.

“Cost of Lost Productive Work Time Among U.S. Workers with Depression,” W. Stewart, MD, et al, The Journal of the American Medical Association, Vol. 289, No. 23, June 18, 2003. Web. 18 August 2015. http://jama.jamanetwork.com/article.aspx?articleid=196767&resultclick=1.

ADDRESSING THE ISSUE

Identifying and addressing presenteeism can improve your company performance and improve the lives of your employees.

HEALTHCARE – WELLNESS BENEFITS

• Employers are the primary source of healthcare

• Coverage for: • Acute medical conditions• Conduct diagnostic testing • Prescription medication• Partial coverage for diagnosis and treatment of mental health issues

• Wellness• Smoking cessation programs• Fees for exercise facilities • Supervised dieting or nutrition programs

CHRONIC CONDITIONS?

• Insurance coverage for some chronic conditions may be limited in duration, with many employees forced to stop treatment when their insurance coverage runs out.

• In other cases, less severe health issues may go undiagnosed, or employees may simply fail to seek a medical opinion due to lack of time or other pressing priorities.

SHIFTING COSTS?

• Shifting increased medical coverage costs to employees engages the consumer but it also...

• Reduces monies available for treatment of non-life-threatening chronic conditions that are typically the primary cause of employee presenteeism.

• As resources to address the root causes of presenteeism diminish, the financial and productivity impact on employers is only likely to increase.

INTEGRATED APPROACH

TOTAL WORKER HEALTH• Example of Integration

• Respiratory protection programs that comprehensively address tobacco abuse

• Ergonomic Consultations that also discuss arthritis management strategies

• Stress Management efforts that FIRST seek to diminish workplace stressors, ONLY THEN work on building worker resiliency

• Integrated training and prevention programs (falls, motor vehicle safety, first aid, hearing conservation, stretching, flexibility and lifting programs)

• Comprehensive screenings for work and non-work risks

• Occupational health combined with a workplace primary care home model

• Full integration of: clinics, behavioral health, traditional safety, health promotion programs, coaching, EAP, nutrition, disability and workers’ compensation.

SILOS

• Create duplication of efforts attempting to address the same root causes – wasting valuable resources that could be applied to new programs and initiatives that could make a bigger impact.

• Lack of coordination between separate health and safety programs usually fails to take full advantage of the knowledge, experience and insight of the respective professionals involved, losing potentially supporting synergies.

• Reduces company-wide visibility of these efforts, and serves to mask their potential contribution to achieving a company’s overall strategic goals and objectives.

CULTURE OF HEALTH• Addressing the underlying health-related

causes of employee presenteeism, such as chronic health conditions, obesity and depression, employees are more likely to be engaged at work and less susceptible to instances of presenteeism or absenteeism.

• Healthier employees are also less likely to experience on-the-job injuries, thereby reducing employee absences due to hospitalization or disability.

WIN-WIN-SUCCESS!

• Happy employees help to support a company’s efforts to improve profitability and competitiveness.

• Employers with effective health and productivity programs generate 20 percent more revenue per employee and provide shareholders with a 57 percent greater return than comparable companies.

• In a separate study, a stock portfolio of selected companies with exemplary health, safety and environmental programs dramatically outperformed the S&P 500 index over a 13 year period.

“The Link Between Workforce Health and Safety and the Health of the Bottom Line: Tracking Market Performance of Companies that Nurture a “Culture of Health,” R. Fabius, MD, et al, Journal of Occupational and Environmental Medicine, Vol. 55, No. 9, September 2013. Web. 19 August 2015. http://www.cancergoldstandard.org/sites/default/files/attachments/Link_Between_Workplace_Health_and_the_Bottom_Line_0.pdf.

THE BOTTOM LINE• Employee presenteeism is difficult to quantify.

• It has and continues to be overlooked as a significant factor decreased productivity and increased costs of employer-sponsored healthcare benefits.

• Employee health and safety often fail to adequately address the underlying root causes of employee presenteeism.

• Companies that have taken an integrated approach to employee health and safety have seen important reductions in the incidence of employee presenteeism and absenteeism, as well as material increases in employee productivity.

These successes have resulted in healthier employees, improved financial performance, and an increased competitive advantage against comparable

businesses.