Low performance costs money
An ongoing study by the DFW (Dallas-Fort Worth) Business Group on Health is dramatically illustrating the true costs of presenteeism — having employees at work but performing below their optimal level. The study, begun in early 2001 with a survey to identify potential target issues, included representatives from the Federal Reserve Bank of Dallas (FRBD), Bell Helicopter, American Airlines, Raytheon, the Institute for Health and Productivity Management, and Pharmacia Corp.
After the initial survey identified musculoskeletal disorders as the proposed focus of the study, a target population was identified. This included two departments within the FRBD — cash and payment services, with a total of about 300 employees. In establishing baseline data, both direct costs (medical claims, prescription drug claims, and workers’ compensation costs) and indirect costs (lost time, short-term disability, absence, and presenteeism) were measured.
"Our main issue was health care costs," explains Bob Queyrouze, CEBS, CCP, SPHR, manager of compensation/benefits for the FRBD. "Employers are at their wits’ end in terms of trying to manage health care costs. You can change plan design and shift costs to your employees, but the frontier not fully explored yet is keeping employees healthy and at work. What is needed is a dual-pronged approach — managing costs and at the same time paying attention to increasing productivity."
A big surprise
The presenteeism data were measured using a modified version of the Work Limitations Questionnaire (WLQ), a survey tool developed by Debra Lerner, MS, PhD, a scientist at the Health Institute of the Tufts-New England Medical Center in Boston. This is where the most surprising data appeared. "I think the impact of presenteeism is a huge surprise," says Queyrouze. "We had no idea it was that significant — over half a million dollars in two departments for just one condition."
The baseline costs broke down as follows:
• Direct costs — Workers’ compensation, $278.03 per employee per year; medical claims, $85.40 per employee per year; and pharmacy claims, $60.43 per employee per year.
• Indirect costs — Lost time, $84.01 per employee per year; STD, $1.50 per employee per year; absence, not available; presenteeism, $2,063.09 per employee per year.
"We were not too surprised at the direct costs because we see them all the time," says Queyrouze, "But the indirect costs, and using the WLQ to ferret out the presenteeism costs, were a huge surprise for us."
Addressing the costs
The study group began addressing the sources of the direct and indirect costs through a number of targeted interventions, including education meetings for employees, programs targeted toward various risk groups, arthritis screenings, arthritis Patient Partners program, and one-on-one consultations.
"We followed up with a questionnaire in December 2002 to assess the impact of the interventions on behavior and employee knowledge," Queyrouze reports. "In terms of the impact on behavior, it’s pretty clear in the people who participated in the interventions. It will definitely help reduce presenteeism, too." A second WLQ survey, to be taken this summer, will measure the impact of the interventions on productivity.
Does Queyrouze have any reason to think his group’s findings would not be borne out in other employee populations? "I think the group we chose is fairly representative," he asserts. "We had management participate too — exempt and nonexempt employees, male and female, and so on."
His experience, he says, convinces him that "Clearly, worksite programs to address both presenteeism and productivity are worth pursuing. The costs of presenteeism have been hidden from employees, but I believe in the next five years, we will see a much greater emphasis on worksite disease management programs to address these issues."
For more information, contact:
- Bob Queyrouze, CEBS, CCP, SPHR, Manager, Compensation/Benefits, Federal Reserve Bank of Dallas, P.O. Box 655906, Dallas, TX 75265-5906. Telephone: (214) 922-6374. E-mail: [email protected].
An ongoing study by the DFW (Dallas-Fort Worth) Business Group on Health is dramatically illustrating the true costs of presenteeism having employees at work but performing below their optimal level.
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