Case Study: The Economic Value of Healthy Employees

You often hear that your health affects how well you work, and when you think about it, it makes sense. Who works as hard or as effectively when they’re sick as when they’re well?

That’s part of the logic behind most company-sponsored health interventions - only will your employees view you as a proactive company that cares about its staff, but they’ll also likely perform closer to their potential if they are healthier. That’s the theory anyway - what’s the evidence to back it up?

Well according to peer reviewed research by Australian Health Management, it’s actually stronger than you may think. Researchers at AHM tracked the health, productivity and absence data of 77 health insurance employees over more than a year. What they found was that changes in health risks (for example physical activity, blood pressure, stress, smoking, weight, etc) were significantly associated with changes in “work impairment,” or on-the-job-productivity loss. As health risks decreased, work impairment decreased; as health risks increased, work impairment increased.

On average, each risk factor increased or reduced over time was associated with a change of 4.2 percentage points of work impairment. That’s the equivalent of 1.6 hours in an average 38 hour week.

AHM case study: Do interventions really work?
In 2004 AHM offered health insurance employees the opportunity to complete comprehensive health assessments that looked at a wide range of health and lifestyle factors and measured the number of health risks the employees had. The company offered the assessments again in 2005 so that employees could compare and see whether their health was improving or declining.

In January 2005 AHM launched a comprehensive health promotion program targeting physical inactivity, weight management, stress management and back care.  The program included on-site wellness programming, health information and education through weekly emails and an intranet web site, screening for blood pressure and cholesterol, an annual health expo, access to an unstaffed on-site gym, and one-on-one telephonic health coaching available to anyone who completed the health assessment.

Interest in the program exceeded expectations: 75 per cent of AHM employees participated in at least one health activity during the program year.

Seventy-seven employees completed the assessment both years, providing a unique opportunity to measure the impact that health risks have on productivity, as well as the impact of the interventions.

Impact
The study found dramatic improvement in levels of physical activity among the matched employees - for example the number of sedentary individuals dropped by 7.8 percentage points. Other studies by AHM have found that increasing exercise has positive impact on health issues ranging from blood pressure and weight control to job satisfaction and stress management. Staff’s perceptions of their physical health improved and their overall smoking rates decreased. 

More than 90 percent of staff who were low risk (0 to 2 health risks) in 2004 remained low risk in 2005, countering population trends to increase risks. Meanwhile the number of people who moved from medium or high risk into the low risk group improved by 2 percentage points.

Those who reduced health risks lost an average of 1.9 risks.

The health and productivity link
As health risks decreased, percentages of work impairment or presenteeism also decreased - by an average of 5.9 percentage points. Likewise as health risks increased, percentages of work impairment increased by an average of 10.7 percentage points.

On average, there was a 4.2 percentage point change in self-reported work impairment for each risk changed from 2004 to 2005.

Changes in illness absence hours showed similar trends (although not as significant). When people reduced their health risks they were absent less often, and when they increased their health risks they had higher numbers of total absence hours. The study found that for every person lost or gained an average of 3.2 work hours for every risk change in health risks.

While these results document the experience of just one employer in the Australian environment, the work impairment changes are similar to results of a much larger study population in the USA. Taken together, the case for work-based health promotion aimed at reducing risks is strong.

Sources: Australian Corporate Wellness, The economic value of healthy workers, Shirley Musich et al, 2006
For more information go to www.totalhealth.com.au