Worksite wellness for the health of it. Part 4

The costs of illness

Illness and injury produce two kinds of costs to organizations — direct costs and indirect costs.

Direct costs could include:

* salary to the absent employee

* medical expenses

* rehabilitation costs

* worker compensation awards

* survivor benefits (in the case of death).

Indirect costs of an unhealthy employee to an organization may include:

* distress to others and disorganization during absence

* costs of temporary replacement or overtime pay to cover the missing employee’s responsibilities

* training of temporary replacements

* retraining of the employee upon return to work

* recruiting, selecting and hiring a permanent replacement when the employee goes on permanent disability or dies

* administrative costs associated with the above.2

Unhealthy employees, due to illness and injury, upset the corporate setting, as well as rob employers of dollars and lost productivity. So who is paying the bill?

In essence, everyone pays one way or another. General Motors says it pays $3.4 billion annually for health care, which amounts to $929 for every vehicle that comes off the assembly line.

Prevention costs are now being proven to be more economical than illness and injury costs. DuPont, a diversified chemical company, found that employees with any of the seven health risks (smoking, obesity, high cholesterol, high blood pressure, excessive alcohol use, lack of exercise and avoidance of safety belts) were absent from work 10 percent to 32 percent more than employees not at risk. However, once DuPont installed health promotion programs at their 41 industrial sites, it noticed a decrease of 14 percent in absenteeism compared with a slight decline (5.8 percent) at the 19 sites where such programs were not offered.

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