Depression: a lot bigger than you think: the absenteeism- and presenteeism-related costs of depression outweigh the medical and pharmaceutical costs and make a strong case for EAP intervention against this condition.

Author:Parry, Thomas

For any benefits or employee assistance professional seeking financial support for program expansion, the question likely to be asked by senior management is, "What return are we getting for our benefits investment?"

Like it or not, those senior managers are doing their job, driving corporate success the best way they know how. To those in the trenches, however, such questions sound short-sighted in not recognizing the value of an investment in the employer's most important asset: a healthy workforce.

The tension between viewing health care as a cost versus health as an investment is more noticeable when economic times get tough and all programs are forced to justify their business value. As noted by Westbay and Sarfaty (2009) in a recent Journal of Employee Assistance article, "In uncertain and difficult times, such as the economic meltdown we are currently experiencing, personal resilience and resources are needed. EAPs are a resource that can make an important difference in employees' lives and, therefore, employers' bottom lines."

Given these competing tensions, what will happen as EA professionals seek approval to expand their EAP resources to meet this increased need? Because employers have come to view EAPs as commodity benefits rather than workforce productivity tools, employee assistance professionals must dig more deeply to present the value of their programs in a way that recognizes the real costs of doing nothing and also expands the definition of "value of investment" beyond medical cost savings.

Advocates for health interventions can come to welcome the "value of investment" question if, instead of focusing only on paid benefits, they also demonstrate the business costs of health-related lost time and lost productivity in making their business case. The Integrated Benefits Institute (IBI) can assist by providing research and measurement tools to help both benefits/EAP managers and senior management demonstrate the full business value of health.


Unfortunately, when the discussion turns to costs, the focus is on paid benefits because that's the only kind of data most employers, senior managers and program administrators typically have available to them. Some employers can't even get condition-specific medical claims information from their insurers or program administrators, much less condition-specific absence or disability data. And when such medical information is available, it only exists when treatment is rendered.

Worse, few employers can track incidental absences associated with a health condition since payroll information usually isn't linked to human resources databases. Even short-term disability (STD) wage-replacement payments are likely to be associated with multiple health conditions, most of which comprise no part of the diagnosis for the disability in the claim file of an insurer or third-party administrator.

A resulting focus only on paid costs, often limited just to medical costs, dramatically underestimates the workforce impact of various medical conditions. Research co-authored by IBI and published this year in the Journal of Occupational and Environment Medicine (JOEM) reports on the full costs of medical and pharmaceutical claims combined with employee-reported lost time. For every $1 of medical and...

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