From absenteeism due to illness to the cost of disability and workers’ compensation, poor health costs the U.S. economy more than a half a trillion dollars a year, according to a new study by a nonprofit research organization.
The Integrated Benefits Institute, which represents major U.S. employers and business coalitions, says poor health costs the U.S. economy $576 billion a year, according to new research. Of that amount, 39 percent, or $227 billion is from “lost productivity” from employee absenteeism due to illness or what researchers called “presenteeism,” when employees report to work but illness keeps them from performing at their best. Here’s a link to their report and statement.
The Institute represents some of the nation’s biggest employers, including Caterpillar (CAT),Chevron (CVX), Google (GOOG), Microsoft(MSFT), and Wells Fargo (WFC). The Institute also represents municipalities, unions and universities.
The Institute is hoping the study brings attention from both presidential candidates, who institute officials say have focused on the cost of health care but not on the “impact of health and productivity,” an institute spokeswoman said.
“There’s a reason that everyone in the U.S. is worried about the economy and health care,” said Thomas Parry, president of the Integrated Benefits Institute. “These are two fundamental issues that are tightly coupled through health’s impact on productivity, and shape our standards of living. Illness costs this country hundreds of billions of dollars, and this should serve as a wake-up call for both candidates and employers to invest in the health of workers, for the sake of the people and the benefit of U.S. business.”
Of the remaining $576 billion tallied in the report, the cost of wage replacement costs $117 billion from absence due to illness as well as workers compensation and both short and long-term disability. Meanwhile, another $232 billion of poor health costs come from medical treatment and pharmacy related costs.
Due in part to chronic conditions like diabetes, heart disease or depression, which can all lead to prolonged illness. Such conditions can trigger absenteeism, disability and workers compensation claims.
The Institute said its estimate was drawn using 2011 data from the U.S. Bureau of Labor
Statistics that shows 128.3 million people in the U.S. workforce and their total wages and benefits of more than $7 trillion as well as the Institute’s “benchmarking data based on 60,000 U.S. employers.”