US employers have been screaming about and occasionally investing money in efforts aimed at the competitiveness handicap they face in global competition due to their healthcare costs.  With most of their overseas competitors in countries whose costs for employee healthcare is less than half that in the U.S., and government insurance bearing much of the burden, the high costs of employee health care means U.S. made goods have to be priced higher, often meaning the loss of sales to such competitors.

It has reached the point where U.S. companies can “offshore” jobs to foreign workers in countries such as India and the Philippines, where total labor costs are only as much as are the healthcare costs of workers in at home.  This promotes the loss of jobs in the U.S., along with the loss of sales, both threatening the labor market here, though reducing the costs of goods to American consumers.

The one advantage America still enjoys, however, is in worker productivity, where our workers produce as much as half again as much per day as do workers in other countries.  This, together with the lower value of the American dollar in recent years somewhat mitigate the effects of higher healthcare costs, though reducing such costs and maintaining or improving our worker productivity advantage would make things much better.

Employee health has been a target for efforts to maintain and improve it for decades, though it received significantly more attention in recent years as employers recognize the potential for employee wellness efforts to improve productivity and performance, rather than just to save on employee, dependent and retiree sickness care costs.  Unfortunately, it is not just American employers who have caught on to this potential; global competitors, particularly in the more developed countries, have made the same discovery.

In fact, foreign employers, insulated as they are from direct costs of employee unhealth by government-paid insurance, have found even more value from their employee health/well-being efforts than American employers have even looked for.  While most U.S. employers still look only for reductions in healthcare costs, and a large minority of them are beginning to look at absence and presenteeism effects as well, foreign employers are finding even more positive effects, including improvements on the revenue as well as cost side of their ledgers.

European employers have been aware of the effects of health on overall performance, with suppliers such as VieLife.com built on a foundation of research into performance of airplane pilots and race car drivers, for example.  [M. Bartlett “Healthy Business” EuroBusiness 4:1 Sep ‘02  57-58]  A British railroad company achieved a 69% reduction in accidents, thanks to its employee health efforts, for example. [“Birse Rail (Case Study)” The Business of Health (UK)]

Another British firm, Standard Life Healthcare was able to reduce its worker turnover by 13%. [“Costs vs. Investment?” Business in the Community (UK) June 2005]  It also reported new business up 26%, and customer retention up 2.2%, while crediting its employee health efforts as being a “big contributory factor” therein. .  Also reported “Employer Health Management” Complinet (UK) Mar 4, 2004 (www.vlelife.com)  Another UK firm reduced its annual turnover rate from 62% to 33%. [“Edmund Nuttall Ltd (Case Study)” The Business of Health (UK)]

Meantime, the focus of efforts is too often on disease, rather than health, and on savings in sickness care costs rather than total labor costs and positive revenue impact.  And critics keep stressing doubts about whether managing disease saves enough in sickness care costs, compared to disease management costs, to generate positive ROI. [S. Sullivan & L. Meyer “Determining the Economic Value of Disease Management Programs for Employers” Managed Care Interface 18:10 Oct 2005 27-31]

This myopic approach to looking for positive impact also results in  myopic selections of problems and opportunities to work on.  Research has shown, for example, that a wide range of unhealthy conditions — inadequate sleep, poor diet, inadequate physical activity, unmanaged stress, musculoskeletal pain, chronic fatigue, emotional disorders, etc. – have far more negative impact on worker productivity and performance than do traditional diseases.  By not even selecting such performance impairment factors for measurement, much less management, employers are missing out on the best opportunities to improve their competitive position.

There are some positive signs in this regard, at least.  More employers and the suppliers that serve them, are beginning to look at both a broader range of performance/productivity-affecting problems, as well as on a broader range of valuable results.  They are also beginning to look at less expensive approaches to managing employee health, further increasing the potential for and realization of positive ROI on their investments.  We are just beginning to recognize and tap the potential to improve the competitiveness of U.S. firms, while improving the health of our population at the same time.