The "Business Case" For Investing in Employee Health: A Review of the Literature and Employer Self-Assessments

March 2004
EBRI Issue Brief #267
Paperback, 27 pp.
PDF, 156 kb
Employee Benefit Research Institute, 2004

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Executive Summary

  • This Issue Brief reports on the findings from interviews with six large employers to learn more about what these employers actually do to promote employee health beyond offering health plans, why they do what they do, how they financially justify what they do to their peers and superiors, and what the prospects are for their more expansive and longer-term approach to health benefits costs in the current general economic climate and in the face of sustained health care inflation. Some of these employers attribute reductions in the cost of providing health benefits to strong management of employee health status, use of health care, and occupational injuries. However, they also believe that the cost of providing health benefits is strongly influenced by health care system and environmental factors outside the work place that affect health.
  • Employers that offer health insurance to their workers generally believe that offering this benefit helps to create a more satisfied and productive work force. The fairly large, sophisticated employers discussed in this report have found that by aligning preventive health services and work place education programs with their health benefit programs they can improve work force health and productivity and manage their employees' use of health care.
  • Such employers are increasingly concerned about distracted workers who are on the job but failing to pay full attention to their duties because of health problems. They've found that employee assistance and related health interventions can deal successfully with this problem.
  • Innovative employers are making significant investments in education programs that discourage unhealthy habits and stress the need for timely and cost-effective responses when a medical problem is identified.
  • Some economists have posited a link between the health of workers and the economic health of the broader society. When individual firms take action to create more productive workers, they argue, the nation's GDP grows in a fashion that provides a more positive environment for all Americans.
  • This economic argument also holds that the nation could be wealthier if the 35 million uninsured American workers and dependents had health coverage; even after the costs of their care were subtracted, there would be a net gain to society.
  • Employers are becoming increasingly frustrated with annual premium increases that are a multiple of the general inflation rate. Unless and until they come up with a way of managing and finding greater value in such expenditures, the future of employment-based health benefits may be at stake.