Published by:
MIT Sloan School of Management
Length: 15 pages
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Abstract
When employers focus only on the direct, out-of-pocket costs of health care, they fail to consider the indirect costs of illness in the workplace form workers'' impaired functioning on the job and absenteeism. The authors present a case study of the effects of clinical depression on direct and indirect health-related costs and provide a model that employers can apply to a wide range of illnesses to analyze their investments in health care. The authors apply the framework to several workplace situations - employees'' depression, cigarette smoking breaks, and arthritis - to estimate the costs of lost productivity. They also show how to do a break-even analysis to determine when employers'' investments in health interventions are likely justified.
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Abstract
When employers focus only on the direct, out-of-pocket costs of health care, they fail to consider the indirect costs of illness in the workplace form workers'' impaired functioning on the job and absenteeism. The authors present a case study of the effects of clinical depression on direct and indirect health-related costs and provide a model that employers can apply to a wide range of illnesses to analyze their investments in health care. The authors apply the framework to several workplace situations - employees'' depression, cigarette smoking breaks, and arthritis - to estimate the costs of lost productivity. They also show how to do a break-even analysis to determine when employers'' investments in health interventions are likely justified.