In case you haven’t noticed, healthcare is expensive, and many employees are choosing to live in poor health rather than pay the costs.
In fact, according to new data by Gallup, one in 4 Americans claim they or a family member delayed medical treatment in 2020 because of cost. That’s partially good news—26 percent is fewer than the 33 percent who reported postponing costs in 2019. But it’s still not great news. According to this, if four of your employees are in a room, at least one has a growing medical condition they can’t afford to treat.
It’s not like American’s health is something to brag about, either. One in 10 American adults have diabetes (around 34.2 million), with approximately one in 3 having prediabetes (around 88 million). About 655,000 Americans die from heart disease each year, and the obesity rate among adults is at a high of 42.4%.
And that’s not even counting the rampant virus that infected millions of Americans, intensified the above mentioned medical conditions, and left many others with respiratory problems whose long-term effects we still don’t understand.
So it’s clear: healthcare problems aren’t going away. In fact, they’re getting worse. And it’s not just a money problem for employees: their health (or lack of it) is costing you money, too.
How Does Employees’ Poor Health Hurt Your Business?
When employees put off medical treatment, they think they’re saving money. In fact, you may think they’re saving you money, too, since you’re not paying for their medical procedures.
But this couldn’t be further from the truth: the costs of untreated illnesses spill over in other ways, most notably in presenteeism and absenteeism.
Unhealthy employees cost you in lost productivity.
Employees in poor health are less productive than their healthier counterparts. It’s what’s called “presenteeism:” your employees show up to work (they’re “present”), but chronic health conditions distract or otherwise stop them from performing at their best.
How much does lost productivity cost employers annually? A hundred million? A few billion? A hundred billion?
Yes, new data from the Integrated Benefits Institute (IBI) puts the dollar amount on lost productivity at half a trillion dollars. If you want that in lost time, it’s 540 million days or 1.479 million years. Put another way, that’s enough time to invent fire (1.4 million years ago), cities (8,800 years ago), grammar (700BC), electricity (1600AD), the internet (1969), and the smart phone (2007), all lost to underperformance every year.
Indirect costs related to poor health are so high, some experts, such as the CDC, believe they’re several times higher than direct medical costs. IBI, on the other hand, puts a number on it: for every dollar you spend on health care benefits, expect to put another $0.61 toward health-related productivity loss.
From IBI’s President, Kelly McDevitt: “Employers who primarily focus on the cost of health care expenses and don’t include the cost of lost productivity and the effects on their business outcomes and employee total wellbeing should look closely at these results. Designing programs and benefits that more fully support today’s employee needs will be an investment in long term success for their business.”
Unhealthy employees take more sick leave.
Unhealthy workers are—surprise—not showing up to work. It’s what they call absenteeism. If presenteeism was lost productivity due to underperformance, absenteeism is its opposite: lost productivity due to employees missing work repeatedly because they’re sick, stressed, or injured.
The emphasis there is on repeatedly: the problem with absenteeism isn’t that workers take sick leave because they have a cold or they’re getting surgery. Rather, the problem arises when workers have chronic medical conditions that, left untreated, continue to take them out of office.
Sadly, most employers have no idea how much they’re losing because of absenteeism. Experts can give us some guidance. Circadian, for example, claims that for companies that offer shifts, $2,660 is lost per shift worker annually. For a company of 500 workers, that’s 1.3 million dollars.
The CDC, on the other hand, says absenteeism costs $225.8 billion for American employers, which comes out to about $1,685 per employee. Taking a slightly different approach, IBI reports that in America sick employees are absent about 978 million days per year.
Absenteeism doesn’t just affect your bottom line: it impacts your entire staff. Someone has to cover for your sick employees. And, when it happens more often than not, absenteeism erodes employee engagement, leaving even the best of your employees feeling stressed, burned out, and frustrated.
How Can You Help Untreated Employees?
To recap: employees are delaying costly medical treatment, which is costing you in lost productivity (presenteeism) and in repeated sick leave (absenteeism). So, aside from taking your employees by the hand to the nearest treatment center and footing the bill yourself, what can you do?
Truthfully—you can still do a lot. Here are three strategies that can encourage employees to get the treatment they need.
1. Don’t raise deductibles, copayments, or premiums.
Look, we get it—health care is expensive for employers, too. Like, really expensive. The Kaiser Family Foundation, in fact, found that on average the annual premium for an individual was $7,188, while the same for a family of four was $20,576. Factor in the costs related to COVID-19, as well as the expected rise in premiums this year, and you’re looking at a hefty cost to keep employees insured.
Naturally, your knee-jerk reaction to higher medical costs is to raise employee’s deductibles, copayments, and premiums, which, you believe, will balance out the extra cost.
Sounds fair, right?
Fairness aside, raising employee’s health costs year-over-year isn’t saving you money. And it has to do with the reasons we’ve cited here: studies show that raising copayments disincentivize employees from seeking medical help, resulting in poorer health, lower productivity, and, in the end, heftier medical bills.
So what can you do on your end to manage rising healthcare costs? A good place to start is to get some data: figure out the health problems that plague your employees the most, as well as how much they’re spending on healthcare. Take this data to an insurance broker, and ask them to analyze your health plan to see if its the best design for your company needs. If it’s not, they may be able to negotiate a better rate somewhere else.
Remember—group needs change throughout the year, so even if you have analyzed your health plan in the past, it’s a good idea to do it once a year (or, honestly, a few times a year).
2. Look into Telehealth.
If you want employees to go the doctor, you need to make the doctor’s office as accessible as possible. And what better way to do that than through telehealth.
Telehealth uses digital technology, like laptops and smartphones, to connect people with doctors, wherever they are. It’s convenient, remote, and, according to Kaiser, it has the potential to save U.S. companies around 6 billion a year in medical costs.
How’s that? Think about it. Employees don’t have to pay hefty hospital fees to see a doctor, nor do they have to go to the ER for a non-emergency. They just schedule an appointment and check-in from home.
But telehealth isn’t limited to Zoom calls and FaceTime appointments: you can also pair telehealth with smart technology that monitors employees’ health. When something goes wrong, or the numbers on the monitoring system are off, your employees can connect virtually with a specialist to see what they need to do next.
3. Offer healthy lending options.
Employees aren’t postponing medical treatment because they don’t want to be healthy. More likely than not, they’re putting off a visit to the doctor because they know in the back of their minds they won’t be able to afford the cost of treatment.
What’s worse: even if employees are saving for treatment, their health is deteriorating, which not only translates into lost productivity but also gives treatable illnesses enough time to develop into more serious health risks, something that can cost even more in the long-run.
So how can you nip medical costs in the bud? One simple solution is to set up a salary-linked loan for employees, something that gives them access to funds without putting them in a financial mess.
But be careful here: you don’t want them turning to high-interest loans that are loaded with hidden fees. That will only exacerbate the problem. A low-interest lending option, on the other hand, can motivate employees to get treatment now without facing major financial consequence later, which will impact the quality not only of their personal lives but of their work, too.
How Stately Credit Can Help Employees with Medical Burdens.
Look, here’s the thing—for medical bills your employees can’t pay, there are good loan options.
Our loans are designed to help your employees get out of financial burdens, including medical costs. We’re sick and tired of lenders taking advantage of borrowers’ needs, which is why our loans have low interest rates and no hidden fees. It’s one of the safest ways to borrow, and, since it comes at no cost to you, one of the best benefits you can give employees.
Reach out to us today, and we’ll help you give your employees the money they need to get the medical treatment they deserve.