In August of 2009, I wrote an article on how CEO's of Fortune 500's as well as those of smaller businesses can win the health-care battle for their employees and companies. Recent predictions of unrelenting increases in health-care costs through 2010 seem to have caused a significant sense of pandemonium both for employers and employees, causing this issue to be one that is engulfed with renewed anxiety on all fronts.
New predictions indicate that health-care costs are expected to grow by another 9% this year, and although this growth percentage represents a slightly slower rate of growth than in previous years, it continues to significantly outpace inflation and wage increases. With corporate profits having taken a beating for many of the Fortune 500's as well as for smaller companies in 2009, many employers have resolved to shift the costs of health care upon employees in terms of higher insurance and deductibles. However, this strategy is not without its challenges. History suggests that it often leads to two consequences:
1. As employees deeply value health-benefits (that U.S. companies are often unable to pay), foreign companies become more attractive to American workers resulting in the loss of American employees to foreign firms. Companies that radically slash benefits also risk losing their best employees to other domestic companies that resolve to maintain or provide better health benefits.
2. Mid-size and large companies often have to confront powerful worker unions that can drive a company to Chapter 11 bankruptcy protection.
What is the way out of this crisis for CEO's of both the Fortune 500's and the mid-size firms? And, is there one that is so foundationally sound that it can truly be relied upon? My answer is: Yes -- there is a way out of this crisis, and as in the case of ALL conundrums, it lies in falling back on the fundamentals. In this case, that means understanding employees' fears surrounding their health and rooting out those fears by truly empowering them with solid, research-based knowledge that can prevent the majority of illness in the first place . For a fuller understanding of how addressing the Primary Causes of chronic diseases can directly and powerfully control your company's health-care costs, please refer to my previous article on the subject. As a follow-up to that article, I have put together a list of 5 mistakes that CEO's often make (albeit unwittingly) that cause them to lose either their profits and/or their best employees as a result of issues surrounding health-care. These have been gleaned from my experience both as an epidemiologist (who oversees large-scale trends in health-care) and from speaking to businesses of all sizes:
1. FAILURE TO UNDERSTAND FULLY THE ALL-CRITICAL IMPORTANCE OF HEALTH-CARE TO EMPLOYEES IN THE CURRENT ECONOMY -- Research unequivocally suggests that U.S. employees value health-care benefits significantly more than increases in wages. Ignoring the importance of health-care to employees is tantamount to committing company suicide.
2. FAILURE TO INCORPORATE MARGINAL ECONOMIC THINKING INTO BUSINESS MANAGEMENT PLANS - This basic principle of Economics is often overlooked by most everyone. In simple language, incorporating marginal economic thinking into business management plans means fully recognizing that people pursue a preferred good (be it a product or service) to the point where their perceived costs equal their perceived benefits. When people "perceive" they are paying "more" for something (especially as "premiums" they must pay for health care), they will demand MORE of it. This suggests that visits to doctors and absenteeism at work will increase (The mindset is, "I am paying for it; let me take full advantage of it"). On the other hand, if we rely on classical Socialized Medicine, that too leads to a double whammy. This time, people perceive that health-care is "free " or "already PAID FOR ," and thus also demand for health services shoots through the roof. In either case, companies suffer massive losses in terms of employee productivity and work efficiency.
3. FAILURE TO PROVIDE TRULY EFFECTIVE, RESEARCH-BASED WELLNESS PROGRAMS -- The "way out," to a great extent, from the losses businesses incur as a result of the factors mentioned in point 2 above is to teach your employees truly how to be well for life . This is not a simplistic answer. Research indicates that when employees are truly well and feel good (both physically and emotionally in their work environment), the incentive to pursue either "paid for" or "free" health-care is greatly offset . A truly effective, research-based wellness program is capable of helping employees create lasting health from the ground-up. By enhancing employee health and their sense of well-being, companies are able to make solid economic gains as they now reduce the real costs associated with having sick employees -- which are employee downtime and associated losses in profits and productivity.
4. FAILURE TO EVALUATE THE HEALTH OF THE WORK ENVIRONMENT -- Is your Corporation housed in a "sick" building? This simple evaluation is one of the most overlooked factors that (surprisingly) effects both employee health and health-care costs. Data suggests that buildings that have no or few windows and have recycled air (rather than large quantities of fresh air) can be psychologically depressing and illness producing. This is not a small matter, as epidemiologic data suggests that 1 in 3 American workers have at least one symptom of (often work-related) clinical depression.
5. FAILURE TO UNDERSTAND THE ALL-CRITICAL IMPORTANCE OF THE WELLNESS OF THE WHOLE PERSON FROM THE STANDPOINT OF BOTH COSTS, AND ITS RELEVANCE TO BUSINESS SURVIVAL AND SUCCESS - Employee morale is directly related to employee effectiveness and productivity. When discussing health-care costs, businesses seldom account for cost increases related to social factors . Again, research indicates that it is critical for employers to oversee and (if necessary) "weed out" those at work who may have a tendency to bully, insult, or belittle others. Failing to recognize the social aspects of a healthy work environment has a profoundly deleterious effect both on employee morale and workplace effectiveness which directly translates to costs.
The bottom-line of all this analysis? It is NOT simple to control health-care costs. Factors from within and without will profoundly affect the viability and success of firms big and small this year (as they do every year). But, those who will resolve to learn and apply the hard lessons learned from Epidemiology, Economics, History, and most of all, from hard won real-life experiences will stand to fare the best of all .
Dr. Desiree Jones, PhD is a Doctor of Epidemiology, who speaks and writes on cutting-edge issues pertaining to chronic disease prevention in the Western and the newly Westernizing nations. She has worked collaboratively with researchers at The University of Texas, Baylor College of Medicine, and Harvard University. Her first book is expected to arrive on the market this year, and is entitled, HALTING THE DEATH MARCH - Why America and The Westernized World are Dying from Heart Disease, Cancer, Diabetes, and Other Chronic Diseases, And How to Stop It . Dr. Jones' work has been featured numerous times - and continues to appear - in major news media such as The New York Daily News, Business Week, Google News Top Stories of the Day, USA Today, The Chicago Sun Times and numerous other nationally syndicated health and news sites. Dr. Jones writes on the underlying root causes responsible for high rates of chronic disease in the U.S. and the Western nations. She is the Founder of The Prevention Revolution , which is ranked among the Top 15 blogs in Health & Heart Disease. The Prevention Revolution brings medical/nutritional research and informed opinion on critical health-care issues to individuals and physicians, as well as to corporations facing skyrocketing health-care costs. Dr. Jones focuses on translating evidence-based research into real-life choices that can help prevent deadly chronic diseases and create lasting health.
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Source Citation
"Heath Care Costs Predicted To Rise 9% In 2010." Basilandspice.com 7 Jan. 2010. General OneFile. Web. 10 Jan. 2010.
Gale Document Number:A215948722
Disclaimer:This information is not a tool for self-diagnosis or a substitute for professional care.
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