"The Big Picture" Newsletter

February 2008 Issue

Worker Trends and Declining Health Status Demonstrate Greater Need to Integrate Medical and Disability Programs

Increased cost and lower productivity result from aging workforce and rise in chronic conditions

At CIGNA we promote the advantages of integrating medical and disability programs because we support the health, well being and financial security of the people we serve. We believe that integrated programs provide better service and improved outcomes for employees and that employers have a real need to lower costs, reduce absences and improve productivity. The advantages that can be gained by medical and disability claim and care management teams working together and sharing relevant information to improve health and reduce absenteeism and presenteeism (employees physically but not mentally fully engaged at work) are becoming more obvious from industry research and employment trends.

For example, consider:

• The aging work force and its impact on disability
  • By 2011, 51 percent of the labor force will be over 40.¹
  • 43% of all people aged 40 will have a long-term disability event prior to age 65.²
  • Older workers typically have longer disability durations.¹
• The rise in obesity and chronic conditions
  • 125 million Americans – 45% of the population – suffer one or more chronic conditions, expected to reach 157 million by 2020.³
  • More than 1 in 5 U.S. adults are now classified as obese based on self-reported weight, and almost one in three on objectively measured weight.⁴
  • The fastest growing causes of disability – diabetes and musculoskeletal – are associated with obesity.³
• The high costs of presenteesim and absenteeism
  • People with major depression lost an average of 27.2 productive work days annually – 68% due to presenteeism; 32% due to absenteeism.⁵
  • 75% of lost productivity costs are related to absenteeism and presenteeism, dwarfing medical and pharmacy costs.⁶
  • Unscheduled absence costs businesses, on average, more than $760,000 per year in direct payroll costs – and even more when lower productivity, lost revenue and the effects of poor morale are factored in.⁷

In addition to these trends, the results of a “Health and Productivity as a Business Strategy” study performed by the American College of Occupational and Environmental Medicine (ACOEM) and the Integrated Benefits Institute (IBI) focused on assessing the full impact of health conditions on medical/pharmacy cost as well as the health-related productivity costs of absenteeism and presenteeism. Published in the July 2007 issue of the Journal of Occupational and Environmental Medicine, the key findings of the study included:

• Health-related lost productivity costs were more than four times greater than medical and pharmacy costs.
• The full cost of poor health, including lost productivity costs, is driven by different health conditions than those driving medical and pharmacy costs alone.

Employers recognize these trends and are increasingly ready to act. CFOs are becoming more attuned to the broader impact of ill health in their companies. A 2006 survey of 269 CFOs by the Integrated Benefits Institute (IBI) shows that more than 60% of CFOs believe there is a strong link between the health of the workforce, its productivity, and bottom-line company impacts.

CIGNA’s own ongoing research also recognizes that link. CIGNA’s 2007 Integration Value Study of 40 customers provides evidence that integrating CIGNA's health care and disability programs offers employers a significant opportunity to reduce their costs and improve their medical and disability outcomes. Specifically, the study demonstrated that employees in CIGNA’s Disability & HealthCare Connect^SM program have at least a 5 percent – and up to 37 percent – greater likelihood of returning to work as a result of CIGNA’s integrated clinical activities. Please click here to obtain a copy of the full study.

All of these studies demonstrate how important it is for employers to assess the broader health-related costs in their company and take a comprehensive, integrated approach to worker health and disease management and prevention. Companies need data driven, integrated, and comprehensive proactive health solutions to understand the total impact of health and wellness on their employees’ health and productivity – and their own bottom line.

CIGNA is at the forefront of helping employers address these issues. As a leader in providing medical, health improvement and disability management programs, CIGNA offers proactive programs and resources that impact overall health and total costs with its integrated approach to employee benefits. To learn more about the research and trends in health and productivity and for your own copy of the special health and productivity issue of CIGNA’s Benefits Bulletin (which you can read here), contact your CIGNA representative.

1. US Census Bureau, December 2005
2. 2005 Field Guide to Estate Planning, Donald Cady
3. Centers for Disease Control and Prevention, 2003
4. “Increases in Morbid Obesity in the USA: 2000-2005,” Public Health, 2007
5. Prevalence and Effects of Mood Disorders on Work Performance in a Nationally Representative Sample of U.S. Workers,” American Journal of Psychiatry, September 1, 2006
6. IBI Research Insights, May 2007 – Single employer example
7. 2007 CCH Unscheduled Absence Survey

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