More Employers Adopting Sweeping Health Management Programs

June 27, 2006 ( - A new survey has found that employers are increasingly implementing comprehensive workforce physical and mental health programs to not only save money but to boost productivity as well.

The survey of more than 600 for-profit and nonprofit US employers conducted earlier this year found more and more companies have broadened their focus on employee health beyond the workplace in an effort to continue battling rising medical costs as well as worker absences, according to a news release.

In fact, the study by Mercer Health & Benefits LLC and Marsh, Inc. found that health management is now widely regarded as one of the most promising cost management strategies available to employers, and most have incorporated it into their health benefit programs. These initiatives range from a piecemeal offering of health risk screenings to far more coordinated, comprehensive approaches.

The Mercer/Marsh study found that 19% of respondents with 5,000 or more employees offer a comprehensive health management program with employee outreach, reinforced by a corporate culture that supports a healthy lifestyle, according to the news release.

Among employers of all sizes, 34% offer a few voluntary health management programs; 15% offer several programs, designed to address needs at all stages of the health continuum; and 11% offer a comprehensive program. Employers with 5,000 or more employees were the most likely to offer several programs (21%) or a comprehensive program (19%), the study found.

Asked about their primary objective for the program, the greatest proportion of respondents said it was to control rising health care costs (88%), and many also mentioned promoting greater employee responsibility for health (76%). However, more than six in 10 (62%) also expect the program to reduce incidental sick leave and disability absence rates, and 60% expect it will improve overall employee productivity. For just over four in 10 (42%), a primary objective is to reduce occupational injuries.

Employers embracing health management are also looking for ways to deal with health conditions stemming from lifestyle and psycho-social factors such as obesity, diabetes, lower back pain, anxiety, depression, and risky behaviors. Of these, depression/anxiety is the category of disability that employers are most likely to say is increasing in terms of frequency of diagnosis or associated cost (43%).

"Employers are under competitive pressure to enhance productivity and control headcount," said Sue Willette, Mercer's leader for Health and Productivity Management, in the news release, "and employees living with these conditions are more likely to miss work, stay out on leave longer and be less productive on the job. By addressing the entire health continuum, health management seeks to keep healthy people healthy, to reduce lifestyle-related health risks that contribute to future costs, absences, and work-related injuries, and to help those affected improve their health and better manage their condition."

The Health Care Bill

According to the news release, a company's bill for its health management program depends on its size. Among all surveyed, the median total annual budget for the program was $25,000. Among those with 5,000 or more employees, it was $200,000. On a per-employee basis, employer spending ranged from $5 or less (27%) to more than $300 (5%). Fifty-four percent of companies of all sizes spend over $20 per employee annually on these efforts.

Reflecting the trend toward greater integration and simplification in absence programs, employers are increasingly combining incidental absence/sick days and vacation days in paid-time-off banks, or PTO plans: 37% now do so, up from 36% in 2004 and 29% in 2003. These plans are most common among health care organizations (70%) and financial service firms (46%). An additional 2% offer a PTO plan that does not include incidental absence days. Over one-fifth of respondents (21%) that are not currently offering a PTO plan are planning to implement one or are considering it.

A report on findings from the Mercer/Marsh Survey on Health, Productivity, and Absence Management Programs 2006 will be available July 31 and may be purchased for $250 at or by calling (212) 345 2451. The study was jointly conducted in the winter of 2005/2006 by Mercer Health & Benefits LLC and Marsh, Inc., both operating units of Marsh & McLennan Companies (MMC). The 611 survey respondents range in size from 100 employees to more than 10,000 workers.