Your employee called in sick again today.

It's the third time this month and, while you empathize with the pressures most people are under (bills, family obligations and a slowing economy) as an employer, you also have a bottom line. Miss that budget and everyone might be out of a job.

The solution: Incorporate a health plan into the company. And the solution doesn't have to cost a pretty penny - in fact, according to Carol Timmings, director of planning and policy at Toronto Public Health, it doesn't have to cost the employer anything at all.

According to Benefits Canada, an industry magazine, each occurrence of absence costs an employer an average of $2,500 in direct and indirect costs (based on nine days absent out of 250 working days and an average payroll of $35,000).

Health Management Research Center at the University of Michigan


A 2007 report by Watson Wyatt, titled Staying@Work Canada, found that mental-health issues are the leading cause of both long- and short-term disability claims - 72 per cent and 82 per cent, respectively. Despite the prevalence of these health issues, only 15 per cent of companies conduct mental-health assessments.

"We have solid research showing that unhealthy work environments lead to psychological disengagement and an increased desire to want to leave," says John Yardley, managing director of the Workplace Health and Research Laboratory at Brock University in St. Catharines. Yet few companies are implementing plans to address this situation.

Timmings' answer - to both a reduction in absenteeism and the rising cost of health plans - is to focus on prevention rather than treatment.

While she does not write off the corporate benefits package, she doesn't believe this is the only way to address employee and employer concerns. "Every company needs to look at the primary issue or issues and then tailor their health plan to (those issues) ... And stay away from 'heavy health care' wherever possible," she says.

For Timmings, "heavy health care" is the expensive benefit plans predominantly used by large corporations. They are "heavy" because they are often expensive, putting them out of reach for most small- or medium-sized Canadian businesses, and focus on treatment rather than prevention.

Instead, Timmings suggests that companies of all sizes focus on prevention - which can be accomplished "with little to no budget, if necessary."

This is welcome news, particularly when the World Health Organization's (WHO) is predicting more than two million Canadians will die of chronic illness, such as cancer, in the next 10 years.

Preventive health-care planning has little to do with the budget and more to do with good management practices, says Timmings. "Good management practices are positively linked to the triple bottom line: Profit, health and social value, (which) results in healthy, loyal employees."

Dee Edington, director of the Health Management Research Center at the University of Michigan, has the data to support Timmings' assertion.

Speaking at an Ontario Hospital Association conference last month on the intersections between business and health, Edington explained how the focus of health management has led to the highest illness and absenteeism statistics since the implementation of benefit plans.

"The health-care strategy since World War II is to wait for people to get sick, treat them and then make a lot of money," says Edington.

"That means for 60 years, all we thought about is high risk - but, with the transition to older ages, all these costs will increase."

It's what Edington describes as an "expensive formula that is not achieving its aim."

For him, the solution is to integrate health into the company culture - "it's too important to be tied into company benefits."

Working with large companies, including Australian Health Management Corp., General Motors, JPM Chase and Kellogg, Edington and his team have processed and analysed statistics for almost two million employees.

"We work with large companies to get the large databases and then apply this information to small and medium-sized businesses, where most people work."

This strategy has helped the U of Michigan's Health Management Research Center become an authority on the impact and costs of health issues on productivity.

According to Edington's research, the top health problems that prompt absenteeism and health-plan claims are: Allergies (33.2 per cent), back pain (26.9 per cent), cholesterol (16.2 per cent), heart burn/acid reflux (15.2 per cent), blood pressure (14.5 per cent), arthritis (14.5 per cent), depression (10.7 per cent), migraine headaches (9.4 per cent), asthma (seven per cent) and chronic pain (6.4 per cent).

"We are always looking towards disease and what we need to do is switch it around and look at prevention," says Edington. "This requires a major change in mentality."

Rather than focus on diseases and the treatment of diseases, Edington suggests companies develop health plans around "health risks."

His research identified the top health risks to employees and employers: Body weight (41.8 per cent), stress (31.8 per cent), proper equipment use (28.6 per cent), increased physical activity (23.3 per cent), blood pressure (22.8 per cent), life satisfaction (22.4 per cent) and smoking (14.4 per cent).

While Edington admits that not all employees will change and adapt to healthier preventive lifestyles, he does say that even a change in a relatively small percentage of employees will result in substantial savings, increased productivity and morale.

Timmings offers these no- or low-cost options for businesses when developing health plans:

* Establish a workplace pedometer challenge: Create a friendly competitive walking challenge by establishing teams in the workplace.

Every day these "walkers" meet in one place to go for a 20-minute walk, when they track the number of steps they took using a pedometer. Record the daily totals for one month and then award nominal, healthy prizes (a box of tea, gift certificates to a grocery store, etc.) at the end of the contest.

* Create a health promotion survey and send it out to all employees. Then establish a healthy workplace steering committee, which is employee driven and has executive and management support.

This committee can then review the surveys and develop onsite and at-home strategies for helping their workforce develop healthier behaviours.

* Create a wellness newsletter.

* Schedule a free, consultative meeting with your municipal public health department or health unit to determine materials, tools and options you have as an employer in developing a non-benefits inspired health plan.

* Provide membership, or discounts to membership, at health or sports clubs.

* Provide vaccinations or at-work seminars from health and wellness groups.

Laura Young, global chief operating officer of wellness for U.S.-based investment, banking and securities firm Goldman Sachs, attests to these and other initiatives.

Speaking at the Navigating the Landscape for Employee Health seminar at the Toronto Board of Trade recently, Young provided an overview of what her firm has done to increase employee wellness and decrease costs.

"We invested in flu vaccinations, fitness memberships, child care and onsite medical visits," she said.

Since the operating cost of the four initiatives amounted to $1,196,545, and the company avoided $3,975,496 in health-related costs due to absenteeism and health claims, the resultant savings equalled $2,778,951.

"Where employers can play a big role is connecting employees to institutions that can help," says Michael Decter, a Harvard-trained economist, author of Navigating Canada's Health Care System (2008) and a leading expert on health systems.

By playing the connector role, employers can alleviate the cost of absenteeism by helping their employees stay healthier longer.

"If you do this well, then, for example, most of the two million diabetics could manage on diet and exercise. If you don't do this well, these diabetics become insulin dependent, which is a chronic disease" that can erode a company's bottom line.

Decter also advises employers to demystify the benefits available to employees - both employer-provided and those available in the community. For example, every pharmacist will do a drug review with a patient, for free, to ensure they are on the right medication, the right dose for their condition and budget, he says.

"The patient journey through the health-care system is not well supported and this is where they lose time from work, waiting for tests, surgery and the like," says Decter.

By focusing on communication and prevention, he says, we could reduce or eliminate the overall cost to patient, taxpayer and employer.

"We need to have these conversations."

(Romana King can be reached a king@businessedge.ca)