Poor health costs employers $576 billion

Publications including The Washington Post, Forbes and Business Insurance recently reported on the estimate calculated by the Integrated Benefits Institute finding that poor health and its impact on productivity costs the U.S. economy $576 billion per year.

In addition to showing the entire financial burden of poor health, IBI researchers found that 39 percent—or $227 billion—is due to lost productivity associated with poor health. Lost productivity results when employees are absent due to illness or when they are underperforming due to poor health (“presenteeism”—when employees are at work but not performing at their peak).

“There’s a reason that everyone in the U.S. is worried about the economy and health care,” said Thomas Parry, PhD, IBI president. “These are two fundamental issues that are tightly coupled through health’s impact on productivity, and shape our standards of living. Since this election is weighing heavily on how the candidates tackle these issues, it’s important that we recognize how they are connected. Illness costs this country hundreds of billions of dollars, and this should serve as a wake-up call for both candidates and employers to invest in the health of workers, for the sake of the people and the benefit of U.S. business."

The estimate for total U.S. health costs is calculated using the IBI Full Cost Estimator (FCE), a proprietary tool that calculates the full costs of health and productivity based on five large databases. The tool can be used to show the full health and productivity costs for a specific industry, or even an individual company. In this case, the FCE was used to calculate the costs to the entire U.S. economy.