Why savings estimates for improved health miss the big picture. Entry 3 – 2010


To see wonderful illustrations of why the “good health = lower cost” equation is an oversimplification of reality, take a peek at the contents of the past two issues of the Journal of Occupational and Environment Medicine.

First, there are several articles reinforcing the widely-accepted direct link between health status and the cost of healthcare.

Four studies show that people WITH a health condition have higher costs than those WITHOUT the condition. Patients with diabetes, fibromyalgia, low back pain and poor sleep, have higher costs and/or absences than patients and workers without those conditions (1, 2, 3, 4).

But that’s just the tip of the iceberg. A potpourri of other studies reminds us how complex the topic really is:

 REDUCING a significant risk factor did not produce lower costs or absences over a two-year period. A successful weight-loss campaign did not produce any cost savings in the next two years following the study, leading the authors to caution against expectations of a positive short-term ROI (5).

The length of absence due to an injury depends largely on the doctor. This study found that 3.8% of physicians in Louisiana accounted for 72% of all workers’ compensation costs (6). Patients who chose—or happened to have treatment from—“cost intensive physicians” could expect to have five times higher costs, even after adjusting for age, sex, medical condition, and other factors. The remaining 96% of doctors seeing workers’ compensation cases accounted for only 28% of costs.

Individual beliefs affect the number of absences for back pain. Workers who have high levels of fear-avoidance beliefs (FAB), beliefs that work will lead to pain, are absent more than workers with similar pain severity but low FAB (3).

 Health improvement alone does not improve return-to-work following extended absence. European researchers found that improved health did not guarantee return to work, especially when certain psychosocial factors—like depression and low self-efficacy— and work factors were present (7).

Companies which self-insure their workers’ compensation benefit have fewer employees who are injured. After controlling for a large variety of other factors, authors concluded that companies that directly manage their experience rating invest more effectively in prevention and reduce injury rates (8).

Putting it all together, we see that—yes—having a condition generally makes a person more expensive than others without the condition. But, changing one’s health condition (such as obesity) does not easily translate to healthcare cost or absence reduction. Indeed health improvement may not save money or result in someone coming back to work if a) they believe their work is harmful, b) they dislike or have conflict at work, or c) they choose a doctor who prefers longer, more expensive treatments. Finally, a company’s commitment to prevention and safety today is driven in part by the financial risk it carries for injuries tomorrow.

How meaningful are studies that attribute costs and absences to illnesses without consideration for these other important factors?

One can’t help but question what we are really measuring when we attribute costs (9) and absences (10) to a medical “cause” such as back pain. What does the cost of illness really mean? Given the complexity, we know the cost isn’t just about necessary medical care but also about the care and lost time that a person:

• believes he needs,
• is afraid he needs,
• lacks the confidence to manage himself,
• has been advised by his specific providers he should get,
• uses instead of facing difficulties at work,
• has incentive to consume,
• hasn’t prevented himself from needing, or
• seeks in conjunction with related issues (including mental health).

If all of the components included in this list define the “true cost,” it is no wonder that we can’t attribute “savings” to a simple reduction in any one condition or its severity. These studies clearly tell us that health improvement is only meaningful in a broader context of life, work, treatment recommendations, and personal beliefs. Improving health is a worthy goal in itself—but for a variety of reasons nicely illustrated in these recent Journal issues—cost savings will not be a certain result.

Why this matters: When we oversimplify the problem of health costs, we risk being disappointed when investments in health programs don’t bring the savings we expect. While there is no shortage of calls for programs that promote “health improvement,” that only gets us so far toward any goal of cost containment or absence reduction. Therefore, the right approach must reach beyond a condition-specific focus, and provide personal expertise, aligned incentives, education, and support to the ‘whole’ person and her or his family.


1. Durden, E. D.; Alemayehu, B.; Bouchard, J. R.; Chu, B. C., and Aagren, M. Direct health care costs of patients with type 2 diabetes within a privately insured employed population, 2000 and 2005. J Occup Environ Med. 2009 Dec; 51(12):1460-5.

2. Kleinman, N.; Harnett, J.; Melkonian, A.; Lynch, W.; Kaplan-Machlis, B., and Silverman, S. L. Burden of fibromyalgia and comparisons with osteoarthritis in the workforce. J Occup Environ Med. 2009 Dec; 51(12):1384-93.

3. Jensen, J. N.; Karpatschof, B.; Labriola, M., and Albertsen, K. Do fear-avoidance beliefs play a role on the association between low back pain and sickness absence? A prospective cohort study among female health care workers. J Occup Environ Med. 2010 Jan; 52(1):85-90.

4. Rosekind, M. R.; Gregory, K. B.; Mallis, M. M.; Brandt, S. L.; Seal, B., and Lerner, D. The cost of poor sleep: workplace productivity loss and associated costs. J Occup Environ Med. 2010 Jan; 52(1):91-8.

5. Finkelstein, E. A.; Linnan, L. A.; Tate, D. F., and Leese, P. J. A longitudinal study on the relationship between weight loss, medical expenditures, and absenteeism among overweight employees in the WAY to Health study. J Occup Environ Med. 2009 Dec; 51(12):1367-73.

6. Bernacki, E. J.; Tao, X., and Yuspeh, L. The impact of cost intensive physicians on workers’ compensation. J Occup Environ Med. 2010 Jan; 52(1):22-8.

7. D’Amato, A. and Zijlstra, F. Toward a climate for work resumption: the nonmedical determinants of return to work. J Occup Environ Med. 2010 Jan; 52(1):67-80.

8. Asfaw, A. and Pana-Cryan, R. The impact of self-insuring for workers’ compensation on the incidence rates of worker injury and illness. J Occup Environ Med. 2009 Dec; 51(12):1466-73.

9. Martin, B. I.; Deyo, R. A.; Mirza, S. K.; Turner, J. A.; Comstock, B. A.; Hollingworth, W., and Sullivan, S. D. Expenditures and health status among adults with back and neck problems. JAMA. 2008 Feb 13; 299(6):656-64.

10. Guo, H. R.; Tanaka, S.; Halperin, W. E., and Cameron, L. L. Back pain prevalence in US industry and estimates of lost workdays. Am J Public Health. 1999 Jul; 89(7):1029-35.


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