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When social ills arrive at work

Experts quantify the financial impact of employees' personal woes

By Stacy A. TeicherStaff writer of The Christian Science Monitor / May 19, 2003



Alcoholism. Drug abuse. Domestic violence. The consequences inevitably show up on the job, whether it's a day missed for a hospital stay or shoddy work because of a hangover.

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But these problems are often hidden from employers - along with the costs to their business.

That's why researchers have decided to step in with some hard numbers. Their aim: to show corporate leaders that giving employees access to confidential screening, counseling, and treatment wouldn't just be altruistic - it is likely to save them money.

One such initiative is the Alcohol Cost Calculator - a free tool placed online earlier this month by a group at the George Washington University Medical Center. It crunches data for 10 industries based on the number of employees plugged in (and can be found at www.alcoholcostcalculator.org).

On the domestic-violence front, a three-year study beginning this summer at the University of Arkansas will measure the costs associated with victims and batterers.

The hope is to raise awareness with these numbers, an important first step that could deepen discussion of how workplaces can be part of the solution.

"Everyone knows that we have underfunded coverage for behavior health issues," says Becky Cherney, who chairs the National Business Coalition on Health. But the problem has been hard to quantify, and the indirect costs have been "the missing piece," she says. "Alcohol is a perfect example. What does it cost in absenteeism? What does it cost in social capital?"

Problem drinkers make up 7.4 percent of the workforce, take a total of 51 million extra sick days, and rack up $26 billion in healthcare costs, according to the GWU project, Ensuring Solutions to Alcohol Problems.

The cost calculator brings those numbers down to a scale that's easier for individual company executives to get their heads around.

A company with 1,000 employees in the manufacturing sector, for instance, is likely to have 65 employees and 127 employee family members who are problem drinkers. They account for 541 days of lost work, 53 extra nights in the hospital, and $22,708 worth of emergency-room visits. The numbers are based on an analysis of federal health and substance-abuse surveys of more than 50,000 adults.

Ensuring Solutions also offers suggestions (and supporting statistics) for how companies can help people turn around drinking problems, or catch them in their early phases.

"We have extremely effective, well-researched treatments for alcohol-use and alcohol-abuse disorders, so these are terrific places for companies to look when they are feeling the pressure of rapidly increasing health premiums and the pressure to increase productivity," says Eric Goplerud, director of Ensuring Solutions.

About three-quarters of the health plans at US companies have inequitable coverage for alcohol problems, such as higher copayment rates or caps on the number of treatments, Mr. Goplerud says. To upgrade the plans would cost companies $1 to $5 a year for each employee, according to various estimates.

One avenue for confidential access to referrals and counseling is an employee-assistance plan. EAPs grew out of a grass-roots movement in the 1970s among recovering alcoholics who wanted to help co-workers, says Margaret Altmix, president of the Employee Assistance Society of North America.

About 48 million Americans have an EAP in their benefits package, according to Ensuring Solutions. The growth has come in part because the stigma attached to using such services is fading, says Robert Kneip, president of Oasis Outsourcing in West Palm Beach, Fla., an EAP provider for 1,500 small and midsize companies.

These plans often address everything from mental health to legal needs. About 20 percent of voluntary EAP referrals relate to substance abuse. That figure rises to between 50 and 78 percent for referrals by managers who are concerned about someone's job performance, says a Boston University report.

As employers design health plans and EAPs, they want to know what return they'll get on their investment. So calculations of the costs of certain problems and the effectiveness of interventions are useful, Ms. Cherney says.

After a review of nearly 50 studies, for instance, Ensuring Solutions found returns ranging from $4 to $23 for every dollar spent on treatment.

But those numbers may not be enough to shift attitudes. In some cases, there's simply a "can't-happen-here syndrome," Mr. Kneip says.

Especially when it comes to domestic violence, even employers who take the issue seriously are at a loss about what to do when its effects spill into the workplace. "There's a sense like, 'We shouldn't get involved, maybe we'd be liable if we didn't do something,' " says Amy Farmer, an economics professor at the University of Arkansas Sam M. Walton College of Business.

Ms. Farmer and her colleagues from several universities plan to survey the employees and managers of large firms that confidentially volunteer. They will ask not only about lost productivity, medical expenses, and job turnover, but also about ways workplaces can be more supportive to victims.

Sometimes, Farmer says, it can be as simple as giving a woman the chance to request confidentially that her paycheck not be handed over to her husband if he drops by to pick it up.

Because economic power is so important to women's ability to leave abusive relationships, "the workplace is a big part of the solution," Farmer says.

Yet as businesses feel the squeeze of ever-higher costs for basic protections such as workers' compensation and standard medical benefits, offering more assistance could be a tough sell.

"Ultimately," Kneip says, "it boils down to How much more can an employer absorb in this economy?"

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