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Company Policy May Contribute to Health Impact on the Bottom Line

Insurance, Time Off, and Other Policies Affect Business Outcomes.

by American College of Occupational and Environmental Medicine
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Human resources policy in areas such as health insurance benefits, paid time off, and compensation are important "missing variables" in studies connecting health and business outcomes, according to a report in the January Journal of Occupational and Environmental Medicine, official publication of the American College of Occupational and Environmental Medicine (ACOEM).

“Because these policies have been largely ignored as potentially confounding variables, the industry cannot determine the degree to which the connection between health and business has been under- or over-estimated," write Wendy D. Lynch, PhD, of Lynch Consulting, Ltd., in Steamboat Springs, Colo., and Bruce W. Sherman, MD, of Employers Health Coalition, Inc., in Canton, Ohio.

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Many studies have evaluated the effects of employee health on business outcomes, such as medical costs, absenteeism, and productivity; but few have considered the effects of key policies affecting the corporate environment, such as:

  • Health insurance benefit design. For example, cost-sharing in the form of higher copayments can have a "relatively large" effect on costs to employers.
  • Paid time off. "Other things being equal, the more lenient the rules and the more generous the allowance, the more absences workers will have," the authors write.
  • Compensation policy. For example, compensation based on performance can lead to substantially higher productivity.

Transitions and turnover and full-time versus part-time status are other areas of company policy contributing to variation in estimates of health effects on costs and other outcomes. Corporate health researchers should account for or measure the effects of these policies in future studies, Drs. Lynch and Sherman believe. They add, “With changes in employment and benefit practices resulting from healthcare reform, consideration of these largely neglected variables has become increasingly important.”