Think the Wall Street credit crisis is bad for business?

Well, you ain’t seen nothin’ yet! I heard a commentary on NPR where an economist being interviewed referred to health care as a “train barreling down on the US Economy.” And while everyone is busy untying the maiden that is the finance industry from the tracks, our back is turned to the real threat chugging toward us with increasing speed.
At $700 billion the current financial bailout is roughly equivalent to 5% of the US GDP. That’s chump change compared to the more than 16% of GDP (yes, that’s over $2.2 trillion) the US spent on health care in 2007. Pop quiz: What’s 34% of 2.2 trillion? Trick answer: The portion of the health care bill that is
paid by business. The costs of poor health are outpacing wages, inflation and GDP. By a lot. According to the
Kaiser Family Foundation Health care spending has risen about 2.4 percentage points faster than GDP since 1970.
The train shows no signs of slowing. The Centers for Medicare and Medicaid Services projects that by 2016 health care spending will be over $4.1 trillion, or, about 20% of GDP. Okay now do the math again! What’s 34% of $4.1 trillion? Answer: If you are planning to be in business in 9 years then we better get this credit crisis solved or you won’t be able to borrow enough money to pay for health care expenses!

Oh and by the way, this is all happening at a point where growth in corporate profits is on the decline and American productivity has reached an all time high – holding steady after impressive gains. In
its annual report the International Labor Organization stated “The difference in [productivity] rankings can be explained by the fact that annual working hours per person employed are considerably higher in the United States than in the majority of European economies.” Unless business plans on lobbying for more hours in a day, their best bet for improving worker productivity will be investing in worker health.
In a
study funded by the RAND Corporation, Soeren Mattke and his colleagues stated that “Annual US health-related productivity losses are estimated to reach some $260 billion, attributable not only to absenteeism but also to presenteeism (being present at work but working at a reduced capacity)”. Yes, you did the math correctly, that is $10 billion more than the current infusion of cash that the US treasury will be putting into American banks, but this number directly impacts business’ bottom line!
The Centers for Disease Control and Prevention (CDC) says
chronic diseases are responsible for 75 percent of the $2 trillion spent on health care in 2005. Such diseases can be dramatically improved by things like: better diet, exercise and self-care.
A study published in the Archives of Internal Medicine showed that if you took all of the Americans who: do not smoke, maintain a healthy weight, consume five or more fruits and vegetables per day, and exercise the surgeon’s general’s recommended 30 minutes 5 days per week, you’d have a whopping 3% of the US population.

So what do
employees’ health habits have to do with business?!? Quite a bit as it turns out. American workers spend close to 2,000 hours per year on the job. At the end of a long work day, a half an hour commute and a family waiting to be fed, how many people are realistically going to change and head back out to exercise for 30 minutes? Would you?
If we are going to stop this train then
Americans need help with their health. Serious help. Currently the place where they spend the majority of their waking hours is not effectively reinforcing healthy behavior. When it comes to employee health you are competing against things like: physical exhaustion, donuts, prepared foods, comfortable couches, a pack of smokes, and beer! Your savviest competitor’s slickest product has nothing on beer!
If you are busy freaking out about the credit crisis and have relegated employee health to some dark little corner of your organization where the sad, unimaginative and ineffective solutions proposed to reverse the state of your workers' health fly in the face of reality, then good luck with that and we’ll see you in the bread line in 2016.
Labels: bailout, cost of health care, employee health