Providing health insurance to employees costs businesses, but so do preventable chronic health disorders leading to excessive absenteeism and/or lost productivity. Businesses in the US with 50 employees or more are required to offer health insurance to them or face federal tax penalties. Meanwhile, research findings published in Preventing Chronic Disease in 2016 noted that annual absenteeism costs ranged from $16 - $81 per employee for a small employer, and $17 - $286 per employee for a large employer. For this reason (and many others), managing healthcare-related expenditures is vital for businesses in order to remain profitable. Increasing employee access to telehealth is a strategy that can aid businesses to reduce employee healthcare service needs while curbing business healthcare expenditures. 

Unhealthy employee lifestyles and the link to increased business healthcare costs

Obesity, smoking, and alcohol abuse are all widely recognized to be damaging to health. Among the 23% of all employed adults who smoke, 37% smoke 20 or more cigarettes each day. Obesity, smoking, and alcohol abuse are all linked to a significantly increased risk for heart attack (per the American Heart Association). Additionally, alcohol abuse is a contributing factor for obesity. Besides heart disease (a leading cause of disability and premature death), obesity, smoking, and alcohol abuse all are linked to a heightened risk for diabetes (Type 2). 

The average (mean) cost for hospitalization due to heart disease is $10,737 – $17,830 per hospitalization (according to an article in 2022 in the Journal of Managed Care & Specialty Pharmacy). The annual cost for the treatment of solely diabetes in an adult afflicted with diabetes (Type 2) is around $9,601. Therefore, enabling employees to receive health education and participate in health prevention workshops via telehealth to address unhealthy lifestyles that can lead to a chronic disorder – which can then result in disability that increases workplace absenteeism – makes good sense for a business. 

For the large number of employees living with diabetes (Type 2), utilizing telehealth in combination with digital health devices can promote better diabetes control. In turn, this can prevent worsened overall health and the development of such diabetic complications as neuropathy (nerve pain) and kidney failure. 

Group health insurance rates for businesses and employee healthcare utilization

The annual rate that a business pays for group health insurance is largely determined by the insurers’ prediction of the costs associated with healthcare utilization (by employees of the business) that will be borne by the insurer. This is also the case for disability insurance rates. Therefore, businesses that have a high percentage of employees with diagnosed chronic health disorders (such as diabetes or hypertension) are more likely to be charged a higher annual rate for group health insurance (as well as disability insurance) coverage. This is yet another reason that preventing employees from developing chronic disorders is important for curbing annual business expenses. 

The Milken Institute reported in 2018 that the following are the most expensive chronic health conditions in terms of national direct costs: 

  • Diabetes ($189.6 Billion in total) 
  • Alzheimer’s disease ($185.9 Billion in total) 
  • Osteoarthritis ($115.5 Billion in total) 

Mental health distress is also linked to the development of chronic health disorders (as well as an increased risk for workplace injury and overall lowered productivity). Therefore, enabling employees at increased risk for a diagnosed mental health disorder to talk to a therapist is an excellent strategy to curtail related healthcare service costs. By reducing the need for employees to travel to appointments with clinicians (requiring a greater time period away from the workplace than a telehealth visit), maintaining usual workplace routines and overall productivity is more likely. 

Lowered cost of telehealth versus in-person physician office visits

Insurance billing for an in-person office visit can be for more than just the visit with the physician or other clinician. A “facility fee” may be charged if the physician does not own the facility (and this is a common practice among hospital-run outpatient offices). In contrast, telehealth visits do not incur this added cost. However, a primary reason that telehealth can result in lowered healthcare expenditures by businesses is that acquiring help from a healthcare provider via telehealth for an illness/injury experienced by an employee while not at work (such as in the home environment) is more likely to lead to taking the correct action to prevent it from worsening.  

For example, an employee who has sprained an ankle may learn through a telehealth appointment (using videoconferencing software) that applying ice right away and then wrapping the ankle with an ace bandage can speed up healing. In this way, the employee may not need to remain away from the workplace to heal for as long as otherwise. Likewise, an employee unsure of whether to take a daily medication with (or without) food can acquire an answer utilizing telehealth, rather than incorrectly taking the drug and consequently developing an untoward symptom. 

Digital devices that keep track of glucose level, heart rate, sleep quality, daily calorie intake, and prescribed medication adherence – and that enable a person’s healthcare provider to receive the recorded data – can be combined with telehealth visits to maintain (and improve) health. 

Contact Ōmcare to learn more about our digital health solutions, and how these can help your business.