Employee Health Care Cost

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Today in many Indian companies a major portions of its budget is allocated towards employee health care cost. It is estimated that for many private companies, 25% of the net profit before tax goes into paying the health benefits of the employees and their families. The bottom line is that unhealthy employees cost a lot of money to the companies. Not only do they have the greatest medical bills, they also are absent more often and are less productive. (Dorman, Peter, 2005). The private companies are also burdened by the fact that the public health services in India does not provide comprehensive health services like how the NHS does.

If protection of the employees pays, then protection and health pay more. The progress of inclusive health management systems can save millions of rupees, lives and lost work hours. The traditional view especially in Indian companies regarding an employer's responsibility towards employee health was that, a company should provide periodic physical examination, continue to pay an employee's salary during illness and secure hospitalization benefits for its employees. In today's world the health promotion programs at the worksite within private companies are increasing drastically that the employees are recognizing the positive relationship between healthy employees and a productive business organization. This is the reason why “worksite health promotion” activities are on the rise as it offers benefits to everyone involved. In turn this also reduces interventional health costs.

Health programmes at the worksite basically aim at protection of health of employees. Though this is its basic function, the workplace health programme should also endeavour to promote the physical and mental well-being of the worker. Obviously a healthy worker is also an efficient and productive worker. The workplace heath programme will thus be a means to achieving better productivity.

From the perspective of the employees the worksite disease prevention and health promotion activities are particularly valuable because they are convenient to attend and usually inexpensive. Health information is easy to obtain and in some cases it is designed to meet the interests and needs of the employees concerned. Co- workers who are involved in health promotion programs can motivate and provide support to each other to change health behaviours within the organization and this in turn adds value not only to the workplace but also to the lives of the employees.

Adding value to the workplace: since an employee spends most of his/her productive years at the workplace, there is no other ideal place for health promotion and preventive activities than at the workplace. Employees who are safe, satisfied and productive are further expected to stay in their jobs for a longer period and do better work. This decreases expenditure connected with training and production, increases the value of the business and improves the environment in which it operates.

Adding value to life: many employees view work as a way to safeguard and persuade the value and purity of their lives and those of their family members. However, while at work there are possibilities of getting injured or fatigue. Thus work place injury and illness can have a significant blow on the employee's quality of life, upsetting personal income, mental health and family well being. The opposite is true for safety and health workplace hence it is vital for the organization to empower the employees about occupational health. (United States Department of Labour, 2009)

Occupational health is essentially preventive medicine. The joint international labour organization and world health organisation committee on occupational health indicate that, in the course of its first session gave the following definition “Occupational health should aim at the promotion and maintenance of the highest degree of physical, mental and social well being of the workers in all occupations; the prevention among workers of departures from health caused by their working conditions; the protection of workers in their employment from risks resulting from factors adverse to health; the placing and maintenance of the worker in an occupational environment adapted to his physiological and psychological equipment and to summarise the adaptation of work to man and of each man to his job. Severe mental health consequences can result predominantly for workers who are out of work for a year or more following an injury or an illness. Several individuals experience a sharp sense of susceptibility, grief, rage, shame and pressure. This pressure can cause added damage and illness compounding the initial crisis. .” (United States Department of Labour, 2009)

It is imperative for organisations to provide proper attention to worker's health. WHO recognises that it is very important to strengthen the key aspects of occupational health and focus on providing basic occupational health services.

As indicated by WHO (2009) health and safety has far-reaching benefits such as:

  • Healthy workers are productive

  • Workplace health risks are higher in the informal sector and small

  • Safe and healthy workplaces contribute to sustainable development

  • Workers, communities and the environment need to be protected from pollution and exposure reduction.

  • Pollution and many environmental exposures that are harmful to health occur from industrial processes. These can be subjective by occupational health and safety programmes

  • Improvement in the employability of workers can be achieved by occupational safety and health by maintaining a healthy and safe environment, workplace redesign and periodic health screening and assessment.

  • Occupational health is essential to public health, for it is ever clearer that major diseases (e.g. AIDS, heart disease) need workplace programmes. (WHO, Occupational Health, 2009)

Occupational stress can cause emotional, physiological and behavioural exertion such as mood and sleep disorder as well as strained relationships with colleagues, family and friends. These factors considerably have an effect on the employers as well. Since health care expenditures are practically 50% higher for workers who account high stress levels, addressing the problem can also drastically reduce employer expenditures.

Though occupational diseases go unrecognized in a large number of Indian industries, common health problems at work can be tackled effectively by curative, preventive and programmes. This reduces the cost of future interventions, reduces sickness, absenteeism, preserves life and promotes successful, vibrant and healthy lives. Overall reducing injuries and illness in the workplace promotes emotional physiological and behavioural health. (WHO, Occupational Health, 2009)

Society has an obligation to safeguard the health of the other worker engaged in diverse occupations. This has grown out of the realization that the workers are more important than the machine he/she operates. The worker cannot be permitted to endanger his/her life and limb in an occupation. Factory laws therefore have been framed in most of the countries to govern the conditions in industry and to safeguard the health and welfare of the workers. The most important factory law in India today are the Factories Act, 1948 and the Employees state insurance Act, 1948. The ESI Act passed in 1948 (amended in 1975, 1984 and 1989) is an important measure of social security and health insurance in this country. It provides for certain cash and medical benefits to industrial employees in case of sickness, maternity and employment injury. The provision of ESI (amendment) Act of 1975 was extended to newspaper establishments. The Act has made provision for benefiting both the employer and the employee. (ECI ACT, CC India.org, 2005)

According to the amended ESI Act of 1975, it is the primary responsibility of the employer to educate the employees on health and to provide all the facilities necessary for their medical care. The primary objectives of industrial medical services are to ensure that the amount of time lost through accidents and illness is reduced to the minimum. A good medical service will help improve job satisfaction and productivity. Health service in industry is more preventive than curative.

Since a healthy worker is a basic requirement of the organization, it is incumbent on the part of the employer to look after the health of the worker and to provide facilities and conveniences that would ensure minimum health standards. Although the law prescribes the minimum standards only, a progressive employer must go further to protect the health of the workers and their dependents.

According to world health organizations, the global strategy on “Occupational health for all” will yield an immense impact on the health and safety of workers in the long run. The leading principle of this strategy is that “Every citizen in the world has a right to a healthy and safe environment and to one that enable socially and environmentally productive lives. It means that for a healthy life of every citizen, safe, comfortable and clean work environment is a necessity. (WHO report, 2005)

“It makes sense to run an effective safety and health program because your people deserve it, your customer's demand it and your business practices and future won't be there without it” (Training and education in occupational Hygiene,1986.)

At the Hindu (India's National Newspaper), the management since its inception in 1878, has always been concerned and committed to providing healthcare of the highest order. The Hindu has always had its reimbursement policy in place which enabled the employees to seek private health care and get reimbursed for the actual amount spent.

Escalation of health care cost challenged the management to provide right health care at the right time with the highest level of quality. At the same time they also recognized that employee's health and well-being as a significant business risk challenge. Therefore The Hindu Health Centre was an initiative to improve health and productivity in a manner that fit their business strategy. The Welfare Centre was started in 1994 with the objective of providing comprehensive healthcare and to propagate preventive aspects of health to the employees. The services of the welfare centre are specifically customized to meet the health needs of the employees. The Welfare Centre at the Hindu offers an opportunity to take steps in preventing illness and achieving positive health. Since most of employee's time is spent at the work place it is imperative for them to stay healthy hence they benefit when the management provides health facilities. It is a known fact that the need for health promotion programmes are on the rise hence the management at The Hindu have also recognized and realized the positive relationship between healthy employees and a productive business organization.

In this study the aim is to evaluate the existing reimbursement pattern in The Hindu and use it to analyse with the services provided by the welfare centre. Furthermore this study would look into the health seeking behaviour of employees in The Hindu, study the financial burden on the organization due to medical reimbursement and it will also study the referral system in bringing down the reimbursement expenditure. The methodology adopted to analyse the above said research objectives are the questionnaire and interview methods. Also a detailed description of the methodology, objectives and data collection undertaken in this present study will be discussed in separate chapters. The present study also offers comprehensive findings from the analysis and provides valuable recommendations to The Hindu.