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Costs Of Workplace Illness & Absenteeism $3b

New Zealand industry is suffering hidden costs of between $2.5 - $3 billion a year through workplace absenteeism and a subsequent loss of productivity, says one of the country's leading specialist health insurers.

Often, these are "unrealised" costs that are trending further upwards and are now impacting directly on company bottom line profitability, says Aetna Health (NZ) Limited chief executive, Steven Goldberg.

Goldberg say that while quantification of the real costs of absenteeism and lost productivity is a difficult process, studies by his company, coupled with first hand claims experience, reveal what he describes as "quite disturbing and staggering" numbers.

"What we are seeing emerge is a kind of new age medical plague that involves personal as well as material cost, in lost competitiveness and lost productivity caused directly by illness and injury."

He says much of the real costs remain hidden because they accrue downstream from any illness or injury suffered by an individual. While direct costs, in salary or wage related terms can be tracked and managed, it's the flow-on impacts which can see them rapidly escalate.

He examples a situation where the absence of a senior supervisor on a log milling line because of treatable back injury resulted in four days production of less than economic timber cuts that cost the company thousands of dollars.

Goldberg says that while New Zealand industry has made considerable advances in injury and illness prevention, particularly over the last five years, the tools have not necessarily been available to measure or protect against any flow-on effects.

"Our discussions with companies employing large workforces show a strong desire on their part to offer assistance more than just prevention education, to get people back to work as quickly and effectively as is possible after illness or injury. For most, this is not just a consideration of productivity, but equally, one of staff welfare."

He says Aetna is taking on the challenge to provide the tools and assistance to enable businesses to better and more comprehensively manage all the impacts of at work illness or injury situations.

"This means not just an offering of risk management or insurance, but a more lateral, comprehensive approach that for the first time integrates these elements with prevention and education programmes and case management."

In effect, says Goldberg, that means delivering to employers a total 'self-help' programme that combines cost control with higher levels of staff welfare assistance through professional risk management, injury prevention, education and rehabilitation programmes.

Pulling such a comprehensive programme together will be a 'first' for New Zealand, but Goldberg says Aetna is already well down the track towards introduction.

"I believe the programme we are now putting final touches to could be one of the biggest breakthroughs in staff welfare and cost control that business has seen for some time."

Stand-alone, clawing back any part of the estimated $2.5 to $3 billion a year in lost productivity from illness of injury would have to have appeal to any business.


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