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Absenteeism, Injury And Illness Costs Businesses

4 January 2006

Absenteeism, Injury And Illness Costs Businesses $940 Million

More than half of New Zealand’s annual corporate business spend of $1.75 billion on health care is lost through absenteeism or loss of work time through illness and injury where staff could be brought back into the workforce sooner.

Research conducted for Southern Cross Medical Care Society by TNS New Zealand Ltd shows absenteeism for workers drops from a maximum 71 days for uninsured staff to just 14 days for those covered by health insurance. Even if the worst cases were taken out of this equation, the uninsured still averaged 48 absentee days.

That amounts to around $940 million in costs for absences due to injury, illness or absenteeism with $395 million spent on ACC, just $240 million spent on private health care schemes and $140 million spent on other health care measures.

“At a time when retention of staff and making the most of their available time is increasingly important to industries coming to grips with labour shortages, the provision of health care obviously has considerable benefits to employers and staff,” says Southern Cross Healthcare Group Chief Executive, Dr Ian McPherson.

Southern Cross is the largest provider of health care services to the corporate sector in New Zealand – servicing more than 6,000 New Zealand employers (more than 354,000 New Zealand employees), and including 91 of New Zealand’s top 100 companies.

“The research shows that providing health cover and introducing corporate wellness programmes can reduce absenteeism and sick leave while assisting staff retention and reducing staff turnover.

“Private health insurance also helps manage down long-term disability costs while wellness programmes assist productivity and the general health of a company’s staff.”

The research shows that productivity from those workers waiting for treatment is higher among insured workers who are less likely to suffer from stress (about 20%) compared with 36% among uninsured workers while waiting for treatment.
Hospitals waiting times are also much less – five weeks compared to 11 weeks – for insured workers following a referral from their GP, while normal productivity from staff is reduced to 48% among uninsured workers compared to 25% for insured staff.

“Given those statistics, though the bulk of our corporate business is among the traditional white collar workers, we expect growth in the coming year for services in the blue collar sector,” says Dr McPherson.

“The wellness programmes available from Southern Cross include hearing and vision tests, functional age testing to assess your functional age against your chronological age, skin checks and flu vaccination programmes. All of those should have a significant impact in assisting a blue collar work force. We also offer health and fitness, weight management, work station assessments, smoking cessation programmes, employee assistance and executive medicals and staff health checks.

“These are all services that can be applied to any business. When you look at the breakdown of the costs of staff health care and the benefits of wellness programmes it is easy to recognise that they are just as important to productivity as injury prevention in the workplace.

“We have a workforce which is getting older and health risks increase with age, so the investment in keeping workers of all ages aware of the need for good diet, exercise and regular preventive care is well worthwhile.”


The national study was carried out by TNS New Zealand Limited and the fieldwork was completed in July 2004.

The subjects involved in the 2004 study included 200 Southern Cross Medical Care Society members who had had an operation and 76 uninsured full time employees aged 18+ who had either been to hospital in the last 12 months or were currently on a waiting list for an operation in a hospital.

About Southern Cross Healthcare:
Southern Cross Healthcare is comprised of two organisations that focus on the health sector in New Zealand:
- One organisation, the first created, is the Southern Cross Medical Care Society with over 800,000 members. It is a not for profit Friendly Society that focuses on delivering health insurance services for both individual members and group schemes.

-The other organisation is the Southern Cross Health Trust. It consists of the Southern Cross Hospitals, New Zealand’s only private hospital network and Southern Cross Travel Insurance.


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