Letter from the CEO
Dear Friends:

U.S. employers significantly underestimate the overall costs of poor employee health—that's the upshot of a new study that appears in the July issue of the Journal of Occupational and Environmental Medicine, according to a recent article on CNNMoney.com (“Poor Employee Health Costlier Than Employers Think,” July 10, 2007).

Basically, the study found that the indirect costs of poor employee health have a huge impact on the bottom line. (Indirect costs are defined as absenteeism and lost productivity due to people working at less than full capacity; direct costs are defined as money spent on doctor visits, hospital stays, surgery, medication, etc.) In fact, when indirect costs are combined with direct costs the impact is four times greater than direct costs alone.

This research interests me because it carries a message comparable to one that LifeCare has long delivered in the marketplace: the indirect costs of work/life challenges have as much if not more impact than the direct costs of those challenges. The absenteeism and presenteeism (present but working at less than full capacity) created by child and elder care crises, for example, are profound: the U.S. Department of Labor estimates that $4 billion a year is lost because of absenteeism due to child care problems alone, while a MetLife study found that employee absences and turnover related to elder care now costs the nation's employers as much as $33 billion a year. And that's to say nothing of the dozens of other work/life challenges that your employees face every day—health and aging related issues, family matters, daily life needs, etc.

One of the conclusions of the employee health study mentioned above is that employers cannot successfully address high health care costs by focusing on direct spending alone. They must measure the indirect costs, as well, and put programs in place that address both. The same is true of work/life issues. By measuring the indirect costs of your employees' work/life challenges, you'll get a truer picture of their impact to your organization's bottom line. And you'll get a firm grasp on the programs that could serve everyone's needs best.

Remember, we're here to help. If you'd like to discuss how you can better measure and understand the direct and indirect costs of your employees' work/life challenges, please e-mail us at connection@lifecare.com, fax us at 203-291-3571, or call us at 800-873-4636.

Also, as always, call or e-mail us if you'd like to share ideas and offer feedback for how we can better serve you.

Sincerely,

Peter G. Burki, CEO