How much does your company lose when employees are out sick or working at less than full strength due to sickness or disability?

If you think lost productivity is a "soft cost" that can't be quantified, think again, says Bill Molmen of the Integrated Benefits Institute, in an article in the Detroit Free Press.

"The issues of healthcare go far beyond direct costs; they go to productivity costs, which can be four to nine times direct costs," says Dr. Joseph Fortuna, medical director of the Engine and Chassis Division of Delphi, the world's largest auto supplier.

Fortuna is a board member of the American College of Occupational and Environmental Medicine, which is doing a major project on health and productivity. Merck & Co. has teamed with the Wharton School and Dow Chemical Co. to conduct a two-year study to determine the total cost of chronic medical conditions to develop effective interventions and improve workforce health. The project studied 12,000 Dow workers in Texas and Michigan and measured the work loss, including absence and lower productivity resulting from chronic health conditions.

Delphi is studying the costs of absenteeism at its Columbus, Ohio, plant. UAW and Delphi officials launched the absenteeism initiative last spring to understand what drives unscheduled absences and how they can be reduced.

"The financial impact is millions and millions of dollars," Robert Saddler, director of labor relations, safety and interior systems at Delphi tells the Free Press. "It absolutely pulverizes profits, quality and plant job security, Saddler says.

To promote a standardized method of linking workforce health to productivity, the Council on Employee Health & Productivity has been developing performance measures that gauge the effectiveness of health-related lost-time programs, such as absentee management and return-to-work programs.

The result: EMPAQ (Employer Measures of Productivity, Absence, and Quality) is a detailed manual that attempts to apply standard methods of reporting and interpreting data on worker health quality and performance.

The council wants EMPAQ adopted as a nationwide standard recognized in the same way an ISO designation is recognized in manufacturing.

Since late 2002, a beta group of employers representing 1.75 million workers has been testing and refining the system. More companies are expected to participate in 2004, according to the article.