The rising cost of chronic diseases, including direct medical costs and indirect costs associated with lost productivity, is a growing burden for businesses, according to research prepared by PricewaterhouseCoopers in conjunction with the World Economic Forum. The report warns that over the next 25 years chronic disease will reduce the available labour supply, savings, investments and ultimately affect the capital markets, and outlines the business rationale for workplace wellness programmes. It states that in an interdependent global economy, chronic conditions such as cardiovascular disease, diabetes and respiratory illness, are creating a significant societal risk that threatens health systems and economic sustainability.

PricewaterhouseCoopers analysis found that productivity losses associated with workers who have chronic disease are as much as 400 percent more than the cost of treating chronic disease. Losses in productivity include disability, unplanned absences, reduced workplace effectiveness, increased accidents and negative impacts on work quality or customer service.

Moreover, the incidence of chronic disease is growing at an astonishing rate. Globally, chronic diseases represent more than half (57%) of all deaths annually, and this is expected to rise by 23% over the next 20 to 25 years, while deaths due to other causes are expected to remain roughly stable through to 2030. This progression of chronic disease is occurring despite the fact that these diseases are largely preventable. While the relative burden of chronic disease is still greatest in industrialised countries, the convergence of the global economies and the Western influence on lifestyles throughout the world will increasingly impact emerging economies at a similar rate.

Given the growing incidence of chronic diseases through the world and new evidence that workplace wellness programmes are effective at reducing the risk of these diseases, the report suggests that businesses have a vested interest in workplace wellness programmes and that public-private partnerships are imperative from a health, bottom-line and national perspective.

Michael J. Thompson, principal, global human resource services, PricewaterhouseCoopers said:

“Workplace wellness is evolving from a project for the human resources department to a priority for the C-suite and drawing the highest levels of attention of senior management and government. Global companies already engaged in wellness programmes are demonstrating that these programmes are a way for them to enhance attraction, retention and the loyalty of employees, while reducing their own health costs, improving productivity and supporting their social commitments.”

The PricewaterhouseCoopers and World Economic Forum report entitled “Working Toward Wellness: The Business Rationale,” identifies four primary reasons that business should invest in the prevention of chronic disease:

Chronic disease drives national healthcare costs
People with chronic disease account for the majority of national health expenditures and approximately 40% of total lost work time. The impact of chronic disease is placing an increasing burden on health systems, taxes and costs of coverage, which increasingly burden organisations and their employees.

Wellness and health promotion programmes are generally focused on reduction of risky health behaviours that lead to the development of chronic diseases. Healthcare costs for those with more health risks increases in proportion with the number of risks they have, even in the absence of a chronic disease.

Productivity losses associated with chronic disease are even greater
Studies have consistently shown productivity costs related to health risk factors to be up to four times those of healthcare costs for employers. The most costly conditions and health risk factors related to productivity are different from those when considering only the cost of treating the disease. Depression, fatigue and sleeping problems – conditions or risks that are often associated with chronic diseases – have the largest impact on productivity. As with healthcare costs, more risk factors multiply the losses in productivity.

In the next 10 years, China, India and the UK are projected to lose US$ 558 billion, US$ 237 billion and US$ 33 billion, respectively, in national income as a result of heart disease, stroke and diabetes and partly as a result of reduced economic productivity.

In many emerging economies, lack of effective treatment of chronic disease during the working years also contributes to the higher numbers of lost years of productive life. For example, by 2030, the total number of productive years lost in Brazil, South Africa, Russia, China and India is expected to increase 64% from 20.6 million in 2000 to 33.7 million in 2030 due to cardiovascular disease alone. This poses significant threats to the vitality of a highly interdependent global ecosystem, which in turn can threaten the sustainability of already burdened social security systems in industrialised societies.

Workplace wellness efforts can positively impact human capital investments
Human capital is an increasingly scarce organisational resource on a global level. The demand for talented people is increasing, and an ageing workforce is creating an additional drain on organisations’ workforces. For example, China will be moving from an era of labour surplus into an era of labour shortage as early as 2010, according to the Chinese Academy of Social Sciences.

PricewaterhouseCoopers analysis found that organisations invest an average of US$290 in labour costs to generate US$ 1,000 in revenue and because the amount of labour investment per dollar generated is increasing, there is a significant opportunity for improvement of return on investment in the workforce. By helping employees work longer and have more productive lives, organisations can protect this asset in the face of growing labour shortages globally.

Furthermore an organisation that shows that it values workers’ health is more likely to attract, retain and motivate employees. Leading organisations have utilised prevention and wellness programmes to demonstrate the value they place on their workers.

Sustainability is threatened by the epidemic of chronic disease
In a globally interdependent economy, the epidemic of chronic disease – a product of both environment and behaviours – is a social phenomenon that is as equally prevalent and preventable as issues such as global warming, infectious diseases, poverty, terrorism, clean water and basic infrastructure. In fact, many of those issues are intertwined with the issue of chronic disease.

Carrie Yu, global retail and consumer leader, PricewaterhouseCoopers, concluded:

“With appropriate leadership, organisations can and should help to drive change. There is a paradigm shift that must occur to focus greater attention on wellness, not sickness, and companies have a unique and vital role to play in improving the health and wellness of their employees. As concerned members of the global community, all businesses have the capability to take action and engage in more extensive partnerships with the public sector to address this as a societal issue.”