Substance Abuse and Health Care Cost for Employers: A Review of the Literature

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Table of Contents

How does substance abuse impact employees work performance
What are the Concerns of the groups affected by Substance Abuse
How can employers reduce health care costs
Conclusion
References

Substance abuse is a condition that can be prevented and treated. Substance abuse disorders impose huge financial costs to both the employer and the society at large. Substance abuse refers to the long-term pathological consumption of either drugs or alcohol. This is characterized by the intoxication of drugs, lack of ability to reduce usage, and a decrease in both the social and occupational functioning of a person. It is also apparent that substance abuse raises health care costs for the employer through high insurance premiums paid and increased on-job injuries. However, these costs can be mitigated by establishing Employee Assistance programs within the organization. The review of the literature on substance abuse and health care costs for employers will focus on these questions:

How does substance abuse impact employees work performance?
What are the concerns of the groups affected by substance abuse?
How does substance abuse relate to health care costs for the employer?
How can employers reduce health care costs?

How does substance abuse impact employees work performance

Substance abuse has a negative impact on the employees work performance. However, this impact is less on work that is repetitive in nature since less concentration is needed when undertaking them (Lewinson, et al., 2004). When an employee is abusing substances such as alcohol, his productivity significantly goes down. His performance, in general, is hampered by; his inconsistency in the quality of work produced, the slow pace at which he undertakes his duties, lack of concentration, fatigue which then leads to an increase in mistakes, poor judgment, and inability to execute complex assignments. Moreover, the increased absenteeism and late reporting to the workplace hamper the performance of both the troubled employee and of his co-workers. The performance of his co-workers is affected by the extra workload they shoulder on behalf of their colleagues. Other factors affecting the employees performance are; excessive sick leaves, more time spent on the phone, frequent early departures, and long coffee breaks (Kinney, 1995). Furthermore, employees on substance abuse are a safety threat to themselves and their colleagues because, under the influence of substances, these employees are bound to cause more accidents and injuries which directly affect their performance and increase the health care costs for the employer. Lastly, employees who abuse substances are reckless with the machines and equipment and more often damage them. All the above factors have a direct impact on the employees performance and the general performance of the business. When the productivity of employees is not satisfactory, the employer incurs huge amounts of costs ranging from wastage to the loss of the contribution that would have been brought by the unprocessed goods (Ghodse, 2005).

What are the Concerns of the groups affected by Substance Abuse

It is important to give a deep insight into the concerns of major groups of people affected by substance abuse. These groups include people directly affected by substance abuse. Among them are children and family, employer and co-workers, and the abuser himself.

When dealing with the issue of substance abuse, families should be treated as important stakeholders. This is because substance abuse has a direct impact on fundamental issues of the family. The impact is manifested in poor marital relationships which ultimately lead to a dysfunctional family. Once the family unit is dysfunctional abusive parenting behavior may creep in. The family also bears part of the cost for the members treatment and rehabilitation (Shulamith, Ashenberg & Huff, 2006).

Employers are major constituents of substance abuse because employees directly impact on the cany. Co-workers on the other hand get concerned when one of them has a problem. It is the co-workers who cover up for their colleague hence shouldering his responsibilities. They even go to the extent of lending him money and constantly correcting his mistakes (Ackley, 1999).

To the substance abuser himself, his actions may bring to him disability due to recklessness and even death. The substance abuser also stands the risk of suffering from depression because of his poor nutrition, sleeping problems, decreased energy a,nd lost job interest. The abuser is also vulnerable to health risks, of contracting HIV & AIDS, asthma, tuberculosis, and others. The abuser stands a risk of wasting his life both socially and occupationally. His loss of contribution will affect himself and the whole community (Ackley, 1999).

How does substance abuse relate to health care costs for the employer?

According to surveys conducted in the past, health care costs have increased tremendously. This means is that, the burden is largely shouldered by the employer. When employers provide health benefits to their workers, they essentially include provisions for substance abuse rehabilitation. Employers usually pay huge amounts of money through health insurance premiums and self-insuredplans for rehabilitation and treatment of their employees. When health care expenses are incurred by an employee working for self-insured companies, it is the employer who settles that bill rather than the insurer company (Klingner & ONeill, 1991). It is therefore important for the employer to constantly monitor health care costs that may show substance abuse.

How can employers reduce health care costs

The significant increase in health care costs has left employers with no choice but to reduce or control benefits to employees. One of the most effective ways to achieve this is by implementing an Employee Assistance Program (EA P). According to Milkman and Sederer (1990), health insurance claims rose up to 70%. Out of this, the employer needs to settle 54%. What employers are therefore trying to do is to mitigate their costs without necessarily affecting the quality of health care provided to their workers. Employee Assistance Program therefore helps to control health care use, quality and claims in a manner that is cost effective and does not affect the quality of the health care and access to the employees (Milkman & Sederer, 1990).

It is true that, not having an insurance cover for employees in need of treatment is an obstacle to health care access. However, even with the availability of good insurance cover, substance abusing employees may end up not fully utilizing it if they are not in contact with an EAP. EAPs provide affective avenues to getting employees who are abusing substances on treatment. They are usually effective because they concentrate on employees with jobs but need help to get out of chemical dependence. Because of the fear of losing their jobs these employees will fully commit themselves to treatment (Milkman & Sederer, 1990).

It is important to reiterate that, adopting a substance abuse program can significantly reduce the cost of business and the industry at large. As earlier mentioned these costs may be in terms of decreased productivity and increased health claims. It is also apparent that, when there is a program in place, absenteeism, injuries in the work place and mistakes committed at work are reduced to a minimal. However, it is essential to note that, several approaches are available to these programs. Each should be tailored to the individual needs of the specific companies in question (Bennett-Alexander &Hartman, 2009).

The components of a comprehensive substance abuse program should however include the following: First, there should be a written policy statement that clearly spells out the companys role in relation to substance abuse. Second, the supervisors should be trained so that they understand the companys policies and procedures on substance abuse and how they can identify and refer employees problems to the assistance available. Third, Employee sensitization on the companys substance abuse program that is at their disposal. Forth, is the companys assistance, here the company may set up its own Employee Assistance Program or seek help from outside organizations depending on its capability. Fifth, companies may decide to carry out drug and alcohol testing in order to reduce substance abuse (Bratter et al., 1995)

Conclusion

Substance abuse significantly increases healthcare cost for employers.

It is up to the employer to device a way to mitigate the impact of substance abuse to the business. In order to achieve this, there is need for the establishment of comprehensive substance abuse programs. When these programs are adopted, it becomes a win- win situation for both the employer and the employee. It is apparent that the gains from establishing a substance abuse program override the health care cost the company incurs. This is because the undertaking will completely mitigate other costs associated with substance abuse, for instance, lost productivity, on job injuries and an increase in health insurance claims.

References

Ackley, D. (1999). Breaking Free of Managed Care: A Step by Step Guide to Regaining Control of your Practice. New York: Guilford Press.
Bennett-Alexander & Hartman. (2009) Employment Law for Business. New York: Irwin.
Bratter, Thomas E. Forrest, & Gary G. (1985). Alcoholism and Substance Abuse: Strategies for Clinical Intervention. New York: The Free Press.
Ghodse, H. (2005). Addiction at Work: Tackling Drug Use and Misuse. Aldershot: Gower Publishing, Ltd.
Kinney, Jean M.S.W. & Leaton, G. (1995). Loosening the Grip: A Handbook of Alcohol Information. St. Louis: Mosby.
Klingner, D., ONeill N. (1991). Work Place Drug Abuse and Aids: A guide to Human Resources Management Policy and Practice. London: Greenwood Publishing.
Lewinson, J. Pedro R. Milkman & John, G. (2004). Substance Abuse: A comprehensiveTextbook. New York: Lippincott Williams & Wilkins.
Milkman, B., & Sederer, L., (1990).Treatment Choices for Alcoholism and Substance Abuse. Colorado: Lexington Books
Shulamith L, Ashenberg, S. & Huff F. (2006). Impact of Substance Abuse on Children and Family. Philadelphia: Haworth press

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Substance Abuse and Health Care Cost for Employers: A Review of the Literature

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