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Mental Health: Countering the High Cost of Stress and Depression
Improving behavioral health with a holistic strategy

By Brent Bowditch (Purdue University) and Steven Cyboran, Hank Christiansen (Sibson Consulting)  6/1/2007

Employers have long been aware of the workplace impact of physical illness and injuries. They are, however, now becoming more sophisticated in their understating of the link between employees behavioral health and their productivity on the job.

Given the overwhelming financial stakes, not to mention the human dimension, employers (including Purdue University, whose story is told below) have no choice but to raise the bar in this area. For example, according to the National Business Group on Health (NBGH), behavioral health problems (including those relating to stress, mental health issues and addictive disorders) cause 217 million missed workdays each year in the United States and account for 7.6 percent of health expenditures, with an indirect cost of an estimated $105 billion.

NBGH reports that behavioral health disorders are the fifth leading cause of short-term disability and the third-ranked cause of long-term disability.

Behavioral health disorders are the fifth leading cause
of short-term disability and the third-ranked cause of
long-term disability.

Despite the powerful testimony of those statistics, traditional disease management programs often ignore behavioral health issues or severely limit spending on behavioral health services, resulting in higher overall health care costs.

It doesnt need to be that way. That recognition underlies the concept of a comprehensive healthy organization campaign, whose goal is to keep healthy people healthy and help unhealthy people change their behavior. The desired outcomes, over and above better employee health, include reducing health costs, improving financial performance, reducing turnover and absence rates, and boosting employee engagement.

The Purdue Story

Purdue University in West Lafayette, Ind., with a combined faculty and staff of 11,000, has embraced that concept through a healthy university initiative to achieve some very ambitious goals. Like many employers, Purdue has evolved its approach to these issues over several years. Purdues original 1995-2002 employee wellness campaign was fun-oriented, voluntary and had no strings attached.

Next came Purdues "WorkLife-Wellness-EAP [employee assistance program]" model, which sought to change employee behavior, focused primarily on health, included some health risk reduction elements, but had little in the way of personalization, evaluation and incentives.

Purdues current Healthy Purdue initiative, launched in 2006, specifically targets the lowering of personal health risk factors, thus ultimately lowering health care costs, reducing absence and improving productivity. Its program includes:

    • An integrated workforce health and productivity database.

    • A health risk assessment.

    • A strategy to improve behaviors.

    • Incentives to participate.

Given the ambitious scope of the effort, Purdue will evaluate key metrics of the Healthy Purdue initiative carefully at regular intervals to keep it on track and, when necessary, make adjustments to the program.

Purdues program recognizes the essential role of communications to support the program. At each step of the program design and rollout, Purdue engages faculty and staff through a variety of targeted communications. Focus groups of faculty, staff and special interest representatives are used to gather input and test the program. Unfortunately, some employers roll out first-class programs only to hear complaints from employees because they were kept in the dark as the strategy and program were being developed.

A review of the early results of the Healthy Purdue health risk assessment found that the top four risk factors for the universityweight, stress, well-being/depression and exerciseaccounted for 75 percent of the avoidable costs attributable to behaviors. As a result, a key focus for Purdue was stress and depression.

Low Morale, Depression Trigger Multiple Impacts

Just as a lack of attention to workplace safety can cause physical injuries, lack of focus on the emotional demands and climate of an office can trigger costly behavioral health problems, which can lead to increased risk of other ailments and workplace hazards.

A 2005 study of employee unscheduled absences by CCH, a Chicago-based technical publisher, compared results from organizations with high and low employee morale. While the results werent surprising, the numbers were stark. For example, the unscheduled absence rate at the low-morale organizations was more than double (3.2 percent vs. 1.5 percent) that of the high-morale employers. Similarly, the survey found that absence related to stress and entitlement was about 30 percent higher at low-morale companies than high-morale ones.

In addition, stress and depression lead to longer durations for disability. An Aetna study found that disability durations can be as much as 100 percent longer when depression is a factor.

The good news: For most behavioral health problems, there are effective treatments, particularly when linked to a broader holistic employer strategy, as is being pursued at Purdue.

Impact of Depression

In 2004, Purdue spent $1.3 million on antidepressant medication for employees. Yet only 21 percent of employees using those drugs were receiving services from a behavioral health specialist, suggesting that many employees might not be obtaining appropriate or adequate care for their conditions. The average annual health care cost per participant for those on an antidepressant ($10,765) was several times higher than those not using such medications ($1,668).

The analysis showed that the 13.5 percent of Purdues participants who had a prescription for an antidepressant were incurring 40 percent of the universitys health care expenses, or $31 million out of a total of $78 million. Purdue projected, based on a careful analysis of the causes of behavioral health issues using a cost-causes-cures methodology (see box below), that a holistic, carefully executed behavioral health strategy could reduce the medical claims of that 13.5 percent employee population segment by 10 percent, for a $3.1 million savings in health care expendituresin other words, a big-enough number to warrant an aggressive effort.

Cost-Causes-Cures Framework Helps Address Vicious Cycle

At a typical organization, 5 percent of the workforce may be absent on any given day for an unscheduled event, 10 percent of positions may be vacant and 30 percent of the workforce that shows up for work may not be fully engaged. Total it up, and 45 percent of the workforcenearly halfis sub-optimized.

Given that most organizations compensation and staffing models do not account for all of the missing or disengaged employees, the inevitable result is that the stressed-out employees who are trying to pick up the slack need to take more time off, or seek other employment, creating a vicious cycle. But the cycle can be broken with a three-stage cost-cause-cure analytical effort:

    Step one. Build a database of withdrawal behaviors (absence and turnover) including the impact of health issues, absence, turnover, lost productivity and the dollars associated with these measurable indicators. Determine potential savings from countering the sources of the absence behavior in order to build the business case for change.

    Step two.
    Analyze the root sources of withdrawal behavior, segmented by employee demographic group, with particular focus on areas that are high cost with the capacity for high impact.

    Step three.
    Develop creative solutions using both traditional and non-traditional approaches to address withdrawal behaviors. Include an estimate on the return on investment (ROI) for absence and turnover reduction to guide investment decisions.

In order to understand the root causes of its expenditures, Purdue performed a careful assessment of the behavioral health offerings and support throughout the university and its benefit programs. Purdue mapped out the process flow for programs (EAP, behavioral health, disability, return to work, etc.), uncovering a lack of coordination and gaps in service.

That process led to the identification of five underlying causes:

1. Barriers -- actual and perceived -- that keep employees from seeking treatment.

2. Lack of a managed behavioral health program.

3. Lack of coordination between Purdues EAP and behavioral health coverage.

4. Lack of coordination with other Purdue programs, such as work/life, disability, workers comp and return-to-work, and the fact that they offered little support to those with behavioral health issues.

5. Employees perception of limited support and understanding from supervisors regarding their struggles with depression and other behavioral health issues.

Confronting the Issues

After estimating the cost and causes of inadequate treatment of employee depression, Purdue and its consultants devised a program to turn the situation around and change behaviors. For example, Purdue:

    • Paid for the first eight in-network behavioral health sessions with no deductible. 

    • Eliminated the deductible for medical consultations with prescribing behavioral health specialists after that. 

    • Increased the number of covered outpatient sessions from 20 per year to 30. 

    • Launched a communications campaign, provided through a number of available channels, raising awareness of service availability and changes.

Another important change was to harmonize EAP and health benefits. For example, counseling for parent/child problems, bereavement and relationship difficultiesissues often not covered through a health planare now covered. The rationale: The cost of not treating these issues, when absence, productivity and engagement are included in the analysis, outweighs the cost in dollars overwhelmingly.

Beyond the basic benefit formula, Purdue enhanced its work-life programs in several ways. For example, continuity of care is improved among the EAP, health and disability plans. Also, coordination has been emphasized between Purdues EAP and employee relations functions to serve employees and managers better.

The ambitious effort remains a work in progress. Purdue plans to investigate the use of a behavioral health company to enhance oversight and expand accessibility and services.

Also on tap for consideration:

  • Additional communications to primary care providers and employees regarding behavioral health services.

  • A thorough assessment of behavioral health care services (health plan, disabilities programs, EAP and health promotion or wellness programs) to ensure their capacity to work cooperatively, expanding EAP services to make them available 24/7. 

  • Vendor summits to coordinate service providers and their offerings better.

Although some of the circumstances at Purdue might be uniqueevery organization has a few distinctive issuesthe principles of addressing the challenge of maintaining and improving employee behavioral health are universal. For the sake of employees wellbeingand employers ability to fulfill their missionsthe behavioral health-based absence cycle must be broken. Purdues effort should give encouragement to others to take the necessary steps.

Brent Bowditch is the assistant director of human resource services at Purdue University, where he is responsible for all benefit and work-life programs. He can be reached at Steven F. Cyboran is a vice president and consulting actuary with Sibson Consulting, a division of Segal, and is a specialist in the area of absence, health and productivity. He can be reached at Hank Christiansen is a consultant with Sibson Consulting and a specialist in the area of behavioral health. He can be reached at

Related Articles:

Study: Enhanced Depression Care May Be Cost-Effective for Employers , SHRM Online Comp & Benefits Focus Area, December 2006

Best Employer Programs for Healthy Lifestyles: Key Components , SHRM Online Comp & Benefits Focus Area, May 2007 

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