Health and productivity management: establishing key performance measures, benchmarks, and best practices

Major areas considered under the rubric of health and productivity management (HPM) in American business include absenteeism, employee turnover, and the use of medical, disability, and workers' compensation programs. Until recently, few normative data existed for most HPM areas. To meet the need for normative information in HPM, a series of Consortium Benchmarking Studies were conducted. In the most recent application of the study, 1998 HPM costs, incidence, duration, and other program data were collected from 43 employers on almost one million workers. The median HPM costs for these organizations were $9992 per employee, which were distributed among group health (47%), turnover (37%), unscheduled absence (8%), nonoccupational disability (5%), and workers' compensation programs (3%). Achieving "best-practice" levels of performance (operationally defined as the 25th percentile for program expenditures in each HPM area) would realize savings of $2562 per employee (a 26% reduction). The results indicate substantial opportunities for improvement through effective coordination and management of HPM programs. Examples of best-practice activities collated from on-site visits to "benchmark" organizations are also reviewed.