By Keith Larson

The impact of our current financial crisis is beginning to spread. According to a recent Kaiser Family Foundation study as reported in an article in Human Resource Executive, nearly half (47%) of health-care consumers reported that someone in their family is skipping pills, or  postponing or cutting back on medical care they needed during the past year due to the cost of that care.

Not only are workers experiencing stress from trying to make ends meet during these tough economic times, now they are skipping important medications because of the cost involved. The long-term effects of such negligence will not only affect their health, but also their employers’ pocketbooks.

Health care has now become as much an economic issue for the American people as job insecurity, mortgage payments and credit card debt. One individual, a 56-year-old accounting manager, told the New York Times in an interview, “Don’t tell my wife, but if I have 30 days worth of pills, I’ll usually stretch those out to 35 or 40 days,” in reference to his cholesterol-lowering medication.

Another recent survey of 686 U.S. consumers by the National Association of Insurance Commissioners found that 22% of U.S. consumers report they have reduced the number of times they visit the doctor because of the current economy. And more than 10% say they have cut back the number of prescription drugs they take or the dosage of those medications to make the prescription last longer.

It stands to reason that if employees aren’t taking their medications, especially those for chronic conditions like diabetes, high cholesterol, and hypertension, a downturn in their health is likely. The patient could end up in the hospital emergency room, incur fees for tests, short-term treatments and possibly even long-term hospitalization. In addition to the employee’s lowered productivity at work, or the cost of unplanned absenteeism, the employer-sponsored health plan could end up with additional bills for thousands of dollars, all resulting from those missed medications.

Do employers have a stake in all of this? According to Sara Teppema, a senior actuary with Hewitt’s Health Management Consulting practice, “Some drugs can probably be cut out of the system with very little bearing on the health of the patient, so in some ways this effect can be advantageous to employers who would like to curb unnecessary spending from their plans.”

However, consider that this problem also affects the employee’s family members, meaning that benefit managers must look beyond their employee data to gauge the long-term impact of this trend. If employees are less likely to be compliant with their drug therapy, so will their family members likely be, which will cost employers money several years down the road. 

Is there a way to minimize the impact of employees curtailing their prescription medications? Perhaps, Teppema said. “There is an easy way to prevent worsening compliance for chronic conditions, and that is to offer a value-based drug plan design where co-pays or coinsurance are reduced for chronic conditions that have an evidence-based drug therapy,” she said. “The outcome is difficult to quantify in terms of long-term medical spend, but studies do show that a reduction in co-pay increases drug compliance, which in turn should lead to better medical outcomes.”

Unfortunately, employers may not even be in a position to provide support. Many, especially smaller ones, struggle to provide healthcare plans in the first place. Amid the worries of workforce reductions, decreased revenue, and aging employees, providing further financial assistance may simply not be in the cards.

For many firms, balancing employee health and wellness with the company’s financial health is increasingly becoming a zero-sum game, with no immediate relief in sight.