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Lowering the Business Costs of Alcohol Problems


The damage is widespread and expensive, but many of the solutions are surprisingly simple.


Lowering the Business Costs of Alcohol Problems

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Choose article section...What can employers do?Enact treatment-oriented corporate policies Offer comprehensive benefits Monitor and maintain a continuum of careIntensify health education and screeningThe Alcohol Cost Calculator

By Eve Raskin, LCSW, and Lynora Williams

The damage is widespread and expensive, but many of the solutions are surprisingly simple.

First of all, alcoholism is more common among your employees than you think. More than 7 percent of U.S. workers are addicted to or abuse alcohol, according to the latest National Household Survey on Drug Abuse. Nor is this strictly an American problem. The World Health Organization has labeled alcohol use the leading cause of disability among men and the tenth leading cause among women in developed countries.

Over the past decade, employers have tended to squeeze budgets for alcohol and substance abuse treatment among workers and their families, but that's not where the real financial damage is done. The bulk of the costs are direct expenditures for related injuries and health problems, and indirect losses from absenteeism, reduced productivity, workplace injuries, workers' comp and disability claims, according to the National Institute on Drug Abuse.

Indeed, one study from Brandeis University estimated that health care costs for employees who have alcohol problems are about twice as high as the average employee. Excessive consumption of alcohol greatly increases the risk for diseases of the liver, pancreas and heart, as well as stroke, ulcers, depression, brain disorders and cancers of the head, throat and breast.

Illness is only part of the story. Problem drinkers — people who have three or more drinks three or more times a week — spend four times as many days in the hospital as the national average, mostly as a result of drinking-related auto accidents, according to the National Institute on Alcohol Abuse and Alcoholism. The Centers for Disease Control and Prevention reports that between 20 and 30 percent of all trips to emergency rooms and almost half of all trauma and injury visits are alcohol-related. For a company that employs 200 workers, that means employees and their family members are likely to have 40 alcohol-related ER visits a year.

Indirect costs are equally significant. Various studies have found that:

  • Heavy drinkers — people who drink five or more drinks per occasion on five or more days in a 30-day period — are much more likely than average workers to miss days for injuries, illnesses and unexcused absences.

  • Alcoholics cause 40 percent of alcohol-related absenteeism, tardiness and poor work quality. Light and moderate alcohol users, who are more numerous, cause the remaining 60 percent.

  • Even when employees with alcohol problems show up for work, one out of five of their coworkers will fear injury or have to work harder, redo work or cover for the drinker.

What can employers do?

Employers who've been successful in preventing and treating alcohol problems sponsor a range of employee resources and worksite health and wellness programs. Actions can be taken — most at low to no cost — to minimize the impact of problematic, dependent and risky alcohol use on the workplace.

Enact treatment-oriented corporate policies

Strong, clear workplace policies can reduce alcohol problems and potential liability for related accidents and injuries. Such policies must, above all else, encourage employees to seek treatment. Thus, by definition, they cannot be punitive when an employee voluntarily asks for help.

This is not to suggest that an employer ignore the consequences of an alcohol-related accident. Those subject to Department of Transportation regulations, for instance, must adhere to stringent policies that include mandatory testing of employees involved in any accident or injury situation. Other industries, such as construction, are especially vulnerable to hazardous alcohol use.

A positive and preventive step would be to expect supervisors to detect and report alcohol-related job performance problems. The signs are frequently obvious, and training people to observe them is not an insurmountable task. Again, though, an enlightened policy will aim at getting people into treatment, not just dumping them on the street.

Some large employers also make space available for discrete lunchtime meetings of Alcoholics Anonymous, even welcoming employees from other local firms.

Offer comprehensive benefits

Many employment-based health plans have significant gaps in their alcohol coverage. An analysis that Ensuring Solutions to Alcohol Problems conducted last year found that access to treatment is restricted by limits on the number of days that patients can receive inpatient care and the number of outpatient visits. One-fourth of the plans studied set maximum dollar amounts that they will pay for alcohol treatment, much lower than for mental or other illnesses. Yet some employers can and do purchase insurance that covers the range of needed alcohol services. One-fourth of the large, self-insured companies that were studied and some individual health plans provide equal coverage for alcohol treatment services.

Those services are frequently offered by Employee Assistance Programs rather than health insurance. They include confidential screening and counseling, which is often web-based, and referrals to treatment, worksite awareness programs and recovery support for workers in treatment.

Monitor and maintain a continuum of care

Alcoholism is a chronic disease. Health plans and EAPs should manage it accordingly. A full and permanent cure may not be the most realistic expectation. It's worth noting, however, that relapse in the first year is actually more common — and yet not greeted with moral condemnation — among people with hypertension, diabetes and asthma.

The path to recovery begins with open access to quality treatment for employees and their dependents, but it continues indefinitely with a well-coordinated plan involving a multidisciplinary treatment team of medical doctors, psychiatrists, EAPs, chemical dependency specialists and social workers, as well as other health professionals.

Benefits can be structured to improve communication between health plans, vendors and providers by using incentives to improve the quality of care. Coordination of the EAP, behavioral and medical services is value-added service for both employer and employee.

Employers can take an active role in managing employees who are temporarily off the job while receiving treatment for alcohol problems by coordinating with care providers, managers and the employee to expedite return to work. Reasonable accommodations in the first few months of recovery would include flexible scheduling that allows time for medical appointments and continuing care.

Intensify health education and screening

Health education programs reduce stigma, eliminate barriers to treatment and can minimize the impact of alcohol on the workplace. Several studies have found that employees who participate in such programs reduce their alcohol consumption and perform more effectively at work.

Wellness programs can help people manage chronic diseases and should have a strong alcohol awareness component. On average, wellness programs comprise 1-2 percent of a company's health care expenses. While such programs may initially cost more, costs go down in the long term. Companies can employ a variety of insurance-related and outreach-oriented strategies to keep even the initial costs manageable.

Confidential screening for alcohol problems can be incorporated into broader wellness programs. For instance, a cardiovascular health education program taken right onto the plant floor produced startling results for United Auto Workers members and their employer, General Motors. A worker-based committee in the GM plant promoted a program that provided confidential counseling about cardiovascular disease risks. Three out of five workers participated. The program emphasized that drinking increases the risk of high blood pressure and weight problems, and affects exercise, coordination, smoking habits and stress.

After the wellness program, 42 percent of the plant's at-risk drinkers became "safer level" drinkers. Nearly 90 percent of employees with high health risks showed improvement three years later. Most impressively, GM's medical costs at the plant dropped by 13 percent, or $453 per plant employee.

In the last few years, many employers began sponsoring confidential programs in which employees self-assess their drinking during National Alcohol Screening Day, held each year in April, thus opening the door for intervention and treatment.

Eve Raskin is a research scientist at Ensuring Solutions to Alcohol Problems at George Washington University Medical Center. Lynora Williams writes and edits on health policy and other social concerns. For details on the studies referred to in this article, please e-mail info@ensuringsolutions.org.


Working with policy makers, employers and concerned citizens, Ensuring Solutions to Alcohol Problems at The George Washington University Medical Center in Washington, D.C., provides research-based information and tools to help curb the avoidable health care and other costs associated with alcohol use. The project works to improve access to treatment for Americans who need it. It is supported by a grant from The Pew Charitable Trusts. For more information about how to minimize the workplace impact of problematic, dependent and risky alcohol use, visit www.ensuringsolutions.org .

Resource Links:

Ensuring Soultionswww.ensuringsolutions.org

National Directory of Drug and Alcohol Abuse Treatment Program 2003http://www.samhsa.gov/index.html

World Health Organization's Alcohol Sectionhttp://www.who.int/health_topics/alcohol_drinking/en/

National Institute on Alcohol Abuse and Alcoholismhttp://www.niaaa.nih.gov/

More Business & Health Articles About This Topic:

Substance abuse: Myths and realities in the corporate sector (January 2001)

When employers get tough about unhealthy habits (March 1996)

The Alcohol Cost Calculator

No, it's not the latest electronic gizmo to help you divvy up your bar tab. The Alcohol Cost Calculator is a new web-based tool that informs employers how much revenue they're pouring down the drain, thanks to alcohol-related problems.

Developed by Ensuring Solutions to Alcohol Problems, and supported by a grant from The Pew Charitable Trusts, the Alcohol Cost Calculator ( www.alcoholcostcalculator.org ) is a research-based online tool that uses federal government surveys to compute the cost of untreated alcohol problems to individual companies. With alcohol-based problems annually costing American businesses $26 billion in health care costs and 51 million extra sick days, the calculator identifies clear steps employers can take to help cut these unnecessary costs.

"This calculator hits the triangle of things that we look for in health care: cost, quality and access. Employers are focused on employee productivity and health care costs. This tool is going to allow them to connect the dots, where alcohol use is concerned. I predict that employers will be very shocked when they really look at what the total cost of this problem with alcohol is," says Becky Cherney, chair of the National Business Coalition on Health.

To use the calculator, an employer answers basic questions about its type of business and number of employees. The calculator instantly returns a customized report detailing the expected productivity losses, extra sick days and health care costs to the company. Suggested steps to rein in the costs are also provided.


Eve Raskin, Lynora Williams. Lowering the Business Costs of Alcohol Problems.

Business and Health

Jun. 1, 2003;21.

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