Report 3 - Exploring the Link Between Work-Life Conflict and Demands on Canada's Health Care System

Chapter 6 - Estimate of the Health Care Costs Associated with High Work-Life Conflict

Until now, we have viewed work-life conflict in terms of its considerable human costs, and the associated direct and indirect costs borne by organizations. Work stress and work-life conflict, however, are not only problems of individual employees and organizations, but are wider societal problems that are ultimately shared by all players in society (Cooper et al., 1996). This chapter of the report will take the discussion one step further by attempting to assign a dollar value to the cost of work-life conflict at the national level.

This chapter is divided into six sections. The socio-economic model used as the rationale for examining the costs of work-life conflict at the national level will be presented in Section 1. Section 2 will present the costs of high role overload in terms of visits to physicians, inpatient use of Canadian hospitals, and visits to emergency departments. Similar data will be examined with respect to work to family interference, family to work interference and caregiver strain in Sections 3 through 5, respectively. The key results from this analysis will be summarized in the last section of this chapter.

6.1 Model for Socio-Economic Assessment of Work-Life Conflict

The model chosen to illustrate the national cost of work-life conflict is taken from a series of studies on workplace health currently under way in the European Union (Cooper et al., 1996; Levi & Lunde-Jensen, 1996). The researchers involved in this project have been attempting to measure the extent of workplace stress in the European Union, and to estimate its impact across the broader European community. The term "socio-economic" refers to the need to calculate the effects of workplace stress for society as a whole, across the economic sectors-to include not only individuals and business, but also governments and the broader society²⁷ (Cooper et al., 1996; Levi & Lunde-Jensen, 1996). A socio-economic perspective on work-life conflict, therefore, addresses the costs of employee stress and ill health at three levels: the employee, the employer, and the broader society and health care system (Figure 9).

Figure 9
Three Perspectives on the Economic Costs of Work-Related Stress
(adapted from Cooper et al., 1996)

The above socio-economic perspective suggests that, to estimate the true cost of workplace stress, we must look not only at the costs incurred by organizations (e.g. in terms of lost output due to absence), but also to other societal sectors for the "hidden costs" (Levi & Lunde-Jensen, 1996). In economic terms, hidden costs are referred to as "externalities": significant costs that are borne by segments of society who are not receiving the benefits (Levi & Lunde-Jensen, 1996). For example, when employers driven by short-run bottom line concerns increase workloads but provide little or no support to their employees (as has been shown to be the case in the Canadian work-life arena-see Duxbury and Higgins [2003]), organizations benefit through increased profits, while somebody else pays. In the case of work-life conflict, it is the employee who pays through distress and illness, employers who suffer from a resultant loss of productivity at work and the Canadian health care system that experiences higher levels of utilization and their associated costs.

How much could health care costs be reduced if Canadian employees were more able to balance work and life? Until now, we have used outcome measures to examine the indirect costs of high work-life conflict associated with use of the health care system. This chapter will take the discussion one step further by attempting to assign a dollar value to use of Canada's health care system associated with high levels of work-life conflict.

The method of socio-economic assessment used by Levi and Lunde-Jensen (1996) to calculate the estimated cost of work-related stress at the national level was adapted for this study to the specific case of work-life conflict. A complete discussion of the methodology used to estimate the costs is beyond the scope of this study but can be found in Duxbury et al. (1999). A summary of relevant details is given for the interested reader in Appendix E while a synopsis of the vocabulary associated with this model is provided in Box 8. In all cases, the calculations were undertaken as described in Appendix E. Key data are summarized in Table 1.

Table 1: Health-Realted Costs of Work-Life Conflict

6.2 Health Care-Related Costs of High Role Overload

Physician visits could be reduced by 25% if high role overload could be eliminated

Approximately 58% of the employees working for Canada's larger employers are at high risk with respect to role overload. Employees with high role overload made an average of 1.74 visits to a physician in a six-month period, while those with low role overload made only 1.11 visits.

In other words, the relative risk of physician visits associated with high role overload is 1.58. The etiologic fraction of role overload is therefore 25% (i.e. physician visits could be reduced by approximately 25% if governments/organizations eliminated high levels of role overload). The direct cost of physician visits due to high role overload was calculated to be approximately $1.8 billion per year.

High role overload increases the costs associated with inpatient hospital care by close to $4 billion a year

As noted previously, there is a strong positive association between role overload and the need for inpatient hospital care. The number of excess days spent in the hospital that can be attributed to high role overload was calculated to be just under six million. These excess days cost Canadian taxpayers just under $4 billion per year. Furthermore, the data indicate that the number of days spent in hospital could be reduced by approximately 17% if role overload could be reduced. Such a strategy would likely reduce the problems many hospitals have with respect to available beds.

Emergency department visits could be reduced by 23% if high levels of role overload could be decreased

Employees with high levels of role overload are 1.5 times more likely to seek care at a hospital's emergency department than their counterparts with low role overload. This increased use of the hospital's emergency department costs the health care system approximately one quarter of a billion dollars per year. Emergency department visits could be reduced by 23% if high levels of role overload could be reduced. Such actions could substantially reduce wait times at hospitals and demands on health care personnel.

6.3 Health Care-Related Costs of High Work to Family Interference

Cost of physician visits due to high work to family interference is approximately $650 million per year

Just over one in four (28%) of the respondents to this survey are at high risk with respect to work to family interference. It would appear that the number of physician visits made by Canadians per year could be reduced by 8.7% if work to family interference was eliminated-a savings of approximately two thirds of a billion dollars per year.

Costs associated with inpatient hospital care due to high work to family interference are almost $2 billion per year

Employees with high work to family interference are substantially more likely to require inpatient hospital care than those with lower levels of interference. These excess visits (about three million) cost Canadian taxpayers almost $2 billion per year. This suggests that the costs associated with inpatient hospital care could be reduced by approximately 9% if employees were more able to balance competing work and life demands and did not meet work demands at the expense of commitments to family and non-work roles.

Emergency department visits could be reduced by 12% if interference from work to family was reduced

Employees with high work to family interference are 1.5 times more likely to seek care at an emergency department than their counterparts with lower levels of interference. This amounts to over 1.6 million extra visits per year by employees with high work to family interference. The cost of these extra visits is approximately $144 million per year.

6.4 Health Care-Related Costs of High Family to Work Interference

Family to work interference has less of a negative impact on health care costs

Both the relative risk and the absolute risk associated with high family to work interference are lower than observed with the other forms of work-life conflict. In terms of absolute risk, only one in ten of the respondents to this survey put family ahead of work (i.e. reported high levels of family to work interference). Similarly, the relative risk associated with high family to work interference is lower than observed with respect to role overload. Nevertheless, the cost for more physician visits associated with this form of work-life conflict is calculated to be just under a quarter of a billion dollars a year. Similarly, the increased number of inpatient hospital days due to this form is interference is estimated to cost another quarter of a billion dollars.

While the relative risk of visiting the hospital emergency department garnered from this form of work-life conflict is similar to that observed with role overload and work to family interference, the costs associated with these visits is lower (about $52 million), due largely to the fact that few Canadians allow family demands to take priority over work (i.e. prevalence is low).

6.5 Health Care-Related Costs of High Caregiver Strain

Cost of physician visits due to high caregiver strain over half a billion dollars per year

One in four respondents to this study reported moderate to high levels of caregiver strain (i.e. experience caregiver strain once a week or more). These levels of caregiver strain end up costing Canadian taxpayers approximately half a billion dollars per year due to the increased number of physician visits resulting from this form of work-life conflict. These costs can be expected to increase in the future as the proportion of the workforce with elder care responsibilities increases (see Higgins & Duxbury [2002] for a discussion of this issue). The government could reduce physician visits by close to 10% (etiologic fraction of 7.7) by providing assistance to working employees with elder care issues.

Inpatient hospital stays could be reduced by almost 20% if caregiver strain was reduced

Employees with high levels of caregiver strain are 1.86 times more likely to require inpatient hospital care than those with low caregiver strain. In fact, the relative risk of hospitalization is higher for this form of work-life conflict than any other. This fact is reflected in data which show the increased costs of inpatient hospital care associated with high levels of caregiver strain are just over $4 billion per year.

High levels of caregiver strain cost taxpayers almost $200 million a year in increased use of emergency departments

Data on the use of hospital emergency departments associated with high levels of caregiver strain are similar to what was observed with respect to inpatient hospital stays. Employees with high levels of caregiver strain are 1.63 times more likely to seek care at a hospital emergency department than those with low caregiver strain. The relative risk of visiting an emergency department is higher for this form of work-life conflict than any other and costs of visits to the emergency room associated with high levels of caregiver strain are second only to those observed with respect to role overload-$164 million per year.

6.6 Summary

Application of the socio-economic model has provided a glimpse of the potential financial cost of work-life conflict to the Canadian health care system. The model suggests that failure to respond to the needs of employees who are experiencing work-life conflict has contributed not only to mounting stress for employees, but also to substantial "hidden" costs to employers and governments.

Our estimates suggested that, in 2001, the health care-related costs of high work-life conflict were staggering-approximately $6 billion a year attributable to high role overload, $5 billion a year to high caregiver strain, $2.8 billion to high work to family interference and half a billion dollars for high family to work interference.²⁸ It should be noted that the above estimates are likely to be quite conservative approximations of the amount that work-life conflict is actually costing Canadians. The cost estimates provided in this report were calculated using data on only those within the high-risk groups. Calculations (not shown) indicate that the estimates increase substantially (i.e. more than double) if we also include those at moderate risk (i.e. moderate levels of work to family and family to work interference). It should also be noted that some of the costs attributed to the different types of health care are derived from 1998-99 data (i.e. physician costs) and 1999-2000 data (i.e. hospital stays). It is likely that the costs associated with these services have increased over the past several years.

The data in Table 1 indicate that two forms of work-life conflict are particularly costly, both in terms of increased demands on the system and increased costs: high role overload and high caregiver strain. Role overload appears to be the greatest culprit: physician visits would be 25% lower, inpatient hospital stays would be reduced by 17% and use of Canada's emergency rooms would be cut by 23% if high levels of this form of work-life conflict could be eliminated. These findings suggest that the downsizing strategies implemented by many employers throughout the 1980s and 1990s and the concomitant increase in employee workloads (see Higgins & Duxbury [2002]) have backfired. The data reviewed in this study indicate that the savings in payroll (i.e. salary and benefit dollars) realized by corporations and public sector employers through downsizing may be offset by substantial increases in costs to the health care system. It would appear that work-life conflict is not only a moral issue-it is a productivity and economic issue, a workplace issue and a social issue, and needs to be addressed as such.

Caregiver strain is also problematic. Analysis of our data suggest that physician visits could be reduced by 8%, inpatient hospital stays lowered by 18% and use of Canada's emergency rooms cut by 14% if high levels of this form of work-life conflict could be eliminated. These findings suggest that the aging of the Canadian workforce and the greater need to provide elder care is overwhelming employees' ability to cope with both work and life demands. The lack of social and governmental support for elder care, as well as inflexible work schedules, mean that employees with elder care commitments often have no choice but to miss work and/or take an unpaid leave of absence. If nothing is done to alleviate the demands placed on these workers, ill health due to this form of work-life conflict is likely to increase dramatically in the next decade as more baby boomers assume responsibility for the care of their parents. These findings indicate that if business does not take strategic action with respect to this issue soon (e.g. implement family-friendly work arrangements and benefits), the government should step in and take action to help employees deal with elder care issues. The country cannot afford to pay the health care costs incurred by organizational inaction in this area.

After examining the data in this chapter, the relevant question changes from "how much will it cost us to deal with the issue of work-life conflict" to "how can governments afford not to address the issue of work-life conflict?"

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