Employers spend considerable time and effort weighing options for health care plans and looking for the best way to handle worker’s comp cases.

They are keenly aware that providing employee health care coverage is a major business expense. Many employers, however, ignore a related and potentially more costly factor: lost productivity due to employees’ physical and emotional health problems.

Occupational health specialists look at lost productivity in two ways: absenteeism and presenteeism. Absenteeism is black and white—either the employee is on the job or he isn’t. With presenteeism, the employee has punched in or has made it to her desk, but pain, depression or any one of a variety of other issues keep her from turning out the quantity or quality of work that would otherwise be possible.

The July 2007 Journal of Occupational and Environmental Medicine (JOEM) reported on a productivity study in which 15,000 employees participated. The research found that “full cost” measures—which include both lost productivity costs related to health issues, as well as medical and drug costs—were four times greater than measures of direct medical spending alone at the four U.S. companies in the study.

Here’s how JOEM conducted this research, as described in Occupational Health and Safety Journal: “Researchers compared pharmacy and medical claims data to employee self-report productivity and health information collected through the Health and Work Performance Questionnaire (HPQ), developed by Ronald Kessler, PhD, and the World Health Organization as a part of the Global Burden of Disease Initiative. Information collected on employer business measures was combined with this database to model health-related lost productivity.”

Using the HPQ “full cost” methodology, the ten most expensive health conditions for companies included musculoskeletal conditions, depression, fatigue, chronic pain, sleeping problems, high cholesterol, arthritis, hypertension, obesity and anxiety.

One of the most startling examples from this study was the cost of back and neck pain, which the study describes as the most expensive medical condition for employees in terms of full costs. Looking at traditional costs of medical and drug treatment alone, the annual cost per 1,000 employees in the studied companies was almost $170,000. Using the full-cost methodology, the figure rose to over $500,000.

Obese employees provide another example of the impact of “presenteeism.” A recent University of Cincinnati study reported that moderately to extremely obese employees had greater health-related limitations at work than did employees who were merely overweight or mildly obese. It took the very obese individuals longer to perform their work due to problems getting around and/or pain from arthritis or other conditions. Employees with moderate to extreme obesity also had increased health-related absenteeism.

Even something as common as anxiety can cause distraction, errors and a slower work pace.

Employees are key assets and caring about their health needs to go beyond handing them goggles and a hard hat. At the end of the day, the employee will walk out the door with any chronic physical and/or emotional health issues affecting not only their well-being, but also how well they will do their job day after day.

By committing time and money to help your workforce stay healthy, you not only can reduce medical and drug costs and reduce turnover, you also can have a significant impact on your company’s productivity.