Nicholson, Sean, Mark V. Pauly, Daniel Polsky, Catherine M. Baase, Gary M. Billotti, Ronald J. Ozminkowski, Marc L. Berger, and Claire E. Sharda. "How to Present the Business Case for Healthcare Quality to Employers." Applied Health Economics and Health Policy, 4 (4) 2005.

This paper addresses an apparent contradiction in U.S. corporate healthcare policy - "many employers are investing in new programmes to improves the quality of medical care and simultaneously shifting more of the healthcare costs to their employees without understanding the implications on the amount and type of care their employees will receive."

Noting that "some cost-sharing strategies have been associated with decreased adherence to therapy and to worse outcomes," the authors argue that corporations should bring the same quality improvement mindset to their healthcare expenditures as they do to their business operations. In particular, companies should measure not only direct medical costs, but also indirect benefits such as lower turnover, lower absenteeism and improved productivity. While some disease management programs (e.g., diabetes and asthma) can pay for themselves just by reducing direct medical costs, others (e.g., programs for obesity or lower back pain) make sense, but only when indirect benefits are also considered. The paper introduces a discounted cash flow methodology for evaluating programs in light of these indirect benefits.

Also includes interesting statistics on the costs of absenteeism, which are, on average, "28% higher than the workers's wage," and estimates of total cost to U.S. industry of a variety of medical conditions.