Employers Should Wake Up to the Real Economic Burden of Insomnia

Volume 2, February 2009
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Sleeping problems rank fifth in the US among chronic conditions in total annual cost per full-time employees, exceeded only by back/neck problems, depression, fatigue and chronic pain. Employers are paying a high price for insomnia on two fronts - productivity loss and health care costs. It is believed that the direct and indirect costs attributable to insomnia exceed $100 billion annually. For many employers, the primary concerns are absenteeism and disability claims. However, there is another issue sounding the alarm — the diminished performance when workers are on the job, also called “presenteeism.”

“Although it has received comparatively less attention, presenteeism likely accounts for a substantial proportion of the costs associated with insomnia,” says Dr. Todd Arnedt, Ph.D., C.B.S.M., Assistant Professor of Psychiatry and Neurology and Director of the Behavioral Sleep Medicine Program at the University of Michigan.

Many implications around the effects of impaired sleep on workforce productivity can be derived using the Work Productivity Activity Impairment (WPAI) questionnaire, which employs a validated algorithm to generate an estimate of productivity impairment. User data from the HealthMedia® Succeed™ online health risk assessment (HRA) show:

  • An average productivity impairment of more than 197,000 Succeed participants who get six hours of sleep or less is greater than 12 percent.
  • For those who sleep seven or eight hours per night, the average productivity impairment is four percentage points lower at 8 percent.
  • For an employee with an annual salary of $50,000, this would translate into more than $2,000 in lost productivity per employee per year.
  • For participants with a sleep problem who also suffer from a chronic condition such as asthma, diabetes, hypertension, or congestive heart failure, the productivity loss was even higher — up to $3,000 per employee per year.

Other studies show the negative effects of sleep loss on functioning. Research shows that people with severe insomnia miss work twice as often as good sleepers and have a higher rate of work-related accidents, and incidence (15 percent vs. 6 percent) of serious work errors. A 2008 poll done by the National Sleep Foundation reveals the impact of insomnia on daytime functioning, the time when most people are paid to perform on the job:

  • 28 percent reported that sleepiness interfered with their daily activities at least a few days a month
  • 29 percent fell asleep or became very sleepy at work in the past month
  • 36 percent reported they had fallen asleep or nodded off while driving in the past year
  • 20 percent said they lost interest in sex because they are too sleepy

Because only a small percentage of those with sleep problems ever receive professional help, insomnia will continue to be a significant burden to the employer’s bottom line unless viable solutions for identification and treatment for insomnia are found and deployed. Until then, employers will continue to lose big profits as their employees lose sleep.

According to the National Institutes of Health (NIH), cognitive behavioral therapy (CBT) has been shown to be effective in treating insomnia. However, in most cases it is delivered by a medical doctor or clinical psychologist and factors like accessibility and cost pose as significant barriers to treatment. Some experts feel that the growing role of the internet could present an opportunity for employers to address insomnia through computer-based CBT. Surveys indicate that searching for health information is the most common activity reported by adults in the US, and a web-based, self-help intervention could appeal to those people already going online to research their health concerns.

One of the most effective ways of deploying a web-based intervention is in conjunction with an online health risk appraisal (HRA), which is typically deployed by an employer in screening large populations. The HRA data can then be used as a basis to identify employee health risks and recruit individuals into appropriate programs to address those risks, including insomnia. A major US corporation with more than 30,000 employees used the HealthMedia® Succeed™ online HRA and found that 30 percent of its employees were getting six hours or less sleep per night. This was resulting in a productivity impairment of nearly 12 percent (a $9.4 million loss) due to insomnia.

Employees that indicated sleep problems in the HRA were recruited into the HealthMedia® Overcoming™ Insomnia program, a web-based CBT treatment solution for insomnia that provides users with an individually tailored sleep improvement plan. The employees that used the program reported significant improvements in hours of sleep per night, confidence to manage insomnia, and overall quality of sleep. They also experienced significant reductions in anxiety, fatigue, difficulty staying asleep, and difficulty falling asleep.

Prior to program use, employees reported a productivity impairment of over 23 percent, as measured by the WPAI. After using the program, productivity impairment dropped by 6.5 percentage points. Given an average salary of $50,000, this improvement projects an impressive productivity savings of $3,250 per employee per year.

“More research is needed to test the efficacy of web-based interventions for insomnia, but this medium has the potential to disseminate a research-supported treatment much more broadly than traditional office-based treatment,” said Arnedt.