LABOR PRODUCTIVITY EFFECTS OF PRESCRIBED MEDICINES FOR CHRONICALLY ILL WORKERS

Previous work on the labour productivity effects of chronic illness ha s not separated the effects of chronic illnesses from the effects of p rescription medications taken to alleviate these conditions. Using nat ionally representative observational data, this study estimates the pu re effect of chronic illness, and the marginal effect of prescription medicines, on labour productivity. As Americans continue to scrutinize health care expenditures, such estimates will play an increasing role in determining the allocation of resources for medical treatments. Es timates are presented of the costs and benefits to employers of coveri ng prescription medications for workers aged 18-64 years afflicted wit h specific chronic illnesses. The effects of prescription medicines on hourly wages and days lost from work are examined for four major chro nic illnesses: hypertension, heart disease, non-insulin dependent (typ e II) diabetes and depression. The net benefits to employers from havi ng workers take prescription medicines for their chronic illnesses are substantial. Assuming average compliance rates are achieved, net bene fits to employers in 1987 amounted to $286 per hypertensive employee, $633 per employee with heart disease; $822 per depressed employee, and $1475 per type II diabetic employee under medication from a physician . These estimated benefits accrue because prescription medications sub stantially lower absenteeism among chronically ill workers.