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Reflection on Robin Williams - Health IS Wealth

Of course we have all seen the tragic news about Robin Williams, So I get to thinking yet again about health.

The most immediate impacts of ill-health are on psychic and emotional well-being. That impacts both the ill person and their friends, colleagues and family. So of course, these social and personal impacts are what have the most immediate impact on an unhealthy person.

But then there are the other financial and economic impacts. If you die early from bad health, then your creativity, productivity and social and professional contributions are lower – maybe much lower – than they would otherwise have ben. If you continue to work even though you have poor health, you are less creative and productive than otherwise so your social and professional contributions are lower.

All of these things have direct impacts on financial outcomes. If you have bad health you will usually contribute less to whoever you work for. You and your employer and the government will pay more to keep your health from deteriorating further, or to try to at least partly restore it.

In other words, these impacts are going to show up on the bottom line somewhere. Profits and valuation will be less than otherwise. So it’s not just a question of ill health contributing to higher costs, it’s going to be reflected in lower profits and valuation.

It’s difficult to measure these impacts directly. But there’s no doubt that they occur, just about everywhere. And these impacts are not minor. It’s just that they are not formally counted.

Most companies and organizations these days encourage their employees to adopt health habits and to exercise more. For them it’s primarily a financial issue. Healthier employees mean lower health costs. They are not really looking at foregone benefits of not having healthier employees. But that’s almost certainly where the biggest impacts are.

And despite all of the efforts by many employers, the sad statistics remain. About one third of Americans are obese, one-third is overweight and one –third is normal weight or below. So that’s potentially up to two-thirds of Americans who are either actually diabetic or have a high potential to go that way.

And that’s not counting the huge numbers of people who suffer from poor mental health, like Robin Williams. Put that all in the hopper and we can see that the impact on financial and economic outcomes is huge.

One of the major implications is that the balance sheets of company’s don’t measure the real value in a company if they could address this issue more effectively. Right now most companies see obesity and weight issues as being primarily lifestyle problems for the affected employees, and an unavoidable financial cost to themselves. But what if they started to look at the valuation benefits of reducing ill-health?

The Federal government has tried to put a national health plan into effect because it understands the catastrophic Impact of health costs on lower-income people. That is a laudable aim. But the aim of the plan is basically to reduce negative impacts, not to restore the positive impacts of good health, particularly in weight control, but also in other areas such as mental health.

Mental health is still the poor cousin of physical health. It probably has as much adverse impact on foregone benefits as does being overweight and from poor lifestyle choices such as eating badly, smoking, not exercising and yes, sitting down at work all day in front of a computer screen, just like your’s truly is doing now.

We recently saw an epic piece of research by Thomas Piketty on the sources of inequality. He sees it primarily due to regressive tax impacts. But what about health? If you can address that, then all companies will be worth more and aggregate demand would raise leading to higher employment and increased personal incomes.

 And what about government statisticians who try to measure the real wealth of common people? A wealthy person with ill-health, like Robin Williams for example, is not as wealthy as they appear to be on paper. And people with low levels of wealth as traditionally measured are actually wealthier when you consider their good health, their higher productivity and contribution and their increased sense of well-being.

It’s a sad fact that a company with employees with higher levels of obesity is actually less valuable than it appears on paper because of the health effect. That’s not being measured now, but it should be. Yes it’s difficult, maybe even offensive to some people. But that doesn’t make it any less true.

I am sure that Robin Williams would have had some choice words to say about that.

 

 

 

 

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Friday, 21 September 2018

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