Organizational Wellness

How to Reduce Corporate Healthcare Costs By Helping Employees Get Better Sleep

Nov 16, 2023
Last Updated May 22, 2024

The ‘rise and grind’ work culture loves to emphasize the importance of long hours and intensive effort. It keeps all the focus on the grind, completely ignoring that rest is required to put in sustained effort at work.

Unfortunately, adequate sleep is increasingly out of reach for many Americans. 

While adults need at least seven hours of sleep a nightnearly a third of Americans consistently get less. On average, we get 6.8 hours a night, a full hour less than Americans got on an average night in 1942. Research has linked insufficient rest to seven of the fifteen most common causes of death in the U.S., including diabetes and hypertension. 

Unfortunately, for most employees, work is the driving force behind their sleep deprivation. Eighty-three percent of workers say work stress causes them lose sleep from time to time — and 9% of them lose sleep over work every night.

Beyond stress, there’s the work schedule itself, which can impact your sleep health. Irregular sleep schedules are tied to degraded sleep, with shift workers being more likely to experience chronic sleep deprivation. In fact, more than half of night shift healthcare workers average less than 6 hours of sleep.

All of these short nights come with an exorbitant price tag. Insufficient sleep costs the U.S. $94.9 billion dollars every year. On the individual level, it’s estimated poor sleep drives up average healthcare spending by an additional $3,400 to $5,200 per person

Here’s how your company can improve employee sleep quality, which can simultaneously drive down your healthcare premiums

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The High Cost of Sleep Deprivation

Let’s take a look at the individual conditions that contribute to the steep price tag of insufficient sleep. 

Insomnia

Insomnia, which is a chronic inability to get enough quality sleep, is extremely expensive. First there is the cost of treating the insomnia itself. Research shows that healthcare expenditures increase by 40% in one year after diagnosis

Then, there is often the cost of treating conditions caused by insufficient sleep, including depression, or injuries caused by exhaustion, such as those incurred in a car crash after falling asleep behind the wheel. When such comorbidities exist, the healthcare costs for people with insomnia are 80% higher than those without it.  

Depression 

Sleep and depression are tightly intertwined. In some cases, depression disrupts sleep. In other instances, getting poor sleep can trigger depression. Whichever the order, it drives up insurance costs. Depression costs an estimated $71 billion a year, a figure that is only rising.

Cardiovascular Diseases

Heart problems — including heart attacks, high blood pressure, strokes, and diabetes — are more common in people who get poor quality sleep. This collection of health problems costs employers $216 billion in direct medical expenses every single year, the country’s most expensive group of conditions

Obesity

Obesity can double a person’s annual insurance costs. This is related to sleep because getting insufficient rest disrupts the body’s chemical balance, making people feel hungry. This encourages people to overeat in an attempt to compensate for their missing energy. This lack of sleep also decreases the energy people have to work out, making it harder to address increased caloric intake. This can kickstart a negative cycle, as struggling from obesity can also reduce sleep quality in various ways — including sleep apnea, a condition that wakes people up throughout the night — making it harder over time to reverse the trend

Hormonal Disruption

Anything that messes with somebody’s circadian rhythm (like night shift work) can disrupt their hormones. Hormonal disruption is associated with disrupted appetites and obesity, as well as insulin insensitivity and diabetes. There are no estimates as to how much hormonal issues from circadian disruptions cost the U.S. healthcare system — given that they are not an illness but a cause of many — making it a silent drain on healthcare spending

Immunodeficiencies

Feeling run down after a few nights of bad sleep? It’s not just in your head. Insufficient sleep weakens your immune system, making it more likely that you will get sick after being exposed to a virus, like a cold or flu. And being short on sleep when you contract the illness likely means it will take somebody longer to recover. These expenses add up: The flu alone costs the U.S. $10.4 billion a year. Going to bed earlier is a lot cheaper — and easier.

Tactics Companies Can Use to Improve Employee Sleep Quality

Many people realize that their poor sleep is an issue. And when Americans struggle to sleep, they’re quick to reach for medical assistance: Nearly 1 in 5 adults in the U.S. use sleeping pills

Sleeping pills for a single individual can cost hundreds of dollars a year, and (here’s the kicker) they’re not always great at helping people get real rest. Popping a sleeping pill earns you, on average, only an extra half-hour of shuteye — and about four out of five users of prescription sleep aids say they oversleep, feel groggy or have difficulty concentrating the day after using them.

There are less expensive and more effective ways to improve sleep health. Including these as part of an employee wellness plan can help you significantly increase the quantity and quality of sleep for your entire team, thus improving the overall health of your workforce.

Exercise

Dozens of studies have found that working out improves both the quality and duration of sleep. This is a widely accessible sleep aid, as sleep improvements can come from any type or intensity of exercise. People don’t have to run a marathon to get a REM boost! 

Companies looking to get employees up and moving have a wide range of options. Subscriptions to fitness apps like Les Mills and Barry’s X — available through Wellhub — can help members of distributed teams move wherever they are located. Organizations can also sponsor gym memberships for employees, and use a fitness class for team bonding. 

Sleep Trackers 

Sleep trackers are devices that measure sleep quality (often based on how much movement a person makes during the night) that have been shown to improve sleep quality. They can be wearable devices or phone apps like SleepCycle. This type of sleep aid is increasingly popular — 28% of adults use a cellphone to track their sleep, and sleep trackers are projected to be an $11.2 billion business by 2028

The strategy has enough potential that the NFL has begun to use sleep trackers to monitor the sleep patterns and health of players. If the NFL thinks sleep trackers can give their employees a competitive edge, why wouldn’t they do the same for your organization? Easily accessible sleep trackers include FitBits and the SleepCycle app. 

Structured Work Hours

Screens are a significant source of blue light exposure, which suppresses the ‘drowsy’ hormone melatonin. This means sending emails or Slack messages right before putting your head down can make it incredibly difficult to fall asleep. Once you eventually do fall asleep, it may continue to have an effect by decreasing sleep quality and how long you sleep.

This can be a challenge for employees as working from home remains popular, and more teams become distributed across time zones. It’s increasingly common for employees to harness the flexibility of remote work by logging off early, only to log on again to work a bit before going to bed. Companies can help employees avoid needless late-night blue light exposure by creating a culture where it’s okay to log off at 5 PM — even if that’s 2 PM for your boss in an office across the country. 

Meditation

Mindfulness exercises target anxiety and physical stress symptoms, which can make it easier for the body to fall asleep. This is part of why meditation can improve sleep quality, reducing insomnia, fatigue, and depression

Employers can help their employees develop (or deepen) their meditation practice by sponsoring subscriptions to apps like Calm and Headspace, which are available through Wellhub. Research has found using guided sessions and soothing recordings on the apps can effectively reduce anxiety and depression. For a personal touch, companies can also host how-to and guided meditation seminars. This gives employees the opportunity to ask questions of a meditation expert that are specific to their practice and sleep.

Help Employees Sleep Soundly with Wellhub

Power employee health through sleep with Wellhub. Our flexible wellness platform gives employees access to impactful tools to truly rest. Meditation apps, exercise classes, sleep trackers — your employees can access it all in one simple subscription. 

The impact is real: Wellhub users are more likely than non-users to say their sleep is extremely healthy, and active users have seen their healthcare costs drop by 35% in just one year.

Start saving today — speak with a Wellbeing Specialist to get started!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!

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Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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