We switched from separate vacation and sick time to PTO several years ago. It hasn't been a problem for me so far. I think the co-workers who run out mid-year are the ones who take time off to take care of sick kids rather than their own illnesses.

We do have a fair number of people who sneeze and hack and cough all day at work. Most of them are suffering from allergies but you can never be sure they're not actually sharing a disease with us all. Just one more reason why I press elevator buttons with my elbow.