Given the economic downturn and accompanying layoffs over the past year, you might think company wellness programs would be going the way of the matching 401(k). Not so.
In fact, many companies that have tried to trim their workers’ waistlines — and health care costs — may find themselves in a better position than ever to give workers a little nudge.
“The rising cost of medical care is unsustainable and is a huge and legitimate concern to employers that pay for it,” says labor attorney Hanan Kolko. “During the past decade or so, health care costs have been rising at three times the rate of inflation. Every nickel that goes to pay for rising medical costs can't pay for raises, pensions or 401(k) matches.”
The median health care expense per employee last year was $7,173, according to a recent survey by Watson Wyatt and the National Business Group on Health.
But companies save from $1.49 to $4.91 in health-related expenses for every dollar spent on wellness programs, according to the U.S. Department of Health and Human Services.
That may be part of the reason why, despite the downturn, employers don’t seem to be skimping on their health and wellness initiatives.
A survey of about 500 human resources and benefit executives by professional services firm Towers Perrin found:
- 50 percent of companies have or will introduce or increase investments in wellness and health promotion in 2009 and 2010.
- 32 percent have or will introduce or increase financial incentives, such as bonuses or premium discounts, for wellness or health promotion activities in 2009 and 2010. Another 30 percent are considering this action.
- 45 percent say they are considering introducing or increasing penalties for nonparticipation in wellness or health promotion activities.
This is an opportune time for employers to focus on wellness, says Dave Guilmette, managing director of the Towers Perrin Health and Welfare practice. Employees, he says, are going to think: “If I want to keep my job, I better pay attention to what my employer is asking me to do.”
Treadmills in the office
Financial services firm USAA has been running a wellness program for five years.
“We think 50 to 80 percent of our medical costs are related to people who are overweight,” says Dr. Peter Wald, enterprise medical director for the firm, which has 20,000 employees.
While the San Antonio, Texas-based firm saw some improvements thanks to the wellness programs, the company had little success actually getting people to lose weight, Wald says.
Previously, workers received a lump sum of money just for participating, but now the company is tying incentives to actual weight loss. Employees have a year to lose 10 percent of their body weight. If they can pull it off, they’ll get $300.
At AstraZeneca US, saving money on medical costs and improving worker productivity are among the key reasons for a continued focus on promoting employee health.
Despite expected layoffs of 15,000 globally through 2013, the pharmaceutical firm has, for the most part, not allowed their wellness efforts to wane.
Due to economic issues, the company did end financial incentives for participation. However, AstraZeneca added a new program to encourage workers to ride their bikes to work every Friday. They also now offer a free two-week trial membership to the fitness center and encourage managers to lead by example by adopting healthy behaviors such as eating right and exercising.
“We know people are more pressured for time,” says Dr. Joe Henry, executive director of US Safety, Health and Environment for the Wilmington, Del.-based company. “If we are going to ask people to work harder and longer hours, we have to give them something.”
So AstraZeneca is making it easier for employees to exercise by scheduling morning meetings later — so workers can hit the gym — and also implementing ‘walk stations’ that allow employees to walk at a slow pace on a treadmill while working or in a meeting.
Ministry Health Care in Milwaukee is hoping financial incentives do the trick.
The hospital and clinic network has seen a cost increase of about 8 percent in its 2008 health insurance premiums and expects a 12 percent rise this year.
But Michael Knitter, director of total rewards at Ministry, is hoping to shave up to 4 percent off costs thanks to a rewards-based weight management program the company implemented last year.
Workers who take part in the program will get $5 every quarter and $5 for every 1 percent of weight loss up to 10 percent per quarter, he says. Also, by participating in the program and agreeing to a blood draw and testing, they can take $240 annually off their premiums.
Cathy Young, a 50-year-old Ministry employee, signed up because she wanted to lose 20 pounds.
“I’m one of those people that when I’m stressed, I eat,” she says. She credits the program with helping her stay on track.
“They give you e-mail reminders every single day to do things like get up and walk around, or grab a glass of water rather than soda,” she explains. “It’s been a big help.”
So far, Knitter says, the program has been successful with a 40 percent participation rate.
But during the latter part of 2008, the hospital saw an actual increase in weight gain among workers because of stress related to the bad economy. “That quarter was when the economy was tanking and people were losing money in their 403(b)s and 401(k)s,” he says. “Now we seem to be on track.”
The recession has caused a lot of stress for workers, and some have seen their healthy habits go right out the window as a result. A recent survey from ZoneDiet.com found that 25 percent of Americans are turning to comfort food more because of the economy.
“Along with emotional eating, I am finding alcohol intake has increased considerably,” says Stephanie Middleberg, a New York dietitian. Many of her clients that used to have healthy food options at work, thanks to their employers, have seen most of those disappear.
Some workers whose companies offer few programs or incentives are taking matters into her own hands.
Judy Podvin, 45, a residential real estate agent from Howell, Mich., has gained about 10 pounds in the last year and says it’s partly due to the economic collapse that has hit Michigan hard.
“No one has any money, people are losing their homes, and half the deals don’t make it to the table even after months of work,” she explains. “It’s so depressing and stressful. You go home and feel sorry for yourself and wait for the next meal.”
She’s trying to eat better and has hired personal trainer Lori Wengle.
“I’ve only gone down 10 pounds and a size and a half, but I feel a million times better,” she explains. “It’s absolutely helped my jobs performance.”