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Companies say wellness programs are worth the investmentBy Lauretta Claussen, associate editor
Health care costs in the United States continue to rise. A survey conducted by Stamford, CT-based Towers Perrin found that in 2009, employers will pay, on average, $9,660 for health benefits per employee – a 6 percent increase from 2008 expenditures. Further, a 2008 study from the Farmington Hills, MI-based American Institute for Preventive Medicine showed the vast majority of health care claims – 87.5 percent – result from employees’ lifestyle choices, including eating poorly, failing to exercise or mismanaging chronic conditions.
As a result of these rising numbers, some companies are taking steps to mitigate increasing insurance costs by helping employees manage their health through wellness programs. Anecdotal evidence from organizations that use wellness programs suggests such initiatives also can encourage employees to work safer and reduce injury rates.
Reaching out to the workforce
Kathleen Krantz is vice president of technical and human resources at the Greater Omaha Packing Co., a beef manufacturing plant based in Omaha, NE, that employs about 825 workers.
In 1992, shortly before Krantz joined the company, a Greater Omaha employee died from poorly managed diabetes. Hearing about the worker’s death compelled Krantz to attend a meeting of the Wellness Council of America – an Omaha-based nonprofit organization focused on workplace wellness.
“Wellness was just kind of evolving at that time,” she said. “When I first went to one of their meetings, I thought there was no way that we, as a manufacturing plant, could participate in a wellness program.” Through the meetings, Krantz discovered wellness programs can be tailored to suit virtually any workforce in any industry.
To get started, Krantz sought assistance from the local community to launch a health fair. She solicited state health departments and insurance companies to gather as many resources as possible, such as flu shots, vision screenings, massage therapy – even clowns to entertain children. Employee interest in the fairs was high – so high, in fact, that subsequent events had to be moved from the local community center to a nearby hotel that could accommodate about 1,200 people.
One reason the outreach was such a success, Krantz noted, is because the company considered the needs and concerns of its unique workforce. “Typically, the Latino culture likes to have events on Sunday afternoons with their families, so all of our health fairs were on a Sunday afternoon,” Krantz said. “The families – they are a part of our claims as well. So the impact of participation is very significant when you involve spouses and children.”
Krantz reported that health care costs at Greater Omaha are about half the national average, which she attributes to “Simply Well,” a program designed to help employees manage their health, and employees paying more attention to their health.
Improving safety through fitness
Atlanta-based packing and shipping giant UPS is the second largest employer in the United States, with about 425,000 employees and 1,500 facilities. Each facility is staffed with its own wellness coach who is on-site during each shift, organizing wellness activities, participating in safety meetings, examining injury rates and brainstorming solutions to reduce them, said Mary Breen, corporate occupational health manager at UPS.
“We’ve really kicked it up the last two years,” Breen said. “We have over 3,600 health and safety committees around the globe, and we have a wellness champion on every single one of those committees.” Although UPS has an extensive wellness program at the corporate level, its facility located in Petaluma, CA, is considered the innovative leader in wellness initiatives.
“The center manager [at Petaluma] saw injury rates being too high in his center,” said Dan McMackin, public relations manager for UPS. “So he got his drivers together and said, ‘What do you think we can do as a safety committee to stem the tide and lower our injury rates?’ What they came up with was the concept of being better prepared for the job before they began.”
The program started with an early morning yoga class and grew exponentially from there. Yoga classes soon became so popular among the employees that they had to be moved from the UPS facility to a nearby yoga studio. The center also pioneered a smoking cessation program, brought in a nutrition counselor to evaluate what workers were eating on and off the job, formed a daily walking club, and offered a short stretching routine every morning.
“Our people have been called industrial athletes,” McMackin said. “They need to be fit for the job, not just get fit from the job. Our job is very physically demanding, and you need to be prepared for it.”
Breen agrees, noting that although musculoskeletal injuries constitute the largest portion of employee injuries at UPS, the Petaluma center went 10 months without a single injury after implementing the yoga program. For that first year, the 100-employee facility recorded just one lost-time injury. Other UPS facilities are now starting to copy the Petaluma facility’s wellness program, McMackin said.
Little research has been conducted to examine the return on investment wellness programs can provide. However, in February 2008, AIPM released a white paper – “The Health and Economic Implications of Worksite Wellness Programs” – that analyzed a number of studies on such programs. Results showed wellness programs provide an ROI of $3.48:1 through reduced medical costs and $5.82:1 through decreased rates of absenteeism.
On average, the paper found, employers saved $71.41 per employee over a nine-month period as a result of reduced doctor and emergency room visits.
A study published last year in the Journal of Occupational and Environmental Medicine (Vol. 50, No. 1) came to the same conclusion. Based on a four-year model, researchers further found that wellness programs can provide an ROI regardless of employees’ general health at the outset.
Since broadening its wellness initiatives over the past five years, UPS has seen a significant reduction in workers’ comp costs. It also has decreased its DART rate by more than 60 percent.
“Wellness impacts safety,” McMackin said. “It impacts people’s attitudes, and, very often, attitudes impact safety. If you approach your job in a positive manner every day, you tend not to get hurt. It’s all one big continuum. If you’re healthy and you’re well, you don’t get hurt as often.”
We Energies is a Milwaukee-based utility provider that employs about 4,900 workers throughout 50 sites in Wisconsin and the Upper Peninsula of Michigan. The company estimates that its wellness programs have helped save nearly $12 million between 1998 and 2007, mostly through reduced workers’ compensation costs and absenteeism. Injury rates are also down, which the company attributes predominantly to its stretching program.
Although rising health care costs and the recent economic downturn may make companies reluctant to add to their out-of-pocket expenses by developing wellness initiatives, the investment in wellness pays dividends, insists Susan Bloomberg, senior wellness manager at We Energies.
“Along with the rest of the country, the We Energies workforce is aging, and the opportunity to create a healthier workforce now, prior to a major medical incident occurring, will save major dollars later,” she said, noting that wellness programs “have well-documented potential to reduce injury and increase vitality, which results in a more engaged, productive, less costly workforce.”
Bloomberg also noted that the current economic situation may result in more employees remaining on the job later in life than they had previously considered. Such decisions “will extend the impact of one’s individual health on company health care and productivity costs – yet another reason to want employees to get and stay healthy,” she said.
Figures and anecdotal evidence such as this may sell executives on the concept of wellness initiatives, but selling employees on the idea can be another matter. McMackin recalled visiting a California facility in which managers attempted to introduce the stretching program used in Petaluma. “There was a good 10 percent [of the drivers who] were not interested. In fact, they were probably snickering; they didn’t take it very seriously,” he noted.
Perseverance is key, McMackin said. “You just have to get them over the hump psychologically that this is something that will benefit them way beyond the job. It’s like anything else – any time you initially bring something into a workplace, there’s skepticism.”
Wellness initiatives sometimes even seem strange to him. “I’m definitely from the old school,” McMackin said. “This stuff, in a way, seems odd to me, and yet I know that it is necessary.” However, Breen noted that the younger generation of new hires were virtually brought up with wellness in their schools and in the general culture. “I think there’s a generation that has to pass,” McMackin speculated, “before the new generation comes in and it’s just expected – it’s accepted.”
At UPS, wellness is at the forefront from day one on the job, Breen said. “We teach [new hires] proper body mechanics and stretching and hydration all within their first four days of orientation,” she added. Another key to UPS’ success is that its wellness initiative is led by ground-level employees rather than executives and upper management. “What we have seen as effective is that the hourly employees take charge,” Breen said. “It’s not the management – management can be there to support – but they need to hand it off to an hourly employee, one of their peers.”
That is the most valuable lesson UPS has learned in the past 20 years, according to McMackin. “Our Teamster employees are taking control and responsibility for their own health and safety. That’s a huge difference.”
The commitment many UPS employees have toward wellness today is on display for all to see, McMackin said. “Drivers were so passionate about some of these wellness initiatives that they’re discussing them with their customers,” he said. “They’re starting to ‘preach the good word,’ if you will, of wellness.”