Newsletter - June 2008

Legal firm, Rothman Gordon, pays about $3,750 for health club privileges for its 31 lawyers and more than 30 support personnel. The facility is open to members 24 hours a day, seven days a week so they can work out before, after or even during office hours.
 
"What we're trying to do is make happier, healthier employees. ... We thought it was a good idea to give all of our people the benefit to work out."
 
Though Rothman Gordon's group insurance plan did not pick up the cost of joining the fitness center, Bill Lestitian, the firm's managing partner, believes that it is a smart and cost-effective way to promote employee wellness and morale, which in the long run could help reduce the firm's medical costs. Besides the club membership, the firm provides crates of fresh fruit as a healthy snack alternative for the office and sponsors a "Biggest Loser" game to motivate its lawyers and staff to get in shape.
 
Such company initiatives to promote worker wellness -- from on-site yoga classes to smoking cessation programs -- are becoming more widespread as employers wrestle with soaring health care costs, said Geri Recht, principal in the Pittsburgh office of management consulting firm Towers Perrin and group leader of health and welfare for the firm's Pittsburgh and Ohio region.
 
"In the last five years it's become a bigger and bigger trend," she said. "It started with some [health club] discount programs and progressed to being as aggressive as hiring someone to be on site ... to manage employee wellness."
 
Consider the costs of employee health insurance and it's clear why more companies are urging their workers to get in shape. Health-care costs nationwide will hit $2.2 trillion, or 16 percent of the gross domestic product this year, with companies paying an average $9,312 per employee for health insurance, according to a Towers Perrin survey.
 
"What really happened is that organizations said they've done what they can to negotiate deep discounts with hospitals and providers; and they've passed on costs to employees ... What's left?" said Ms. Recht. "They can't shift more costs to the employees. They have to get the gross costs lower."
 
Beyond exercise opportunities, Del Monte, the San Francisco-based maker of packaged tuna, fruit and vegetables offers healthy cooking demonstrations in its test kitchen hosted by a company nutritionist; distributes its own no-sugar fruit cups and other health-conscious snacks to employees; and recently sponsored the Del Monte Fitness Cup, an eight-week challenge during which workers were encouraged to walk an extra 2,000 steps a day and participate in weigh-ins to earn points for pounds lost.
 
To date, the company has picked up the cost of all its wellness programs, including the health club discounts, said Mary Sestric, a manager in corporate communications. But Del Monte plans to explore what discounts it might obtain in the future through its insurance providers.
Whether or not insurance plans help subsidize the costs, companies that invest in employee wellness should see a payoff, studies show.
 
Highmark Inc., the Pittsburgh-based insurer, found that for every dollar spent on wellness programs, employers saved $1.65 in health-care expenses.
 
At Johnson & Johnson, the pharmaceuticals and consumer health products company, a four-year wellness program involving more than 18,000 workers saved the corporation $8.5 million a year in reduced health-care costs, according to the American Institute for Preventive Medicine study. Citibank saw a return of $4.56 for every dollar spent on a health management program, the study said.
 
Members of all Highmark insurance plans receive discounts on products and services including spas, personal trainers and fitness centers, Kristin Ash, a Highmark spokeswoman, said in an e-mail. For its own employees, Highmark provides free, on-site fitness facilities at its main offices Downtown and in Camp Hill, Cumberland County, while workers at satellite offices can obtain free memberships at local gyms. 
 
H.J. Heinz Co. picks up the cost of gym memberships for its work force "because we believe healthy and fit employees are always more productive and that is good for both the employee and for the company," Michael Mullen, director of global corporate affairs, said in an e-mail.
 
When Tricia Cooper, a legal administrative assistant at Rothman Gordon, decided to lose 10 pounds in February, she thought it would be more fun if colleagues joined her in a "Biggest Loser" game modeled after the popular reality TV show.
 
Mr. Lestitian and other administrators at the law firm approved the idea immediately and even offered to pay for weekly prize incentives for participants, including $50 gas cards and gift cards for health-related services such as massages. Trainers at a local club agreed to handle weekly weigh-ins for the 16 lawyers and staffers at Rothman Gordon who signed up for the game. The grand prize for the person who sheds the highest percentage of weight is an overnight package at a premium hotel including dinner.
 
"People are excited," said Ms. Cooper. "They're utilizing the gym at lunch. Even if they're not doing a heavy workout, they will change shoes and walk on the treadmill for 20 minutes."
Gym membership by themselves may not bring a huge financial return to employers, said Towers Perrin's Ms. Recht.
 
"People who were going to join are joining anyway. If you're not branding it as part of a broader wellness program, there's no return on investment."
 
It's the creative incentives that could help employers realize more long-term savings, she said.
 
For instance, companies might offer the health club discount and $100 to employees who complete a biometrics screening and then consult with a health coach. Some provide insurance premium differentials to employees who don't smoke.
 
Then there are employers who take a hard stance by charging their workers if they don't complete health screenings or work with fitness professionals.
 
"Some say, 'If you don't get your biometric screening, I'll charge you $40 a month and if you don't work with a health coach, you will pay $70 a month more in insurance premiums next year.' It depends on the leadership," said Ms. Recht. "Some are really engaged about wellness and its importance and that drives organizations to have a strategy that is much more aggressive."

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