Corporate wellness programs sprout up as companies face higher healthcare costs

Corporate wellness programs sprout up as companies face higher healthcare costs

Could corporate wellness programs drive supplement use in the United States?


Although they have been on the scene for 30-some years, corporate wellness programs are evolving from being a nice, “new agey” thing to do to an increasingly popular business strategy that can drastically reduce a company's healthcare costs and improve employee productivity and retention. Such programs are being embraced by large corporations, such as IBM, Google and Safeway, as well as by smaller companies. “The workplace is where you can reach the most people to change behavior and help them improve their health,” said Iris Sokol, president and founder of Fitness Works at Work, a pioneer in developing corporate fitness, health and wellness programs. “And many programs also allow families to participate, so you are not just reaching the employees.”

The corporate wellness programs in existence today are as diverse as the companies they serve. Some offer changes as simple as providing healthier snacks in vending machines, while others go all out with full blown models featuring onsite fitness centers, nutrition and health experts, ongoing education and assessment, and incentives to participate. The metrics for calculating the true effectiveness of corporate wellness initiatives can be difficult to come by; but, as corporate healthcare costs continue to rise, many companies are proving willing to take a chance on programs designed to give their employees a health boost.

Serious Savings

Statistics on the value of wellness programs to healthcare costs and prevention are increasingly compelling. For example, a meta-analysis of workplace disease prevention and wellness programs, conducted by Harvard University School of Public Health researchers, found that for every dollar spent on wellness, medical costs dropped by $3.27 and absenteeism costs dropped by $2.73. Another study published in the Journal of Occupational and Environmental Medicine in April 2009 reported that workers with low health risks cost their employers $1,472 annually in lost productivity, while those with three health risks cost $5,952 in lost productivity. Researchers estimated that if 100 employees reduced one risk, it would save nearly $150,000 in productivity.

Such potential savings are helping to fuel the expansion of corporate wellness programs across the United States. Sokol, who has been implementing corporate wellness programs since 1982, said that, despite the down economy, she is seeing an explosion of interest because companies are starting to see the upside. “The potential of wellness programs involving diet, lifestyle, exercise and nutrition can provide strong ROI for companies to reduce absenteeism and improve presenteeism,” added Jay Udani, MD, CEO of Medicus Research and assistant clinical professor of UCLA School of Medicine. These initiatives can also help as companies re-structure and the economy affects jobs. “People now have less opportunity to take time off when they are sick or in pain,” Udani said. “So there is a big opportunity to try and keep people well and improve their quality of life so that they can perform at a higher level in the workplace.”

Healthcare Economics Drive Corporate Interest

The growing interest in corporate wellness programs comes down to healthcare economics, said Tim Avila, president and CEO of ZSweet. “Governments are no longer able to pay for their healthcare obligations,” he explained. “As a result, they will have to support programs that help make their populations and work forces healthier.” But, to be successful, corporations and consumers will have to buy into the wellness mantra. “This is not 20 years away,” Avila said. “It's happening now.”

The U.S. healthcare reform bill signed into law in March 2010 does include some federal funding for corporate wellness measures. For example, starting in 2014, employers can offer greater incentives to employees for participating in corporate wellness programs or for meeting certain health targets.

Still, many believe the bill did not go far enough, said Brady Davis, founder of Elements Health Plans, a provider of integrated health plans, insurance and worksite wellness programs. “The Obama administration wanted to pass something and caved in significant areas,” Davis said. More people will be covered under the new law, but as Davis sees it, the winners are still the pharmaceutical and insurance industries — and they will not be regulated on what they charge consumers until 2013-2014. “We're going to have a real cost structure problem in five years, as this reform is implemented and more people are forced into an already broken system,” Davis said. This, of course, could motivate even more companies to institute wellness programs for their employees, Sokol said.

A Work in Progress

Not too long ago, few companies saw the wisdom of providing benefits that would make their employees happier and healthier — but that is changing. “We have seen companies give many reasons for pursuing wellness programs,” Sokol said. “Back during the dot-com craze, employers needed to do whatever they could to keep their employees. Now the primary reason is reducing healthcare costs.”

Slashing healthcare costs, however, takes time and metrics, which can be difficult to pin down, Sokol added. That is why she advocates designing more aggressive wellness programs that utilize lots of metrics — such as periodic screenings of body mass index, blood pressure and cholesterol levels. “If you take people by the hand and lead them through it, you will see health changes,” Sokol said.

Collecting individual metrics can be problematic from a privacy perspective, however, and some critics of wellness programs argue that tracking these measurements and rewarding employees for achieving goals can be discriminatory. For instance, Safeway's “Healthy Measures” program, for which 30,000 participants have signed up, has been criticized for rewarding employees who score well on health screenings with lower insurance premiums. In fact, health organizations such as the American Heart Association and the American Cancer Society have stated publicly that such programs discriminate against employees who are less healthy or have pre-existing conditions.

To avoid these kinds of problems, companies will often use third-party providers such as Sokol's company, Fitness Works at Work, which keeps individual information private and typically reports to its clients only aggregated results.

Companies today are also becoming less focused on generating a quick return on investment with their wellness programs. “CEOs are starting to understand that this is the right thing to do, so they are not often asking for detailed metrics,” Sokol said. “They know they will see ROI, but they also know it takes years to change behavior.”

Reducing Serious Health Risks

According to Davis, the majority of corporate wellness programs today are focused on reducing serious health problems — rather than on helping everyone become healthier. “What [companies] often try to do is identify participants with critical risk conditions,” Davis explained. “They pick off the low hanging fruit, so to speak — the smokers, the diabetics, the obese and the depressed. The theory is that if you reduce these risk factors you will reduce claims and save money.”

While this strategy can work, Davis said the follow up and guidance given to these participants is often too general to help them really change their lifestyles. “Unfortunately, many of the tools companies use to help people solve these problems are developed by the insurance industry — which is focused on sickness care, not wellness care,” Davis explained. “The guidance will be from a doctor or nurse practitioner who might tell them not to use supplements because of contraindications. What they need is someone to tell them how they can supplement appropriately without contraindicating.”

Whether supplements are in the mix or not, using a personalized approach that includes employees of all health levels is important, said Linda Vacovec, vice president and director of health promotion at Fitness Works at Work. “You can't overlook the healthy in a wellness program,” Vacovec said. “It is just as important to keep them healthy and not let them slip into the at risk category.” Successful programs, she added, need to be consistent and continuous and have a good way of communicating what they offer to staff. They also need buy-in from top management — or the program won't get off the ground. “Management has to support it monetarily and in a personal way by taking part,” Vacovec added.

Promising New Models

One corporate wellness program at today's cutting edge has achieved top-to-bottom employee support. Standard Process, a manufacturer of whole food supplements, offers a comprehensive program that was born in 1998 from management's vision to reduce healthcare costs and improve employee wellness. “We knew we wanted it to be both employee and health focused,” said David Barnes, director of research at Standard Process. “How best to do that was the question.”

The Standard Process program began with simple activities such as allowing employees time to take walks or hikes during the day and providing counseling from a naturopathic resident. Today, the company offers an onsite fitness center, annual health screenings, regular health and nutrition events and seminars, as well as access to fitness trainers, chiropractors, nutritionists and other healthcare practitioners.

In addition, generous cash incentives promote participation and award health and nutrition achievements. “This makes for happier employees who are more engaged in their jobs, and it has a profound effect on performance, safety and absenteeism,” said Kevin Setnes, the corporate health and wellness manager who oversees the program's implementation and strategies.

The program is paying off in other ways too. “The company is saving money on claims,” Setnes added. “We know our Challenge winners cost 40 percent of what the non-participant group does. So when you are talking about thousands of dollars of healthcare costs, that's significant.”

[Editor's note: For more on Standard Process' corporate wellness program, see page 27.]

Progressive wellness programs, such as that implemented by Standard Process, have the potential to save companies real money, and Elements Health Plans has developed a model to help prove it. The company combines insurance and claims analysis expertise with health promotion experience to provide customized, integrated healthcare solutions for its corporate clients.

As part of its services, Elements Health Plans builds an employer profile using its proprietary Health and Lifestyle Assessment program and Health Plan Analytics software. The company's proactive artificial intelligence software makes customized recommendations for a client's employees that are based on science and practitioner experience, Davis explained. “It provides comprehensive evidence-based information and customized guidance to the individual.” For example, the software uses an evidence-based approach to determine what vitamins an individual should take and how much of that vitamin they need. “The assessments are ongoing,” Davis added. “So as a person's needs change, so does the dosage.”

Elements Health Plans is currently running pilot programs for some of its clients in which it targets specific conditions with supplements and diet, Davis explained. “We're finding we can reduce the time it takes to reverse a condition by maybe six to eight months,” he said. “That is a huge cost savings for a corporation.”

Davis said new models such as his can help consumers and companies drive changes in healthcare. “Smart people are examining what is happening at the cutting edge and will do what is right because the system isn't.”

These creative solutions must be the wave of the future, Setnes added, because employees are getting increasingly unhealthy — and it's creating a competitive disadvantage for U.S. companies. “Like Japan of several years ago, our workers are suffering from burnout, and we are still not out of it,” Setnes said. “Companies have to take the lead because we are a corporate society and capitalism still rules. The ideas are out there; we just have to do it.”

Standard Process' Corporate Wellness Program Provides a Model for Industry

When supplement manufacturer Standard Process instituted its first employee wellness initiatives 12 years ago, the company probably didn't realize it would be setting the bar for corporate wellness programs — but that's exactly what happened. Today, the Palmyra, Wisconsin-based company's wellness program is a top example of what is possible, especially for a small company with limited resources. Although wellness is at the root of what Standard Process stands for, the company's program evolved from broader concepts of quality control, sustainability and simply doing what's right for your employees, said David Barnes, the company's director of research.

The program started in 1998, when Standard Process began offering employees time for exercise and to clear their minds during the day. Today, the company employs five full-time staff members to run and administer the program and offers an onsite fitness center, annual health screenings, nutrition information and education, access to health experts, and cash rewards for participation and meeting set health goals. “This is an extraordinary program and investment in health and well being for a company this size,” said Kevin Setnes, Standard Process' corporate health and wellness manager.

Participation in the program is high. Of the company's 285 employees, about 200 take the health screenings and another 100 participate in the wellness challenge, which offers generous incentives to participate and meet health and fitness goals. For example, employees earn credits for improving specific biomarkers, such as blood pressure; for attending a seminar; or for working out in the fitness center. The program features three award levels: An employee who earns 85 or more points (out of 100), receives a gold award and $750; 70 points earns a silver award and $500; and 55 credits wins a bronze award and $250. “Employees can really earn back most of their health insurance premiums for the year,” said Setnes. “We had 37 people get gold last year. That is quite an achievement because you have to be involved at all levels to win gold.” The incentives, Barnes noted, are crucial to the program's success. “That is what it takes to get people over the hump and participate.”

Standard Process also offers employees an allowance to purchase company supplements for themselves, their families and their pets. “Management is very generous in this regard, and it makes it easy to supplement,” Setnes said. “Employees can't say they can't afford it.”

Despite the resources it takes to manage, Standard Process executives know that the company is saving money and gaining other benefits through its wellness program, Setnes said. Beyond the approximately 40% that Standard Process saves on health claims for those employees who participate, the company's pool of healthy employees is growing, Setnes noted. In addition, employees are learning how prevention works — and spreading that knowledge to others. “We don't focus on symptoms; we focus on alignment and getting back to basics through whole foods and nurturing the body from the ground up.” Standard Process also knows that it is fostering a better, more productive work environment, he explained. “Our employees like coming to work. They are enthused, and they perform at a higher level.”

As Setnes noted, another side benefit for Standard Process is that the company's employee wellness program is a good story for both existing and potential customers. “When clients visit, they see the program,” Setnes said. “It has a presence, and it definitely helps the business. They see in this program what we stand for as a company.”

Could Corporate Wellness Programs Drive Supplement Use?

Beyond improving the health statistics of their own staffs — which, incidentally, is a perfect fit with the corporate missions of many dietary supplement and functional food suppliers and manufacturers — what business opportunities could corporate wellness programs bring to nutrition-related companies? More specifically, could nutritional supplementation become a bigger piece of formal corporate wellness initiatives?

Although dietary supplements could become a larger, more important component of corporate wellness programs, most initiatives today do not formally drive supplement use — and significant barriers currently prevent formal partnering between supplement manufacturers and corporate wellness providers. Here's one case in point: Fitness Works at Work, which has been designing and implementing corporate wellness programs since 1982, provides expert nutritional training for its clients but generally doesn't address supplements because it is focused on teaching people how to get proper nutrition from whole foods, said Iris Sokol, the company's president and founder. Fitness Works at Work also doesn't allow promotion of specific brands in its corporate wellness programs, Sokol added. “I don't think companies would be very receptive to partnerships with supplement companies,” she said. “I would be leery of that, just as I would be of promoting particular exercise equipment.”

Others, however, believe that supplement companies have an important role to play in corporate wellness reform — one the industry has not been terribly successful at to date. “Converting these people to a healthy lifestyle is the last frontier for our industry, and we need to be creative and make it as easy as possible,” said Brady Davis, founder of Elements Health Plans, a provider of integrated health plans, insurance and worksite wellness programs. “This is where industry marketers are missing the boat. We need to be looking at how we can support companies running these programs. We need to sit down with Safeway and Walmart and ask them what they need from us. Can employees buy supplements from Walmart at a discount and then get credit for buying them? We need to say, ‘We want to work with you. What do you need?’ ”