Companies offer wellness programs to cut insurance costs
Phil Ashton, 41, a Heinz employee, and Sandy Sabo, 45, who works for Ensr Inc., work out at Gold's Gym, Downtown, during their lunch hour.
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At 10:30 one night, Bill Lestitian, managing shareholder of Rothman Gordon, ran into one of his firm's paralegals in the lobby of the Grant Building, the Downtown office tower where his law practice is located.
Mr. Lestitian was thrilled -- not because the employee was working late into the night but because she was exercising at the Grant Club, a fitness facility in the building where the law firm recently bought a membership for all its attorneys and staff.
"That's a good thing," said Mr. Lestitian whose firm paid 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, Mr. Lestitian 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."
A study released this year by the American Institute for Preventive Medicine found 62 percent of all companies -- ranging from small to medium and large -- offer some type of wellness program.
While five years ago wellness programs typically were offered by insurance companies as part of benefit plans, now employers are anxious to develop and execute them internally to make sure they impact as many workers as possible, said Ms. Recht. "Today, it's the employer's program."
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? Reduce health risks of [employees]," said Ms. Recht. "They can't shift more costs to the employees. They have to get the gross costs lower."
At Del Monte Foods' regional headquarters on the North Shore, its 550 workers can exercise in an on-site fitness center that overlooks the Allegheny River and features cardio machines, free weights and circuit training equipment. Or they can join running and walking clubs that traverse convenient riverfront trails during lunchtime. After they work out, or walk, employees can shower and change in the fitness center locker room before returning to their desks.
If they don't want to work up a sweat at the workplace, Del Monte employees have access to discounted memberships at health clubs in the GlobalFit national network, which include some Curves and Bally Total Fitness centers in the Pittsburgh area.
Beyond exercise opportunities, the San Francisco-based maker of packaged tuna, fruit and vegetables offers healthy cooking demonstrations in its test kitchen hosted by a Del Monte 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.
Among the fitness centers where Heinz employees can be found breaking a sweat is the new Gold's Gym at Stanwix Street and Forbes Avenue, Downtown.
"Heinz is our No. 1 corporate member," said Tony Santella, manager and co-owner of the two-story health club that opened in January on two floors in the Kossman Building. Besides Heinz employees from the food company's global headquarters in One PPG Place and its offices in Heinz 57 Center, Sixth Avenue, Gold's corporate discount plan has attracted law firms, accounting firms and other businesses that "want their employees to get motivated," said Mr. Santella. Regular memberships in the club, which is open seven days a week including early mornings and evenings, average around $39.99 a month, he said.
Like many health facilities that are trying to forge more corporate partnerships, Gold's will track participation for member companies by providing weekly or monthly reports of how many employees come in to ride an exercise bike, attend a Pilates session or do other activities.
The YMCA, which plans to open new locations in U.S. Steel Tower this summer and in Market Square next year, also offers to track employees' use of their facilities for companies that subsidize worker memberships.
"It's simply a mode to make sure they're not wasting money on their employees," said Katharine Rummel, the Y's corporate wellness director.
The Y is doing a marketing push to tenants throughout the U.S. Steel Tower, where its 14,000-square-foot facility on the concourse level will include cardio and strength training equipment and studios for yoga, Pilates, spinning and step classes. The Y's 42,000-square -foot facility that will occupy the former G.C. Murphy store between Fifth and Forbes avenues will feature a pool in addition to exercise equipment and studios for group classes.
The Y, which sold its current facility on the Boulevard of the Allies to Point Park University, welcomes the new competition from Gold's and the Grant Club, which opened last October, said Ms. Rummel.
"It validates there's a market Downtown for places for people to go and be active. We think it's great."
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 at Backrubs and Bodyworks, Downtown. Trainers at the Grant 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 the Omni William Penn 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."
First Published May 11, 2008 12:00 am