Of f the critical issues facing corporate
Corporate giants are responding to this exponential increase in a way that is characteristically American-they are reacting to costs by trying to control them once they’ve already occurred. True, managed care and some degree of health care rationing is essential. Business has the right to use its tremendous purchasing power to place limits on what it will accept from providers. Furthermore, employees should share the consequences of their life-style decisions through well-placed incentive programs.
But while these efforts are vital, it’s amazing that so little attention is paid to the role of wellness. It seems obvious that the best way to control health costs is to prevent them from ever occurring in the first place.
THE EVOLUTION OF WELLNESS
My experience with the concept of wellness started at least 40 years ago-a time when my management career was just beginning to flourish. But instead of embracing the daily challenges of private enterprise, I found myself chronically fatigued, irritable, sleeping poorly, and generally unenthusiastic. Convinced I was suffering from some wasting disease, I visited the Mayo Clinic.
There, I met with an internist and underwent what seemed to be every test they knew how to perform. When results were gathered the internist looked at me and said, “I’ve got good news, and I’ve got bad news. The good news is we can’t find a single thing wrong with you; the bad news is there is nothing we can do to help.”
Then he said a very revealing thing: “You wouldn’t believe how many people in circumstances similar to yours come to us with exactly the same problem.” It quickly became obvious that if the medical profession couldn’t help, I was going to have to help myself.
I got involved with nutrition and read all the popular books of the day. I studied meditation and the mind’s extraordinary effect on the body. And I learned about aerobic exercise and its benefits on the cardiovascular and pulmonary systems. When I incorporated these elements into my life-style-a healthy diet, meditation, and aerobic exercise-I began to feel well. Exceptionally well. I had discovered what is now known as wellness.
As an evolutionary process this took about 20 years, by which time I was convinced that fully 90 percent of all human ills are self-manufactured. It became important to me to share this information with employees because I truly believe, with very few exceptions, that people don’t want to be sick. I had quite a challenge convincing management that a wellness facility would prove beneficial. After all, this was 1970 and medical costs were a relatively fixed corporate expenditure. But after much pushing and prodding, the management team relented, and in 1980 we cut the ribbon to a state-of-the-art 24,000-square-foot on-site wellness facility.
COST CONTROL ON SITE
The facility represents our efforts to change the internal corporate culture and create an environment where health and wellness are not only encouraged, but expected of employees. It is a proactive attempt to control health costs by reducing the likelihood they’ll occur.
A cost/benefit analysis by the University of Oregon School of Management revealed that for every dollar we spend on wellness, we see a return worth $6.15. A break-even analysis showed that annual operating costs of the program can be covered with as few as 580 participants-this in a company with 10,000 employees. Even more revealing is that between 1988 and 1989, when health costs were rising 18.6 percent nationally, our costs rose only 5.9 percent while adding to the benefits package.
Although we have implemented managed care programs and preferred provider networks, these programs are aimed at changing an external culture over which we have limited control. While necessary for cost containment, such programs address only one side of the health care equation. My contemporaries at other companies claim we’re successful with wellness because we don’t have unions. But that’s a cop-out, for you don’t have to negotiate a wellness center into your union contract. Look about; there’s mounting proof that wellness is working.
Pennzoil, for example, has saved an estimated $1.3 million in the cost of cancer therapy through early detection and treatment of 22 malignancies. Blue Cross /Blue Shield claims a return worth $1.45 for every dollar invested in its wellness program. And Control Data’s “Staywell” program has saved the company at least $50 per employee per year in direct health claim costs and another $100 million in indirect savings through reduced absenteeism and turnover and increased productivity.
In terms of gathering quantifiable data on the relationship between prevention and cost control, the wellness field is still fairly new. But as far back as 1985 there were hints we were onto something important. A survey conducted that year by the Department of Health and Human Services revealed that wellness benefits outweighed program costs for the majority of companies that participated in the survey.
Clearly, wellness is a case where longterm investment is mandatory. It’s not a strategy that will provide quick, measurable returns because healthy life-styles take time to develop and maintain. Unfortunately, in an era when the allure of short-term profits is driving American business, it appears long-range investment is a thing of the past.
WELLNESS AND THE OLDER EMPLOYEE
A healthy work force is inextricably linked to long-term profitability. But as the American population ages and the employer’s tab for age-related health and disability costs increases, the profitability of all companies is threatened.
At Coors, the proportion of workers aged 55-64 will increase from 9 percent to 41 percent in the next 20 years, potentially increasing the number of employees who cannot perform their physically demanding jobs or who suffer from declining health associated with age. Subsequently, our annual costs for long-term disability cases is predicted to rise to at least $2.3 million-that is, unless we can prevent or minimize these disabilities through targeted wellness efforts.
As the national aging trend indicates, Coors is not alone in this situation. To avoid the costly, long-term disability benefits, worker’s compensation, and lost productivity associated with aging, employers have to get serious about creating and maintaining healthier employees. Companies should also increase their emphasis on control of musculoskeletal injuries, hypertension, and cardiovascular disease. Ergonomics is part and parcel of disability management and wellness. And instead of waiting for older workers to access wellness programs on their own, the programs should be brought to the work force and made available to all employees during working hours.
There is a direct analogy between money expended on unnecessary absences and, using Coors as an example, on materials waste; between money saved on disability and money earned through beer sales. Money earned or lost either way is money that will make us more or less successful. Disability costs are not simple, unalterable, inviolate costs of doing business. They are costs that can and must be avoided to stay profitable.
Beyond prevention, employers should be committed to retraining disabled workers, to maintaining positive relations to prevent expensive litigation, and to developing on-site rehabilitation programs designed to return disabled employees to work as quickly as possible. Leaders in the field of age-related disability management include Burlington-Northern Railroad, which, in 21 months, cut in half the number of employees unable to return to work as a result of disability and reduced the number of lost work days by 3,000; and General Motors, whose disability prevention and management efforts have saved the company a whopping $140 million in disability costs.
REDUCING STRESS CLAIMS
Wellness programs are especially beneficial when it comes to that nebulous diagnosis known as stress. Psychological costs now represent 30 percent of all health care costs, and people are getting workman’s compensation on the basis of burnout and on-the-job stress. This is probably the easiest condition in the world to fake, not unlike the notorious whiplash claims of years ago.
But used effectively, wellness programs offer an obvious solution. If an employee experiences job stress and refuses to participate in company-sponsored wellness and stress reduction programs, who is ultimately responsible? Certainly not the employer who has made stress control a priority for workers. Carefully orchestrated wellness programs can reduce the employer’s liability in stress claims by 95 percent, placing the burden of proof on the person who claims a stress-related disability. Not only will this curtail hikes in insurance premiums, but reduced employee stress will increase productivity.
AT&T deserves credit for going a step further with its stress prevention efforts. Recognizing that stress in a person’s life is not always job-related, the company’s “Total Life Concept” wellness program is being reorganized to give employees the autonomy and flexibility to attend to personal matters that may interfere with their job performance.
Employees are given personal time that can be used to pick up a sick child from school, and they are allowed-within reason-to arrange work schedules to fit their personal schedules. AT&T’s management believes that if people are given more autonomy, their stress level will decrease, they’ll become healthier, and ultimately, they’ll become better, more loyal employees.
Dr. Herbert Benson, an early pioneer in the relationship between stress and disease and author of The Mind-Body Effect and The Relaxation Response, describes the benefits of wellness programs this way: “Fully 60-80 percent of visits to a physician’s office are the result of stress-related illness. If people can learn to deal with stress effectively, a tremendous cost savings will be realized.
“Furthermore,” writes Benson, “the vast majority of risk factors for cardiovascular disease are preventable through wellness techniques-a healthy diet, no smoking, regular exercise, maintaining an ideal body weight and stress management.”
POSITIVE PUBLIC RELATIONS
Wellness programs can foster good public relations, particularly for manufacturers of consumer goods. People make purchasing decisions based on a number of obvious reasons including quality, price, and advertising. But more subtle is the influence of the overall image and ideals of the company. All things being equal, if a company shows concern for its employees by promoting wellness, and another company doesn’t, whose product would you buy?
If you want your employees to respect and admire you, you have to respect and admire them first. Wellness programs offer the side benefit of showing employees you care. One note of caution when setting up wellness programs: Your concern for employees must be perceived as altruistic, and not as a measure intended for cost control. Otherwise, employees will feel exploited.
So why isn’t wellness seriously considered a cost control measure, particularly among the nation’s top executives? Some must feel it’s a soft subject; not meaty enough to compete with the real issues of American business. My colleagues claim it’s something best left to the human resource experts. Unfortunately, a human resource professional may have the talent, drive, determination, and foresight to pursue a wellness program, but if there’s no support for it up the line, the program is ultimately doomed.
START AT THE TOP
Wellness requires personal awareness and commitment by the CEO, the president, and the vice presidents on down-in that order.
If a top-level manager is overweight, smoking half a pack a day, and enjoying three-martini lunches, that person is in no position to talk about wellness for the rest of the company. It’s like parenting. You cannot instruct others to do as I say, not as I do. If you don’t want your child to smoke, you don’t smoke. If you don’t want your child to be fat, you’re not fat. You have to be able to teach by example. But it’s threatening to some executives to change their life-styles. The lack of successful wellness programs is often based on fear, and not understood or evaluated as a business decision at all. It’s based on the personal unwillingness of corporate leaders to lead by example.
AN OUNCE OF PREVENTION
It is obvious that prevention of illness is the best cure. It’s cheaper-and generally smarter-to eliminate toxic waste at the plant than to clean up an entire neighborhood after a spill. It’s cheaper to maintain plants and facilities in good working order than it is to design and build new ones. And it’s cheaper to install smoke detectors than to shoulder the cost of equipment and facilities lost in a fire.
In fact, wellness programs are not unlike smoke detectors, in that they alert participants to potential health risks and minimize the likelihood of loss or damage.
However, wellness is not just a way to harness health care costs. Health promotion programs help companies demonstrate a we-care attitude by getting employees started toward a longer, healthier life. The overall gain is a clear benefit for U.S. society at large.
Used effectively, wellness programs allow people to perform at their greatest potential and achieve the greatest satisfaction from their jobs and their lives.
William K. Coors is chairman and president of Adolph Coors Company, with $1.3 billion in 1989 revenues. The grandson of the company’s founder, he holds a bachelor of science degree and graduate degree in chemical engineering from Princeton University.