Health Care and Insurance and Economy and Manufacturing & Technology

Employers target obesity through wellness programs: Overweight workers contribute to higher health costs

January 31, 2005

Companies enjoy seeing an increase in their bottom line as a reflection of positive growth.

They don't, however, like to see growth in employee "bottoms," as evidenced by a national obesity epidemic that is becoming a public health crisis and is cutting into corporate profits through increased health care costs.

A study by the not-for-profit, nonpartisan Trust for America's Health reported that nearly 119 million American adults-65 percent-are overweight or obese. The group warns that obesity may soon overtake tobacco as America's leading health problem and preventable killer.

Indiana has the fourth-highest level of adult obesity in the nation at 26 percent, the Washington, D.C.-based trust said.

The state spent an estimated $264 per person in 2003 on medical costs related to obesity, the 22nd-highest amount in the nation.

And according to the Bureau of Labor Statistics, 66 percent of the nearly 15 million Americans employed in manufacturing in 2003 were overweight or obese.

The Indiana Manufacturers Association knows firsthand the effects of increased health care costs borne by companies and their employees. In the 2004 Indiana Manufacturers Association Health Care Purchasers' Survey, dealing with rising health care costs was the top concern of employers.

Jeff Goodwin, executive vice president and chief operating officer of the IMA, said Indiana manufacturers struggle to offer competitive health care benefits and wellness programs while remaining competitive in the marketplace.

"Our manufacturing companies have to compete in a world economy," Goodwin said. "It's changed the whole cost of running a manufacturing shop." And the demand for raw materials has driven up operating costs as well.

That's not to say employers aren't interested in or willing to incorporate wellness into their employee benefit programs. Goodwin said that in the recent survey, 14 percent of employers checked that they are developing or increasing funding for employee wellness programs.

Some IMA members have contracted with Indianapolis-based wellness firm Spectrum Health Systems to help them control health care costs while improving employee health.

Sally Stephens, Spectrum's president, said the company provides a variety of services to IMA members and other companies, including a health improvement program.

While participation in the program is voluntary, Stephens said more of her clients are tying participation-particularly with on-site health screenings-to premium contributions and the benefit plans.

"It's still voluntary, but the employees are strongly encouraged because of the impact it has on their pocketbook," Stephens said.

New Jersey-based consumer products giant Johnson & Johnson is one such company that has tied increased benefits to wellness promotion. The corporation, which employs more than 110,000 people, offered employees an additional $500 in benefit credits if they participate in health screenings.

Closer to home, Columbus-based Enkei America, a manufacturer of wheels for high-performance automobiles, is a firm believer in the economic payoff of on-site wellness programs.

"Our wellness program is important because it should eventually help reduce our medical expenses because we're selfinsured," said Larry Schuyler, Enkei America's general manager for administration.

Schuyler said making employees aware of potential health risks before they become major problems benefits not only the employee but the company as well.

"For the cost you pay for a wellness program, you only need to identify one or two sick employees to cover the cost through prevention," Schuyler said.

He said it's not hard to encourage participation.

"People intuitively know what they need to do," Stephens said. "They are really looking for resources and tools that can make it easier for them to incorporate healthy lifestyles changes."

Have wellness programs accomplished what employers had hoped they would?

"We've seen very noticeable overall reductions in risk profile of the organizations," Stephens said. "We compare the same group of employees who participate in consecutive years so you can really see a change in the health-risk status."

Stephens said wellness programs take time before paying off.

"It's an investment in [a company's] most important asset-their employees," Stephens said. "The benefit for employers is it helps to stabilize increases in health insurance costs, reduce absenteeism, and increase productivity, but, most importantly, it builds good will with their employees."

So if the benefits can be shown, why don't more companies offer on-site well ness programs?

"The issue is what's affordable," the IMA's Goodwin said. "Indiana manufacturing tends to be dominated by small to medium-size companies. Other states are home to major manufacturing corporations, and the cost of implementing a wellness program can be spread over a number of employees. With small companies, one or two additional claims can have a big impact, especially with manufacturers who are self-insured."

Also at issue is the role of an employer in promoting wellness for its employees.

"You can't mandate that employees practice healthy lifestyles," Goodwin said.
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