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Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles.

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At General Mills Inc., conference-room meetings always include fruit and vegetables for snacks. Alaska Air Group Inc., which doesn't hire smokers, is trying to get worker spouses to kick the habit. And employees at Quest Diagnostics Inc. pay cheaper insurance premiums if they take health risk assessments.

After years of halfhearted wellness programs, companies say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. In some cases, managers' compensations are tied to getting workers involved in health screenings and programs.

"Improvement of health is right up there with quality and earnings per share—it's not just a human resources program," says Fred Williams, director of health management strategies at Quest Diagnostics, a provider of medical tests.

Companies are trying a number of ways to coerce workers to quit smoking, lose weight, and get tested for health problems. Obese workers cost private employers $45 billion a year in medical costs and lost productivity, according to the National Business Group on Health. And while obesity is gaining on tobacco use as a contributor to health problems, smoking continues to be the No. 1 cause of preventable death. Each smoker costs employers an additional $1,850 a year in extra medical costs, the business group says.

Williams backs up his rhetoric. To get people signed up for extensive health tests a few years ago, Williams threatened to charge business units that didn't get at least 50 percent participation, a move that put managers' budgets in jeopardy. The threat worked. Managers pushed their employees, and Quest was able to meet its sign-up goal.

The investment in healthy employee efforts returns $4.80 for every $1 spent over a three-year period, Williams says. Two thirds of the return was the result of higher worker productivity, and a third was because of lower medical costs, he says, citing a company analysis.

A study by the Watson Wyatt Worldwide Inc. consulting firm shows there's a big increase in companies offering programs to change employees' behavior in just the past year. Fifty-eight percent of 275 companies surveyed say they offer these programs through their health plans, compared with 43 percent last year.

The study also shows a correlation between companies that offer some sort of employee outreach and keeping health insurances costs flat. Almost 90 percent of the companies with the lowest growth rates for health care costs (a 0.5 percent median increase) offer health risk appraisals. More than 70 percent of this group offers smoking cessation.

To get workers to sign up, companies provide incentives. Quest Diagnostics employees who take a risk assessment will get an almost $400 discount on their health premiums next year. A small but growing number of companies are testing variances in premiums to entice people to take better care of themselves. For most companies, a minority of workers account for the majority of health costs.

"There's more and more interest in it because they tried everything else," says Michael Wood, senior consultant of health and productivity management at Watson Wyatt. "You can only do so much cost shifting to employees. After that it becomes too painful."

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