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Employers Offering Workers Incentives to Get Healthier

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ST. LOUIS - Employers have built weight rooms, paid for smoking-cessation classes and stocked apples in vending machines. Health-conscious workers exercised and gave thanks.

But workers hard on the path to physical ruin - the chronically stressed, the obese, the exercise-averse - ignored the corporate call to wellness.

Now, spurred by health-care hyperinflation, some companies are speaking a language that gets everyone's attention: money.

They're giving discounts and rebates on health-insurance premiums as well as offering lower co-pays and richer benefits to employees who renounce their unhealthy ways. They're giving days off to winners of weight-loss contests and offering free sessions with personal trainers.

The bottom line: A healthy employee is a productive employee.

Employers are concerned even more about protecting productivity than about reining in runaway health costs, said Jay Savan, the lead health-care consultant in the St. Louis office of Towers Perrin.

Roughly half the cost of a medical episode is lost productivity, he said, with about 39 percent from the direct cost of medical claims and about 11 percent tied to sick pay or short-term disability pay.

In promoting wellness, employers are acknowledging the high price of ignoring the bad habits of workers. Unchecked appetites can contribute to absenteeism in the short term and chronic disease in the long term. But promoting health can boost morale today and can help control costs tomorrow.

Rodney Menzel, 40, a machine operator at Pohlman Inc. in Chesterfield, Mo., won cash and a day off this year in a workplace weight-loss contest. He has diabetes and hypertension, conditions related to the 420 pounds he once carried on a 6-foot-1 frame. He knew his weight was causing problems, but to motivate him, it took the friendly competition, the public weigh-ins and the company's decision to highlight health in posters and plant meetings.

"It makes a lot of sense to present this information in the workplace," Menzel said. "It kind of shows they are putting a little care into people. They want you to be healthy. I ... can tell you that walking around this plant all day after dropping 70 pounds, I don't go home nearly as tired."

Jim Sullivan, an executive vice president, said everyone wants to be healthier, but most people need a little push. Pohlman has had a health-education program for more than a year, and the message is getting through, Sullivan said: In a recent round of meetings, at least two-thirds of the workers raised their hands when he asked if they're doing something to improve their health.

Benefits consultants report that a lot more companies are employing carrots than sticks to motivate behavioral change. Many are mindful of running afoul of discrimination prohibitions in the Americans With Disabilities Act. For example, prorating health-insurance rates based on body mass might be judged discriminatory against people with a genetic propensity toward obesity.

A few companies charge smokers more for health and life insurance. Benefits consultant Hewitt Associates has identified some that pay less toward medical bills if an employee or a dependent isn't wearing a seat belt when injured in a car crash.

Hewitt said 40 percent of the 960 large employers nationwide that participated in a recent survey used incentives or disincentives last year to promote healthier behaviors, up from 14 percent in 1993.

Three in four employers in Hewitt's survey provide tools to help workers with asthma, cancer, diabetes or heart disease manage their chronic illnesses.

Experts estimate that 80 cents of every health-care dollar is spent providing care to the sickest 20 percent of patients. Companies hope to steer employees to the right care at the right time. It saves money, minimizes the crisis episodes that result in hospital stays and improves a person's quality of life.

To be sure, St. Louis-area companies aren't on the cutting edge when it comes to providing economic incentives for lifestyle changes. Consultants and insurance brokers report that, as a group, local companies are more concerned with capping their annual outlay for health care than lowering their employees' cholesterol.

But this might be about to change.

Mercy Health Plans, a St. Louis-based insurer, is rolling out a product designed to motivate employees to take charge of their health and well-being.

William A. Bennett, head of marketing and communications, said it's the way of the future. The coverage is available only to employers that self-insure by assuming the financial risk for health-care claims. Frequently, these companies hire insurers such as Mercy to administer their health insurance and to process bills for payment.

Pohlman was the first company to sign up for Mercy's plan. Pohlman spent a year preparing its 300 employees for the conversion March 1 from the traditional health-maintenance organization. First, it grounded them in using the Internet-based tools that support the insurance product and then taught them steps to become healthier. Mercy surveyed Pohlman workers to identify health risks.

Mary H. Althaus, a registered nurse and a health educator for Mercy, met with employees in groups and individually. She chastised smokers for taking better care of their pickups than their bodies. She got one worker's attention by showing that he had spent nearly $23,000 on a pack-a-day habit.

Since the insurer entered Pohlman's automotive-components plant, 20 of the 45 smokers have completed cessation programs, and 16 stayed smoke-free.

Before employees can enroll in the My Choice program, people covered under the employee's policy must pledge to get age-appropriate preventive care as well as to abstain from smoking or to enroll in a smoking-cessation program. They must drive sober and wear seat belts. People with chronic illness must follow nationally recognized best medical practices.

Using the sophisticated Web-based tools, workers can make decisions on health-care purchasing. They can weigh and contrast various treatment options for a back injury, see a virtual surgery or decide whether a Big Mac is worth the 590 calories.

The site's My Health tools include an individualized health assessment and improvement plan. Participants can sign up to get reminders when it's time for a cancer screening or a cholesterol check.

Ultimately, employers decide whether workers who take the healthy-lifestyle pledge pay lower co-insurance or deductibles than those who opt for standard health-insurance plans.

Mercy recommends offering co-insurance. With co-insurance, employees pay some percentage of treatment cost, in contrast to fixed co-pays for medical services. Co-insurance is believed to sensitize patients to the high cost of care.

Sean T. Donlin, a senior vice president of the Lockton Cos. in St. Louis, was instrumental in developing My Choice. He's promoting it among his insurance-buying customers.

"Employers are really looking to drive predictable health costs," Donlin said. Until now, they have been trying to do this by reducing benefits and jumping from insurer to insurer to find a price they can live with, even if it meant that employees had to switch doctors or pay more for less coverage.

Sullivan, the Pohlman executive, said his company had been on that slippery slope when it adopted My Choice.

"Our health-care costs were increasing on an average of 22 percent a year. We could no longer afford that, and our employees could not afford that," he said. "Each year, we reduced our benefits slightly and increased employee deductibles."

Pohlman signed with Mercy because it saw the potential to stop eroding health benefits. The company doesn't expect a quick fix, but it hopes for savings in the long run, as employees develop healthier lifestyles. Eventually, it might be able to add back benefits.

Pohlman made the My Choice benefits and co-insurance requirements slightly more attractive than the standard insurance plan it offered as an alternative. "We did that so people would sign up for My Choice to be healthier and not because the other plan was punitive," Sullivan said.

My Choice attracted about 80 percent of the employees.

Savan, the Towers Perrin consultant, said behavior-modification programs aren't one-size-fits-all. They must be fitted to the employer's pocketbook and the employees' needs. In a white-collar environment, where some employees work seven days a week, stress management or a healthier balance between home and work might be the aim. And in "Coronary Valley," the name health researchers apply to the upper Midwest and the South, companies might get the most payoff in promoting smoking cessation, healthy diets and increased exercise.

One of Savan's clients, the Star Tribune newspaper in Minneapolis, has workout facilities in each of its plants and free access to a personal trainer. Employees can earn "Wellbucks" that are used for fitness classes and merchandise.

Also, they can qualify for as much as a two-month rebate on their health premiums by completing a health assessment, forswearing certain risky behaviors, exercising at least 90 minutes a week and completing three health-education courses. Every family member covered by the policy must do the same.

Health and wellness is woven into the culture at Johnson & Johnson, a health-products company based in New Jersey. A subsidiary, Johnson & Johnson Healthcare Systems, customizes and manages health-care programs for corporate clients. Still, only two out of 10 workers made the effort to fill out an annual health-behaviors survey until the company sweetened the pot.

Johnson & Johnson offered respondents a $500 rebate on health-insurance premiums. Survey participation shot up to 90 percent, and the company got a payback, too. Between when the financial incentive started in 1995 and 1999, workers reduced health risks associated with high cholesterol, high blood pressure, low-fiber diets, tobacco and lack of exercise. The company cut medical costs by $225 per employee a year.

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(c) 2003, St. Louis Post-Dispatch. Distributed by Knight Ridder/Tribune News Service.

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