Businesses experiment with wellness programs to cut costs, increase productivity

August 19, 2012

As employers look to trim health care costs and increase the productivity of their workforces, an increasing number of them are experimenting with wellness programs that reward workers for healthy lifestyle choices or penalize unhealthy ones.

A survey of large companies released in August by the National Business Group on Health found that 61 percent of firms said they found such initiatives to be among the three most effective tactics for keeping a lid on health care costs. And among firms that offered financial rewards for healthy behavior, the median compensation amount will rise to $450 in 2013, up from $300 in 2012.

This focus on incentivized health care is taking shape in different ways at businesses across the Washington, with workplaces trying everything from raffle prizes to cash payouts to competitive team challenges to get their workers in better shape.

And many firms have plans to expand these programs next year.

At Gaithersburg-based Sodexo, they’re using “a combination of a carrot and a stick” approaches to wellness, said Julie Peterson, vice president for compensation and benefits.

The food-service company hits tobacco users with a $600 surcharge on health care each year unless they participate in one of its free smoking cessation seminars. And in 2013, it plans to offer a $100 reward to workers who fill out a health-risk questionnaire and complete a biometric screening.

Next year, 1,100 Sodexo employees in the Chicago area will pilot team physical fitness challenges, nutrition education sessions and one-on-one health coaching for people with chronic conditions. They will also name company “wellness champions” who will act as team captains that peers can look to as models for healthy living.

At the end of the year-long experiment, they’ll consider implementing the measures more widely if they seem to have a impact on staffers’ health.

For Sodexo, Web-based wellness programs didn’t seem like the right fit for its workers, who are spread out over 6,000 far-flung locations.

“If you’re somebody that’s working on your feet, working, say, in a kitchen environment, your opportunity to check the Web is limited,” Peterson said.

Web seminars have been more popular at McLean-based consulting company Booz Allen Hamilton, where employees can get advice from their desks on topics such as how to manage blood pressure, cope with stress or live with asthma, said Kimberly Young, a senior associate in the company’s people services department.

In recent years, Booz has raffled gift certificates to employees who completed a health risk assessment or got a biometric screening, a policy which has slightly increased participation.

But Young said it’s clear that offering financial incentives might be a more effective option, and therefore the company is considering a structure that would tie rewards to premium costs.

Other workplaces have attempted to tap workers’ competitive spirits as part of their wellness measures. American University holds a biannual pedometer challenge in which teams of employees keep track of their daily step count to compete for prizes. Of the school’s 2,300 full-time workers, 477 participated in the most recent edition of the contest.

Ann Joiner, the university’s senior director of employee benefits, said they also bring in an outside vendor twice a year to do screenings that measure a person’s body mass index, glucose levels, blood pressure and cholesterol. Last year, they held a raffle for participants in which winners could choose from three prizes: An iPad, a spa package or a private cooking lesson.

UnitedHealth Group, an insurance company that works with 250,000 companies nationwide, including many in the Washington area, started a personal rewards program two years ago.

The company said that of its clients nationwide, 19 have already implemented these programs, five more are adding them in 2013, and 50 additional employers have discussed the possibility of adopting the program.

“This is without a question the most popular topic and trend we’re hearing about from our customers,” UnitedHealth spokesman Daryl Richard said.

And there’s evidence that the program is working: Since 2010, the company says 73 percent of all participants had an annual physical, compared with 39 percent in 2009.

Meredith Baratz, the firm’s vice president for market solutions, attributes the popularity of individually-tailored, incentive-based programs to a variety of factors.

“It’s that combination of information that’s personal to me. It’s relevant to where I am. It’s actionable,” she said.

Sarah Halzack is The Washington Post's national retail reporter. She has previously covered the local job market and the business of talent and hiring. She has also served as a Web producer for business and economics news.
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