Joseph Reese was incorrectly identified in yesterday's Health section. He is president of Provident Indemnity Life Insurance Co. of Norristown, Pa.

When ex-smoker Joseph Reese became president of Indemnity Life Insurance Co. in Norristown, Pa., four years ago, he questioned why the first life and health insurance company to offer nonsmoker discounts on health insurance had many employes who smoked.

"We became convinced that smokers are more of a health risk and we have verified that," said Reese, 57, who quit smoking for three years, started back up, then kicked cigarettes for good 12 years ago. "It didn't seem to make sense to tell the world not to smoke while we were smoking."

Reese organized a committee of employes who smoked and asked them to recommend how the company should handle smoking at the worksite. The result: a phased-in total office smoking ban since 1983 followed by an extensive ("but not expensive") wellness program, including aerobics, weight loss, cardiopulmonary resuscitation training, a walking club, prizes for wearing seat belts, money back to employes who don't use their sick days, and a $300-a-year charge to smokers to cover their excess insurance premiums.

Indemnity Life is one of thousands of companies around the country that has launched an all-out war on employe ill health. At least 50 percent of businesses with more than 100 employes now have some kind of health promotion activity, according to preliminary results of a survey of 1,300 companies by the Department of Health and Human Services.

"Within the next five years, the vast majority of American businesses will have some component of health promotion built into their benefit plan," predicts George Pfeiffer, director of the Center for Corporate Health Promotion in Reston, Va.

Some of these programs are as simple as offering free high blood pressure screenings. Others are as complex as fully equipped gymnasiums. But whether they're treating one aspect of fitness or helping shape up the entire employe, increasing numbers of employers are counting on wellness programs to cut the high cost of health care benefits and heighten employe satisfaction and productivity.

In the utopias of worksite wellness -- Tenneco, Xerox, Johnson & Johnson, Bonne Bell, Inc., Kimberly Clark and Pepsico -- employes enjoy Nautilus and pool-equipped facilities with a full-scale program of activities.

At Pepsico headquarters in Purchase, N.Y., an on-site 12,000-foot facility houses smoking cessation, karate, prenatal aerobics, tai chi and video golf.

At Kimberly Clark in Neenah, Wisc., the employe health program is housed in a $2.5 million facility -- including a track, sauna and whirlpool -- which is open to spouses and retirees.

At Campbell Soup Co. in Camden, N.J., 70 percent of the employes participate in "Turnaround" -- a program of stress management, nutrition awareness, self defense and lower back care.

At the Xerox Training Center in Leesburg, Va., 15,000 to 20,000 employes a year participate in activities at the fitness facility, which includes racquetball courts, two large gymnasiums and an exercise trail.

Even worksites without "steam and chrome facilities" are becoming more innovative.

The vast majority of places can't afford full-scale fitness facilities, notes the Center for Corporate Health Promotion's Pfeiffer. But they can afford worksite wellness options such as these: Flexcon Co. in Massachusetts gives $30 gift certificates to employes who quit smoking. Most of the 120 employes at the Safeway Bakery Division in Clackamas, Ore., exercise in a facility they built themselves. They earn exercise points good for T-shirts with the company's wellness theme -- "Buns on the Run." The Vermeer Manufacturing Co. of Pella, Iowa, donates money to the favorite charities of employes who exercise and awards prizes to seat belt wearers. First Interstate Bank in Santa Fe, N.M., reduced employe donut consumption by 75 percent by offering free fresh fruit every Wednesday.

Proponents of corporate fitness claim a host of benefits from savings on health insurance to increased productivity and retention of employes.

"Absenteeism is down, our cleaning bills are down and our insurance claims are down," said Indemnity's Reese. "And employe attitude is super."

But others urge caution.

Corporate wellness "is very much like high blood pressure," says Dr. Dennis Colacino, a long-time leader in the field and head of Pepsico facilities. "Most people have gotten the message. But now we have to show them how to go about improving the programs."

Despite widespread good intentions and successes, Colacino says, worksite wellness programs have room to improve. Lack of space, low participation rates, loss of motivation and what Colacino calls "a scarcity of competent people" plague even the best programs.

Notes one Office of Personnel Management employe who exercises during lunch: "They said we were going to start a walking program here. Right now we only have two showers we share with the custodian. Those of us who are already doing something don't want more people because you know they aren't going to expand the facilities. It's a mixed blessing."

Since motivation is a major factor in continuing fitness habits outside the office, it's not surprising that keeping up with workouts can also be a problem in corporate fitness facilities.

"Companies will claim that 90 percent of their employes use their facilities," says George Pfeiffer, former head of the Xerox program. "But when you ask about the rate at two to three times a week, the utilization rates are 25 to 30 percent."

There is some concern, too, that wellness programs attract the employe who is already fit -- not the out-of-shape, cigar-chomping salesman careening toward a heart attack.

According to Brandeis University sociologist Peter Conrad, who is studying worksite programs at Harvard Medical School, the average participant is a nonsmoker who has a greater concern for health, believes in the value of exercise, is in better-than-average physical condition and uses fewer health services.

The Washington Business Group on Health (WBGH) reports that "worksite weight programs suffer major attrition problems," with an average drop-out rate of 50 percent.

But with increasing sophistication in behavior modification techniques, many of these problems are being creatively addressed. Dr. Kelly Brownell of the University of Pennsylvania School of Medicine designed one of the most successful weight-loss programs by promoting competition.

In 1982, he convinced three Williamsport, Pa., bank presidents and their 250 employes to compete for the greatest percent weight loss. Participants chipped in $5, pooled the money and awarded it to the winning bank team at the end of 12 weeks. The result: average weight loss was nine pounds for women, 16 for men. The drop-out rate was less than 5 percent, and six months later, the participants had kept off an average of 80 percent of the weight they lost.

"Our hope was that competition between groups would promote cooperation within groups," said Brownell. "The spirit of the enterprise was partially responsible for the success. People got excited."

Incentives like those are effective, says WBGH, because they are already "a well-accepted pattern of management-employe collaboration." Outside the wellness arena, this approach "has been used to improve work performance, increase sales, reduce accidents, and reward loyalty."

Offering free recipe books to employes on a weight control program, or paying an employe to stop smoking or start running, maintains WBGH, is the logical extension of a motivational strategy that already works.

"Behavioral research seems to point to the idea that employes learn more or do better if they make some kind of contribution -- money, time, or sweat," says Ruth Behrens, WBGH worksite coordinator.

The American Hospital Association, for example, initially charged $10 for a series of employe health tests valued at more than $100. "We got a lot of response that said, 'It was too cheap, we should be paying more,' " said Behrens, former director of that program. The second year, when a sliding scale of $5, $15 and $20 was initiated, 95 percent of the employes said the fee was about right.

A company-offered incentive worked for Fannie Mae employe Lisa Robertson, who "kidded" herself that her 15-year cigarette habit was under control.

"I only smoked on weekends," said Robertson, a 33-year-old senior analyst with the Federal National Mortgage Association. "A pack Friday night, a pack on Saturday and one pack Sunday."

Frustrated with attempts to curtail smokers, in September Fannie Mae offered a 50 percent rebate off the $225 corporate SmokeEnders fee if employes stayed off cigarettes for three months after the end of the class. Robertson signed on and quit smoking, along with 11 other people out of a class of 14. Eight qualified for the rebate in January.

"That was enough of a hook for me to cough up the $225," said Robertson. "I could justify $100 if I could get off cigarettes . . . The rebate gets you through the hard times. I might have eventually signed up without the incentive , but I would have had to be feeling pretty rich."

The potential for savings through wellness programs is substantial: companies spend as much as $2,000 a year on health costs for each employe, according to the U.S. Chamber of Commerce. WBGH estimates that, compared with nonsmokers, workers who smoke are 50 percent more likely to be hospitalized, have twice as many job-related accidents, have absenteeism rates approximately 50 percent higher and cost businesses between $624 and $4,611 a year.

High blood pressure adds $2 billion annually to the cost of running businesses, and accounts for the majority of visits to hospitals.

But whether the stop-smoking, stress management and stretching classes of worksite wellness can address businesses' bottom line is a subject of debate.

"When people talk about these programs being important vehicles for cost-containment, there I would say very strongly the data aren't in," said sociologist Conrad. "There are a lot of claims made for worksite health programs -- increased productivity, reduced absenteeism, increased morale. There is no data on morale and productivity, and it's very mixed on absenteeism. One of the issues is that we don't know the effects of wellness programs on these things people claim."

In Conrad's 1984-85 study, he found no significant differences in job satisfaction between those involved in wellness programs and employes who didn't participate. "In fact, people not in the program had slightly higher job satisfaction," he said.

"People who come to the program come because of certain kinds of desires to improve. People who are in the program say they feel better and they feel more productive across the board, but that doesn't mean they are. I'm not sure that we'll ever get data on these things."

"Exact data may not be the issue," says WBGH's Behrens. "Anybody who believes in these things and says I want to prove that they work can prove that. Or if they say, I want to poke holes in the research and show they don't work, you can do that. When you're dealing with business and health, the likelihood that you can put together a perfect double blind study is very low. They all run into problems."

Kathryn Kelly, director of General Health's National Health Network, a 4,500-member data base of wellness services nationwide, notes, "It's been heralded as the panacea of the problem with rising health care costs. It's been seen as an executive perk. It's neither.

"Companies don't do this because they think it's going to save money. It's not a cost-saving strategy. It's a response to the demand of the employes."

*"If high costs were really an issue, we wouldn't see over half the companies having programs. It makes good intuitive sense."

But even though the data lacks the conclusiveness of the smoking-lung cancer connection, recent research shows that there are significant benefits. Among them: Iowa's Vermeer Manufacturing Co. estimates that for every dollar they spend on wellness, they save $10. Blue Cross-Blue Shield of Indiana recently tracked employe claims over five years and found an 8 to 10 percent reduction in claims for companies with wellness programs. Johnson & Johnson recently discovered that its wellness program paid for itself through lower hospitalization costs. After one year, participating employes took 13 percent fewer sick days than during the previous year and had a 32 percent decline in high blood pressure. Employes who exercised also burned 43 percent more calories than those who didn't exercise. Tenneco says insurance claims for its female employes who exercise in 1983 averaged less than half of those for the sedentary crowd. Male employes' insurance claims also went down that year. Absenteeism was cut for both men and women.

"I don't think it costs anything," said Reese of Indemnity's program. "Because the benefits are financially positive and not negative."

Even companies convinced of the benefits of worksite wellness may still avoid launching programs. "It's not that companies don't believe in health," said General Health's Kelly. "It's what to do, how to make intelligent decisions.

"The big question for most companies is, 'We want to do something, but we don't know what to do.' Is $75 per person or $25 per person a reasonable cost? The companies that made a decision to do something are faced with the question: What's a good quality package?"

To meet this need, General Health set up the National Health Network to link companies with qualified health promotion providers in their area -- ranging from individuals such as aerobic dance instructors to groups such as the American Lung Association.

In the same vein, the Center for Corporate Involvement, a joint effort of the American Council of Life Insurance and the Health Insurance Association of America, set up 12 Wellness Councils across the country to aid businesses in finding out what other businesses are doing to boost employes' health.

Reese, who founded the Wellness Council of Southern Pennsylvania, says exchanging ideas with other companies "keeps new ideas flowing into the hopper. We've been going for four years and I don't see it cooling off at all."

Developing a corporate wellness program is much like launching a new product, says General Health's Kelly.

"You need to profile where your greatest needs and interests are," Kelly said. "Where are the big pockets of stress and smoking? If staffers aren't interested in sweating with a bunch of other people, look at what the employes are interested in."

Reese suggests that companies talk "to some other folks who've done it and set up an employe committee. It's very helpful if it comes from employes and not management."

The program's biggest boosters are those who've experienced dramatic health improvements through their participation.

For example, without the convenience and support of the General Accounting Office's Health Advocacy Program, "there's no way I would have done it," says Gill Fitzhugh of his 19-pound weight loss. The 38-year-old auditor responded to an invitation in his office "in" box nearly three years ago to begin lunchtime workouts.

The on-site GAO facilities are "as good as a high school locker room," he said. "It's convenient. It's a real benefit."

The camaraderie and support has helped him keep the weight off, Fitzhugh says. "It's a lot easier to suffer with everybody else," he says, "than by yourself."

Marta Vogel is a Washington writer.