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Corporate Wellness Programs: Healthier Employees, Lower Costs

Lawmakers trying to curb the rising cost of U.S. health care are eyeing the potential of wellness and prevention programs. The workplace, where Americans spend so much of their time, is seen as a natural place for some of these efforts.

Johnson & Johnson, known to consumers for products such as Band-Aids and Tylenol, is also famous among employers as leader in the field of corporate wellness. The company launched its first such initiative in 1978. More than thirty years later, the program has more than 80 percent of employees participating.

Here’s how it works: employees fill out a health risk assessment survey that asks lifestyle questions – such as whether they exercise and if they smoke. Their blood pressure and cholesterol are tested, and body mass index is measured. If the employee is found to be in a high-risk zone for any chronic conditions, such as pre-diabetes, they’re asked to participate in free programs and counseling to help them get healthier. As an incentive to participate, employees are given a $500 credit toward the cost of their health care premiums. All employees also are given access to on-site fitness centers and programs and are offered subsidies for gym memberships.

Studies have shown the program – called “Live for Life” – has resulted in significant improvements in employee health as well as a reduction in company health care costs.

Recently, Johnson & Johnson also launched a project to market corporate wellness administration to other companies.

Dr. Fikry Isaac, executive director of global health services at Johnson & Johnson, runs the company’s wellness program. He spoke recently with KFF Health News’s Jenny Gold about Johnson & Johnson’s program and how corporate wellness could be incorporated into the current effort to overhaul the nation’s health system. We edited the interview.

Q: Describe what the wellness program looks like.

A: I would describe it as a holistic approach that addresses the needs of individuals, whether it’s mental or physical needs or anything related to their family or work. We focus on prevention and behavioral change. But we also offer tools for people to know their health risks and numbers. What’s their cholesterol, sugar, body mass index? We offer them ways to learn [this information] and solutions, focusing on three key areas: healthy eating, helping people stop smoking, and we want people to be more active and really address their health needs.

Q: If I come to the company as a new employee and want to be part of the program, what happens?

A: You would participate in the health risk assessment. The output is personal and confidential. Nobody else has access to your information. We take that (and aggregate it with others’ information) and assess the health of the population in Johnson & Johnson and target the areas of need. As part of the process, you’re told of the two or three top priorities from a health perspective that we have solutions to. For example, if you’re a smoker, we would offer you an online digital media smoke cessation program. We would also offer you someone to give you counseling by telephone. Or if you really want to see someone face-to-face, we will offer you that as well. If there’s a recommendation for you to use a pharmacological aid we will offer it to you at no cost under your health benefit plan.

All of that is linked to a discount. In 1995, we created a program to give you a $500 discount into your health plan upfront [if you take the health risk assessment]. If, in the risk assessment, you are found to have some of those risk factors and you participate in the program, you maintain the discount. If you’re healthy, you still get the discount. All employees are treated the same.

Q: How does a program that sounds like it costs a lot end up saving money?

A: We have shown that we are impacting the bottom line-the cost of health care delivery. We have done several peer-reviewed studies in 2002 which looked at our program before we implemented the [discount] approaches. Those reports show that we’ve reduced the risk factors in the population that participated in the program. Currently, we still see ourselves as having the healthiest employees if we compare them to the national data on smokers, body mass index, physical activity, cholesterol, hypertension, diabetes.

There is an impact on people’s health. We saw in 2002 that there is a $225 per employee per year reduction in health care costs. We have seen their utilization of the health care system go down, so if you project out to 2007, that’s $400 per employee per year cost savings.

Q: Why are they using the health system less? Losing weight and stopping smoking seem more like  long-term changes.

A: You start to see results within the first two years, but the optimal results you see in year three and four. It’s worth the investment. The bottom line is that we track our per capita health care cost trends over the years. Our per capita health care cost over the past 10 years has been 1 to 2 percent below the benchmark, which are the groups that compare to J&J health plan offerings.

Q: You’re in Washington, D.C., to meet with congressional staff about these corporate efforts. What will you say?

A: I would like to see that there is something in the reform bills encouraging employers — whether small, medium-size or large — to really address the culture of health within their population, because that is really a reflection on how their business will be successful in the future. It’s a good investment and good business.

Q: How would you like to see that done?

I’d like some recognition for employers of any size that if they implement those types of comprehensive health and wellness prevention programs and offer them to employees, they should get some sort of a tax credit, for example. That would be very advantageous.