Corporate wellness programs are hardly new. As far back as the 1920s, Japanese workers started their day with a round of calisthenics. But with the cost of health-care plans soaring, and increased recognition of the relationship between lifestyle choices and costly chronic conditions, the plans have gained credence as a tool for reducing health-care expenses.

Modern programs go well beyond calisthenics. Companies may hire personal coaches and offer on-site nurses or Internet checkup tools to encourage employees to eat right, exercise, and quit smoking. Employees may be rewarded for meeting certain health goals or just for participating.

For corporations, the goal is to reduce the hospitalizations, doctor visits, and pricey prescriptions associated with poor heath habits. The programs target diabetes, heart disease, and other ailments related to obesity, poor diet, and inactivity. A healthier workforce can mean not only lower direct health-care costs but also reduced absenteeism and higher productivity.

Theoretically, the impact can be huge. Some companies claim to have earned returns of as much as 300 percent on investments in encouraging healthy living in the workplace. Little wonder that wellness plans have become so popular. "Every major corporation is now working on adopting some form of health improvement," insists Helen Darling, president of the National Business Group on Health, a Washington, D.C., nonprofit group that represents employers on health-care issues. "PepsiCo just rolled out a huge health-improvement plan, and IBM and Sears are developing them."

But they are proceeding with caution. Despite the appealing prospect of shrinking waistlines along with health costs, there are two problems with wellness programs. First, returns can be difficult to measure. Second, the programs raise some ethical questions: how involved should employers be in the nonwork habits of employees? When does gentle prodding cross the line into intrusion into their personal lives?

Healthy Hospitals
Despite these issues, Fairview Health Services, a health-care system based in Minneapolis, decided to work on improving the health of not only its patients but also its 13,000 benefit-eligible employees. In 1996, it offered employees at one of its sites a frozen-yogurt cone to complete a health-risk assessment (HRA). This test identified high-risk factors like obesity and unhealthy habits like smoking or a sedentary lifestyle. From there, the company helped employees target the risk areas identified in the HRA. The employees responded so well that the company decided to roll out the program companywide.

Today, Fairview has a comprehensive health-management program. Each year, staff members complete a new HRA and mark progress against prior evaluations. StayWell Health Management, the vendor hired to administer the HRAs, provides health coaches who discuss ways to improve overall health and develops programs in areas including depression, nutrition, and exercise. Employees also learn how to reduce stress and manage health conditions like arthritis and diabetes.

Currently, 80 percent of Fairview's employees participate in the program, thanks in part to the incentives offered. Instead of a yogurt cone, employees who enter the program now receive a $25 gift certificate for the company store. They also receive a $50 credit at the store for completing any health behavior-change program and $100 for completing a disease-management program.

The incentives are just a small part of the cost of administering the program, which runs $2.3 million annually. "Every year we are scrutinized" by senior leadership, says Barbara Eischen, director of health and benefits services at Fairview. To obtain continued funding, the administrator must provide good data on the return on investment. So far, the results have been encouraging. In 1996, employees averaged 4 health risks each. By 2003, that number had dropped to 3.1, says Eischen. The improvement translates into an average cost saving of $464 per employee—$282 in medical-plan expenses, $75 in reduced absenteeism, and $107 in workers' compensation costs—or $5.6 million for the entire company.

Most of those savings come from keeping health-premium hikes to a minimum. Over the past 30 months, health-care premiums jumped an average of 10.9 percent at other Minneapolis-area companies, while the premium increased just 5.6 percent at Fairview. The positive results earned Fairview a C. Everett Koop National Health Award, which is given annually to organizations that document the fiscal and physical results of improved corporate wellness. (The 2004 winners were General Motors Corp. and the International Union­UAW.)

Go It Alone
Florida Power & Light Co., a $9 billion power company in Juno Beach, Florida, has enjoyed an even better rate of return on its health-management program. Andrew Scibelli, who runs the program, says the company achieved a 325 percent rate of return over five years because Scibelli, a former adjunct professor of exercise science at Florida Atlantic University, created the program himself. "There's no question that we save by not having a primary vendor," he says.

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