BUSINESS
Chemical Producers Find Employees' Good Health Is Good for Business • Firms say 'wellness' programs contribute to the bottom line through lower medical costs, better productivity Susan J. Ainsworth, C&EN Houston
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he health promotion movement has been gathering momentum over the past two decades, aiming in particular at the diseases that are the major causes of death in the U.S.— heart disease, cancer, and stroke. Individuals—through lifestyle changes— can control the risk factors that have been shown to contribute to these health problems, such as excess weight, high blood pressure, high cholesterol, and smoking. Without a doubt, that message is finally sinking in with the American public and an increasing number of corporations are buying into this type of reasoning, too. Large companies in particular are expanding the number of health promotion programs they have been offering, going well beyond the proverbial onsite fitness center. At the same time, they are becoming more sophisticated about identifying the specific health needs of their employees, targeting efforts to meet those requirements, and then tracking their success. Chemical companies are among those taking note of the big benefits they can reap by helping their employees live healthier. Studies show that getting employees involved in health promotion programs can be an effective way for companies to control skyrocketing medical care costs. Moreover, experts report that these programs can lower absenteeism, boost employee productivity and morale, and add immeasurable public relations and recruiting value to the corporate culture. With the chemical industry still in a
Carbide employees exercise near Texas City plant down cycle, companies can ill afford to support these programs for altruistic reasons alone. "I feel very strongly that employee health promotion is a business issue," says Catherine M. Baase, director of health promotion at Dow Chemical. "We don't offer these programs just to be nice. They exist to help add value to the bottom line." Educating management on the virtues of employee health promotion "will be the challenge of the 1990s," says Jean B. Case, corporate medical director at Union Carbide. The typical employer biases that say "prevention doesn't pay and employers won't get money back on prevention" are the ones that these program leaders are working to change. "There is plenty of good data to justify these programs. It just has to be pulled together to show management that it makes sense to support these efforts," says Case. One way medical directors are justifying the cost of health promotion programs is by looking at the cost of unhealthy people. For example, Baase considered the value behind the $62,000 Dow kicks in annually for its Midland headquarters fitness center,
which about 2000 employees pay to use. When one manager pointed out that Dow's expenditure was roughly equivalent to insurance payments to cover one heart attack, it really put the cost into perspective, she says. Union Carbide's Seadrift, Tex., facility, like many other business locations across the U.S., was looking for a way to reduce the medical costs that were escalating out of control, explains Cathy Hale, senior human resources division head at the site. "Then we realized that a significant portion of our costs were due to lifestyle-related illnesses." In response, in March of this year the facility launched the SHAPE (Seadrift's Healthy & Physically Fit Employees) program aimed at educating employees and their dependents on how to live healthier. The program is structured so that employees can score points and get monetary rewards by exercising regularly and attending health education seminars. SHAPE has been a great success judging from its participation rate; roughly three fourths of Carbide's employees and spouses at Seadrift are involved in some facet of it. Getting management support for the JUNE 7,1993 C&EN
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BUSINESS
program was not a major problem, says Hale. "When we showed management the numbers and how we could reduce our costs through these lowcost programs, they bought into the idea." Hale says the plant has set "significant goals" to improve its employees' health risk status. By 1995, the Seadrift facility aims to have 100% of its employees and their spouses participating in the program. By that year, it also hopes that 10% of those involved will have made at least one improvement in their lifestyles to decrease a healtL risk factor. By 1997, its goal is to have lowered absenteeism resulting from nonoccupational illness 10%, and by 1999, to reduce overall health care costs at the site 5%. At Carbide's Texas City plant, employees have been instrumental in cutting medical costs and improving employee health. For example, "by using the quality process [Carbide's] pipe shop welders identified lack of physical fitness as a major contributor to their high back injury record," says James Hockersmith of the Texas City plant wellness staff. "They instituted an on-company-time stretch and flex program which has reduced their injury rate of 4% per year from 1980 through 1986 to no injuries from 1987 through 1993." In addition to looking at the cost of employing and insuring unhealthy people, many companies are also pondering how the cost of health promotion programs compares with other employee costs. For example, in an attempt to relate the $100 per employee per year that Dow budgets for health promotion programs at most sites to some other company expenditure, Baase recognized that, in the past, Dow had spent an equivalent amount per person on summer picnics or holiday parties. Cost should not be the only yardstick by which companies gauge the value of health promotion programs, says Lloyd B. Tepper, corporate medical director for Air Products & Chemicals. For example, these programs serve as "a powerful recruitment tool," because they suggest something about the company and its values. "It builds on the concept that to have a good company you have to stand for the right things." In addition, the programs help to integrate employees at a work site. "When you see our senior executives 22
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working out at our fitness center alongside other employees, I think that's healthy." Still, with profit margins as slim as they are now, chemical company management wants to see measurable benefits from the programs they are investing in. In response, health program coordinators are developing more sophisticated means of collecting data to track the success of those programs and to tailor programs to meet needs specific to various work sites. For example, two months ago Carbide installed a new Corporate Health Strategies database at its Danbury, Conn., headquarters. The system is designed to analyze health claims data corporatewide to look more closely at "what people are getting sick from. For example, we might see that we have a high incidence of cardiovascular problems at one plant or high prenatal costs at another site," says Case. "This will eventually help the company to focus its programs on those areas that have the biggest potential payoff." Eastman Chemical did a six-month pilot study in September 1991 involving 1200 employees to see if offering wellness programs was worth the trouble, explains medical director Darryl S. Addington. During that time it monitored participation rate, individual health improvement results, and employee satisfaction with the program, a kind of turnkey package called Live for Life supplied by Johnson & Johnson Health Management. In early 1992, Eastman adopted the program, which includes one-on-one health monitoring to improve the health
and lifestyle of its employees, Addington says. However, much to its surprise, the company witnessed an increase in job satisfaction and morale as well. Among the test group, 75% said they felt much better about the company than they did before the program was implemented. "These were changes we didn't go into the program looking for." Eastman was so pleased with the results that it expanded the program to include another 4000 employees in June 1992. Currently, 66% of the 5400 employees now offered the program participate in at least one sector of it, says Addington. Eastman has been feeding data into a computer program to get a better handle on how its Live for Life program may be affecting medical costs, "which is a big cost for our company," says Addington. While that data collection continues, the company already has established enough of a baseline to show it saved roughly $700,000 in medical costs in 1992. "And if people keep those risk factors under control, that savings will be repeated in
ple, "as the sophistication of health knowledge in the population has risen, the content of our programs has changed." But above all, programs have to change so that they are always aligned with constantly shifting business needs, Baase says. "We've worked very hard for the past few years to change our programming as other initiatives, issues, or opportunities come up." For example, to address the emphasis Dow is placing on diversity and family issues, the company has developed a lactation support program to help women employees who are electing to continue with breast-feeding after they return to work. In a pilot program completed this past January, the company found that some of those employees participating in the program returned to work sooner Employee fitness facilities, clockwise from than they expected and their breastleft, at Eastman Chemical, Air Products, and fed infants were sick less frequently. Hoechst Celanese That translated to medical cost sav1993 and 1994 and beyond." Adding- ings and reduced the number of days an ton estimates that these savings have at employee was away to care for a sick least paid for the cost of implementing baby. the program and he anticipates that The program served as a morale "we will see a return on the investment booster as well. All participants who within two or three years," after East- evaluated the program had positive feelman rolls the program out to the entire ings about it and its impact on the work Kingsport, Tenn., plant site. site climate. "It was a low-cost improveTo further explore the benefits of its ment to diversity in the workplace and I program, Eastman is now doing a study think we are getting a tremendous rewith Johnson & Johnson to determine turn," notes Baase. "When a program how its health promotion program may like this one meets both a health need be specifically affecting the quality of its and a need of the company, we get a employees' work and the company's double bonus out of it." products. Results of that study are exIn another new program that addresspected in two to five years. es the business opportunity to reduce Last fall, Dow North America com- medical costs, Dow is helping its empleted a six-year study of 11,496 of its ployees be wiser health care consumers. employees that showed that those who Through its medical consumerism proused the resources of its health promo- gram, Dow is educating individuals to tion program were more successful in be active and effective partners in acreducing their health risks and improv- quiring high-quality, cost-effective health ing their overall health. With the study care using a combination of both self-care data, Dow was able to directly correlate and the health care system, says Baase. the use of health promotion resources to "Health care costs are an enormous proba reduction in health risk status in four lem right now and we hope to seize the areas: smoking, alcohol use, cholesterol, opportunity to reduce those costs by working on the demand side of the cost and hypertension. Like many other companies who are equation." more closely monitoring their proDow continues to modify the programs, Dow is using the data it collects gramming mix under its Employee Asto make changes in the types of health sistance Program umbrella to keep up promotion programs it offers. "If a with the evolving business climate. For company wants to be successful in example, recently the company develhealth promotion, programs have to oped "Coping with Change" presentaevolve," says Dow's Baase. For exam- tions specifically to help employees deal
with the company's recent reorganization and downsizing efforts. "Many of the presentations turned into consultations," says Ann S. Taylor, a psychologist on the Employee Assistance Program's staff. 'Teople have to work through their reactions before they can become committed to the new organization and become 100% productive. We help people work through this change process." As awareness of the importance of these programs grows, health promotion is being formalized into corporate cultures. At Hoechst Celanese, for example, employee wellness is being incorporated into its two-year-old Vision of Excellence program, putting that issue on a par with such heavyweight commitments as community outreach, waste minimization, and product safety. An essential part of the Vision of Excellence was the creation of end states— definitions of where Hoechst Celanese wants to be at some point in the future in various areas. The employee wellness end state calls for "employees to participate in health monitoring and be actively involved in the continuous improvement of their state of wellness." A drafting committee is currently working to explore and define what it means to meet that goal. By soliciting comments around the company, the committee hopes "to come to grips with what management will be responsible for doing and what opportunities and guidance we can offer," says Daniel J. Thomas, Hoechst Celanese's corporate medical director. When the draft is completed within six to 12 months, the final document will be used to reinforce already existing health promotion activities that vary from site to site and range from periodic, voluntary examinations to determine health risks to subsidized memberships at fitness centers to nutritional counseling. To be sure, in these lean times for the chemical industry, it's tougher to justify expenditures on health promotion programs. But ironically, at the same time, the lean times make these programs all the more necessary. "Wellness really is a business issue," says Carbide's Case. "If you want a healthy company, you need healthy people. Employees will be more productive and better able to handle stress if they take good care of themselves. And that's more important than ever, because the 1990s will be turbulent times for corporate America." • JUNE 7, 1993 C&EN
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