Belt tightening

Downward business cycle may influence how employers invest in wellness

Employee Benefit News

By Lydell C. Bridgeford

October 1, 2008

The down economy is affecting employers' bottom lines across all aspects of business, which means expenses are getting squeezed. ...

Still, experts seem to agree that, despite tough economic times, employers remain committed to their wellness and health management programs, even though some are holding off on adding higher-cost elements. ...

Considering new ideas

A slowdown means employers have to be more creative and think outside of the box, says Brian Passon, wellness consultant and director at Corporate Fitness and Health, a company that focuses on wellness in the workplace. ...

A tight economy also means that an employer's health-related vendors, individuals involved in worker's compensation, occupational health, wellness and the health plan, must be on the same page. That requires "getting everybody together once or twice a year to examine how are we improving the health of our employees, and making sure we are not duplicating services. In tight times, you want to ensure that you are only paying for the services that you need," Passon says.

Taking the long view

Of course, employers want to lower health care costs, but they also see engaged, healthy and productive employees as being a positive offset to the economy, which many organizations are concerned about, says Chris Boyce, CEO of Virgin HealthMiles, a Massachusetts-based wellness program provider.

"The conversations that we have had with employers is that wellness programs are not discretionary spending, because organizations realize that they are already spending a lot of money on health care, which keeps increasing," Boyce says.

In a slow economy, there's more of an imperative to try to figure out how to control health care costs and keep employee morale high. "They find investing in wellness during a tight business quarter is necessary because their health care costs have not changed that much and they are looking for ways to reduce that costs," he adds. ...

"Over the years, we have done all we know how to do on the medical side to control costs and still offer quality care. You can only do so much in that arena before you start cutting benefits, which we did not want to do," says Bill Reynolds, corporate director of benefits and compensation at Interface Inc., a Georgia-based carpet manufacturing company. ...

Most employers do realize that wellness and health management are not short-term strategies, says Carol Tavella, a senior manager at Chicago-based consultancy SMART.

Yet in light of the economy, some employers are beefing up their programs

"The reason for that is a good health management program is going to focus on the big health influencers, such as tobacco use, nutrition, weight management, physical activity and stress reduction," she says. "Those are the things you start to think about in terms of behavioral interventions."

Interventions, such a walking program, bringing in Weight Watchers, brown bag lunches about nutrition and having experts speak about stress reduction, are low-cost items. ...

The other interesting thing about the current economic climate is that it can be leveraged to increase the perceived value of wellness incentives, which are a key driver to get people to participate in wellness programs.

Tavella notes: "All of sudden, when that $25 gift certificate, which in the past might not have had much value to a worker, becomes a $25 gas card, then that is something that everyone covets."