Get out your jogging shoes. The health police are after you. Group insurance used to charge every employee the same amount. But with corporate America in the throes of double-digit health-care inflation, a small but growing number of companies is sending employees a message: shape up or else. U-Haul in Phoenix, Ariz., makes smokers and the seriously overweight pay a $120-a-year insurance premium; fitter employees get their premiums waived. Adolph Coors Co. in Golden, Colo., will foot 90 percent of employees’ medical bills (instead of 85 percent) only if they’re fit or swear to follow a health program. And Foldcraft in Kenyon, Minn., requires workers to pay at least a $900 deductible unless they score well on a variety of tests, including blood-pressure readings and body-fat analyses. Says Michael Carter, of the benefits-consulting firm Hay/Huggins: “Management is saying, ‘No more Mr. Nice Guy. When it comes to spending our money, you’re going to play by our rules’.”
Why are companies tightening their grip? Nothing else has successfully controlled health-care costs. Despite the advent of “wellness” programs and attempts to rein in doctors and hospitals, the cost of corporate medical plans grew 22.6 percent in 1990, according to the benefits-consulting firm A. Foster Higgins. So far most costcutting efforts have been directed toward treating illnesses rather than preventing them. But according to a study by Johnson & Johnson, 15 to 25 percent of the health-care costs incurred by employees are due to preventable illnesses. Moreover, officials at Southern California Edison Co. have found that individuals with three or more coronary-risk factors had health-care claims twice as high as those with no risks. With employers demanding more preventive care, Blue Cross and Blue Shield announced last week it will offer coverage for periodic screenings.
Conventional wisdom holds that all this prevention will lead to healthier workers and, therefore, a healthier bottom line. It may not be that simple. Some research actually supports the argument that prevention does not pay. Louise Russell, professor at Rutgers University’s Institute for Healthcare Policy, says preventive screenings may make people live longer and have fewer illnesses but won’t necessarily lower health-care costs. Take high-blood-pressure testing. While most Americans get their blood pressures measured regularly, only about 10 percent will ultimately succumb to hypertension. Says Russell: “It costs more to screen and treat high blood pressure than it does to leave it alone and pay for the consequences.”
Such arguments don’t faze employers who have called out the lifestyle inspectors. A recent Harris poll for Metropolitan Life showed that 86 percent of corporate executives believe in increased premiums for people with unhealthy habits. To that end, firms are resorting to everything from pampering to pointed nudges to make workers toe the line. To avoid a sledgehammer approach, most portray their incentive programs as rewards for good health habits rather than as penalties for bad ones - and insist participation is voluntary. A few take an openly tougher stand. Baker-Hughes in Houston collects $10 a month from workers who use tobacco. The company also requires employees to score in an acceptable range on three out of four health tests (cholesterol and triglyceride levels height-weight ratio and blood pressure) in order to collect a $100 annual reward. No one gets a break. In April, Joe Vinson, Baker-Hughes’s compensation-and-benefits director, flunked the tests for cholesterol and triglycerides. “The majority of my department took it and passed,” he admits. “Looks like I need to cut back on the Mexican food.”
Executives at Mesa petroleum don’t just get ribbing from their underlings. The pressure to measure up comes directly from the top. Company chairman T. Boone Pickens, an inveterate fitness fanatic, has been known to grill top executives about their weight and cholesterol levels. The company shows it is serious about attracting workers to its corporate fitness center by offering complimentary snacks (healthy, of course) and clean workout clothes, not to mention shampoo, body lotions and towels.
Still, the issue of employer meddling has some health-care experts worried. “There are still many questions that need to be addressed,” says Sonia Muchnick-Baku of the Washington Business Group on Health. How much control do employees really have over their health? And what role do hereditary, environmental and socioeconomic factors play? Another thorny issue: some firms have begun to take lifestyles into account in hiring and firing. Janice Bone, a payroll clerk from Wabash, Ind., brought a wrongful-discharge suit against her former employer, the Ford Meter Box Co. The company fired her after a drug test turned up traces of nicotine in her urine. In an effort to reduce medical costs, the firm says it had instituted a policy of not hiring smokers - even those who only smoke in their homes. Lew Maltby, a spokesman for the American Civil Liberties Union, believes employers like Ford Meter are overstepping their bounds: “If it’s permissible for an employer to fire you because something you do in your private life is unhealthy, you don’t have a private life left.”
Such questions can only grow more complex. Currently, most programs that target less-than-healthy employees don’t penalize them too heavily. But health-care consultants believe companies will eventually tie about 10 percent of their medical packages to employee conduct. The number of companies instituting financial incentives is also expected to rise - from about 1 to 2 percent of major U.S. corporations today to more than 50 percent in 1995, says Curtis Wilbur of Johnson & Johnson’s Health Management Inc. So eat, drink and be wary - for tomorrow you may pay.
Under Hershey’s new plan, employees earn rewards and penalties based on their health habits. In 1992, the maximum fee for unmodified risky behavior would be held to $600 a year. After that, it could rise to $1,404.
Risk factor Healthy range Credits per Charges per (as defined year acceptable year, unac- at Hershey) results ceptable results Tobacco No use $132 $384 Blood pressure 140/90 or lower $60 $420 Weight Within 20% of MetLife scale $48 $384 Exercise Three times per week, 30 minutes each $96 $96 Cholesterol 240 or lower $24 $120 Possible annual totals $360 $1,404
