Companies Get Creative to Cut Healthcare Premiums
> 6/22/2006 8:35:26 AM

Ballooning healthcare costs often show up in one place before all others: businesses' bottom lines. It makes sense that the larger companies, those with the most employees to insure, can see massive chunks of their profits eaten up by the cost of providing healthcare. As U.S. News and World Report writes this week, this has led many companies to push excerise, using many creative incentives, to try to shrink their investment in maintaining the health of their employees.

Regular exercise lowers the risks for major health problems like cardiovascular disease, cerebral vascular disease and some cancers, not to mention helping to manage stress and fight depression and depressive symptoms. The former helps companies cut down on insurance costs by eliminating costly claims, the latter, though, may be even more important. Employees with a strong mental health, who manage stress and are free from depression, have been shown to be much more productive than those dealing with moderate mental health disorders. Conventional wisdom, in this case, is very true: happy workers are better workers.

Some companies, like Clif Bar from Berkeley, CA, take this healthcare approach very seriously. As U.S. News writes:

Clif Bar, the energy-bar maker in Berkeley, Calif., spends about $1,000 per employee each year providing about 150 staffers with a free gym, three personal trainers, 24 classes a week, and a paid 30-minute workout break every day. "I consider it money very well spent," says David Jericoff, executive vice president of people, noting that yearly savings in insurance premiums are in the "double-digit percents."

Improving the fitness of employs already with the company is only one way that companies are improving themselves. As PepsiCo vice president of benefits Greg Heaslip points out, to attract healthy employees companies need to let them know that healthy living is a priority.

"A CFO at one company once said to me, 'I wonder if these fitness centers really work. It's only the healthy people that are in there,'" says Scibelli. "My response is, those are the people you want to attract. It's easier to keep people healthy than return them back to health." And the hope is that with the right kind of nudge, desk potatoes will follow. "We have a saying around here," says Heaslip. "Good health is its own reward--but incentives help."

By engendering a mentality of fitness, companies can expect to see major returns on their investment, which is why companies like Clif Bar will spend as much as $1,000 on what amounts to preventative care for their employees. As healthcare costs continue to rise, creative solutions like these are goning to be required. Clearly, if you can keep an employee healthy, they won't need to use their health insurance as much, won't miss as much work and should even be happier and more productive. It's a formula that more business's should be looking into to help improve their own morale and company health.

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