Corporate wellness, Safeway style

by Lesley Politi on January 15, 2009

 Eric Ward finally said goodbye to Baby Roo.

A trim man with an easy smile, the 47-year-old Benicia resident realized he needed to make some changes in his life after his father died in his 60s of prostate cancer. “My father was of that generation where they didn’t go to see a doctor. They just lived with it, and as a result he died of it. That really was an eye-opening thing for myself,” said Ward, manager of corporate maintenance in Safeway’s office facilities management division.

Now he works out five mornings a week at the grocery giant’s new fitness center, not far from his office at Safeway’s Pleasanton headquarters. Coupled with lunchtime walks, his new exercise plan helped him get rid of the kangaroo-pouch pot belly that he had nicknamed Baby Roo. “It’s just been an ongoing process, and it’s been a very positive process overall,” Ward said.

He credits Safeway’s new approach to employee health care as easing his way, even in these rough economic times, to achieve his goals of losing weight and becoming more physically fit. “There are a lot of companies that basically are saying, ‘You’re on your own completely,’ ” Ward said.

Indeed, as the next national debate on reforming health care gears up in Washington, Ward’s employer is taking a fresh look at how it can both cut costs and create a healthier workforce. “Band-Aids don’t work,” says Safeway Senior Vice President Ken Shachmut. “A systemic challenge needs a systemic solution.”

Shachmut, whose mandate includes what the company calls “health re-engineering,” says that the solution should start at the bottom of the food chain – with individuals taking more control over their health dollars and focusing more on prevention than on treatment.

Beyond routine health matters like flu shots, Pap smears and prostate checks, prevention is not the starting point for most employer-based insurance plans. Unlike setting a broken arm or taking out an inflamed appendix, the health benefits of making lifestyle changes are a lot like the dog that doesn’t bark in the night. It’s hard to measure the savings from crises that don’t happen because people are getting into better physical shape.

But 70 percent of health-care costs, Shachmut said in an interview, are linked to behavior – smoking, eating too much of the wrong things, not getting enough exercise and such. So Shachmut convened a task force to use the company’s approach as an experiment in generating new ideas to reduce Safeway’s cost for health insurance.

Stefano DellaVigna, an associate professor of economics at UC Berkeley, says a number of researchers in his field of behavioral economics are interested in the issue: “Can we help people with incentives to healthier living?”

“I actually think paying people to do things is probably quite helpful,” he said. “If we do it in an intelligent way … there probably is a way to help people achieve their better goals by adding some incentives to it.”

Safeway’s market-based approach for its nonunion administrative employees gives price breaks for practicing what the company preaches. The newest part of the plan, called Healthy Measures, just went into effect on Jan. 1. This program gives employees reductions in their insurance premiums if they are, and stay, within certain limits on four common medical risk factors – smoking, obesity, blood pressure and cholesterol.

Rebates for making the grade on all four risk factors total nearly $800 a year for an individual employee, plus a similar amount for the employee’s spouse or partner. Tests were administered last summer for those employees participating in the rebate plan; tests for significant others will be phased in by 2010.

People who tested within the limits got lower health premiums at the outset of this year, while those who missed one or more of the four goals can get a retroactive rebate if they improve sufficiently by the end of the year. The discount for each factor is considered separately – smoking and obesity are higher, while blood pressure and cholesterol are lower, Shachmut said.

As an example of how the new system works, he explained, an employee who fails the obesity test can get a retroactive payment if he or she loses 10 percent of his or her body weight by Dec. 31. If that person’s body mass index is nonetheless still over 30 at the beginning of 2010, the payment is withheld until another 10 percent of his or her total weight is lost by the end of that year, and so on until the employee reaches the permanent goal of a BMI reading of less than 30.

No requirements are imposed on children covered through an employee’s insurance, and medical exceptions are made for those with conditions that prevent reaching the stated goals.

The Healthy Measures paybacks come on top of a financing system implemented in 2006, called Market-Based Health Care, that establishes an HRA – a health reimbursement arrangement – for each participating employee. Safeway pays the first $1,000 of annual health costs, the employee pays the next $1,000, and after that the company pays 80 percent of costs. Long-term disability insurance and greater coverage at an additional cost are available.

Instituting that plan cut per-capita health-care spending by 13 percent, Shachmut told the Health Care Blog in October – a far better outcome than the company had expected.

It’s too soon to tell whether Healthy Measures will produce comparable savings, but Shachmut said it has already paid off for some employees. As a result of the initial screenings last summer, two employees in Texas were hospitalized immediately, one with extremely high blood pressure and the other with extremely high cholesterol, making him a candidate for bypass surgery. Neither one had any idea he was at such risk, Shachmut said.

He noted that he himself passed only three of the four tests – the exception being the obesity measure. But, like other participants, he will get a retroactive rebate if he loses enough weight by the end of the year.

Ward said he passed all four tests. One of his responsibilities as facilities manager became scouting gyms to find the best equipment and the best ideas for the new Fitness Center. The state-of-the-art facility, free to all Safeway employees, is used heavily before and after work and on Saturdays.

With a complete roster of lunchtime classes and an impressive lineup of machines to leave no body part unbuffed, and separate rooms for aerobics and for women (as one regular said, “I don’t mind working out, but I don’t want men watching all that jiggling”), the ambience can compete with that of any upscale gym.

The center has provided another unexpected benefit – as a social center, Ward said, a place to meet everyone from hourly workers to executives on “common ground.” No one wears a necktie with his workout clothes.

A counter near the gym entrance is piled with literature about charity marathons, good eating habits and a “Pledge to Fitness,” in which employees promise: “I am making a commitment to working out


days as week for

minutes a day for the next

weeks.” 

Cathy Ikeuchi, Safeway’s energy operations department manager, has no trouble making such a pledge, since she was already in good enough shape to pass all four tests. But having the fitness center nearby, instead of having to go to a public gym late at night, is a boon for this 45-year-old single mother of two from Pleasanton. “I’m really just a gym rat,” she said.

She and a colleague in her department have become gym buddies at lunchtime. “We guilt each other into going,” she said. She has taken “ab” and kick-boxing classes, once even “boot camp” – a rugged hourlong run through pushups, weights, running and other strenuous drills.

Another plus for her is the free-lunch card. Eight visits to the gym equals one free lunch in the cafeteria, where offerings and presentations have been revised to reflect the policy of paying more attention to health. Ikeuchi said she eats a lot of salads and vegetarian meals. It’s less expensive than going out for a restaurant meal, she added. “You can get a full meal for 3 bucks.”

At first glance, the cafeteria, which the company subsidizes, has the appearance of the deli department of a Safeway in a ritzy neighborhood. There are soup, salad and sandwich bars. Some hot foods are premade, while others are cooked to order. There are cases of cold drinks and snack foods by the cash registers.

But a second look shows that attention is being paid to better eating habits. Signs give portion size, calorie count, cholesterol and fiber count – though not sodium content – along with the price of each prepared food. The pasta is whole wheat, and nothing is deep-fried. There are a couple of high-fat offerings, such as pizza, as well as bargain meals.

At the salad bar, calories are posted for each type of dressing. The drinks cooler is filled with milk, juices and flavored waters, with Coke and Pepsi confined to one bottom shelf. The snacks near the pay stations are fresh fruit, energy bars or low-fat chips.

Tucked into a corner of the cafeteria, behind a partition for privacy, is an “assessment center,” a high-tech station for measuring blood pressure, weight and body-mass index. Employees can log in, create personal accounts and keep track of their records.

Dianne Lamendola, group president of information technology, said Safeway as a company has finally caught up to her long-term lifestyle of eating right and getting plenty of exercise. Before the institutional emphasis on healthier behavior, she said she used to get teased about the way she ate – no processed foods, healthy meals, frequent small snacks. With the new approach in the cafeteria, she said, “It’s great that everybody eats like I do.”

Now 45 and a Walnut Creek resident, she said she has been athletic most of her life. When the fitness center first opened, her IT department started a team, and now 50 to 100 people participate in the “fitness challenge,” she said. “It’s just been really natural for me to try and get other people to participate.”

George Xiromamos, a server engineering manager, played office Santa Claus in 2007 – no padding needed. Last month, he would have had to use pillows to fill out the costume.

His full-Santa weight was 282, and his waist 56 inches. In the interim, he went on a six-month, medically supervised fast, eating only extremely low-calorie protein concoctions instead of solid food. Now he has a 32-inch waist and wears “European mediums,” he said.

His doctor had warned him about the quality-of-life issues – diabetes, high blood pressure, knee trouble, mobility problems, fatigue – associated with obesity. What finally made Xiromamos decide to do something about his weight was the realization that he couldn’t keep up with his two young grandchildren.

He went “looking for the magic bullet,” and said he considered bariatric surgery before going on the no-food regimen and losing 105 pounds. The fast, at John Muir’s Metabolic Nutrition Program in Walnut Creek, wasn’t covered by his Safeway insurance program.

That’s typical, said William Hartman, a psychologist and director of behavioral medicine at the Weight Management Program in San Francisco, which also offers medical fasting and follow-up maintenance programs.

Group insurers are reluctant to pay for procedures or programs that are expensive in the short run but save money over the long haul, Hartman said, adding, “Insurance companies figure that the employee gets healthy and starts to save money down the road, but at the rate that employers switch insurance plans, the insurance company that pays for obesity treatment may not be the same company the employee has three or four years from now, when that employee’s health care costs are reduced.”

Xiromamos, 49, who lives with his schoolteacher wife in Clayton, said that the new Safeway program has nonetheless saved him money because he passed all four Healthy Measures tests “with flying colors.” At his previous weight, he said, he took four blood pressure medications, but now he doesn’t need any of them.

Since his job is at a facility in Walnut Creek, he doesn’t use the Pleasanton gym, but he works out at home using a DVD and exercise bands. When he takes his 4-year-old grandson and 2 1/2-year-old granddaughter food shopping, he said, he encourages them to look for food with Safeway’s “Eating Right” labels.

Exercising regularly, stopping smoking, changing bad eating habits and losing extra pounds add up to a prescription for better living. But do they make for a healthier workforce? There is anecdotal evidence that the answer is yes.

Weight loss, especially when combined with more physical activity, brings both psychological and medical benefits, said Hartman, of the Weight Management Program.

“Improved body image correlates highly with self-esteem, so we’re going to assume that somebody who has better self-esteem will be more positive, more productive and certainly a more active employee,” he said. “Also, there is a reduction in depression with weight loss, and that clearly impacts workplace performance.”

But will giving people economic incentives to live healthier lives really bring down health care costs for employers? The jury is still out on that question.

Stephen Shortell, dean of the School of Public Health at UC Berkeley and a specialist in health policy and management, said that in the past few years, businesses have experimented with a number of programs rewarding good health practices. Safeway’s new plan is just one approach; others include lower co-pays and eliminating deductibles for insurance coverage for healthier employees, and direct cash bonuses for achieving certain outcomes, such as blood-sugar measurements.

So far, there has been no authoritative research on whether such programs work or which produce better results, Shortell said, adding that he expects to see such studies start to be published in the next year or so.

“Employers can play a very important role in reinforcing what patients and their doctors are trying to do,” he said. “I don’t dismiss what employers are doing, but it alone is not going to have a big impact.”

The broader problem, as Shortell and no end of other experts say, is that the whole health care delivery system is broken. Safeway’s approach of using economic incentives to get people to lead more healthy lives may benefit its own employees without putting a dent in the overall problem.

“This alone is a small drop in the bucket. It’s not unimportant, but it’s really part of a larger picture to have a healthier workforce, healthier Americans,” Shortell said. He ticked off a list of “basic social determinants of health,” which includes such big-picture items as education, a “built” environment that encourages more activity on the job and in private life, work environments redesigned to reduce stress and public policy decisions that bring about cultural shifts, such as eliminating smoking from workplaces and banning sugary soft drinks from sale in schools.

In academic terms, Safeway’s experiment is part of the ROI – return on investment – approach to bringing down health costs. “Changing individual behavior is a good thing to try to do, but it’s probably not where the big lever is,” Shortell said.

Part of the debate, too, is the question of whether an employer should be re-engineering its employees’ eating and exercise habits, or whether these should be strictly personal decisions.

DellaVigna, the behavioral economist, said that over the long term, the goal is for employees’ better selves to take over the responsibility for improving their own healthy behavior. As long as employers just give a gentle nudge and keep incentives achievable, he said he sees nothing wrong with “lightweight paternalism.” –

Eric Ward

Working out: While Ward had been a gymnast in college, until not long ago he lived a sedentary life. Now he works out in the Fitness Center for 90 minutes a day, starting at about 6:15 a.m. so he can begin his workday by 8 or 8:15 a.m. At one point, he stopped working out, but resumed because he discovered he felt better when he exercised. He also takes walks during his lunch break and on weekends.

Eating: He says once he stuck to pizza and TV viewing as a weekend activity, but his eating habits are much better now that he has made a decision to live more healthily. He realized he was eating to cover up problems and to make himself feel better. Since he started eating better and working out, he has lost 40 pounds.

Quote: “I went from being unhealthy, to being borderline normal, to being athletic.”

Dianne Lamendola

Free time: Lamendola’s favorite sports are mountain biking and road riding. She has always done aerobics, and six years ago started adventure racing. It’s a team sport, and a couple of other Safeway employees have participated with her. When the new gym opened, she added workouts to her already rigorous exercise regimen.

Healthy Measures tests: She reports that she passed all four tests in Safeway’s Healthy Measures health assessment, but until then, she hadn’t known her cholesterol number. She says that access to those kinds of tools has helped her do things she had been putting off.

Quote: Safeway is investing in “preventative types of things that we’re doing to help ensure employees are healthy, have a higher quality of life and, ultimately, are happier because of that.”

Cathy Ikeuchi

Lunch: Ikeuchi says that before the Healthy Measures program was announced, she favored salads loaded with high-calorie dressing, and pasta or Mexican food. Now she hits the Healthy Selection station in the cafeteria or makes a salad from the salad bar using spray dressings that are lighter in calories and fat. She often buys small cups of fruit for an afternoon snack.

Free time: She has always been active, even before the company started encouraging changes. She hikes, works out at the gym, rides her bike and plays tennis. Still, she loves eating out or cooking at home. Now, she says, she makes more careful food choices and tends to eat healthier at restaurants – what she calls a lifestyle change that has carried over to her two kids, too.

Quote: “After working out, even if I have the urge to eat something fatty, I usually do not because the healthy choices are staring at me, guilting me into choosing them.”

- Stephano Della Vigna, economics professor at UC Berkeley. Gail Bensinger, formerly The Chronicle’s foreign editor, wrote most recently for the magazine on financial abuse of the elderly.

Source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/04/CM1714IPV8.DTL&type=printable

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