Johnson & Johnson's Health and Wellness Program

Background Note Contd...

Explaining the development, Camille Haltom (Haltom), a health care consultant with Hewitt Associates explained¹⁸, "Because employers are under increased cost pressures, there is a renewed interest and excitement about health promotion and medical management programs that can provide cost savings, reduce absenteeism and increase productivity." Major companies in the US reaped substantial benefits by implementing WPs (Refer Exhibit II). PepsiCo¹⁹ invested $2 million in a fitness center and realized a return of three times the money it invested. Similarly, Dupont introduced a program, 'Health Horizons'²⁰ and realized savings of five times the money it invested.

Tenneco²¹ which invested a sum of $11 million to start a fitness centre, spreading over a total area of 25,000 square feet in Houston found that the annual medical claims of employees who participated in its fitness program, decreased by about half. General Electric was able to cut down its health care costs by 38% in one-and-a-half years by introducing a wellness program for its employees.

The employees who did not participate in the program witnessed an average increase of 21% in health care costs. A study conducted by the Mutual Benefit Life Insurance Company, New Jersey, revealed that the employees who participated in health programs had medical claims that were, on an average, 70% less than that of non-participants.

Haltom said²², "We expect that organizations will not only continue to offer health promotion programs but look for ways to enhance and expand existing programs for employees." In order to protect and promote the health and well-being of its employees and their families, J&J also introduced its HWP in 1995. Though several organizations in the US had introduced HWPs earlier, the manner in which J&J implemented it was unique and resulted in significant benefits for the company.

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18] In an article titled "Health and Productivity Programs Continue to Grow in Popularity as Health Care Costs Rise," by Suzanne Zagata-Mera and Kelly Zitlow dated July 15, 2002 posted on www.was.hewitt.com.
19] PepsiCo is a global leader in foods and beverages industry with a turnover of $27 billion in 2001. It has more than 1,47,000 employees. The company's brands are sold in about 200 countries.
20] A health initiative program launched for the benefit of employees' health, fitness and well-being, which yielded Dupont a return of $5 on every dollar invested in the program.
21] Tenneco is a $3.5 billion global automotive manufacturing company based in Lake Forest, Illinois. It is one of the largest designers, producers and distributors of automotive and emission control products and systems in the world.
22] In an article titled "Health and Productivity Programs Continue to Grow in Popularity as Health Care Costs Rise," by Suzanne Zagata-Mera and Kelly Zitlow dated July 15, 2002 posted on www.was.hewitt.com

Case Details

Case Code : HROB025
Themes: HR Practices and Policies
Case Length : 14 Pages
Period : 1998-2001
Organization : Johnson and Johnson's
Pub Date : 2001
Teaching Note : Not Available
Countries : USA
Industry : Consumer Goods

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