Johnson & Johnson's Health and Wellness Program

BACKGROUND NOTE

The US industry spent approximately $200 bn per annum on employee health insurance claims, on-site accidents, burn-out and absenteeism, lower productivity and decreased employee morale due to health problems.

Moreover, according to the estimates of Mercer^[10] , the US industry expenditure on the medical and disability bills of employees was rising significantly. In 1998, companies had paid an estimated $4000 per annum per employee as healthcare costs, and that rose to $5,162 in 2001 and around $5,700 in 2002. Apart from other health related problems (Refer Table I), stress at workplace was considered to be one of the main reasons for this high expenditure.

Work stress led to problems like nervousness, tension, anxiety, loss of patience, inefficiency in work and even chronic diseases like cardiac arrest and hypertension. As a result of these health problems, absenteeism increased and productivity of employees declined.

TABLE I
ANNUAL AVERAGE COST PER EMPLOYEE DUE TO
VARIOUS HEALTH PROBLEMS

Nature of Health Problem	Annual average cost per employee
Heart disease	$236
Mental health problems	$179
High blood pressure	$160
Diabetes	$104
Low back pain	$90
Heart attacks/Acute myocardial blockages	$69
Bi-polar disorders/Maniac depression	$62
Depression	$24

Source: www.news.cornell.edu

In 1997, the Whirlpool Foundation^[11] , the Working Mother magazine^[12] and the Work and Family Newsbrief^[13] carried out a survey in the US, which involved about 150 executives. The survey discovered a close connection between employee wellness programs^[14] (which included flexi work options, employee care, employee assistance programs) with 16 key result areas including enhanced efficiency, low absenteeism, low turnover, high employee satisfaction, high morale and reduced health-care costs of employees.

This signified that a company which had a good health and wellness program had to offer less in terms of monetary assistance to its employees. Elaborating the benefits of these programs, DW Edington^[15], Professor at the University of Michigan said^[16] , �Wellness programs in general, and fitness programs in particular may be the only employee benefits which pay money back. When more people come to work, you don't need to pay overtime or temporary help; when people stay at the job longer, training costs go down; lower health care claims cost you less if you're self-insured and health care insurers as well as some companies are already beginning to create premiums based on fitness levels.�

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THE HEALTH AND WELLNESS PROGRAM

EMPLOYEE ASSISTANCE PROGRAMS (EAP)

ERGONOMICS INJURY PREVENTION PROGRAM

THE BENEFITS REAPED

TABLE III - J&J HEALTHY PEOPLE 2005 TARGETS

EXHIBIT I - CHAA'S CRITERIA AND POINT WEIGHTING OVERVIEW

EXHIBIT II - BENEFITS OF HWP REAPED BY OTHER ORGANIZATIONS

EXHIBIT V - THE 16-POINT SAFE FLEET PROGRAM

ADDITIONAL READINGS AND REFERENCES

^[10] Mercer is a human resources consulting company that provides consulting services in areas such as compensation, employee benefits, communication, HR, human capital strategy, investment and program administration. Its operations are spread across 40 countries and 140 cities, with over 13,000 employees.

^[11] Whirlpool Foundation (WF) involves itself in charitable activities like funding research studies and giving away charitable awards through its �Direct Philanthropic Operating Program.'

^[12] Working Mother Magazine has a reach of more than 3 million readers every month. The magazine assists women in integrating their professional and personal lives. It is a guide for present and next generation working mothers.

^[13] The Work & Family Newsbrief is an 8-page digest of the most important work life news, best practices, research, company experiences, legislation and partnerships in the US. It provides news about the latest workplace polls, workplace forecasts and academic research of top companies in hiring and retaining the best talent.

^[14] Employee Wellness Programs include Employee Assistance Programs, workplace ergonomics, interpersonal skills, workplace safety, prevention of violence, drugs, HIV/AIDS at workplace and diversity management.

^[15] Dee W. Edington is a professor of Kinesiology at the University of Michigan and has authored and co-authored several articles and books. His work on Health Risk Appraisal and Corporate Health Evaluation programs is regarded as a benchmark for developing business plans in wellness programs.

^[16] In an article titled �Experience of other companies with Wellness Programs,� posted on www.championhealthandfitness.com.