When is employee health your business?

US workers are facing growing pressure from employers to get fit, lose weight and quit smoking. The main reason for all this attention to the health of employees is a financial one: the huge growth in healthcare costs.

by Business Week
Last Updated: 23 Jul 2013

Such policies have in some cases brought about life-saving medical interventions, but they tread controversially on personal freedom and have, in certain cases, led to employees losing their jobs.

Scott Rodrigues, a technician working for the lawn-care company Scotts Miracle Gro-co was fired last September because, according to his boss, he had failed a drug test - for smoking. Rodrigues had only just joined the company and claims he was told at his interview that after his 60-day probation period had passed he would be eligible for healthcare benefits including help to quit smoking. 

Rodrigues was sacked after just two weeks at the company. In November he filed a lawsuit in Massachusetts against the company on the grounds that it had fired him before he became eligible for healthcare benefits.

Harvard Business School professor Michael E Porter says companies cannot afford to let employees drive up healthcare costs by failing to address healthcare problems, particularly as health insurance premiums have risen inexorably.

The "wellness" craze among US employers, though, has its critics. Scotts Miracle Gro-co's attempts to monitor and change employee behaviour would strike most Europeans as Orwellian. It's CEO Jom Hagedorn is a zealous reformed 40-a-day smoker, whose mother died of lung cancer.

The company's healthcare bills had risen by 42% between 1999 and 2003, when it doubled the cost of health benefits to employees - an unpopular move among staff. But that was only the beginning of a whole new approach to employee health, which aimed to reduce a 50% obesity rate among employees, of whom 25% also smoked.

A smoking ban was instituted, after the firm took legal advise that in most of the states it operated in it was not illegal to hire and fire people on the basis of their smoking habits. To avoid discrimination suits, it brought in an established healthcare company to run its wellness programme. Human resources sold the policy to employees.

To sweeten the pill, Hagedorn put $5 million into a 24,000 square-foot health facility for staff. The clinic employs two full-time doctors, five nurses, a dietician, a counsellor and two physical therapists for the company's 6,000 employees. In turn, employees are obliged to undergo rigorous health assessments on the pain of fines of up to $107 a month on to their healthcare premiums.

Not surprisingly, some staff complained of Big Brother tactics, and Hagedorn had to sell the programme hard to get it accepted. Some 70% of employees have since joined the fitness centre.

But the Rodrigues lawsuit hangs over the future of the wellness programme. If his lawyers are successful in arguing that the policy is a slippery slope to totalitarian control of employee lifestyles, wellness programmes across the country could suffer. So far, though, the company's stock is up 58% since the programme began, suggesting that shareholders feel the benefits are real enough and ‘wellness' is a risk worth taking.

Get healthy - or else
Business Week, 26 February
Review by Joe Gill

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