Wellness on tap at Coors.

Don't think of your wellness program as just a warm and fuzzy benefit - it can be an effective cost-cutting strategy. Find out how Coors' plan keeps the work force and the bottom line healthy.

In July 1981, the doors to Coors' on-site wellness center opened for the first time. In the early days, this facility was our way of subtly encouraging employees to pursue wellness in body, mind and spirit. The center offered exercise programs, cardiovascular and weight-training equipment, health-education courses and health screenings like mammograms and blood-pressure evaluations. We made no attempt to quantify our returns in terms of lower health-care costs because that wasn't the center's intent. Our goal was employee well-being and primary-care prevention.

But our focus changed as our health-care costs escalated nearly 50 percent between 1983 and 1986. We wanted some sense of the bottom-line benefits, if any, our wellness benefits provided. Embarking on a major cost-benefit study, we found we could expect that each dollar invested in the program returned $1.24 to $8.33, depending on whether we were analyzing the best-case, typical or worst-case scenario. The average we could expect to save was a return of $6.15 for every dollar invested. We estimated the program saved the company at least $1.9 million annually by decreasing medical costs, reducing sick leave and increasing productivity.

The study, conducted by James R. Terborg, a professor at the Graduate School of Management at the University of Oregon, further showed we could cover the annual operating costs of the program, including fixed and variable costs, with as few as 130 participants. In 1994, the center registered 51,000 uses by more than 2,350 employees (some employees use more than one service or program). At our Golden, Colo., headquarters, we employ about 5,200 workers. For employees at our Memphis, Tenn., and Shenandoah, Va., facilities, where we don't have enough people to make an on-site wellness center feasible, we offer incentives for them to join local health clubs. Those incentives also apply to people in our field force.

If we could generate this kind of return from a program that we didn't originally intend as a money saver, we began to wonder what kind of impact a more organized wellness approach could have. What if we offered employees additional on-site health services, such as primary and dependent care? What if we managed disability or workers' compensation cases more aggressively to improve care for employees and expedite their rehabilitation? These questions prompted us to begin looking at wellness not as a program in and of itself, but as an integral piece of our overall health cost-management strategy.

THE WHOLE ENCHILADA

Today, we've expanded the focus of our wellness program to include prevention, rehabilitation, secondary prevention and managed care. At the same time, we target our efforts in certain areas to the employee populations at highest risk for specific health problems. So it's not just marathon runners who use the wellness center - we now have people with back problems and cardiac health programs. One of our biggest obstacles has been getting our blue-collar workers to participate as much as the white-collar portion of our work force does, so we've begun to focus more on reaching that population, too. Similarly, we tailor our wellness programs to individual work sites, because workers' needs vary from site to site.

Because many people need some encouragement to pursue wellness, we do what we can to keep the message in front of employees by using home mailers, table displays in the cafeteria, posters in the hallway and articles in the company newspaper. Plus, we're trying to overcome the attitude that wellness programs are "one-shot deals." In other words, we want people to retain the healthy behaviors they learn for as long as possible, so we're building into our programs more consistent and sustained follow-up with employees.

To help us carry out those goals, we have six employees on staff at the wellness center, plus three clerical employees, and we also contract with an outside cardiologist. Here are some highlights of our wellness and primary-care programs.

Cardiac rehabilitation. We provide a free comprehensive cardiac-rehabilitation program to Coors employees, spouses, retirees and dependents recovering from cardiac illnesses. The program's main objective is to return employees to work in their original jobs as quickly as possible. To date, 98 percent of the employees completing the program have returned to work in about 1.3 months. The national average is 70 percent and eight months, respectively. Many of those employees were able to assume their original jobs, and overall the program has saved us a total of more than $3.5 million in lost wages and $2.6 million in actual costs. Coors pays $662 per patient for the cardiac rehabilitation program, but the average external cost of such a program is $1,700.

Orthopedic rehabilitation. Coors' physical-therapy department offers an orthopedic screening, treatment and rehabilitation program. The department focuses on preventing and rehabilitating back injuries, whether or not they're work-related. A work-conditioning program of general physical conditioning and specific rehabilitation exercises also is available for restricted-duty employees, spouses and dependents. Our estimates show we can save $114,000 per year by using internal resources to provide the orthopedic program instead of outside providers.

Screening programs. Coors introduced on-site mammography in 1985 for employees, and we made it available to spouses the following year. In 1994, we gave 1,492 mammograms (about a 65-percent participation rate). Four of the women tested had malignancies.

Employees pay $5 for the test; Coors' cost for each screening is $65 P a total of $890,760 last year. But when we calculate the direct medical, short- and long-term disability costs, temporary-replacement fees and ongoing benefits, we estimate the screenings save us $132,000 for each employee early detection and $65,000 for a spouse (medical costs only). Other screenings we offer to employees, retirees and spouses are prostate- and cervical-cancer screenings, as well as glaucoma tests and lipid and glucose screenings.

Physical exams. Employees and retirees are eligible for periodic physical exams at our on-site medical center. Blood tests, chest X-rays, electrocardiograms and pulmonary-function testing are some of the services we provide, depending on the individual's health needs. Nurse practitioners perform the exams and teach health-promotion and disease-prevention techniques.

Dental center. A preventive dental center is available on-site to employees, eligible spouses and dependents 13 and older. Free cleanings, X-rays, screenings and education on dental hygiene encourage employees and their families to regularly take care of dental needs.

Primary care. Employees, eligible spouses and dependents age 13 or older Can obtain primary health-care services from physicians and nurse practitioners at Coors Medical Center. Pre-operative blood and X-ray testing are also available. The employee's cost for each visit is $5.

Managed care. We offer employees and family members comprehensive managed-care programs in which registered nurses review hospitalization, home health care and outpatient care.

Pre- and post-natal programs. Pre- and post-natal managed care is available through a cooperative effort that includes an in-house telephone counseling program for employees and spouses. Specialists at our medical center handle work-site concerns and questions related to pregnancy, and our wellness professionals help design pre- and post-natal exercise and nutrition programs. In addition, the wellness center has set up breast-pumping stations in four locations around the plant for new mothers returning to work.

Financial incentives for wellness. Coors encourages employees to develop and maintain healthy behaviors by offering special incentives. For example, nonsmokers pay 50 percent less for supplemental life insurance than smokers do.

In January, we adopted a flexible-benefits package that allows employees to earn up to $250 in additional benefit dollars, as well as $250 for their spouses, when they make these six wellness pledges: to abstain from tobacco; to consume alcohol responsibly; to use safety equipment, such as seat belts and helmets; to assume responsibility for their mental health by promising to seek counseling for stressful situations; to stay physically active and to have their blood pressure checked every six months. Employees are on the honor system to keep these pledges, and we deduct the benefits dollars they earn from their insurance premiums.

Managed mental-health care. After experiencing a 46-percent increase in mental-health costs in just one year during the late 1980s, we embarked on a major overhaul of our employee-assistance program. Today, our aggressive managed behavioral health-care system includes team-based case management. Treatment involves the patient, the family, the mental-health-care provider, a counseling services case manager and other resources as appropriate. Although this often means we foot more of the costs up front, we believe we need to address both the work and family environments. And we still get a bang for our buck because we've reduced our dependence on hospital care for treatment and now use partial-care and home-care alternatives.

In 1993, the latest year for which figures are available, Coors' cost of employee behavioral health treatment was $1.3 million, or less than 5 percent of our total health-care budget. Nationally, companies have to earmark between 12 percent and 20 percent of their total health care budget for behavioral health services.

Targeted-intervention programs. The average age of our work force is 42, with more than 30 percent older than 50, so the sheer number of employees entering their coronary-prone years has the potential to push the number of cardiovascular cases beyond what we can financially withstand. That's why we developed LifeCheck, a voluntary cardiovascular program. We decided that instead of waiting for workers to use the program on their own, we'd bring it to them in their work areas. It starts with a two-week identification phase, in which we combine employee questionnaires and health screenings to determine which employees are at elevated risk for cardiovascular disease. Then we offer one-on-one lifestyle counseling and health-education and exercise programs to high-risk individuals at their work sites.

So far, we've introduced LifeCheck to only one group of employees, and we've determined that if we offer it companywide, the projected annual savings - from reduced medical costs and sick leave and from increased productivity - could range from $440,000 to $1.8 million in direct and indirect costs. Furthermore, these figures are based on an employee participation rate of just 20 percent. Plans are now underway to introduce LifeCheck to other work sites within the company.

As you can see, we take a multi-faceted view of wellness. We're very concerned with preventing disease, which was the original mission of our wellness program, but we now also focus on primary care and rehabilitation. This means all programs related to employee health, such as group health, counseling services, benefits, medical-review services and the medical center, have to work in tandem.

But although we use wellness as part of our overall benefits cost-management strategy, we don't scrutinize every program for its potential return to the bottom line. It would be hard to measure the financial impact of stress management and parenting classes, for example. However, a variety of wellness services is essential to create and sustain a culture that is health- and performance-oriented. These services may not show a direct bottom-line benefit, but they do contribute to that nebulous quality known as worker morale. This doesn't mean we don't measure whether or not a specific program is effective, but we do evaluate the effectiveness of a wellness effort in relation to the whole health-cost picture.

Of course, part of the difficulty Coors and many other companies experience in measuring the effectiveness of wellness programs stems from the issue of avoided costs. We assume, using rational arguments, that wellness programs do what they're intended to do and that lower health risks really translate into lower costs, but only now are we analyzing and using data to prove this.

To support prevention activities, health-care managers need proof that a wellness program worked because certain things did not happen, such as episodes of specific illness, days away from the job because of illness or injury, and utilization of medical services. But to do this, employers must have information systems that allow them to compare an employee's health status and medical claims before and after an intervention to determine what, if anything, has changed. These data can help companies project what might have happened to their health-care costs if they hadn't intervened at all.

MESHING THE DATA

One of the next major steps for us is to integrate our various health-related databases so that we can determine the reciprocal influence of health and wellness programs on medical costs, sick leave and so on. Some of the databases that we're thinking of pulling together for this reason are wellness-program participation rates, safety records and accident reports, workers' compensation claims, short- and long-term disability claims, health-benefit claims, laboratory or medical-test data and safety records.

In the short term, integrated health data will give us the ability to identify specific costs by diagnosis and to define our overall risk profile by combining data from health-promotion and disability systems. We want to use our data to identify trends and outcomes so we can design even more appropriate and effective health-cost management strategies. Of course, we keep all employee information confidential.

Thanks to the combined impact of our wellness programs and other parts of our health-care program, our total health-care costs decreased 6.4 percent in 1993. This compares favorably with the 8.9 percent increase experienced by other companies, as measured by a benefits-consulting group. We haven't finished calculating our 1994 figures yet, but we estimate our costs will rise by about 1 percent [ILLUSTRATION FOR OMITTED].

As these figures demonstrate, our decision to continue to support wellness services isn't entirely altruistic. Anytime we can cut overhead costs, we can increase shareholder return. So we'll continue to uphold the wellness philosophy as an important part of our overall corporate culture, for the sake of our employees and our shareholders.

Mr. Clifford is director, planning analysis and reporting, at Coors Brewing Co. in Golden, Colo. Mr. Diaz is the former of Coors.