Leaders of some of the biggest U.S. corporations, from Coca-Cola Co (KO.N) to Johnson & Johnson (JNJ.N), unveiled a campaign on Tuesday to reduce the nation's healthcare costs, urging their peers to embrace wellness programs to improve employee health.
The newly-formed group, called The CEO Council on Health andInnovation, said it came together "to lead the U.S. business community" in improving employee and community health and reducing costs.
The council's members also include Verizon Communications Inc(VZ.N), Aetna Inc (AET.N), Bank of America Corp (BAC.N), Walgreen Co (WAG.N), McKinsey & Co, Blue Cross and Blue Shield Association and the Institute for Advanced Health. Combined, the group said its healthcare benefits cover 150 million people.
In a report released at a press conference in Washington, D.C. in conjunction with the Bipartisan Policy Center, the council called on employers to accelerate the adoption of wellness programs to improve nutrition and weight management, promote physical activity, help employees quit smoking and manage chronic diseases.
Several council members described successful wellness initiatives at their own firms and urged others to follow suit.
"Today is about a call to action," said Coca-Cola Chief Executive Officer Muhtar Kent. The company's sugary soft drinks have been the target of public health advocates who argue they contribute to obesity and related diseases such as diabetes.
Workplace wellness programs, a $6 billion-a-year industry, are popular because they promise to improve productivity, cut absenteeism and reduce medical costs by averting expensive illnesses.
Some employers, including Bank of America, offer financial incentives for employees to get screened, while others have begun to penalize workers who don't participate in wellness requirements.
Despite the rising popularity of such programs, some independent research has shown that wellness campaigns do not always cut costs as hoped.
A long-running workplace wellness program at PepsiCo (PEP.N), for example, helped reduce costs for workers with chronic diseases by cutting down hospital admissions. But the savings for employees who were urged to make preventive changes to their lifestyle were negligible, according to a report published in the journal Health Affairs in January.
Still, Dr. Fikry Isaac, vice president of global health services at J&J, said the company's own research showed that every dollar it spent on wellness programs yielded a potential $2 to $4 return on investment.
"We believe it does work and we have the ability to show quite a bit of evidence," he said.
One J&J study that lasted more than six years showed a $565 dollar saving per employee per year, Isaac said, adding that healthcare costs for J&J over the period rose just 1 percent, compared to a gain of 4.7 percent for its peers.
(Reporting by Toni Clarke in Washington; Editing by Michele Gershberg and Tom Brown)