How exercise can pay off

Nation's Business, Feb, 1997 by Michael Barrier

Physically active employees can mean a healthier company--in more ways than one. Here's how you can encourage such activity.

Even moderate amounts of regular physical activity can bring definite health benefits, by reducing the risks of heart disease, high blood pressure, diabetes, and other ailments. That was the gist of Physical Activity and Health, a report last summer from the office of the U.S. surgeon general.

For business, the implications of the report are clear: Encouraging physical activity can yield concrete gains in the form of lower health-insurance costs and improved employee performance.

Many large companies got that message long before the report was issued. In 1991, a study at Steelcase, an office-equipment manufacturer, found that participants in a corporate fitness program had medical-claims costs 55 percent lower over a six-year period than did nonparticipants.

Such figures, multiplied many times over, lie behind the fitness centers and exercise programs that many large companies now offer their employees as part of their wellness programs. A 1992 government survey found that more than two-thirds of companies with more than 250 employees had fitness programs of some kind.

When it comes to small business, though, the picture is much cloudier;-there are no figures for companies with fewer than 50 employees. "We're not really sure what's happening among the small-business population," says David Hunnicutt, president of Wellness Councils of America (WELCOA), a nonprofit health-promotion organization based in Omaha, Neb.

When a small business does embrace an exercise program, though, the results can be as impressive in their way as the figures from a large corporation such as Steelcase. For example, the Kearney Orthopedic and Fracture Clinic, in Kearney, Neb., with 35 employees, began a wellness program six years ago. "We concentrate a lot on exercise and low-fat eating," says Deb Lundeen, a registered dietitian who is the clinic's wellness director.

The clinic began to see financial gains within two years, Lundeen says, through a slowing of the rate of increase in its insurance rates. By 1995, she says, "our [health-care] usage decreased so dramatically that we were able to go self-insured."

The clinic offers wellness services to other small businesses in the Kearney area, but "we concentrate the majority of our energy on our own employees," Lundeen says. Other companies tend to think about the cost of such a program rather than the benefits, she says: "It's hard for employers to see how it's going to benefit them in the short term."

In other words, to many small-business people, fitness programs can look like just another employee benefit. Brenda C. Loube, president of Corporate Fitness Works, a Gaithersburg, Md., firm that runs fitness centers for large companies in five states, says that small businesses often look at health promotion in terms of "employee relations, employee morale. Large corporations are looking to control costs."

But focusing on preventive-measures such as exercise "is no different than projecting the finances of your company and planning ahead," Loube suggests. "How much money are you wasting of sick leave and absenteeism? How-many dollars are you willing to put into prevention to affect those high-cost areas that right now you're just letting happen?"

Even those small companies that are convinced of the value of exercise may have trouble reducing that value to figures. Michael R. Davis, a principal of Bergmeyer Associates, a Boston-based architectural firm with about 85 employees, can't quantify the benefits the firm may have realized from subsidizing employee memberships in Fitcorp, a local chain of fitness centers.

"I've been trying to encourage our corporate accounting department to see if there isn't some way we can use it to save us money on our insurance," Davis says, "but I think that's like No. 18 on a list of 20 for them to do."

However interesting such hard evidence might be, no astute small-business person is going to wait on it before encouraging employees to become more active. The debate is over, the returns are in: Exercise pays off, for companies and workers alike. "Most companies know now, from everything that's out there, that wellness pays," says Sheila I. Drohan, Corporate Fitness Works' CEO. "They're going to get that investment back."

The only question is how to encourage physical activity most economically and effectively. Some pointers:

Offer as many alternatives as possible.

Small businesses ordinarily can't provide fitness centers on their premises--but they can encourage their employees to join health clubs, by arranging for discounted memberships.

A small firm's commitment to exercise should go far beyond encouraging health-club memberships, though. Only about one-quarter of Bergmeyer's employees take advantage of the fitness center membership subsidy, Davis estimates, and only about half of those, perhaps 10 people, use the facilities more than three times a week.