epsiCo
Inc. might be better known as a global purveyor of soda and chips, but it’s quickly
shaping up as a model for corporate wellness as well.
Since rolling out “HealthRoads” in September 2004, the Purchase, N.Y.-based food-and-beverage giant has made impressive strides in employee health improvement and health-care cost control: More than 60% of the company’s 82,000 benefits-eligible employees and spouses in the United States have taken a personal health assessment, and 60% of these reduced or eliminated at least one health risk, Pepsi officials said.
In all, the company has reduced or eliminated more than 46,000 health risks. In 2007, Pepsi introduced a new smoking-cessation program tied to a $600 health benefits surcharge on self-proclaimed smokers who don’t take part.
Participation spiked tenfold, and the quit rate rose from 20% to 34%. Since 2004, the annual rate of increase in Pepsi’s health-care costs has dropped four percentage points.
Health-care costs are rising at a rate below the national trend— in the low single digits. Although wellness is just one plank in Pepsi’s overall strategy for managing these costs, executives say it is making a difference.
"We're seeing … our employees much more engaged in terms of physical fitness and understanding nutrition, so there’s actually a cultural shift from a health perspective," said Maria Sharpe, Pepsi’s senior vice president for compensation and benefits.
HealthRoads also garnered support from senior management, which recognized the program as a concrete way to demonstrate Pepsi's commitment to "cherish" its employees, said Greg Heaslip, Pepsi's vice president of benefits.
LuAnn Heinen, vice president and director of the National Business Group on Health's Institute on the Costs and Health Effects of Obesity, Minneapolis, said Pepsi's program is impressive in its design and incentives, as well as how it has been communicated.
"What makes all of these programs succeed is when they figure out how to put something together that speaks to their population and whatever subgroups there are, so it seems to me that [Pepsi] had really thought that through," she said. Pepsi's wellness guide runs 30 pages and is chock-full of opportunities and financial incentives for employees to manage and improve their health, including fitness, nutrition and stress management programs, and access to a wellness coach.
| HEALTHROADS HIGHLIGHTS | |
| Program | Incentive |
| Personal health assessment | Earn up to $100 in rewards |
| Wellness coaching (six- or 12-month programs) | Earn up to $100 in rewards |
| Healthy pregnancy | Receive a $50 savings bond for baby and qualify to participate in $1,500 raffle |
| Weight management | Earn up to $25 in rewards |
| Exercise | Earn up to $25 in rewards |
| Healthy eating | Earn up to $25 in rewards |
| Stress management | Earn up to $25 in rewards |
| Smoking cessation | Avoid $600 surcharge for smoking and earn up to $100 in rewards for successful program completion |
| Annual maximum: $250 in rewards per employee and $500 per family | |
An individual can earn up to $250 a year in rewards, an amount that doubles if both the employee and their spouse or partner participate.
Pepsi is working with an outside expert to calculate the program’s return on investment, Mr. Heaslip said.
He expects that work to yield a methodology that other companies may use to determine ROI for their programs. Sustaining momentum over time remains the greatest challenge, and Pepsi has responded by constantly reviewing and revamping its offerings and incentives.
Initially, employees earned $50 for taking a personal health assessment. That amount was later doubled to draw more interest.
"I think that’s one of the keys," Ms. Sharpe said. "You can’t just introduce it and expect participation to remain steady. We retool it on an ongoing basis and reinvent it all the time."
The company also is seeking to bolster grass-roots support for HealthRoads. It will assist wellness committees at various Pepsi work sites in developing local programming such as a health fair or a walkathon.
"Those are the kinds of things that start to create a culture of wellness in the locations where our people work that will ultimately sustain this program going forward," Mr. Heaslip said.
—Crain's Benefits Outlook Online, November 2008
Karen Pallarito is a reporter for Business Insurance. To comment, e-mail
editors@workforce.com.
