Employee health is PR problem/opportunity for Scotts

scotts.gifMy post of 11/13/06 told of a gutsy move by Scotts Miracle-Gro to ban smoking by its employees, on and off the job. I’m betting it’s the first of many such stories we’ll be reading — and helping to manage — in the near future.

cover.gifScotts’ initial proposal drew tons of criticism and a few lawsuits. But this week (Feb. 26) it drew the cover story in Business Week. “Get Healthy — Or Else” is a great case history for companies that covet the many benefits of a healthy workforce. You’ll also want to check this BW Online Extra interview with Scotts CEO Jim Hagedorn.

Hagedorn knew it would be an uphill battle to sell his idea. But he opted to go where others fear to tread. He told BW:

“Jack Welch told me: Man, you have balls of steel,'” says Hagedorn. “This is an area where CEOs are afraid to go. A lot of people are watching to see how badly we get sued.”

If you follow business, you know that Welch is the king of steel-balls management. But this story shows Hagedorn is no slouch in the cojones department himself.

Some excerpts from the story:

About employee health programs:

Companies save money. Employees get healthier. What’s not to like? But the wellness craze raises important issues. One is that people could start blaming unhealthy colleagues for helping push up premiums. Then there are the privacy and discrimination issues: How far should managers intrude into employees’ lives?

About the Scott’s health initiative:

Scotts employees are now urged to take exhaustive health-risk assessments. Those who balk pay $40 a month more in premiums. Using data-mining software, Whole Health analysts scour the physical, mental, and family health histories of nearly every employee and cross-reference that information with insurance-claims data. Health coaches identify which employees are at moderate to high risk. All of them are assigned a health coach who draws up an action plan. Those who don’t comply pay $67 a month on top of the $40. “We tried carrots,” says Benefits Chief Pam Kuryla. “Carrots didn’t work.”

So far, the company says, more than 70% of headquarters staff belongs to the fitness center. The smoking-cessation program has already had a 30% success rate. The wellness program, which costs $4 million a year to run, is a financial drain. But the company expects it to pay for itself in three to four years. Other large companies have seen a 3-to-1 return on investment in their wellness programs.

With health care costs center stage in the coming presidential race, I have a funny feeling we’ve not heard the last of this issue. And I’m betting hundreds of CEOs are rooting for Jim Hagedorn right now.

Me, too. I could use to lose a few pounds.


3 Responses to Employee health is PR problem/opportunity for Scotts

  1. Becky Smith says:

    Wow! This case is pretty tough to digest.

    Though after reading Hagedorn’s responses in the Online Extra interview, I have to admit that he makes great points. If “healthy” employees have to essentially pay the high price of health insurance for “unhealthy” employees, then bring on the wellness program! It’s not right for responsible employees to have to answer for the irresponsible behavior of fellow employees.

    I think that as long as Hagedorn makes clear that he cares for his employees’ health and well-being, his plan will be effective in the long-run.

  2. Bill Sledzik says:

    It’s a case in which the rights of one clash with the rights of many. I liken it to the dim bulbs who ride motorcycles without helmets. You are, indeed, free to risk your own health. But you don’t have the right to cost me money — money from insurance premiums I paid into the same pool — money that’ll be paid out to care for you in your vegetative state, caused by smashing your pumpkin against the curb.

    Of course, this can go too far. Will we see the day when a person who’s 20lbs. overweight is denied a job? What of a person whose genetic history indicates the likelihood of heart disease? I certainly see both sides on this issue. That’s why it’s a dilemma we’ll be talking about for a good while.

  3. […] Honda’s retreat on smoking to another Marysville, Ohio, company that created national buzz last year by banning smoking among employees — on OR off the job. […]

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