Fall 2007 Issue
Workforce Wellness: A CEO's Perspective
James Hagedorn, CEO and chairman of the board of The Scotts Company, the world’s leading supplier of consumer products for lawn and garden care, is a member of the CDC Foundation Board of Directors. Scotts, a $2.7 billion company, has a comprehensive wellness program that includes a $5 million wellness center and a tobacco-free policy in states where permitted. Hagedorn, a former U.S. Air Force captain and F-16 fighter pilot with a reputation for candor, recently shared his thoughts about employee health and the economic impact of rising healthcare costs.
Why do you think addressing employee health is important?
When you’re running a business, profit matters. Improving workforce wellness is partly about driving down health costs, but it’s also about employees’ wellbeing. If I knew there was a machine that was chopping employees’ arms off in my plant, and did nothing about it, I would be considered irresponsible. In my view, addressing smoking and obesity are not that different – the health consequences of both are catastrophic.
What sparked your interest in helping your employees take better care of themselves?
Scotts had already begun using health risk assessments and other tools to implement a wellness program for our associates when I saw an interview one night on CNN that got me thinking about who’s paying for healthcare in America: employers. And if employers are paying for healthcare, we need to take responsibility for fixing it.
That interview reinforced my beliefs, but we had really begun making a proactive effort well before that. We had a couple years running when our healthcare costs had increased almost 20 percent in each of those years.
Your wellness strategy at The Scotts Company is unusual and innovative. Can you tell us more about what you’re doing and why?
We’ve built a culture of wellness at Scotts in a lot of different ways. About two years ago, we decided to “in source” some aspects of medical care to give our associates more tools to proactively manage their own wellness. To that end, we built our own wellness center at our Marysville, Ohio, headquarters. It’s a $5 million facility that includes a fully staffed and equipped medical office, a fitness center and a pharmacy.
Our employees agree to take a comprehensive health assessment (handled by an independent third party), or pay $40 more each month in premiums. About 95 percent of our people participate in these surveys, and about half of our staff is flagged as high risk. If you’re considered “high risk,” you get a personalized strategy to address your specific issues. There’s no insurance co-pay for employees who go to our medical facility or purchase generic drugs. We reimburse employees in other U.S. locations for fitness club memberships and weight management programs. We also made the decision to be a tobacco-free employer in states where it’s permitted, and to have a tobacco-free workplace.
What opportunities do you think workforce wellness presents in terms of profits and competitiveness?
We can’t continue to contend with healthcare costs growing at three times the rate of inflation. It’s expensive, but we know that dealing with obesity and smoking will help our long-term healthcare spending history and improve employee productivity. The question we’re asking now is, ‘What’s the return on investment?’ We think the data will prove itself over the next five to six years.
What wellness strategies work particularly well, in your opinion?
We started out with a lot of carrots, but unfortunately we learned that sticks are most effective – for example, losing your job because you smoke. In the states where we can control it, three-quarters of our people have already quit smoking, or are in the process of quitting. We have a non-union workforce of 6,000 employees, and our associates pay about 20-25 percent of their healthcare costs. We want employees to take responsibility for their health. They understand that when the company’s costs go up, theirs will too.
How does supporting the CDC Foundation make a difference for corporate workforce wellness?
The CDC Foundation is independent, which means that we can steer resources toward the CDC to strengthen CDC’s ability to address workplace health issues. The CDC Foundation has a really important role in helping CDC kick start workplace wellness initiatives that are difficult or otherwise impossible to do alone.
- Lisa Splitlog