Amy Borghese

Thursday, 25 September 2008 20:00

Wellness at work

Approximately 90 percent of all work-places with 50 or more employees and virtually all employers with more than 750 employees offer some form of health promotion program at their workplace. Clearly, many consider creating a healthy work environment good business.

“The majority of large employer groups have developed wellness programs. They understand that promoting wellness in the workplace just makes sense on a lot of levels for employers,” says Michael P. O’Donnell, Ph.D., MBA, MPH, vice president and chief wellness officer for UPMC Health Plan.

If done correctly, health promotion programs can be beneficial to a company. Healthy employees miss fewer days of work and are more likely to stay on the job longer. Health promotion programs can improve health by reducing health risks, helping manage controllable diseases and reducing the use of avoidable substances.

Smart Business talked with O’Donnell to identify what an employer should know to develop effective wellness programs in the workplace.

What are some of the pitfalls that employers may face in starting a wellness program?

One of the biggest mistakes employers make in the area of health promotion is to focus exclusively on education. They believe that all they have to do is give people the right information and people will make the right decisions. They focus on improving the communication by making multimedia presentations, improving the graphics, etc.

You can educate others all you want about leading a healthy lifestyle, but if they’re not motivated, they won’t do it. Actually, most people know that they should exercise. Most smokers know that smoking causes many kinds of cancer. If knowledge were enough, no one would smoke and everyone would exercise. What employers may not realize is how hard it can be for some employees to act on what they know.

What elements are necessary for a health promotion program to succeed?

There are four factors: awareness, motivation, skills and opportunity. Programs that do not include efforts to motivate people, build skills and provide opportunities for health are not likely to succeed.

Awareness is important to mobilize support. When people realized that secondhand smoke causes more than irritation, and that it actually makes people sick and can cause lung cancer and heart disease, workers mobilized to force their companies to create smoke-free workplaces. Without this knowledge, a worker might view a no-smoking policy as restricting personal liberties rather than as a way to protect worker health.

Should employers utilize financial incentives as motivation?

Financial incentives are great at getting people in the door. They are good ways to get people to take a health risk assessment or participate in a health screening. But, they have virtually no impact on behavior changes. You can use financial incentives to get your employees’ attention, but to get beyond that point, the incentive has to be more intrinsically important to an individual. Another problem with financial incentives is that when the financial incentive goes away the motivation to participate often goes, as well.

Why are skills needed for someone to succeed in a wellness program?

Living a healthy lifestyle can be equated to learning a new language. You have to immerse yourself in a new culture. It’s not enough to know what you need to eat. You also need to know where to buy these foods, how to prepare them, and what to order and what to avoid when you eat in restaurants in order to eat healthy. The most successful skill-building programs will teach strategies to overcome barriers that usually cause people trouble in making behavior changes.

How can an employer help employees succeed in a health promotion program?

It can be little things. For instance, making the stairwells open and encouraging people to walk up to their offices rather than ride the elevator. Highlight areas outside where employees can walk on their lunch hour. Offer healthy food in the cafeteria. Establish a smoke-free environment. An employer has the ability to set policies that can encourage employees to lead healthier lifestyles.

How do you determine if a health promotion program will be beneficial to your company?

The first step is to clarify your goals. Why do you want to develop a health promotion program? Is it to improve health, reduce medical costs, enhance productivity or attract talented employees?

The next step is to think about how much achieving those goals is worth to you as an employer. If it is worth $10 per employee, don’t bother. Helping people change habits they have formed over decades of time is not easy, and it is not cheap.

If it is worth $100 or more per employee, the next step is to do some in-depth research to figure out the best program to develop to achieve your goal. You can do this research on your own or by hiring a consultant. Some health plans can help you with this step.

MICHAEL P. O’DONNELL, Ph.D., MBA, MPH, is a vice president and chief wellness officer for UPMC Health Plan. Reach him at (412) 434-1200.

Thursday, 25 September 2008 20:00

E&O coverage for tech industry

In the ever-changing technology industry, it’s a fact that products and services may fail to perform as expected. Many technology companies do not realize their general liability policy does not protect their business against failure causing financial injury to a third party, such as a customer or vendor, says Ken Harrison, commercial insurance broker with Westland Insurance Brokers.

With attorney fees averaging $300 to $400 per hour, industry experts estimate the average cost to defend a financial injury claim often exceeds $200,000. What business owners need to know is there is insurance available providing coverage for defense costs and settlement awards through a technology errors and omissions (E&O) policy.

Smart Business spoke with Harrison about technology E&O insurance and how business owners can be assured they are making informed buying decisions when it comes to protecting their company.

Why is it important to have E&O coverage?

E&O insurance protects businesses against failure of their products or services causing financial injury to a third party, such as a customer or vendor. It also protects against breach of contract when a business fails to deliver services or products in accordance with contractual terms. It is important to have an E&O policy because it fills in gaps left by a general liability policy that often protects against third-party bodily injury and property damage but stops short of providing coverage for monetary damages, such as loss of profits. Each policy may differ, so it is important to work with a broker to determine your specific needs.

Who should purchase technology E&O insurance?

Networking and information technology companies, electronics manufacturers, technology consultants, and telecommunications firms all require such coverage. Because technology companies are at the forefront of innovation, unforeseen or unanticipated failures sometimes occur. Without E&O insurance, hardware, software and telecommunications companies are putting the longevity of their business at risk.

Why is E&O coverage often not purchased?

One of the main reasons companies do not purchase E&O insurance is because they are not aware of or informed of their exposure. Many customers say they have contracts in place with all their customers and vendors that limit their liability and hold them harmless should failure occur. While a legally reviewed contract with well-crafted protective clauses could prevent companies from paying indemnity, it does not prevent a customer or vendor from filing suit or leaving the contractual interpretation up to a judge or jury. Without an E&O policy, a company being sued could be left to find counsel on its own and pay damaging legal expenses out-of-pocket.

Other reasons technology businesses do not buy E&O coverage include not being contractually required to carry it or not wanting to pay the additional premium such a policy would cost. Every technology company has some form of E&O exposure. Whether a small start-up business or a large multinational corporation, there are carriers and policies available to match individual business needs. Every buyer should, at minimum, be aware of his or her exposure and be confident he or she is making informed buying decisions when it comes to E&O insurance.

What is important to understand about a technology E&O policy?

Coverage varies among carriers. This is why it is important to have an experienced broker to point out the differences and match companies with a policy that best fits their needs. Some key aspects include:

  • Claims-made versus claims-made and reported policies. No customer should be purchasing an E&O policy without knowing the difference between the two. Be on the lookout for hidden reporting triggers.

  • Enterprisewide and worldwide coverage. This means the policy is not limited solely to technology products or services and coverage will respond to losses and lawsuits outside the United States.

  • Definition of damages and payment. How a policy defines damages determines how it will respond and pay in the event of a claim. While some policies may leave damages undefined and left to carrier interpretation of the loss, other policies will be specific about the type of damages covered.

  • Indemnification versus pay-on-behalf. Indemnification policies could leave an insured business on its own to pay defense fees and then await reimbursement.

  • Terms. Insurance buyers should read exclusions carefully and also be interested to know whether their policy includes cost of contract, delay in delivery, security breach, choice of counsel and duty to defend clauses.

What should technology business owners look for in an E&O insurance carrier?

One should partner with a carrier that offers breadth of coverage and has specialists in underwriting, risk control and claims handling dedicated to servicing technology companies. There are a limited number of carriers in the market that truly specialize in writing insurance for technology businesses. Take the time to research the various carriers and talk with a broker about the one that can best protect your business.

KEN HARRISON, MBA, is a commercial insurance broker with Westland Insurance Brokers where he specializes in property and casualty insurance for technology companies. Reach him at (949) 553-9700 or

Thursday, 25 September 2008 20:00

Make the better decision

The fall season is the time when about 80 percent of employers hold their open enrollments. This annual event allows employees to ask questions and choose the health plan best suited for their families’ needs. Choosing a health care plan is no longer just a health care decision, it is a financial decision.

“This is about setting your annual health care budget,” says Don Whitford, director of sales and client services with Priority Health. “It is important to prepare for the ‘what if’ in medical care.”

Smart Business spoke with Whitford about how employers should help employees prepare for open enrollment and how to make open enrollment successful for employers and employees.

How can employers prepare for open enrollment?

Communication should be constant. Employers should inform their employees about the types of plans being offered. The financial aspects of the plan should be disclosed as early as possible. Employees should be informed if they are expected to contribute for plan coverage and what outof-pocket costs can be expected.

How should employees utilize open enrollment?

Employees should track their coverage needs from the previous year and then document how their current plan covered such needs. During open enrollment, you can compare how other plans would have covered the same needs. You should use this period to talk with the representatives at your health plan provider and let them help you figure out which plan will cover your needs.

What should employees ask their carrier when trying to select a plan?

The network — They should ask questions to fully understand which physicians are in the network. Employees should make sure they are comfortable switching physicians if their current physician is not in their network.

Co-pays and deductibles — Employees need to know what their out-of-pocket costs are with their plan. They also need to understand what is and what is not covered.

The drug formulary — Every plan uses a drug formulary (see Smart Business September 2008), but different health plans cover different drugs. This must be understood by the employee especially if he or she is switching from one benefit plan to another.

The customer service policy — When the employee calls in with a question, to whom will he or she speak? How quickly can the employee expect resolution to his or her problem? What is the percentage of calls that are resolved on the first call?

How can employers make the open enrollment process easy and effective for their employees?

Many employers make the mistake of not taking advantage of the resources their carriers provide. As a business owner, you are not required to be an expert on the health care plans you provide your employees. However, you are responsible for providing the proper resources to help employees make the best decisions. An employer should allow the carrier to have its representatives address the employees. Schedule on-site walk-in sessions for your employees to meet with representatives from the health plan. The frequency of these sessions will depend on the size of your work force. Employers should also open communication to employees’ families.

What educational information should be provided to employees before and during open enrollment?

Carriers should be able to provide crisp, concise benefit summaries. The carrier should have a user-friendly Web site that provides information on a number of topics such as the drug formulary and how benefit designs work. The employer should provide the pricing information for the employees. The key is to be open with all information and how the plans work as early as possible so that employees have enough time and information to make a well-educated decision.

Are there certain areas within a plan that employees should evaluate in an attempt to save money?

These areas may vary between each employee depending on his or her personal needs. That is why it is important to track and identify those needs. There are a few key areas where employees can look to save money. The first area is the deductible. Which services have deductibles or co-pays? What are the amounts of these co-pays? How often do I use these services? Are the competitors’ co-pays significantly different?

For employees with younger children, it is beneficial to look at the carrier’s coverage for preventive measures such as vaccines and routine checkups. Some carriers only allot a certain amount of funds for preventive services. After the employee’s fund is capped, then all preventive measures become an out-of-pocket expense for the employee.

DON WHITFORD is the director of sales and client services with Priority Health. Reach him at or (248) 324-2711.

Thursday, 25 September 2008 20:00

How do you decide?

If there is a major decision to be made in your company, who makes that decision? As the owner, do you make all the decisions on your own? Odds are likely that prior to any major decision being made within a company, other people, advisers or experts are consulted.

For a public company, there is likely an advisory board in place for such major decision-making. Smaller businesses may not have such a formal board in place.

But, every company should seek outside advice and expertise. For the smallest companies it may simply be their accountant, lawyer or family friend.

“The key is to formalize the relationship and role to ensure that expectations are set so results can be achieved,” says David Janus III, president and CEO of FirstMerit Bank’s Cleveland region.

Smart Business spoke with Janus about the value an advisory board can add to a company and how such boards should be formalized.

What value can such an advisory board add to a privately owned company?

The advisory board acts as an informal executive management team, adding management depth and providing strategic and oversight breadth. An effective advisory board shapes and challenges management’s goals, holds management accountable, and lends critical thinking to guide strategic direction and resolve problems. An effective board works to position a company to continuously improve its performance over time.

What is the risk for a privately held company if there is not an advisory board?

A company without outside advice risks insulating it from important perspectives that may grow or increase its franchise value. Fresh ideas and creative thinking is necessary to keep a company flourishing. Outsiders from other industries with different skills and professional experience lend critical insight that can make the business more competitive and effective.

Who should be selected to make up the advisory board?

The board should be made of a broad group of professionals who can be critical and constructive. Avoid constructing advisory boards filled with friends who will always support the owner regardless of results.

Paid advisers, such as the company’s accountant and lawyer, have a vested interest in the success of the firm and are deeply knowledgeable about the company. It is also valuable to add others without an intimate knowledge of the company who bring different skill sets that can aid the company operationally and strategically.

Chemistry among the board is also important. The board must be committed to the company’s success. And, if you are paying your board members, make sure you are holding them accountable and getting your money’s worth.

On what aspects of the company and operations should a board provide advice?

The board should focus on higher-level strategic goals and objectives while management handles the day-to-day details. A financial and operational scorecard can direct the board’s attention to problem areas. If problems persist, the board is responsible to challenge the owner and to suggest solutions.

Why don’t all companies have advisory boards?

There are a number of reasons. Some owners feel that they alone know the business and should make the decisions. Other owners may choose to consult with friends or hire professionals, such as accountants, lawyers and bankers, at times of conflict. Family-owned businesses may run entirely by the decisions of family members.

An advisory board can be crucial to the growth and success of a business. There is vast talent and knowledge available to business owners from individuals with experience in diverse businesses and industries. If you can tap into an extended knowledge pool to better your company, why wouldn’t you do it?

DAVID JANUS III is the president and CEO of FirstMerit Bank’s Cleveland region. Reach him at or (216) 694-5658.

Tuesday, 26 August 2008 20:00

Rx plans benefit all

When patients are diagnosed with a chronic or life-threatening disease, physicians must determine if drug treatment is the best option for their patient’s needs. Health plans utilize several programs, including a drug benefit management program, to ensure drugs are affordable and accessible to patients who need them.

With a drug benefit management program, the goal is to provide appropriate, affordable and accessible drug benefit coverage so that positive patient outcomes are achieved, says William Valler, associate vice president of pharmacy at Priority Health. With such a program, new medications are constantly reviewed and updated. This program also works as a type of check and balance system between the prescribing physician, the pharmacist and the patient to ensure that the patient is receiving the most effective form of treatment possible.

Smart Business spoke with Valler about the pharmacy benefit management program, how a drug formulary is designed and how investing in such programs is beneficial, not only to the patient but also to the patient’s employer.

What is a pharmacy benefit management program?

This program combines the knowledge of skilled medical professionals to monitor and prevent any adverse effects of drug combinations for patients. The goal is to operate a detailed monitoring system to provide the best care possible to keep patients as healthy as possible. A drug formulary — an approved list of the most effective drugs and treatments possible — is also formed within this program. There are both positive outcomes for the patient and the business owner who purchases the health care with this program.

A team of pharmacists and physicians work to ensure that therapies are being prescribed based on sound scientific evidence and principles. All of these methods are put in place to make sure the

patient receives optimal care.

How does pharmacy benefit management reduce medical costs?

To reduce costs, a preferred list of formularies is established. This list ensures that the appropriate drugs are available to patients. The drugs on this list are deemed the most effective and, often, the most affordable.

There will be cases where a patient requires a drug not on the list. This does not mean that the patient is necessarily denied coverage of this drug. Rather, the patient simply has to complete an authorization process to make sure the drug is, in fact, needed and will provide the best treatment possible. This decision is not made solely by an insurance processor. With the pharmacy benefit program, medically trained professionals and pharmacists are making these evaluations.

The operator of the pharmacy benefit management program will also work with drug manufacturers to negotiate costs for prescriptions and is often able to offer drugs at a lower cost, which benefits both the employer and employee.

Why is it important for employers to invest time and money into such programs?

For employers, the overall cost savings is significant. If an employee is receiving the appropriate treatment, he or she is much more likely to recover or become healthier. This reduces future medical costs for employers. Appropriate treatment and medication may also increase an employee’s quality of life and productivity. All of these are savings for an employer.

What is the drug formulary, and how does it work?

The drug formulary is a list of drugs selected by a team of medical professionals who identify the most appropriate for treatment of certain ailments. Many will likely be glad to know that the drug formulary is developed by a pharmacy and therapeutics committee.

Medications are first reviewed to make sure they are clinically sound. The committee must determine that the drug is effective and that the side effects don’t outweigh the treatment. If a drug has the same effect for patients, then we look at the economic side of the drug. Which drug will be cheaper but still effective for the patient?

In order to complete this process, the committee does a thorough review of the clinical and medical literature and looks at the patient experience, the national guidelines for related diseases, the recommended treatments for such diseases and then the economic data. Physician recommendations are also reviewed. Finally, the committee determines which drug is most appropriate for the disease and it is added to the formulary.

WILLIAM VALLER is associate vice president of pharmacy at Priority Health. Reach him at or (616) 464-8918.

Tuesday, 26 August 2008 20:00

Vehicle maintenance programs

As companies try to tighten their belts, they may be overlooking programs that could, in fact, save money and their reputation. Businesses utilizing commercial fleets should implement vehicle maintenance programs. Some businesses have a haphazard approach to vehicle preventive maintenance (PM) and confuse “as-needed” or “crisis” maintenance with preventive maintenance, while others view their fleet as a key asset and a rolling billboard for their business and thoroughly track preventive maintenance for each vehicle.

The perceived cost savings of continuously postponing PM certainly has an impact on the decision to overlook PM, says Eric Crandall, senior risk control representative for Westfield Insurance. The increased durability of consumable vehicle components can also give the false impression that PM is not needed. This seemingly “quick fix” to cost savings can cost much more in the long run.

Smart Business spoke with Crandall to learn about how investing in PM programs can help reduce insurance costs, save money and help maintain a positive reputation.

What role do vehicle maintenance programs play in obtaining vehicle insurance?

Insurance carriers evaluate the insurability of commercial auto fleets from many different angles. Along with driver selection, qualifications, orientation, training, accident reporting, recordkeeping, etc., preventive maintenance schedules are reviewed to aid in evaluating the potential of a failure occurring while a vehicle is being operated that could lead to injury and/or property damage.

Why are PM programs beneficial to reducing costs and sustaining good business?

Formalized PM programs differentiate companies that use a proactive approach for commercial auto exposures as opposed to a reactive approach of controlling auto claims. Not surprisingly, companies with formalized PM programs tend to experience fewer and less severe commercial auto claims.

Though PM programs are only one of many elements that determine loss experience, companies with formal PM programs and subsequent limited commercial auto claims experience are looked upon favorably and enjoy far more competitive pricing for their commercial auto insurance.

At some point, the anticipated maintenance cost, less the remaining depreciation value, will exceed the cost of a replacement vehicle. Thorough maintenance records will allow management to accurately determine this ‘break-even’ point and avoid spending capital on an asset that is past its useful life.

Beyond preventing accidents caused by vehicle deficiencies, PM programs and inspections can aid in reducing many other direct and indirect business costs, including:


  • Injury of employees involved in accidents



  • Damaged public opinion of a business whose vehicle is involved in an incident that inconveniences others via traffic congestion



  • Temporary loss of a company vehicle



  • Loss potential of delivered product or service equipment



  • Delayed product delivery or provided services resulting in customer dissatisfaction



  • Renting or leasing a replacement vehicle


What should be evaluated in a PM review?

Insurance carriers want to verify that companies adhere to the manufacturer’s service recommendations, recognize wear signs of consumable components that must be replaced or serviced, train drivers to identify indicators of deterioration, pull vehicles out of service that are in need of PM, adhere to PM schedules and document PM performed on each vehicle. Consumable components that should be addressed include such factors as brake performance, tire condition, steering system performance, vehicle lighting and conspicuity, battery performance, etc.

PM programs should pertain to all vehicles, from the company president’s private auto to the fleet of delivery/service trucks; no vehicle should be exempt from PM schedules.

Should such programs be outsourced or conducted by an on-site staff?

If a company performs its own maintenance, adequate facilities and equipment must be provided, as well as ongoing training of mechanics for changes in equipment and repair procedures. Likewise, companies outsourcing vehicle maintenance should verify that these mechanics are qualified to perform the work and are reputable. In either circumstance, PM programs require management commitment, qualified mechanics, a strict adherence to developed schedules and continuous documentation of PM efforts.

What about the costs of PM programs?

The lack of a formal PM program actually costs the business more in the long run via maintenance-related accidents, delays, customer dissatisfaction and repair costs that are greater than the value of the vehicle.

While many commercial auto losses can be attributed to driver behaviors, poor PM can be a contributing factor, if not the main factor for many commercial auto collisions. Separating these claims from the other commercial auto claims clearly demonstrates the effectiveness of a formalized program.

Many companies with formalized PM programs learned long ago that worn, failed or incorrectly adjusted components can cause or contribute to accidents and adversely affect their bottom line and reputation.

ERIC CRANDALL is a senior risk control representative for Westfield Insurance. Reach him at or (630) 587-1400.

Monday, 26 January 2009 19:00

Crunching the credit

These days, there is a misconception regarding the credit crunch. If you take a look at the data published by the Federal Reserve, commercial and industrial lending was actually up through November 2008. This means for traditional operating businesses, there is plenty of credit available.

The same data shows the real difference in credit today — lending standards have generally tightened. So, businesses on the margin (high leverage, weak cash flow coverage) that may have received loans several years ago, may now have trouble getting those same loans. Further, the data shows that loan spreads have widened for businesses.

“Even though LIBOR and federal funds are at historically low levels, a borrower’s all-in rate, even with a higher spread, is extremely cheap right now,” says Jim Geuther, manager, commercial banking, FirstMerit Bank.

Smart Business spoke with Geuther about how businesses can plan to operate successfully with new lending standards.

How can businesses survive if they are dependent on credit?

Communicate with your bank. This cannot be emphasized enough. Banks are being extremely diligent about reviewing their credit portfolios. A business owner should meet at least quarterly with his or her bank and review current financial information, including the budget/backlog and receivables aging. The business owner and the bank should be on top of any trends or changing industry conditions.

Business owners should also scrutinize the bank. That means owners should perform their own due diligence. Business owners should know the bank’s financial condition (profitability, loan/deposit ratio, charge-offs and capital level) and its ability to provide additional credit in the current market. Through this turmoil, an extreme divergence has developed in what certain banks can and cannot do. It is important that the business owner understand the bank’s capabilities.

How do you recommend business owners adjust their business plans to prepare for tighter lending standards in 2009?

The primary concern of a business owner should be his or her own operation. The credit is available to the well-managed business. A motto for a business owner should always be this: Plan for the worst and hope for the best. That means a business should have a definite action plan should market or industry conditions deteriorate. The business should have flexibility to withstand changing conditions. The most important measure of this flexibility is the business’s working capital position and access to liquidity, including a line of credit. An owner should be examining all assets and business options in order to maximize liquidity.

What are successful businesses doing today to stay on top during turbulent times?

Most have communicated with their banks and negotiated extensions to their lines of credit to ensure access to liquidity. Too often, businesses focus on what they paid for the credit. Smart business owners realize that the access to credit and ability of the bank to respond appropriately is vastly more important. The ability to access credit is crucial for most companies, thus, being a well-run business has never been more important. Most capital market alternatives are not available for accessing credit. Bank credit remains the best source of capital for closely held businesses. A business’s credit needs should contract as its volume contracts. Again, the credit is available and inexpensive right now, but the business owner should be prepared to meet higher standards from the bank in order to gain access.

What qualifications are banks looking for today when they provide credit?

Today, banks are looking at a business’s cash flow, liquidity (working capital), net worth, collateral and industry risk. Certainly, specific industries are having a tougher time accessing credit. Industries such as automotive, investment real estate owners/developers and retailers are a few such industries. That said, a superior management team can still produce outstanding results in a difficult industry, and a good bank will provide credit to the right owners/managers.

Again, communication comes into play here. Banks want to know what you are doing and what you plan to do in the future. Keep them involved in your business plan.

What risks should business owners be aware of during turbulent times?

Today business owners don’t only have to worry about their own actions. Businesses also need to know what their business partners, suppliers and customers are doing in their businesses. Receivables risk is greater than ever. A business should re-examine its customers. What is their financial condition and ability/history of payment? Don’t assume that a ‘legacy’ customer will pay just as it always has. Communication is also important with those with whom you do business.

Are these tighter credit standards something businesses will be able to survive?

Most businesses have an uncanny ability to do what they need to in order to survive some hardship. The real difficulty for those businesses on the margin is to find the ability to fund the growth when demand ramps back up. It is at that point that the flexibility afforded by a strong balance sheet becomes imperative.

JIM GEUTHER is a commercial banking manager with FirstMerit Bank. Reach him at or (216) 694-5683.

Sunday, 26 October 2008 20:00

Keeping holidays healthy

During the season of giving, employers often like to thank their employees with treats and indulgences. The holiday season is often filled with sweet treats and parties. While this may seem like a nice gesture from an employer, it can lead to long-term weight gain and health problems.

Americans on average gain one to two pounds during the holiday season. This may not seem like a big concern for one year, but over five years, it means you could gain five to 10 pounds, says Wendy Wigger, director of wellness for Priority Health. Such weight gain can contribute to more serious health-related problems. It can often be difficult for employers to maintain a healthy work environment, but it is crucial to help employees maintain healthy lifestyles. Employers should strive to design an environment and plans that work for all members of their staff and that lead to successful outcomes, says Wigger.

Smart Business spoke with Wigger about ideas for keeping employees healthy during the holiday season and the importance of setting realistic health goals.

How can an employer help employees maintain healthy lifestyles during the holiday season?

  • Celebrate after the holidays. The holiday season can be very stressful. Employers need to realize that employees are trying to fit many more activities into their 24-hour day. If an employer is opting to host a holiday celebration to thank its employees, it may choose to have it after the first of the year when employees have more time and will enjoy the celebration more.

  • Offer on-site seminars or exercises for employees. These may include lessons on stress management, balancing life and family and depression designed to help employees during the stressful time of the year.

  • Don’t center the holidays around food. Try to avoid parties that focus on food and drink. There are other social event options that do not make food the central focus. Some companies choose to adopt a family for the holidays and work together to collect items, socialize and give back to the community.

  • Offer healthy options. If you choose to have a more traditional holiday party, offer healthy options as well as the sweet treats. This gives your employees the opportunity to practice smart eating decisions while including them in the celebration.

How can individuals maintain their workout routines during the hectic holiday season?

  • Carve out personal time. We are so inclined to give, give, give during the holidays that we usually end up at the end of our own list and do not make time to exercise and maintain healthy lifestyles.

  • Set realistic exercise goals during the holidays. You may have to adjust your schedule to fit in the exercise required to maintain a healthy lifestyle. This may mean that you cannot walk 30 minutes on a treadmill, but with conscious efforts, you may be able to break up that cardio routine into 10-minute intervals that you complete while shopping or running errands for the holidays.

  • Enlist the help of a friend. If you have someone trying to stay on track with you, it may be easier to avoid temptations and complete your exercise routine.

  • Exercise before the chaos starts. If you exercise first thing in the morning, you are less likely to be distracted later in the day or have something important come up that distracts you from your routine.

Are there any programs that employers can implement during the holidays to help employees?

Employers may offer incentives to employees for living a healthy lifestyle during the holidays. Again, this is only effective if realistic goals are set. Such programs need not focus on employees losing weight during the holidays; rather they can focus on employees maintaining their current weight. You can offer incentives to the employees who maintain their weight or only gain a pound. You want to design programs that are meaningful to the individuals, and support them with resources to change behaviors. These programs should be set up for success.

Employers can provide their staff with a healthy holiday shopping list. When people do last-minute shopping, they often overspend and make poor choices. If they have a healthy shopping list in hand, they may pick healthier gifts for their loved ones and spend less in the long run.

When should individuals start implementing a healthy lifestyle?

There is never a wrong time to start implementing a healthy lifestyle. Don’t wait until the holidays are over and pile up the food and calories in the meantime. Start simple. During the holidays, do little things such as walking more, drinking more water and exercising whenever possible. Outline a healthy lifestyle plan and put it into practice.

WENDY WIGGER is the director of wellness for Priority Health. Reach her at (616) 464-8758 or

Thursday, 25 September 2008 20:00

Get on board

Have you ever made a major life decision, such as buying a house or starting a family, without consulting the opinions or advice of trusted individuals in your life? Do you feel more confident in your decisions if you have discussed all the pros and cons with an expert or even a confidant?

Most people would agree that discussing such personal life decisions is helpful and may even guide them down a better path. The same holds true for decisions one must make for one’s business. Thus, every business should have an advisory board to hold discussions and help make such decisions.

“An outside advisory board is assembled to provide counsel and outside expertise to the owner,” says Doug Houser, senior vice president with FirstMerit Bank. “It should provide invaluable advice and fresh ideas to help the owner reach his or her goals.”

Smart Business spoke with Houser about the value of an advisory board to privately held companies and how business owners should develop such a board.

What is the risk for a privately held company if there is not an advisory board?

The greatest risk is that the owner becomes too narrow in his or her thinking in pursuit of his or her goals for the business. It is not likely that one individual can consider as many variables as a well-rounded group of four or five people could. By tapping the broad range of experiences of an advisory board, there is a more sound and reasoned evaluation of the decisions facing that owner. Ultimately, the same conclusion may be reached, but through this consensus, the owner should have an even greater confidence of success.

Privately held companies may overlook this need because the owner feels if he or she started the business he or she knows it better than any outsider and is entitled to make all of the decisions. This may not be the most effective way to run a business.

What value can an advisory board add to a company?

The greatest return that an advisory board provides is simply enhancing the value of the business — to the community, its associates and, of course, the financial return to the owner. Just as with a public company, the advisory board should provide some perspective from each of these viewpoints.

The existence of an advisory board is a signal to employees that the owner is willing to be challenged and consider a broader range of ideas. This should tell any potential employees that their voice will be heard, as well. This may help attract and retain valuable employees.

How should the advisory board be formed?

The form of the advisory board can take many shapes. Some boards may be less formal and consist of trusted advisers already employed by the company. They may not have formal meetings, but rather are consulted as needs arise. Any business trying to achieve significant growth in an industry that currently has significant volatility should have a more formal structure. They should convene regularly at quarterly meetings with a prepared agenda to address.

The board should be composed of individuals with exposure to many businesses, including that specific industry. You want to bring the broadest experience base and a sense of good and bad practices to the table. It is critical, however, that the owner makes it clear to the advisory board that it needs to challenge the company and provide critical thinking. Alleviate any potential conflict.

On what aspects of the company and operations should a board provide advice?

Primarily the focus should be on strategic direction and management/succession. Strategic direction is a catch-all but can be characterized primarily as an evaluation of risk and return.

The two issues that have effectively killed the most closely held businesses are rapid growth and a lack of succession planning. An advisory board should evaluate the effective allocation of capital. Most importantly, do not stretch too far too quickly so as to risk the farm. The advisory board should ask, ‘Where is the business achieving its greatest return?’ Capital should be deployed in those segments. Do not be afraid to abandon a certain strategic direction/segment simply because it is a legacy portion of a business. Second, the advisory board should be comfortable challenging the owner in an attempt to create depth in its team.

Why are business owners hesitant to implement an advisory board?

There are typically three reasons: financial information disclosure, time commitment and openly having their decisions challenged.

With regard to financial disclosure, advisory board members should be expected to sign confidentiality agreements. In terms of the last two issues, it is easy to argue that the return on this investment of time and strategic review is overwhelmingly positive if done the right way. No matter the merits of the advisory board’s views, the owner always maintains the right to overrule and remove the advisory board — it is the owner’s company.

If you are an owner, it is crucial to do your research and commit fully to the concept as the return will be tremendous. If you are an existing or potential associate of a closely held company or a center of influence, know that the presence of an advisory board will give the business a far greater likelihood for success going forward.

DOUG HOUSER is senior vice president with FirstMerit Bank. Reach him at (614) 545-2770 or

Tuesday, 26 August 2008 20:00

The high cost of smoking

Cutting costs and increasing revenue are common goals for which companies strive. Downsizing and increased productivity are often used to achieve these goals. However, Sally Stephens, president of Spectrum Health Systems, suggests employers begin to take notice of those employees who are costing them the most.

The Centers for Disease Control and Prevention calculate the average cost of smoking as $3,383 per smoker per year. This breaks down to an estimated $1,760 in lost productivity and $1,623 in excess medical expenditures.

Smart Business asked Stephens how employees that smoke affect company costs and the options employers have to take action.

What are the health effects of smoking?

Some of the irreversible health effects are permanent changes in the structure or function of organ systems. Coronary artery disease is the No. 1 cause of death in the United States and stroke is No. 3. There is a strong link between smoking and both diseases. Smoking also leads to an increased risk of certain cancers, heart attacks, diabetes and ulcers. It reduces lung function and can develop into obstructed pulmonary disease.

There are significant benefits for a person who quits smoking. Within five to 10 years after quitting, a former smoker’s health risk is no different than that of a nonsmoker.

Why should employers worry about having employees who smoke?

Smokers cost companies money. Smoking can cause the development of costly medical conditions and often companies end up footing the bill. Smokers tend to see physicians more often and simple conditions, such as the common cold, often develop into more serious respiratory problems.

A smoker may need more time off work after having surgery because healing time is delayed, and smokers are more susceptible to incurring infections. Also, smokers have an overall lower survival rate after surgery.

Smokers are at a higher risk for a multitude of health problems as compared to nonsmokers that, in turn, result in higher medical costs, increased absenteeism and lost productivity.

How can smoking affect an employee’s work performance?

Smoke breaks are a major issue regarding a worker’s performance. If workers leave their desks to smoke, they are not working. In turn, there is a loss in productivity.

Absenteeism is a large piece of the burden in the cost to an employer. Companies are paying smokers for days they are absent from the job as well as for medical bills they are accruing.

A smoker’s level of concentration and ability to interact with others decreases as the level of nicotine in his or her system drops. The exact results of such a drop in nicotine primarily depend on the habit of the smoker and the frequency in which he or she smokes.

How can employers curb employee smoking or help employees quit?

A common trend for many employers is to become more involved in employees’ health. One way is to implement a no-smoking policy. This policy differs among companies. Employers may prohibit employees from smoking anywhere on company grounds. Some companies even enforce the rule that employees are not allowed to smoke in their cars in the parking lot.

Now, we see some executives offering incentives, such as leave time. They are also implementing certain programs that help their employees quit smoking. Employers are trying to get very aggressive about helping their employees improve their health by using incentives, such as cash and health insurance premium discounts, to encourage employees.

Employers should realize smoking is a tough habit to break and should be considerate of the challenge. Executives of companies could offer smokers help to quit, such as covering the cost of nicotine replacements or offering smoking cessation programs. Stopping smoking used to be a costly venture; however, today, there are more options at reasonable prices from which employers can choose. Employees who quit could save their employer around $3,000 a year. Medical costs will decrease as the employees’ overall health improves.

Are there any legal considerations regarding no-smoking policy programs of which executives need to be aware?

An employer must be cautious of the discrimination laws. For example, one must be careful when offering a smoker a monetary incentive to quit. This is considered a form of discrimination against a nonsmoker because a nonsmoker does not qualify for the incentive. If incentives are offered, they must be offered in a way that all employees are eligible.

The American Civil Liberties Union warns against the use of discrimination against lifestyle choices, such as smoking. It fears that the use of such discrimination might then go deeper into an individual’s lifestyle choices and violate privacy.

SALLY STEPHENS is the president of Spectrum Health Systems. Reach her at (317) 573-7600 or at

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