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Some employers see benefit innovations as ripe for export

Some employers see benefit innovations as ripe for export

When Dole Food Co. announced recently that it would share its successful wellness program with other employers, it joined a handful of employers trying to capitalize on the success of their benefits- and human-resource-related operations.

Dole's move demonstrates how an employer can take a benefits problem and turn it into a potential source of revenue. But the move is unusual because employers traditionally have closely guarded details of their health care cost containment strategies for competitive reasons.

Although Dole will not charge directly for use of its wellness education program, it does plan to co-brand its components, which include a nutrition newsletter, healthy food service recipes, signage, kiosks and videos, with other employers that use it. This could lead to increased sales for the Westlake Village, Calif.-based company, which is the world's largest fruit and vegetable company, a company spokesman said.

"We want to offer some components that are pretty turn-key," said Jennifer Grossman, vp in charge of the Dole Nutrition Institute, a nonprofit arm of the company that was founded approximately four years ago by Chairman and Chief Executive Officer David Murdock to research and propagate the potential of a plant-based diet to improve health and prevent disease. The institute created the Corporate Wellness Toolkit from components of Dole's own successful employee wellness program. The program won the California Fit Business Award in 2005.

"We are a research and education arm, but we need to report and be a productive part of the company," Ms. Grossman said. "We may not be making money right now, but I'm hoping that ultimately...there may be a time when this could be just an independent, freestanding product."

Stamford, Conn.-based Pitney Bowes Inc. is another company that is offering its benefits innovations to other companies.

The mail services company stands to benefit financially by selling software that will operate on the platform for electronic medical records being created by Dossia, a project in which Pitney Bowes and several other employers have invested, according to a company spokesman.

Before it joined the Dossia project, Pitney Bowes also had considered patenting the company's unique "value-based" benefit design that eliminates financial barriers to preventive services and maintenance drugs as a means to reducing employee health care costs, but later decided against it, according to Dr. Jack Mahoney, corporate medical officer.

"There was interesting talk internally about whether this was intellectual property," he said. "At the end of the day, we decided there was nothing here that unique. The piece that was patented was the predictive model software, but it was leased from another company," Dr. Mahoney said.

Instead, the company's benefits executives have been touring the country to share the program's success with other employers.

"The idea is, how do you get other employers to think differently about their process? That was the background of doing the book," Dr. Mahoney said, referring to "Total Value, Total Return," which he co-wrote with David Hom, vp for employee benefits. So far, 30,000 copies of the book, which is available at no charge, have been distributed. A sequel, "Fit Benefit Design," is due out this April.

"We've been very, very open with what we have done. We're real happy to talk with people. Kick the tires, look at the numbers. Most of what we've done is more in the vein of open access," Dr. Mahoney said. "We're more interested in changing the health care system," through innovation and collaboration with other employers.

Meanwhile, St. Paul-based 3M Corp. is continuing to introduce new ergonomics products out of a division launched in the late 1990s as a result of a successful internal ergonomics education program (see related story).

New Brunswick, N.J.-based Johnson & Johnson also found a way to profit from its own employee health and wellness programs by creating the Health & Fitness Services Division, which it sold to Health Fitness Corp. in 2003.

"It's pretty unusual for an employer to take something from their internal operation and market it to other companies unless there's a tie-in to the core business," said Steve Raetzman, east division practice director at Watson Wyatt Worldwide in Arlington, Va.

In fact, in recent years, employers have increasingly turned to outsourcing or streamlining of their noncore operations, such as benefit plan administration, "so the idea to build them up is unlikely," Mr. Raetzman said.

While Mike Miele, president of Apex Management Group in Princeton, N.J., acknowledged that "there's always been a little bit of showmanship from leading employers...they're not licensing the formats out to other companies."

Helen Darling, president of the National Business Group on Health, agreed.

"It is very unusual. Many years ago, Johnson & Johnson did that with their state of the art program and spun it off," she said. "But it might be hard for a company in a very different kind of business to do this."

"On the other hand, employers such as hospitals or other companies that have more health people on staff such as Dole might be able to monetize their 'intellectual capital' and use their sale of the new product to stimulate demand for more healthful foods," Ms. Darling said.

Regardless of whether these employers' overtures are self-serving, they are highly unusual given that employers, in general, have been closely guarding their own secrets to keeping health benefit costs in check out of concerns it will make them less competitive, said Gary Earl, the former benefit manager from Caesar's Entertainment Inc. Employers are finally beginning to recognize that the only way to fix the health care system is by working together, he said.

"There's a social conscience that is now starting to take hold. There's also an economic conscience," Mr. Earl said. "People are finally starting to realize they have to start sharing, because if they don't, (the current employer-based health care system) is going to collapse."