Safeway Employees Get Fit, Cut Healthcare Costs

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Many struggle to make it to the gym for a workout, but what if Americans had a state-of-the-art gym at their job?

For employees of the grocery store chain Safeway Inc., this is a reality.

Along with a place to exercise, they enjoy an on-site cafeteria that serves nutritious meals.  Safeway CEO Steve Burd says it's a method that not only keeps workers happy, but also drives down healthcare costs.

"We've done nothing more than follow the business model of the automobile insurance industry," he explained. "Where driving record and driving behavior determines premium."

According to Burd, 70 percent of healthcare costs are driven by behavior. In response, 25,000 Safeway employees volunteered to measure their weight, blood pressure, cholesterol and whether or not they smoke.

If they score well they pay a lower premium and if they improve over time, they can collect a rebate.

"People should have free choice," Burd said. "They should live with the consequences of the choices that they make."

Jo Chiti, a 39-year-old Safeway human resources associate, has battled weight most of her life.

"When you're heavy as a woman, it's depressing," she said. "It affects you emotionally."

Last year, Chiti's obesity sent her blood pressure soaring. That's when she listened to Burd preach about the benefits of Safeway's health plan.

"It just made me think about what (I was) doing long-term to myself from a health perspective," she said. "And prior to that it had always been (about my appearance)."

Chiti started counting calories, watching her portions and exercising and lost 40 pounds as a result. Now, every week she checks her blood pressure and weight at work.

"It feels great," she said. "I feel like a different person."

Since starting the incentives program five years ago, Burd says Safeway's healthcare costs have remained flat compared to a 40 percent jump for most companies.

He is convinced that the plan can be the model for the rest of the country.

"Bottom line is develop a healthcare plan where behavior really matters," he said. "Encourage a culture of health and fitness and you can more than finance healthcare coverage for the 47 million people that are uninsured."

Safeway provided food for thought as the healthcare debate grinds on.

*Originally aired July 23, 2009.

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