A “Smart Little Company” Lowers Healthcare Costs; Creates Healthy Workforce

Highsmith Inc.—“the smartest little company in America,” according to Inc. magazine—keeps its healthcare costs dramatically below the national average. Highsmith’s healthcare premiums increased on average only 4.9% from 2002 to 2004, compared with the average national increase of 12.6%. At the same time, the company’s employees are healthier than ever.

This innovative company and the philosophy that led to these results have been attracting media attention, including NBC Nightly News with Tom Brokaw, The New York Times, which featured Highsmith in a supplement on women’s health, and Inc. magazine.

How do they do it?

The Highsmith Philosophy

Duncan Highsmith, Chairman of Highsmith Inc., described his winning strategy to employers who attended the First World Congress Leadership Summit on behavioral health and wellness in Baltimore this May.

Mr. Highsmith emphasized that managing healthcare costs and improving the quality of the workforce are closely linked. To him, developing the business meant developing the full potential of the people who worked there. “We wanted to ensure the long-term vitality and viability of our small, family-owned business,” he said.

Wake-Up Calls

“By the mid-80s, we had grown to $25 million in sales but we were forced to acknowledge that a small mail order company in rural Wisconsin could not easily attract the growing numbers of thoughtful, creative, productive people we needed to handle the growth we projected,” Mr. Highsmith explained. “That was wake-up call number one.”

A second wake-up call came in 1989, when the company was facing a 53% increase in health insurance premiums.

The Highsmith Response

The company responded to the wake-up calls by including wellness as part of its business plan. “We couldn’t build a fancy exercise facility,” Mr. Highsmith said. “Instead we shuffled chairs around the lunch room and scheduled exercise sessions for employees and spouses.” Bagels and juice were made available at meetings instead of doughnuts, and prices were lowered on healthier choices offered in the vending machines.

But the company wanted to do more than point employees toward a healthy lifestyle. Employees were—and are—expected to make healthy choices that address their physical health, emotional wellbeing, personal and professional relationships, and performance on the job.

Highsmith instituted the following blend of components to support employee development and productivity: job/career development; work/life enrichment; personal well-being (which included destigmatizing mental illness); self-care; physical well-being; incentives; and benefits that include a rich health insurance plan, flextime, free time, an employee assistance program (EAP), health screening, a 401K plan, and health and dependent care reimbursement accounts.

All of these programs are delivered for $175 per employee per year.

Monetary Incentives

Employees have the opportunity to receive a monetary incentive for health insurance premiums. If an employee meets the requirements, Highsmith pays 75% of the single or family health insurance premium. If not, the company pays only 60%.

The requirements for eligibility for the incentive are enrollment in the health insurance plan, nonuse of tobacco products, participation in the annual health screening, and age- and gender-specific physical exams. Eighty-three percent of employees in Highsmith’s health plan choose to participate in the health screening.

This annual screening for employees and spouses measures height and weight, blood pressure, blood lipid panel, glucose, and cardiovascular endurance. Participants complete a coronary risk profile and receive immediate feedback on results of the health screening.

The Results

In the five-year period from 2000 to 2004 there was a 53% decrease in the number of health screening participants whose total cholesterol was in the high-risk range, a 52% decrease in the number of participants with high blood pressure, and a normal blood glucose level in 84% of all participants.

Turnover in the organization has been held to single digits, and the average length of employee service is 14 years. The investment Highsmith makes in their people helps build a strong, stable workforce.

EAP utilization is three to four times the national average. Employee resiliency as measured by their EAP provider is extraordinary, even in the face of emotional, political, business, and market stress since 9/11.

Secretary Thompson of the U.S. Department of Health & Human Services announced in December 2004 that Highsmith Inc., won the Department’s in the category of “healthy workforce, small employer.” The award recognizes businesses that are leading efforts to promote healthy lifestyles in their communities.

Mental Health Aspects

The federal government’s Substance Abuse and Mental Health Services Administration (SAMHSA) singled out Highsmith as a model medium-sized company, and here are some of the reasons Highsmith won SAMHSA’s recognition. Highsmith offers:

• A comprehensive menu of health promotion and disease prevention activities, including mental and emotional health programming and screenings, domestic abuse outreach and education, and stress reduction and time management programs.

• Classes that span job and career development, personal well-being, self-care, physical well-being, and work/life enrichment.

• An EAP that provides employees with tools to balance work/life.

• An orientation session for new employees that includes a class called “First Aid Kit for the Mind,” which describes signs of mental illnesses, stress, and substance use disorders and how to maintain mental fitness.

• An Intranet section that links employees to information on depression and anxiety, relationships, and domestic abuse. Another section, “Leader’s Edge,” features resources for line managers, including “Your Role and the EAP.”

Highsmith strives to make mental health on a par with physical health.

It’s All About Choices

“People who make better choices in their own lives make better choices on the job,” Mr. Highsmith said. “Our data will never match the rigor of large-scale statistical standards,” he acknowledged, “but that’s not the point. The point is that we’re running a business. We pay attention. When something works, we repeat it, refine it, and we align it ever closer with our business strategies. We constantly tend and nurture our employee development initiative just like we do the other parts of the business.”

What’s their ROI? Highsmith continuously transforms their business model with the support, encouragement, creativity, and the participation of their employees. “We do things together,” he said, “we make decisions together, we run the business together, we get healthy together.”

Mr. Highsmith closed the Baltimore conference to the sound of rousing applause from the employers in the audience.

About Highsmith

Highsmith Inc. is a distributor of supplies, furniture and equipment to public, academic and special libraries, as well as schools and school libraries, throughout the U.S. and abroad. Located in rural Fort Atkinson, Wisconsin, Highsmith employs about 220 people, 74% of whom are women.

Last Updated: April 2005