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Safeway May Enter Wellness Arena

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Safeway Inc. is thinking about exporting the wellness lessons it has learned from the programs it has developed for its own 200,000 employees.

Steven Burd, president of Safeway, Pleasanton, Calif. (NYSE:SWY), talked about the possibility that the company might get into the wellness business recently during the company’s third-quarter earnings call.

In September, Safeway hired Dr. Kent Bradley, a health services consultant and former chief medical officer for TRICARE-Europe, to be the company’s first chief medical officer. Bradley will lead a Safeway Health unit, the company said at the time.

Burd told the analysts and others listening to the earnings call that Safeway Health is a new vehicle.

Bradley will try to help Safeway continue to manage the company’s own internal health care costs, and also to help Safeway Health “take what we’ve done so well internally and see if we can productize that and bring that to the marketplace,” Burd said.

Safeway Health could introduce programs based on the company’s own benefit plan data sometime in the next 12 to 18 months, Burd said.

Safeway Health has had good success with immunizations, Burd said.

And “we’ve cracked the code, we think, on obesity,” Burd said.

Safeway Health could use that experience to create a weight management service for consumers, Burd said.

Safeway makes employees who are overweight pay more for health coverage, and it offers them free nutrition counseling services and gym memberships. Overweight employees get cash back if they lose at least 10% of their body weight by the end of the year.

Safeway says it believes employees who participated in 2010 lost an average of about 4 pounds each. The percentage of employees classified as obese dropped 7%.


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