by Dave Chase
Given that most employees don’t want to participate in such programs and rarely change behaviors if they do, that’s going to be tough. But tough quickly morphs into impossible when you read further. Because Goetzel combined cardiac prevention spending (like tests, doctor visits, statins, etc.) with cardiac care spending on events (like heart attacks) to reach that $327 figure. Yet prevention spending and event spending are opposite types of expenses. Workplace wellness programs push employers to increase prevention spending to avoid event spending. Hence, they should vary inversely.
His asserted savings from a workplace wellness program evaporate if the two types of expenses are, quite appropriately, separated.134 Peeling out heart attacks—a roughly 1-in-1000 shot in the working-age population, costing maybe $50,000 apiece—shows that most cardiac spending already goes to prevention, since heart attacks and related events cost only $50 PEPY. A perfect wellness program costing $150 would therefore lose around $100 PEPY.
2. Connecticut Wellness Program Increases Health Care Spending
We’ve all heard the saying “The operation was a success but the patient died.” That’s pretty much what happened in the state of Connecticut.
Analysts looking at outcomes for the state employee workplace wellness program concluded in a Health Affairs article135 that it actually increased health care spending. But that was “a good thing,” according to an interview with Connecticut Comptroller Kevin Lembo.136
Lembo also explained that costs increased because people are getting more checkups, which he calls “high-value care.” However, checkups are far more likely to find problems that don’t exist than to successfully address problems that do, according to the Journal of the American Medical Association.137 The USPSTF and Consumer Reports Choosing Wisely program specifically says annual checkups “usually don’t make you healthier.”138
The same checkups were said to account for a drop of 10 percent in ER visits. Yet, the benefits plan’s first-ever copay for ER visits ($35) was put in place during the same period, a far more likely cause for the drop.
Meanwhile, state employees are potentially being harmed. The Connecticut program requires female employees to get mammograms while they are still in their thirties. This is such a bad idea that the USPSTF guidelines don’t even bother recommending against it. The rate of false-positives from routine mammography of young women—requiring biopsies and possibly even mastectomies—overwhelms the possibility of saving a life.
Connecticut didn’t disclose how much its program costs, but assume the usual $100 to $150 PEPY. Then add on to that an undisclosed increase in health spending, plus the possibility of harming female employees, plus the lost work time for all those extra doctor visits and screens. This program could be costing state taxpayers hundreds of dollars per state employee.
3. The Wellness Trade Association’s Official Guidebook Says Wellness Loses Money
Perhaps uniquely in the annals of trade associations in any industry, the Health Enhancement Research Organization (HERO) actually admits their members’ product—workplace wellness programs—doesn’t work. The tables, charts, and figures in this section are directly drawn from their Program Measurement and Evaluation Guide: Core Metrics for Employee Health Management, downloadable from the Population Health Alliance website.138
Specifically, the study highlighted by HERO shows that $0.99 per employee per month (PEPM) in savings stemming from “potentially preventable hospitalizations” are not enough to cover workplace wellness program expenses (Employee Health Management, or EHM), which they peg at an unrealistically economical $1.50 PEPM.
From page 15 of the Guidebook.
Then, from page 23, the $0.99 savings in “potentially preventable hospitalizations.”
One might say: “Yes, maybe avoidance of ‘potentially preventable hospitalizations’ doesn’t cover the costs, but surely workplace wellness programs impact other costs.” And they do—but the impacts go in the wrong direction. On page 22, HERO says that:
[W]hile we focus on decreased impactible [sic] utilization here, it is important to recognize that EHM [employee health management] should increase the use of certain services, such as preventive and screening services, certain chronic medications, and outpatient visits. It is even possible to see a rise in ER and urgent care visits.
Critics would argue that even the $0.99 is overstated, by about the same amount, because the hospitalization rates that declined enough to generate that modest savings figure were related to asthma and heart attacks—and hospitalization rates for asthma and heart attacks were declining at about the same pace everywhere in the country, workplace wellness program or not.
4. The Wellness Industry Trade Publication Admits Multiple Wellness Failures
In its thirty-year history, the American Journal of Health Promotion (AJHP) has never once published an article showing losses from workplace wellness programs or criticizing them in any meaningful way—at least, not on purpose.
Their first slip-up came in an editorial in the September/October 2013 issue, when they admitted that 90 to 95 percent of programs have no impact.139
The second was when they published a meta-analysis showing that ROIs varied inversely with “methodological quality.” In other words, badly measured studies showed high ROIs, while well-measured studies showed low ROIs.140
Among well-measured studies, the highest-quality studies of all are randomized control trials (RCTs), which are the “gold standard.” For example, RCTs are required to get drugs approved. To their credit, the authors admitted that RCTs “exhibited negative ROI.” But then, to nobody’s credit, they concluded that ROIs were positive by averaging the ROIs from the invalid studies with the valid ones! In the same way that “averaging” Copernicus and Ptolemy leads to the conclusion that the earth revolves halfway around the sun.141
This was definitely a slip-up. A subsequent July/August 2014 AJHP issue devoted the entire “Editor’s Notes” to explaining why they didn’t really mean it, and really, “no one knows” what wellness ROI is.142
The third example was from that very same editor, Michael O’Donnell, who eventually gave up on finding an ROI in health care spending. “Who cares about an ROI anyway?” were his exact words.143 Yes, forget about sales incentives, product enhancements, marketing, advertising, or social media. According to O’Donnell, the surefire way to increase revenues—by 1 percent—is to pay your employees to exercise.
To reflect the full value of goods and services produced by each employee, the 1% increase in productivity should reflect revenues earned per employee. For example, if total payroll costs represented 30% of total revenues, a 1% increase in productivity might really represent $1933 [in extra revenues] for an average employee.144
Mr. O’Donnell’s cost accounting is as creative as his way of generating revenue. Somehow, in Mr. O’Donnell’s calculation, no revenues are lost when employees are off the line, phones, trucks, or sales floor for 90 minutes a week (a 3.75 percent productivity drop in a 40-hour work week). Only the time itself is lost. He calculates this as $2,184. That, of course, exceeds the revenue increase, generating losses of $251 PEPY from lost work time. That is in addition to the usual $100+ PEPY loss from paying vendors.
These examples are hardly cherry-picked. They’re legion. But just to be fair, let’s look at what the industry itself says are the best programs.
The Industry’s Supposed Best
The following vendors and programs were selected by a committee of workplace wellness program executives led by Ron Goetzel as the best of their respective years, each of them winning the industry’s top Koop Award (named for former Surgeon General C. Everett Koop).
2011: Eastman Chemical
Between 2004 and 2006, Eastman Chemical apparently generated massive savings from a workplace wellness program before the program had even started, as Figure 12 shows. The upper line shows the cost trend for nonparticipants, the lower line for participants. Note that while both trend lines started out
at roughly the same point, by 2006 the nonparticipants’ line was $2,432 while the participants checked in at $2,073, a “savings” of $359. On a side note, the risk factors for participants stayed almost the same between 2004 and 2008, meaning no savings could be attributable to the program even if it had existed the entire time.
Health Fitness Corporation/Eastman Chemical ROI Analysis from Koop Committee Submission
2012: State of Nebraska
The Nebraska program claimed to have saved the lives of 514 state employees with colon cancer. However, Al Lewis has pointed out that this would have been statistically impossible given that only a few thousand state employees (the state would not disclose the exact figure) were screened for colon cancer in the first place and only 5 percent of Americans will get colon cancer, 90 percent of them over age 50.145 The medical director of the state’s workplace wellness program vendor, Health Fitness Corporation, explained to the Omaha World-Herald146 that what he meant when he said that the employees had cancer was that the employees didn’t have cancer, but they could get it someday. Indeed, that is true—and not just for those 514 state employees but for everyone else as well.
As you can see, the actual report didn’t address the medical director’s nuance that the program didn’t actually catch any cancer cases.
With its targeted messaging strategy, the State of Nebraska has helped catch 514 new cases of early stage cancer before it was too late!147
It failed to even mention the numbers were based on just screening people who might, hypothetically, get cancer someday.
2015: McKesson
McKesson has made a major commitment to workplace wellness programs, likely spending hundreds per employee per year on nine different wellness vendors.
Somehow they won the Koop award—and claimed massive savings due to improved health—despite reporting zero change in employee health risk factors. Note that their total biometric risk factors did not fall. Instead, the “increased to elevated risk” column virtually offsets the entire “decreased to low risk” column.
2016: Boise School District
At least McKesson’s employee risk factors didn’t deteriorate. The same can’t be said of the Boise School District and its workplace wellness program vendor, Wellsteps. Like McKesson and its vendors, they did not total the increases and decreases in risk factors. Deliberately or not, they also displayed them in a manner that obfuscated the total changes in each direction of risk.
Once you parse the data, you see that employee health deteriorated in grand fashion, since 1004 more risk factors deteriorated than improved. This objective deterioration in risk mirrored the subjective deterioration. As the table below shows, employees actually felt that their health deteriorated over the period, from 7.96 to 7.92 on a scale of 10. If you’re wondering why the awards committee honored Boise, consider the number of applicants in 2016, seven.148
Of course, massive savings were claimed. Read Figure 13 below carefully. When read in conjunction with the above deterioration of outcomes, it appears that the more health deteriorated, the greater the savings from wellness…until roughly a third of all health benefits expenses for the Boise School District were apparently wiped out by the program.149
Predicted versus Actual Medical Costs for the District
Appendix B
CLIENT NOTICE, PLAN SPONSOR BILL OF RIGHTS, AND CODE OF CONDUCT
Sample Health Rosetta Client Notice
Congratulations! We’re excited you’ve decided to work with a Health Rosetta Certified Benefits Professional. The Health Rosetta Institute (HRI) is a 501(c)(3) non-profit organization with a mission to help group benefits purchasers sustainably reduce health benefits costs and provide better care for their employees. We maintain the Health Rosetta, an expert-sourced blueprint for wisely purchasing benefits sourced from the highest-performing benefits purchasers and experts everywhere.
A primary goal of HRI certification programs is to help benefits purchasers reduce your spending while improving the quality of care your plan members receive. This notice is to help you understand what to expect working with a HRI Certified Benefits Professional.
What to Expect?
One of our core principles is that higher transparency, trust, and integrity in the purchasing process improves the quality of benefits purchasing decisions. To facilitate this, HRI certified professionals commit in our agreement with them to adhere to certain specific practices.
•Only make changes that have been shown to improve care while improving your costs AND your employees’ costs. No more choosing between hurting you or hurting your employees.
•Review this notice with you to set expectations.
•Fully and meaningfully disclosure their compensation in writing.
•Think, plan, and act in your long-term interests, including completing 3-5 year strategic plans.
•Adhere to the HRI Code of Conduct you should have received with this notice
•Adhere to the HRI Plan Sponsor Bill of Rights you should have receive with this notice.
These practices significantly differentiate both certified professionals and their design, purchasing, and management process from the highly-conflicted, opaque status quo process. To maintain the quality of HRI certification programs, they’ll ask you to sign this notice and a couple other documents throughout the purchasing process.
How the Health Rosetta Ecosystem and Certification Benefit You
You’ll likely benefit both directly and indirectly as a result of working with a HRI certified benefits professional. Here are a couple of the main ways.
•Higher-value benefits – You should start seeing returns in the form of sustainably lower costs and higher quality care within the next 12 months. While we can’t promise specifics as this varies on many factors, Health Rosetta components implemented by other employers have sustainably reduced their spending by 10-40% per year.
•Access to a deep ecosystem of solutions and best practices – Our health care system is in the early days of a dramatic transformation, with many new innovative approaches. This makes it difficult for you and most advisors to see through the noise. Certified professionals have access to other certified people, industry leading experts, the Health Rosetta blueprint, and other community resources to sift through this, improving the likelihood that design changes, programs, technologies, and services you implement are appropriate and likely to work.
•Learning from others – The education and other resources we make available for certified professionals are based on the real life experience of other purchasers, not theory. We actively cultivate shared learning to keep us abreast. We maintain a network of more than 3,500 experts and high national visibility to create a hivemind for identifying the best approaches. See just a few of our collaborators at healthrosetta.org/who-we-are/.
We have high expectations for certified professionals and work to attract those seeking to go above and beyond them. However, if you feel your certified professional is not meeting your needs, discuss with them or contact us directly at [email protected]. . We’re happy to help. You can find more resources, our book The CEO’s Guide to Restoring the American Dream, and subscribe to updates and education at healthrosetta.org.
From Dave, Sean, and the entire Health Rosetta team, we’d like to thank you for choosing to work with a HRI Certified Professional.
Health Rosetta Plan Sponsor Bill of Rights
1. Service Agreement Fiduciary Duty Protection
You have the right to ensure that your obligations as your plan’s sponsor, administrator and fiduciary are protected and enhanced in your service agreement.
2. Transparent Relationships & Conflict Disclosure
You have the right to expect transparency, including disclosure of conflicts, in financial dealings between you and your broker, advisor, or consultant, carriers, and vendors.
3. Independence
You have the right to ensure those financial dealings do not compromise your fid
uciary responsibility and the independence of the advice you receive.
4. Access to all options
You have the right to receive information about the full range of options available to you, not just those which preserve or optimize your representative’s income or plan administrator’s revenue.
5. Independent Review
You have the right to an unbiased, independent review of all pertinent market options in an impartial manner, not just those which preserve or optimize your representative’s income or plan administrator’s revenue.
6. Comprehensive Reporting
You have the right to receive comprehensive reporting of your costs, and the potential drivers of those costs.
7. Answers to Questions
You have the right to receive answers to your questions, with no cloaking of responses with HIPAA Privacy and other “confidentiality” curtains.
8. Effective Adjudication
You have the right to expect those you hire to adjudicate benefits to give their best effort to identifying inappropriate and grossly inflated charges before they issue payment.
9. Access to data
You have the right to your data and should agree upon this requirement prior to execution of any vendor agreement.
10. Complete reporting
You have the right to receive complete service and outcome reporting from each of your vendors, including all fees associated with services rendered.
Health Rosetta Benefits Advisor Code of Conduct
