This Wellness Data Isn’t Looking Too Healthy. If It’s Right, Wellness May Actually Be Dead

There is a saying: “In wellness, you don’t have to challenge the data to invalidate it.  You merely have to read the data.  It will invalidate itself.” Indeed, if there is one thing you can take to the bank in this field, it’s that articles intending to prove that wellness works inevitably prove the opposite. Another saying is that the biggest enemies of Ron Goetzel and his friends (the Health Enhancement Research Organization, which is the industry trade assocation) are facts, data, arithmetic, and their own words.

And Mr. Goetzel, writing in this month’s Health Affairs [behind a paywall], is Exhibit A in support of the paragraph above.  The “overscreening today, overscreening tomorrow, overscreening forever” gravy train of the wellness industry is officially dead. (They can still screen employees intermittently, according to guidelines recommended by the US Preventive Services Task Force, but no wellness vendor ever got rich by doing that.)

It did not die because of his conclusion that companies with lower employee risk factors spend more than companies with higher employee risk factors. That by itself would be worthy of a headline, of course, since it’s quite at variance with the massive savings shown in the Koop Awards he gives to his friends.  But there is much, much bigger news, though in this case he “buried the lead,” in a sleight-of-hand that he knew Health Affairs‘ peer reviewers wouldn’t notice.

The Death of the Wellness Industry

Here’s what he did — very clever, but not clever enough not to get caught. He and his co-authors pegged average employer spending on cardiac at a perfectly plausible $329 per employee per year. However, they decided not to split that average of $329 out into “bad” spending (specifically, spending on events, like heart attacks), vs. “good” spending (prevention expense — things being done to avoid heart attacks).

How big a rookie mistake is combining these two opposites, prevention expense with event expense and calling it “average payment for all CVD claims”?  It would be like saying the average human is a hermaphrodite.

If they had split that average out into its two opposite components, they would have been forced to reveal that spending on actual avoidable events is less than spending on wellness programs to avoid those events.  That, of course, is exactly right, and was what we showed about 14 months ago.

Let’s do the math

How much do employers spend on heart attacks? Well, here is the number of heart attacks. I’m spelling it out so that people can replicate this using the official government database, tallying all the heart attack-related DRGs:

  1. DRG 280 — 12,825
  2. DRG 281 — 15,404
  3. DRG 282 — 18,365
  4. DRG 283 — 1,800
  5. DRG 284 — 275
  6. DRG 285 — 160

This totals to 48,829.  Roughly 100,000,000 adults are insured through their employers. That means that about 1 in 2000 will have a heart attack in any given year.  I had thought it was 1 in 1000, and my own data — from 30 commercial health plans and large employers for which I measure event rates — backs that up. Let’s resolve that disparity in favor of giving wellness the benefit of the doubt and double the HCUP figure to match mine.

Now assume $50,000 per heart attack all-in. That is high, but once again, benefit of the doubt. So of the $329 PEPY that Ron calculated for prevention and events combined, only $50 ($50,000 per heart attack and 1 in 1000 working people suffering one) is spent on events.  The rest is spent on prevention and management expense, like putting people on statins, diuretics etc., doctor visits, lab tests etc.

Not avoidable, and not even reducible through wellness. Just the opposite– these wellness people are always wanting to close “gaps in care” by doing more of this stuff.

How this invalidates screening

According to Mr. Goetzel’s own data, a wellness program — health risk assessments, screening, portals etc. — costs about $150 per employee per year.  An industry that spends $150 PEPY to get what Ron estimates to be a 1% to 2% reduction in a $50 PEPY expense can’t survive on merit, which explains all the lying about savings, not to mention lying about me.

Anyone care to claim the $2-million reward I’m offering for showing wellness saves money?  I didn’t think so…

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6 replies »

  1. There are other costs associated with heart attacks that employers might care about: cardiac rehab, productivity loss due to absence for hospitalization and rehab, and loss of talent if the employee dies from the heart attack.

  2. As a former HR exec, I would recommend some programs to address the scenarios you mention, but not with an expectation of an r.o.i. in terms of health costs. Instead we would approve the programs as part of employee retention and employee satisfaction efforts….and often in response to issues raised in our employee satisfaction surveys. I think many of my HR counterparts do believe the hype about reducing health costs/improving employee health (in spite of poor data re health cost reduction). Another factor: we had an aggressive profit sharing plan for all employees……so even the lowest paid employee wanted to see profits increase and they often complained when they perceived superfluous expenditures including benefits and too fancy office/facility upgrades.

  3. Al – if a large employer came to you and said.

    “Okay, we buy it. We don’t accept that what the other guys are selling us. But we still want to do something. This is something we feel strongly about. We’d like to design our own wellness program internally and we’d like you to validate it and help us implement it.

    Our CEO has made the following observations:

    1. Over the last few years, based on what I’ve seen at company retreats and the Christmas party, I’ve noticed that drinking seems to be an cultural problem in our organization. I’d like to think about how we can address that.

    2. I keep getting e-mails from employees at crazy hours of the day. At first I thought it was a coincidence, but I am beginning to understand that there is an expectation being set by many of my managers that e-mails must be responded to immediately. I’d like to do something about it, implement a policy. Is there a way we can measure the results?”

    3. I like to walk around our Palo Alto office (hint, hint) and get a feel for what’s happening. I’ve noticed that a surprising number of our employees seem tied to their desks. They don’t go out. They almost never leave their desks. While this makes me happy, as their boss, I am also slightly concerned. Is there something wrong with these people?

    4. As you may have heard, a very respected member of our engineering team had a heart attack and died last month. The incident happened in the middle of the work day and was very upsetting for employees. We’d like to understand if we can identify people who may be at risk in the future and get them help. Is there anything we can do?

    There’s only one problem. Our CFO wants some sort of data or a plan to show ROI.

    Would you tell them not to waste their money?

    If you accepted their assignment (and the ridiculously generous check they are waving in front of your face) do you think it would be possible to show that such a program saved money? How would you do it?

    No, this is not an invitation to direct readers to Quizzify, we are legitimately curious. : )

  4. When I was a VP of HR we always had employees trying to convince us to launch a wellness program. At the time I thought their pitch that it would save us money was doubtful, and suspected they were sincere but were most interested in the company paying their gym/health club memberships.

    Here is a question for Al: do you distinguish between targeted programs aimed at diabetes prevention (type 2) or programs like smoking cessation vs. Wellness programs? Have you looked at whether these limited programs worked?….seems more likely than broad based wellness.

  5. Al, unlike some of your articles, this one is a tad difficult to follow. That may simply reflect my lack of statistical training, but other than an outright attack on Mr. Goetzel specifically (which seems to be getting unfortunately personal) and wellness in general, I got lost in your numbers which seem to be equating “cardiac” with “heart attack.” I’m disabled having not seen Mr. Goetzel’s Health Affairs article, but reconciling these numbers is not my primary concern.

    What I am more concerned about is the very real possibility that you are convincing employers to stop doing anything in this arena. THAT would be tragic, and I hope you are not trying to accomplish that. I’ve read in other articles you’ve written that rather than 4P activities, employers should use programs that employees actually like and voluntarily sign up for without the use of penalties or incentives. With that I agree. Paying people to get well doesn’t work. Irritating and embarrassing people to get well doesn’t work. Got that.

    I also agree that most workplace wellness activities to date have failed because they have not connected with employees viscerally, and that a culture and environment of wellbeing is needed to start that process. Long-term behavior change is, as we say in Boston, wicked hard. We need to nurture and support employees to facilitate them making themselves healthier.

    We cannot cease our efforts in this regard. I accept that you have shown some activities to be failures, but we cannot leave it at that. Are you saying that all workplace wellness activities are doomed to failure? That there is nothing that can be or should be done? I’d hope not. There is much more that can be done (smarter and better) in the workplace to address the very real issue of chronic illness and debilitating stress and depression. I would encourage you to use that demonstrably sharp wit of yours to turn to that task.