A critical observation in Cracking Health Costs is you need not “challenge the data” to invalidate claims that wellness saves money. Instead, you can simply read the data as presented. You’ll find it usually invalidates itself.
Nowhere is that more true than in a study published this month by Mercer, Staywell and British Petroleum (“BP America”) in the Journal of Occupational and Environmental Medicine (JOEM). As we’ll demonstrate, the results completely contradict Staywell’s own statements, and are also mathematically impossible. Indeed, Mercer was a wise partner choice by BP America because their validations are often unconstrained by the limits of possibility. For instance, they validated massive savings both for infants in a North Carolina Medicaid program that did not enroll infants, and for a Georgia Medicaid disease management program that did not manage diseases, at least according to the FBI.
Along those lines, let’s see what happens when one compares the JOEM conclusion — that the Staywell wellness program for BP America achieved almost $20,000,000 in savings on 20,343 BP participants after only two short years – to the limits of possibility.
It turns out this overall savings claim of $1,000/person would require completely wiping out wellness-sensitive medical events (heart attacks, diabetes events etc.) not just on those 20,000+ people, but also on perhaps 40,000 of their closest friends. The authors elected not to disclose the change in wellness-sensitive medical events across the entire eligible population, perhaps because they were embarrassed by the size of the decline, if indeed those events declined at all.
The long awaited federally-mandated RAND Corporation report on workplace wellness programs is finally out, after months of anticipation. Despite an odd now-you-see-it/now-you-don’t release, both wellness proponents and critics anxiously awaited the report’s public deliverance.
Like many documents emanating from the political cauldron, the RAND report has elements in it to please both camps, although proponents will have to reach deep into the document for snippets of hope built around simulations, models, and what they term “convenience” samples of employers predisposed to support health-contingent workplace wellness programs.
For critics of health-contingent workplace wellness programs, the conclusion is much more straightforward: even using prejudicial data sources and lacking a critique of the quality of the evidence, the impact of workplace wellness on the actual health of employees and the corporate medical care cost burden, is, generously stated, negligible.
This is not worth $6BN a year, which is the purported size of the US market for health-contingent workplace wellness programs (“purported” because like everything else in wellness, the size of the industry itself is totally opaque). There are clearly better ways to spend these funds; at the very least, it must be possible to get the same dismal results for far less money and with vastly less complexity.
With the push of the Affordable Care Act, the drive to implement health-contingent workplace wellness programs is accelerating. The RAND report, rather than contributing propellant, ought to give responsible business leaders pause as they consider whether to step up the pressure (i.e., increase incentives and penalties) for employees to participate in these highly intrusive, clinically dubious, spendthrift programs that yield health in RAND’s hypothetical world of models and simulations, but perhaps not so much, as RAND notes, in a more earthbound reality.
The lesson for executive leaders is that the nearly hagiographic employer belief in the value of health-contingent wellness is completely undone by the fact that RAND says virtually no employer (2% of their sample) measures program impacts and, as we have written previously, it doesn’t look like any employer, benefits consulting firm, or vendor actually knows how to do so.
The exponential growth in wellness programs indicates that Corporate America believes that medicalizing the workplace, through paying employees to participate in health risk assessments (“HRAs”) and biometric screens, will reduce healthcare spending.
It won’t. As shown in my book Why Nobody Believes the Numbers and subsequent analyses, the publicly reported outcomes data of these programs are made up—often to a laughable degree, starting with the fictional Safeway wellness success story that inspired the original Affordable Care Act wellness emphasis. None of this should be a surprise: in addition to HRAs and blood draws, wellness programs urge employees to go to the doctor, even though most preventive care costs more than it saves. So workplace medicalization saves no money – indeed, it probably increases direct costs with these extra doctor visits – but all this medicalization at least should make a company’s workforce healthier.
Except when it doesn’t — and harms employees instead, which happens altogether too often.
Yes, you read that right. While some health risk assessments just nag/remind employees to do the obvious — quit smoking, exercise more, avoid junk food and buckle their seat belts — many other HRAs and screens, from well-known vendors, provide blatantly incorrect advice that can potentially cause serious harm if followed.
The following statistic from the Centers for Disease Control and Prevention (CDC) never fails to shock: the 133-million adults – or “nearly 1 in 2” — with chronic disease account for 75% of spending. Engaging those high utilizers, the story continues, will help bring healthcare spending under control.
This storyline is a classic healthcare urban legend. Essentially nothing in that paragraph makes sense as a matter of policy, or even arithmetic.
Yes, the CDC got their arithmetic wrong. 133-million Americans comprise about 60% of adults, not “nearly 1 in 2.” Second, their definition of “chronic disease” specifically includes stroke, which is a medical event, not a chronic disease, and cancer, many of which would not fit that definition either. (Sloppy editing and arithmetic is a CDC trademark. They also observe that ”almost 1 in 5 youth…has a BMI in or above the 95th percentile” on their growth chart, which of course is mathematically impossible as written.)
Third, speaking of definitions, how are they defining “chronic disease” so broadly that 60% of us have at least one? Are they counting tooth decay? Dandruff? Ring around the collar?
Corrected or Not, The Statistic Itself Makes No Sense
The statistic is intended to demonstrate that a concentration of costs among people with out-of-control chronic disease but actually shows the opposite. It shows a diffusion of costs, not a concentration. 60% of adults accounting for 75% of spending – or even the incorrect 50% of adults accounting for 75% of spending — is about as far from a 20-80 rule as one can get. Basically costs are not concentrated in ongoing day-to-day chronic disease.
Second, that 75% covers all expenses of that 60%, not just being out of control and needing to go to the hospital, which seems to be the underlying assumption behind the flurry of activity designed to engage these people and control their conditions. Quite the contrary: in many conditions (rare diseases, high blood pressure and asthma come to mind) preventive drugs already overwhelm medical events as a expense category. In a typical commercial or even TANF Medicaid population, only about 10% of hospitalizations are for the five “common chronics” of asthma, diabetes (and its complications), CAD, COPD and heart failure. (In Medicare this percentage and absolute number are much higher – that is indeed a population where control of chronic disease matters.)
It’s not quite time to publish the obituary for by far the most extensive patient-centered medical home (PCMH) network in the country, Community Care of North Carolina (CCNC) but it’s certainly time to spellcheck it. The HMO-friendly GOP controls the statehouse, a blistering audit on Medicaid management has just been released (with plans for a CCNC-specific audit in the works), and the state’s most influential media outlet has ”vindicated” those who were excoriated for daring to question it, such as me, to name one random person who has frankly obsessed with it. (This might explain why I never get invited to parties.)
By way of background, the state’s Medicaid agency initiated what might loosely have been termed an enhanced-access model almost 15 years ago, and have subsequently expanded their experiment into a full-fledged patient-centered medical home, which currently covers many disabled members, the large majority of the non-disabled adults, and most of the children.
This wasn’t just any old medical home – it was the “poster child” for the PCMH movement, even making it onto NPR. Here is the influential and literate Disease Management Care Blog on the subject:
The ability to gather, analyze, and distribute information broadly is one of the great strengths of digital health, perhaps the most significant short-term opportunity to positively impact medical practice. Yet, the exact same technology also carries a set of intimately-associated liabilities, dangers we must recognize and respect if we are to do more good than harm.
Consider these three examples:
Last week, a study from Case Western reported that at least 20% of the information in most physician progress notes was copy-and-pasted from previous notes. As recently discussed at kevinmd.com and elsewhere, this process can adversely affect patient care in a number of ways, and there’s actually an emerging literature devoted to the study of “copy-paste” errors in EMRs. The ease with which information can be transferred can lead to the rapid propagation of erroneous information – a phenomenon we used to call a “chart virus.” In essence, this is simply another example of consecrating information without first appropriately analyzing it (e.g. by asking the patient, when this is possible).
At a recent health conference, a speaker noted that a key flaw with most electronic medical record (EMR) platforms is that they are “automating broken processes.” Rather than use the arrival of new technology to think carefully, and from the ground up, about the problems that need to be solved, most EMRs simply digitally reify what already exists. Not only does this perpetuate (and usual exacerbate) notoriously byzantine operational practices and leave many users explicitly complaining they are worse off than before, but it also misses the chance to offer conceptually original approaches that profoundly improve workflow and enhance user experience.
Politicians and pundits everywhere call for more disease prevention as a way to reduce healthcare costs. Certainly you cannot argue with the logic that “an ounce of prevention is worth a pound of cure.”
Or can you? It turns out that you can not only argue against that so-called logic, but – just as with cancer detection, which may have been done to excess in some protocols — you can mathematically prove that, at least for asthma, it takes a pound of prevention to avoid an ounce of cure.
The database of the Disease Management Purchasing Consortium Inc. (www.dismgmt.com) tracks both asthma drugs and visits to the emergency room (ER) and hospital stays associated with asthma. The average cost of an attack requiring an ER visit or inpatient stay is about $2000. The average cost to fill a prescription to prevent or recover from an asthma attack is about $100. It turns out that asthma attacks serious enough to send someone to the ER or hospital are rare indeed. In the commercially insured population, these attacks happen only about 3-4 times a year for every thousand people. (The rate is much greater for children insured by Medicaid; additional resources spent on prevention could very well be cost-effective for them.)
For a million-member health plan, that might be 3000 or 4000 attacks Yet that same million-member health plan is paying for hundreds of thousands of prescriptions designed to prevent or recover from asthma attacks. Depending on the health plan, the ratio of drugs prescribed to asthma events serious enough to generate an ER or hospital claim ranges from 60-to-1 to 133-to-1. Using those statistics of $2000 per event and $100 per prescription, a health plan would pay, on average, anywhere from $6000 to $13,300 to prescribe enough incremental drugs to enough incremental people to prevent a $2000 attack.
Averages lump together people at all risk levels. Surely some of those people really are at high enough risk of an attack that they are already inhaling their drugs regularly to prevent one, and have a “rescue inhaler” nearby. By definition their risk of attack is much greater than for low-risk people. Assume, very conservatively, that low-risk patients have a risk of attack which is half that of the average patient. This means that putting most low-risk patients on drugs costs $12,000 to $26,600 for every $2000 attack prevented.
No one would deny that we’ve reached a point in public healthcare finance where tough choices have to be made about what gets covered and what doesn’t. There is, however, one fairly easy choice, and that is to reconfigure the $3 copay for Medicaid members using the emergency room.
I would propose a replacement benefit of $0 for the first visit and $20 for each subsequent one, in a given calendar year. Not every state, but any state that reaches certain thresholds for physician access or urgent care availability may switch to this policy.
Here are the arguments in favor. First, each $3 visit costs the state and federal government about $500. There are few discretionary or semi-discretionary patient decisions that cost so little to trigger so much taxpayer spending. (Hospitalizations have that kind of ratio, but a patient can’t check himself into a hospital the way he can visit an ER.)
Second, one must consider the historical context. The $3 copay (“$3” is a shorthand for $0 to $10 — I don’t think it is over $10 anywhere) is a vestige of the bad old days when it was very difficult to find physicians who accepted Medicaid patients. That is still the case in some locales; they would not be eligible for this waiver. The world has changed, but the copay hasn’t.
Third, ER utilization rates in the TANF population, which because of its average age is generally pretty healthy, far exceed that of the commercially insured population. This is despite the fact that TANF members in general cost much less than commercially insured people, a gap that widens still further once birth events are removed from the calculation. Clearly there is much excess utilization.
The ongoing saga of savings estimates for the Community Care of North Carolina (CCNC) patient-centered medical home (PCMH) is finally over. The verdict: no savings. Because the scale and visibility of the CCNC experiment are unparalleled in the Medicaid sector today, it is important that the right policy and delivery system lessons be learned from this dispositive conclusion.
Lesson 1: Enhancements in access do not necessarily create cost reductions, at least in Medicaid.
CCNC is by all accounts an excellent program from the patient’s perspective. Indeed, if I were a Medicaid recipient, I would want to live in North Carolina. The leadership of CCNC is passionate about the program and constantly strives to improve it. However, as was amply observed by J.D. Kleinke on this very blog last week, Medicaid recipients have many lifestyle and economic issues that even the best-intentioned and best-incentivized doctors will never be able to systematically address.
Lesson 2: Perhaps it is time to create an ER co-pay for Medicaid recipients that has more than one digit to the left of the decimal point.
Even as ER co-pays for commercial insurers have soared in the last decade, Medicaid ER co-pays remain virtually non-existent. CCNC created excellent reasons to use primary care but was not permitted to re-price the ER to economically encourage use of primary care. Many Medicaid recipients overuse the ER in part because it is basically free. For the CCNC experiment to truly have a chance to reduce ER visits now that they have created a worthy substitute with their PCMH, it’s only fair to them (and to taxpayers) to reconfigure the financial incentives so that people use their worthy substitute … and then re-measure savings.
North Carolina Medicaid recently reported, for the third time, using a third consulting firm, the achievement of massive savings through its patient-centered medical home (PCMH) program, now called Community Care of North Carolina (CCNC). Among other things, CCNC pays the physicians more money in order to encourage and compensate behaviors and processes, including enhanced access to care and case management, to hopefully reduce the need for emergency and inpatient services. (A brief summary of this and past consulting reports appear in the current issue of Modern Health Care. http://www.modernhealthcare.com/article/20120218/MAGAZINE/302189938/1140)
However, the third time is not a charm. Notwithstanding these consultants’ reports — which paradoxically support my contrary conclusions by choosing to ignore the overwhelming data contradicting their own claims – the program is a total failure as far as reductions in cost and inpatient utilization are concerned.
Fact #1: According to the Medicaid and CHIP Payment and Access Commission (MACPAC) report to Congress http://www.macpac.gov/reports, North Carolina is by a significant margin the highest-cost state per capita in its region for adult and for child Medicaid spending. These are the two categories in which the PCMH has been in place the longest. In the “aged” category, in which PCMH had barely been started when the MACPAC data was compiled (and would not affect medical costs noticeably because the state is a “secondary payer” following Medicare, and most Medicaid “aged” spending is custodial anyway), North Carolina is the lowest cost state in the region. Continue reading…