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Do Workplace Wellness Programs Make Business Sense?

The press and trade publications strongly endorse workplace wellness programs as a good investment for employers. Soeren Mattke, a physician and RAND senior scientist, explains why his work tells a different story.

Why are workplace wellness programs so popular?

Because employers think the programs make business sense. They are supposed to improve employees’ health, increase their productivity, help control their chronic conditions, and reduce their risk of developing a chronic disease in the longer term. Employers believe that the dollars they spend on these programs will come back to them in avoided health care costs. For example, a recently published review suggested that employers gained three dollars in health care savings for every dollar spent on a workplace wellness program.

What does a typical workplace wellness program look like?

They usually have two components: lifestyle management and disease management. Lifestyle management focuses on employees with health risks such as smoking or obesity. The goal is to help employees reduce those risks, thus steering clear of serious disease down the line. In contrast, disease management is intended to support employees who already have a chronic disease by helping them take better care of themselves, e.g., reminding them to take their medications.

So are the programs living up to their press?

Perhaps in part. We recently published a study that included almost 600,000 employees at seven firms. We found that lifestyle management reduced health risk, like smoking and obesity, but no evidence that it lowered employers’ health care spending. Our new analysis extends that finding. Looking at 10 years worth of data from a Fortune 100 employer, we found that its program generated a reduction of about $30 per member, per month in health care costs. But disease management was responsible for 87 percent of the savings.

How does this disparity translate into return on employer’s investment?

The return on investment is strikingly different. For the disease management component, the employer earned a $3.80 return for every dollar invested in the program. For lifestyle management, the return was only $.25 for every dollar invested.

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Is There Really a Physician Shortage?

Large coverage expansions under the Affordable Care Act have reignited concerns about physician shortages. The Association of American Medical Colleges (AAMC) continues to forecast large shortfalls (130,000 by 2025) and has pushed for additional Medicare funding of residency slots as a key solution.

These shortage estimates result from models that forecast future supply of, and demand for, physicians – largely based on past trends and current practice. While useful exercises, they do not necessarily imply that intervening to boost physician supply would be worth the investment. Here are a few reasons why.

1. Most physician shortage forecast models assume insurance coverage expansions under the ACA will generate large increases in demand for physicians. The standard underlying assumption is that each newly insured individual will roughly double their demand for care upon becoming insured (based on the observation that the uninsured currently use about half as much care). However, the best studies of this – those using randomized trials or observed behavior following health insurance changes – tend to find increases closer to one-third rather than a doubling.

2. A recent article in Health Affairs found that the growing use of telehealth technologies, such as virtual office visits and diagnoses, could reduce demand for physicians by 25% or more.

3. New models of care, such as the patient-centered medical home and the nurse-managed health center, appear to provide equally effective primary care but with fewer physicians. If these models, fostered by the ACA, continue to grow, they could reduce predicted physician shortages by half.

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PepsiCo’s Wellness Program Falls Flat

For those of us who actually think wellness outcomes should be evidence-based, a landmark study was released today:  the first evidence provided by a major organization voluntarily (as opposed to being outed by us, like British Petroleum and Nebraska) that wellness doesn’t work.   January’s Health Affairs features a case study of PepsiCo, authored by RAND Wellness Referee Soeren Mattke and others, in which a major wellness program was shown to fall far short of breaking even.

The specific highlights of the PepsiCo study are as follows:

  • Disease management alone was highly impactful, with an ROI of almost 4-to-1;
  • Wellness alone was a money sink, with each dollar invested returning only $0.48 in savings;
  • The wellness savings were attributed to an alleged reduction in absenteeism, as self-reported by participants.  There was no measurable reduction in health spending due to wellness.

Even though the wellness ROI was far underwater, we suspect that the ROI was nonetheless dramatically overstated, for several reasons.  First, the authors acknowledge underestimating the likely costs of these programs, focusing only on the vendor fees without considering lost work time, program staff expense and false positives.  Second, no matter how hard one tries to “match” participants with non-participants (the wellness industry’s most utilized measurement scheme), it simply isn’t possible to compare mindsets of the two groups.  We learned from one of Health Fitness Corporation’s many missteps that participants always outperform non-participants, simply because they are more motivated.  Third, the absenteeism reductions were self-reported, by participants.

Finally, PepsiCo’s human resources department, having made the mistake of accepting Mercer’s advice to implement one of these programs, was already taking some political risk by acknowledging failure.  Had they incorporated the adverse morale impact, lost productivity due to workers fretting about false positives, Mercer fees and staff costs, participant bias, and self-reporting bias, the ROI could easily have turned negative (meaning the program would have been a loser even if the vendor had given it away) and the HR staff could have been taking serious career risk.

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What to Do About Futile Critical Care

Thanks to extraordinary advances in medicine, critical care providers can save lives even when the cards are stacked against their patients. However, there are times when no amount of care, however cutting-edge it is, will save a patient. In these instances, when physicians recognize that patients will not be rescued, further critical care is said to be “futile.” In a new study, my RAND and UCLA colleagues and I find that critical care therapies that physicians regard as “futile” are not uncommon in intensive care units, raising some uncomfortable questions.

Of course, we’re fortunate to have such fantastic technology at our disposal — but we must address how to use it appropriately when the patient may not benefit from high-intensity measures. When aggressive critical care is unsuccessful at achieving an acceptable level of health for the patient, treatment should focus on palliative care.

In our study, my colleagues and I quantified the prevalence and cost of “futile” critical care in the journal JAMA Internal Medicine. This can be seen as the first step toward reevaluating the status quo and better optimizing care for critical care patients.

After convening a group of critical care clinicians to determine a consensus definition of “futile treatment,” our research team analyzed nearly 7,000 daily assessments of more than 1,000 patients.

We found that 11 percent received futile treatment, while an additional 9 percent received “probably futile” treatment.

So physician-perceived futile critical care is indeed prevalent. But what about the cost?

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More Work Is Needed on the Safety and Efficacy of Healthcare Information Technology

If one were writing about the improvement of gastronomy in America, one would probably not celebrate “over 300 billion hamburgers served.”  But that’s very much the type of success Dr. Ashish Jha is celebrating in last week’s piece on recent US healthcare IT sales. Unfortunately, the proliferation of Big Macs does not reflect superior cuisine, and healthcare IT (HIT) sales do not equate with better healthcare or with better health. Quantity does not equal quality of care.

To be sure, Dr. Jha acknowledges the challenges of rolling out HIT throughout US hospitals. And he should be strongly commended for his admission that HIT doesn’t capture care by many specialists and doesn’t save money. In addition, Dr. Jha points to the general inability of hospitals, outpatient physicians and laboratories to transfer data among themselves as a reason for HIT’s meager results.

But this is a circular argument and not an excuse. It is the vendors’ insistence on isolated proprietary systems (and the government’s acquiescence to the vendors) that created this lack of communication (non-interoperability) which so limits one of HIT’s most valuable benefits.

In our opinion, the major concern is that the blog post fails to answer the question we ask our PhD students:

So what? What is the outcome?

This entire effort is fueled by $29 billion in government subsidies and incentives, and by trillions of dollars spent and to be spent by hospitals, doctors and others [1].

So where is the evidence to back up the government’s and industry’s promises of lower mortality, improved health and lower health care costs?

Single studies tell us little. Sadly, as many as 90% of health IT studies fail the minimal criteria of the respected international literature syntheses conducted by the Cochrane Collaboration.

In other words, studies with weak methodology or sweetheart evaluation arrangements just don’t count as evidence.
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7 Burning Questions on Marijuana Legalization

Believe me, I’ve heard all the pot jokes, and some of them are true. Public support for legalizing marijuana use is at an all-time high. Some state-level marijuana laws are going up in smoke. And yes, Washington and Colorado are embarking on a historic joint venture.

Puns aside, discussions about marijuana legalization are getting serious. In November, voters in Colorado and Washington made the unprecedented decision to allow commercial production, distribution and possession of marijuana for nonmedical purposes. Not even the Netherlands goes that far.

Policymakers in both states are confronting some new and tricky issues that have never been addressed. For them, and for anyone else thinking about changing their pot laws, here are seven key decision areas that will shape the costs and benefits of marijuana legalization:

1. Production. Where will legal pot be grown — outdoors on commercial farms, inside in confined growing spaces, or somewhere in between? RAND research has found that legalizing marijuana could make it dramatically cheaper to produce — first because producers will no longer have to operate covertly, and second because suppliers won’t need to be compensated for running the risks of getting arrested or assaulted. After lawmakers decide how it will be grown, production costs will be shaped by the number of producers and other regulations such as product testing.

2. Profit motive. If there is a commercial pot industry, businesses will have strong incentives to create and maintain the heavy users who use most of the pot. To get a sense of what this could look like, look no further than the alcohol and tobacco industries, which have found ingenious ways to hook and reel in heavy users. So will private companies be allowed to enter the pot market, or will states limit it to home producers, non-profit groups or cooperatives? If a state insisted on having a monopoly on pot production, it could rake in a decent amount revenue — but for now, that possibility seems far off in the United States since marijuana remains illegal under federal law.

3. Promotion. Will states try to limit or counter advertisements in the communities and stores that sell marijuana? U.S. jurisprudence against curtailing what’s known as “commercial free speech” could make it tough to regulate the promotion of pot. While a state monopoly system could help control promotion, those advertisements you see for state lotteries should give you pause.

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From Boston to Oklahoma -Lessons for the Regional Trauma Response System

Monday’s massive tornado ripped through Moore, a suburb of Oklahoma City, devastating homes and businesses and killing at least two dozen people. The disaster came just over a month after an explosion at a fertilizer plant devastated the town of West, Texas, killing 15 people and injuring some 200 others. Just two days earlier the bombings at the Boston Marathon left three dead and more than 260 injured.

Three mass-casualty events occurring in three very different settings show that disaster preparedness should not be limited to large cities or “target” areas in the United States. One trait that is common to all such events—whether urban, suburban or rural—is the need for coordinated, responsive trauma care for victims.

Boston had an advantage over the rural community of West in that seven hospitals, including facilities with readily available, highly specialized trauma and burn care, were in close proximity to the site of the blast. In contrast, the majority of casualties in West had to be transported to hospitals in Waco, 20 miles away. The main receiving facility, Hillcrest Baptist Medical Center, is a hospital with trauma care capability. Other victims were treated at Providence Hospital, which is not a trauma center, and Scott & White Memorial and McLane Children’s Hospital in Temple, Texas, about 50 miles away. Several patients were transported as far as 75 miles to Parkland Hospital in Dallas, the closest facility with burn and highly specialized trauma units. Most of these victims had traumatic injuries. In the case of Moore, the tornado inflicted significant damage to Moore Medical Center, requiring 145 casualties, including 45 children with minor to severe injuries, to be taken to other area hospitals in and around Oklahoma City.

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Why Only Business Can Save America From Health Care

For a large and growing number of us with meager or no coverage, health care is the ultimate “gotcha.” Events conspire, we receive care and then are on the hook for a car- or house-sized bill. There are few alternatives except going without or going broke.

Steven Brill’s recent Time cover story clearly detailed the predatory health care pricing that has been ruinous for many rank-and-file Americans. In Brill’s report, a key mechanism, the hospital chargemaster, with pricing “devoid of any calculation related to cost,” facilitated US health care’s rise to become the nation’s largest and wealthiest industry. His recommendations, like Medicare for all with price controls, seem sensible and compelling.But efforts to implement Brill’s ideas, on their own, would likely fail, just as many others have, because he does not fully acknowledge the deeper roots of health care’s power.

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Could Social Impact Bonds Help Restore Public Budgets?

Government budgets are tight during the recession, with cuts to public health budgets being announced on almost daily basis. What strategies are available to enhance revenues for public welfare programs–for the kinds of health and education expenses that won’t “pay for themselves”(at least in the short term), and therefore are often the first to get slashed in hard times? Raising tax rates among the wealthy, and introducing new taxes like a Robin Hood Tax, have been widely discussed. But some researchers have also studied entirely new revenue-generating strategies for social welfare programs that don’t rely on taxes—including a popular pay-for-performance scheme based on “social impact bonds” (SIBs).

How they work

A SIB is one of many “payment by results” plans. Just like other types of bonds (for instance, the municipal bonds we invest in to fund a local community college), SIBs involve private investors paying for a particular program that funds some social welfare operation. But SIBs are organized such that if the social welfare program is successful, there should be some net savings to the government and benefits to society.

For example, if a public health program prevents diabetes by successfully sustaining a weight loss intervention, the government should save money that would have otherwise been spent through Medicaid or Medicare on future hospitalizations caused by diabetes. As part of a SIB, the government agrees to pay a portion of these savings back to the investors who funded the weight loss program. And just like any investment, if the program fails, the investors lose money—theoretically attracting investors towards the most effective social welfare programs.Continue reading…

Looking For Quality In the Wrong Place

Last week I attended the first annual meeting of the Long-Term Quality Alliance and listened to Gregg Pawlson (a geriatrician and executive with NCQA) talk about quality measurement.  Right now, quality measurement does too little to drive practice towards quality care because it is based only on things that are “feasible,” or easy to measure—like what gets coded on medical bills. Pawlson observed that while feasibility must be one of the watchwords of quality measurement for now, in the near future electronic medical records should allow us to move beyond billing codes to gather real clinical data for more important quality measurement, including key care processes and outcomes.

I sure hope so. Because those who have looked beyond the dim illumination of current billing-based “quality measures” and searched in the darkness where real processes of clinical care can found have found that the situation is grave.  The ACOVE (Assessing Care of Vulnerable Elders) process, while laborious, looks at clinical care where it really happens – in offices and charts – rather than in bills and therefore has a better chance of driving meaningful quality improvement. Readers  know that I am a big fan of this work, begun at RAND by outstanding clinician-researchers including Neil Wenger, David Solomon, David Reuben, and many others.  I believe that ACOVE is an example of what we need in elder care: high quality evidence about essential clinical practices that are sensibly related to real health outcomes and show how we could (often easily) do better for older people.  ACOVE is a blessing.Continue reading…