A trio of groundbreaking publications on healthcare came out this April. They are my required reading list for CEOs. First is a study published in last week’s Journal of the American Medical Association (JAMA) by Eappen and colleagues (including among them Atul Gawande). The study found infections occurred in 5 percent of all surgeries in an unnamed southern hospital system. For U.S. hospitals, this is not an unusual rate of error — even though it is about 100 times higher than what most manufacturing plants would tolerate. No automaker would stay in business if 5 percent of their cars had a potentially fatal mechanical flaw.
If that’s not bad enough, the second finding is where we enter the realm of the absurd: according to the study, purchasers paid the hospital to make these errors. Medicare paid a bonus of more than $3000 for each one of the infections; Medicaid got a relative “bargain,” paying only $900 per infection. But the real chumps were the commercial purchasers (CEOs, that’s you). Employers and other purchasers paid $39,000 for each infection, twelve times as much as your government paid through Medicare. Most companies could create a good job with $39,000, but instead they paid a hospital for the privilege of infecting an employee. How many good jobs haven’t been created so businesses can pay for this waste?
Most employers are far more hard-nosed about managing their purchase of, say, office supplies than they are in purchasing health care — even though, unlike healthcare, paperclips never killed anyone and no stapler can singlehandedly sap a company’s quarterly profit margin. Yet, according to the Catalyst for Payment Reform, only about 11 percent of dollars purchasers paid to healthcare providers are tied in any way to quality. The results reflect this neglect of fundamental business principles for purchasing: Quality and safety problems remain rampant and unabated in health care, while employer health costs have doubled in a decade. Continue reading…
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.
Suppose one day you sit in front of your work computer, click on a link supplied by your employer, and set about the task of answering a hundred or more highly intrusive health questions. Setting aside the issue of financial penalties or rewards for doing the survey, you would trust that the instrument itself, called a health risk appraisal (HRA), would actually have a sound scientific basis, especially since its ultimate goal is to give you purportedly accurate health guidance.
Unfortunately, your trust in the validity of the tool would be quite misplaced.
HRAs are an essential screening tool in workplace wellness programs despite the fact that no body of evidence clearly demonstrates either their fiscal or clinical value and that no health services research has determined which HRA is the optimal tool. Indeed, a recent review of HRAs concluded that they increase spending, not reduce it, and that no one has any idea whatsoever whether taking an HRA has anything to do with the delivery of health value.
By masking essential methodological truths about HRAs, wellness vendors have essentially hustled their employer clients into believing that HRAs, which frequently ask clinical questions best left to primary care clinicians or restate platitudes (gosh, I didn’t know it’s safer to drive while not under the influence), are both probative and predictive of a person’s health future. This is just simply wrong.
Influencing behavior through both choice architecture and pricing differentials challenges many employers, however. There is a fear factor in play (“some of my people will be unhappy”), as well as financial issues, because the corporate managers responsible for food services often have their compensation linked to the division’s profitability. You make a lot more money selling soda than you do selling romaine. The same perverse financial conundrum appears when corporate food service companies run cafeterias. The on-site chef and managers typically operate on a tightly managed budget that leaves them little flexibility to seek out and provide healthier options.
A chef employed by one of thelargest corporate food service providersin the country told me last year that he could not substitute higher protein Greek yogurt for the sugar-soaked, low-protein yogurt in his breakfast bar. When I asked why, he told me that Greek yogurt was not on his ordering guide, and he was not allowed to buy it from a local club warehouse and bring it in. In this same company, beverage coolers were stuffed to overflowing with sugar-sweetened drinks, all of which were front and center (and cheap), while waters and low-fat milk were shunted to the side coolers. In another scenario, health system leaders I met with last year all raised their hands when I asked if they had wellness programs and kept them up when I asked if they also sold sugar-sweetened beverages in their cafeterias at highly profitable prices. The irony was completely lost on them. They had to be walked through the inconsistency of telling their employees to take (worthless) HRAs and biometrics, but then facilitating access to $0.69 22 oz fountain sodas.
Walgreens, the country’s largest drugstore chain, announced on April 4th that its 330+ Take Care Clinics will be the first retail store clinics to both diagnose and manage chronic conditions like asthma, diabetes, high blood pressure, and high cholesterol. The Nurse Practitioners (NPs) and Physician Assistants (PAs) who staff these clinics will provide an entry point into treatment for some of these conditions, setting Walgreens apart from competitors like Target and CVS whose staff help manage already-established chronic illnesses or are limited to testing for and treating minor, short-lived ailments like strep throat.
A one-stop shop for toothpaste, prescription drugs, and a diabetes diagnosis? The retail clinic phenomenon has its appeal: it allows patients convenience and better access to care through longer hours and more locations than our health care system now provides. Walgreens leaders bill their latest offering as a complementary service to traditional medical care. They envision close collaboration with physicians and even inclusion in Accountable Care Organizations, according to reporting by Forbes’ Bruce Japsen (though it’s not clear how the retailer would share the financial risk or savings in such a model).
You’d be forgiven if, after reading last month’s Health Affairs, you came to the conclusion that all manner of wellness programs simply will not work; in it, a spate of articles documented myriad failures to make patients healthier, save money, or both.
Which is a shame, because – let’s face it – we need wellness programs to work and, in theory, they should. So I’d rather we figure out how to make wellness work. It seems that a combination of behavioral economics, technology, and networking theory provide a framework for creating, implementing, and sustaining programs to do just that.
Let’s define what we’re talking about. “Wellness program” is an umbrella term for a wide variety of initiatives – from paying for smoking cessation, to smartphone apps to track how much you walk or how well you comply with your plan of care, and everything in between. The term is almost too broad to be useful, but let’s go with it for now.
When we say “Wellness programs don’t work,” the word work does a lot of, well, work. If a wellness program makes people healthier but doesn’t save lives, is it “working”? What if it saves money but doesn’t make people healthier?
On March 20, 2013, the media picked up a story about CVS Caremark’s latest wellness program. In summary, CVS will be requiring all of its employees to complete a health screening in order to qualify for a reduction in their health insurance premium. For those employees who participate, the employee’s screening data goes to a third party, and CVS never sees it.
Such wellness financial incentives are commonplace and have been around a long time. And if that is how the media had described the CVS program, it’s doubtful anyone would have even paid any attention to it. Unfortunately, that’s not how the media ran with the story. Let’s look at how the media sent the wrong message – using ABC News as an example – and why it matters to get the message right.
Sending the Wrong Message
ABC’s Good Morning America segment was emblazoned with the headline, “Who’s Watching Your Weight – CVS Employees Required to Disclose Weight.” Their website ran a similar headline, “CVS Pharmacy Wants Workers’ Health Information, or They’ll Pay a Fine.”
Increasingly, the health care community is experimenting to see if managing the health of a defined population – say diabetics – improves their health and also reduces the cost of health care or its rise over time. In other words, the healthcare profession seeks to determine if value can displace volume (our fee-for-service tradition) in delivering medical services. Humana’s first-of-its-kind, two-year pilot health-and-wellness program may provide some welcome answers.
A unique factor of the Team Up 4 Health program reflects its participants – hundreds of residents in Bell County, Kentucky (population: 28,750). Statistics show that its population bears a high incidence of preventable chronic illnesses. One-third of the county’s adults are obese and one-in-eight has Type 2 diabetes.
Alice: Cheshire-Puss, would you tell me, please, which way I ought to go from here?
Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don’t much care where.
Cheshire Cat: Then it doesn’t matter which way you go.
Alice: —So long as I get somewhere.
Cheshire Cat: Oh you’re sure to do that if you only walk long enough.
Lewis Carroll, The Adventures of Alice in Wonderland
2013 has arrived and employers now find themselves on the other side of a looking glass facing the surreal world of healthcare reform and a confusion of regulations promulgated by The Accountable Care Act (ACA) and its Queen of Hearts, HHS Secretary Sebelius. Many HR professionals delayed strategic planning for reform until there was absolute certainty arising out of the SCOTUS constitutionality ruling and the subsequent 2012 Presidential election. They are now waking up in ACA Wonderland with little time remaining to digest and react to the changes being imposed. A handful of proactive employers have begun, in earnest, to conduct reform risk assessments and financial modeling to understand the impacts and opportunities presented by reform. Others remain confused on which direction to take – uncertain how coverage and affordability guidelines might impact their costs.
If reform is indeed a thousand mile journey, many remain at the bottom of the rabbit hole – wondering whether 2013 will mark the beginning of the end for employer sponsored healthcare or the dawning of an era of meaningful market based reform in the US. HR and benefit professionals face a confusion of questions from their companions — CFO’s, CEOs, shareholders and analysts.
Diet and exercise: they were supposed to be the answer to all that ails America’s obesity and health care cost problem.
Signs of this Utopian vision are everywhere. From entire government departments encouraging healthy lifestyles through fitness, sports and nutrition, government websites that encourage “healthy lifestyles,” and entire community efforts to partner with health care organizations to fight obesity with the hope of cutting health care costs.
What if, believe it or not, when it comes to people with Type II diabetes, diet and exercise don’t affect the incidence of heart attack, stroke, or hospital admission for angina or even the incidence of death?
Suddenly, all health care cost savings bets are off. Suddenly, we have to re-tool, re-think our approach, understand and appreciate the limitation of lifestyle interventions to alter peoples’ medical destiny. Suddenly we have to come to grips with a the reality that weight loss and exercise won’t affect outcomes in certain patients. Suddenly, there is a sad reality that patients might note be able to affect their insurance premiums by enrolling in diet and exercise classes after all.
These thoughts are so disruptive to our most basic “healthy lifestyle” mantra that few can fathom such a situation. Nor would any members of the ever-beauty-and-weight-conscious main stream media be likely to report such a finding if it came to pass.