Debunking The Bad Math Of Workplace ‘Get Well Quick’ Schemes

doctor exam

(Wikimedia Commons)

“Workplace wellness” is a big and burgeoning movement. But is it a bubble?

If you work in a company of any size, chances are you know the “wellness” drill. Your employer is getting killed by health care costs, and tries to bring them down by motivating workers to get healthier. The wellness program offers you incentives — as much as several hundred dollars a year — to fill out a questionnaire on your health risks, get medical tests, lose weight, quit smoking, lower your cholesterol.

What could be bad, right? You win, your company wins. The idea is so appealing that it’s enshrined in the national health overhaul best known as Obamacare, and in the latest groundbreaking health reform moves in Massachusetts. And it has fast become the norm: Most companies that offer health insurance benefits now also offer some sort of wellness plan as well.

Author Al Lewis (Courtesy)

Author Al Lewis (Courtesy)

So when Al Lewis takes on the $6-billion wellness industry in his recent book, “Why Nobody Believes The Numbers,” he’d better be packing some good ammo. And he is: Fifth-grade math. Well, sometimes fourth-grade.

Lewis — an expert in “care management” across populations and measuring efforts to improve it — argues that yes, wellness is a bubble, because much of the movement carries a fatal flaw: Its potential economic benefits have been outrageously oversold.

Many wellness program vendors promise companies that they can quickly and cheaply cut their workers’ health costs — and back their claims with numbers that could not survive the most elementary scrutiny, he says. (Lewis titles Chapter 3, “Case Studies That Flunk Every Plausibility Test Known To Mankind.”)

‘The entire economic justification for wellness is made up.’

One example of many, his helpful analogy from the housing world: “If you insulate your house, you should save money overall, but you won’t save money on insulation.”

The health care equivalent is that you need to spend money to save money overall. If you get your workers to go to the doctor more and take more of the drugs they need, you may save money by avoiding hospital stays and ER visits. But — contrary to what some wellness experts claim — you’re not going to see your spending on drugs and doctors go down, too, Lewis says. That would be like saving money on insulation.

“What are these people thinking?” he asks. (On his Website here, he bestows “Intelligent Design Awards” to some of the more egregious overpromisers for “setting back the evolution of the wellness field.”) In essence, he argues, virtually all the data on the wellness Return on Investment — “The entire economic justification for wellness, is made up.”

Fightin’ words, and Lewis acknowledges that his camp of wellness-data skeptics makes up only perhaps 2 or 3 percent of the field. But Forbes contributor David Shaywitz praises him as a purveyor of “an inconvenient truth.” And “the good news,” Lewis says, “is that arithmetic is not a popularity contest.”

Lewis is not arguing that all wellness programs are pointless. Good ones can work, he says, slowly and modestly. But without accurate data,  wellness programs cannot be assessed, he says, and much of the money spent on them could thus turn out to be wasted. Including quite a few taxpayer dollars.

Our recent conversation, lightly edited:

So you’re challenging the wellness industry, but do you accept its underlying premise, that chronic disease is our biggest health problem and that lifestyle issues are the biggest factor in chronic disease? 

The brief answer is yes. But the much longer answers are:

National Cancer Institute/Wikimedia Commons)

National Cancer Institute/Wikimedia Commons)

It does not logically follow that by paying people, you can get them to change their lifestyles and therefore fix the problem. The average German worker has twice the output of the average Greek worker, but nobody has suggested that Greece can solve its economic problems by giving classes in how to behave like Germans.

If you actually look at the spending on chronic disease, it’s not as easy as just ‘We have to do prevention,’ because in fact the large majority of money in chronic disease is already being spent on some level of prevention. Asthma is the clearest example: A health plan already spends 10 or more times as much on asthma medications and other asthma prevention as it spends on emergency room visits, and it’s the same structure across the board.

Take the heart attack rate, which is 1 in 500 in the working-age population. If you look at what is spent on cardiac drugs and procedures and tests to prevent heart attacks, it’s already vastly more than is spent on the events themselves.

In fact, per 1,000 people in a commercial health plan, if you look at diabetes and its complications, heart attacks, angina, and a few other things, the number of admissions to the hospital per 1,000 people over the course of the year is five or six, and over the course of the year they spend about $200 per person on these admissions, out of a total of $4-5,000. So it’s “Let’s go after this because everybody says we should,” as opposed to “Let’s do the arithmetic.”

And the general picture is that you have companies that face skyrocketing health costs, and they’re desperate, and the wellness experts say, ‘We can help you cut that’? 

Yes, and it’s a complete fallacy. if you had a drug for the common cold, you’d look at the number of people who had the common cold and figure out how many colds your drug would avoid.

For wellness, they don’t look at wellness-sensitive events like heart attacks and say, ‘Did the rate of these go down?’ They just say, ‘Your total costs went down,’ and take credit.

If you ask a wellness vendor, ‘Show me your list of wellness-sensitive events,’ they don’t even have one. They don’t know what they’re trying to avoid. I’m currently putting together a list of wellness-sensitive events.

For many employers, wellness is now the single biggest discretionary Human-Resources-type spending they do. The average incentive is $460, and that doesn’t even  begin to cover the cost of the program, which could be another couple of hundred dollars per person.

‘You’re trying to create a culture of health but you end up creating a culture of deceit.’

How does it tend to go? Say I’m a company and you’re doing a typical wellness program for me. 

I offer you a ‘health risk assesmment’ in which people go online and fill out a bunch of answers like how much they drink — and by the way, they’re not going to tell you how much they really drink, they’re going to lie. You’re trying to create a culture of health but you end up creating a culture of deceit.

As the employee, you know that if you fill out the risk assessment about half of that 460 bucks will go to you right away. So you fill it out and you get a report, and they tell you what all your risks are, and then they tell you that you need coaching and they try to set up phone calls for you.

If you smoke, the employer will offer you a couple of hundred dollars plus a nicotine patch. So there are smokers who are spending probably $2500 a year smoking, and they’re supposed to stop because you’re giving them a couple of hundred bucks and a patch.

Next, they have biometric screens where you go in and get blood drawn and some other kinds of screening, and these things are supposed to tell you what your risks are.

I’ll also offer you some kind of weight loss thing, like a “Biggest Loser” competition, maybe give you pedometers. You can’t argue with a pedometer. It doesn’t save any money but it’s nice to know how far you walk in the course of a day.

So basically, it’s usually a Health Risk Assessment plus coaching plus nicotine patch plus weight loss. One vendor claims that with just a Health Risk Assessment, they’ll get you an 11.4 times Return On Investment. Some people claim savings of more than 100%.  I’ve probably seen 30 Return on Investment numbers, and I haven’t seen one that wasn’t obviously made up.

Is this really the wellness industry norm, or just a few bad apples?

There are two ways you can tell a wellness vendor is a good guy. One is that they don’t claim a Return On Investment and number two is that when you go to their Website they don’t have a ‘brokers’ tab that says, ‘We work with you,’ which means ‘We pay you to push our product.’ They have to do it, but the ones who brag about it are the bad guys, which is most of them.

Essentially, this is the entire industry with few exceptions, because in order to compete in this industry, you have to be able to show the highest Return on Investment the fastest, because that’s what the customer is looking for. Whether it’s valid or not is of no concern.

But what about all the reputable studies that say wellness programs save money? Including a seminal piece in Health Affairs that found that it returns $3 for every dollar spent? What about the national fame of the Safeway wellness plan that influenced the Obamacare wellness piece?

Yes, Health Affairs legitimized it three years ago in an article by Harvard professors called “Workplace Wellness Programs Can Generate Savings.” I would say, ask them how they feel today. My feeling is that the bigger these bubbles get, the faster they burst, and the same media that has been fawning all over it is going to be piling on when it bursts.

On Safeway, let’s start with the premise: It turns out Safeway did not even start their wellness program until after they already had three years of flat costs, because they had put in a high deductible. And when they started the wellness program, the trend went way up. Also, the wellness plan only applied to the headquarters staff, so it is a complete myth that Safeway saved money to start with. Check out the Washington Post story on this.

‘I suggest that you take 1 percent of the money you’re throwing away on your wellness program and use it to clean the restrooms more often.’

I used to not only drink the Koolaid, I used to mix it up and offer it to everybody. I was the worst. If you go back 10 years and you look for people who were pushing disease management, which is essentially wellness for sick people, I was the number one drug pusher. But the difference is, when I saw the data and the data just did not fit, I changed. My job description now is, I’m the guy — and there are a couple of people like me who I work with — we tell the truth.

So if wellness isn’t the way to bring down health costs, what is? 

It’s life by healing a thousand cuts. It’s ‘Let’s do a whole bunch of little things,’ and if you want to make a really big impact, you have to shift a bunch of costs back to consumers. There’s not much else to be done. If there were something easy to do, people would have done it. By doing all best practices, you could cut between 2 and 5% of costs.

So as an employer, what should I do for my employees?

If you ask a general what the most important thing in soldiers is, they’re not going to say wellness, they’re going to say morale, of which health is a part. The big picture is: What is going to excite your employees about coming to work and make them productive? I suggest that you take 1 percent of the money you’re throwing away on your wellness program and use it to clean the restrooms more often. So now you have 99 percent left over to create a true wellness culture.

Massachusetts, with its latest health reform aimed at containing costs, is diving head-first into wellness-type stuff. What’s your reaction?

I would ask the people who put together this legislation, ‘What is the rate of preventable events, avoidable through this kind of activity, right now?’ And if they can’t tell you, the legislation is based on a phony premise.

The other thing all these wellness trends have in common is that they’re all pointing the finger at the patient. ‘If only we had better patients, we’d have a great practice.’ Well, Massachusetts has some of the healthiest people around…

Readers, reactions? What results have you seen from your workplace wellness program? Here’s a recent Health Affairs blog post co-authored by Lewis and an interesting counter-point from a colleague of Lewis’s: On Workplace Wellness, Don’t Throw The Baby Out With the Bathwater.

 

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  • Anthony Cinotti

    Question and Comments.
    Regarding Bravo Mikes reply below:
    What is the current law on basing premiums or employer contributions on an employee’s biometrics being within recommended parameters? Same question regarding with improvement in these numbers. Programs used to be points based only, biometric specific was not allowed. Has this changed?.

    Comment: Many companies are wary to offer programs based on rewards/penalties on the above parameters, especially blue/grey collar. Comments, like, ‘I’d eliminate half of my workforce if I tried to implement these penalties’ are common. A company’s largest ROI would be in changing that workforce, not so much the white collar, who tends to be more in tune with their health.
    Secondly, all change requires a motivator. After the HRA is complete, what is my motivation to take action? It is not a coach telling me that I am overweight which MAY lead to chronic conditions in the future. I already know this. A minor financial penalty that may add $50 more to my monthly premiums is not going to motivate any change for the majority. It may affect a few, but what’s the ROI on that? You want effective change, focus on the individual, find their motivators (appearance largely) and work with those who want to change. Ah, but that’s way too complicated and expensive.

    Lastly, it is an obvious statement that healthier employees are happier, more efficient and use less sick days. An effective wellness program all comes down to company culture and a true commitment to wellness and its employees for the long haul.

    For example, there are traditionally three barriers to fitness: Time, money and convenience. If an employer truly wanted to promote a healthier lifestyle, they would focus on these barriers. For instance, allowing extra time during the workday for exercise. The majority of the workplace without flexible schedules is exhausted after the workday and exercising after work is not an option. Allowing extra time during the workday would go a long way in assisting employees to begin exercising. Unfortunately, this unthinkable for the majority of companies throughout the U.S.

    Bottom line: The vast majority of companies simply want to say they have a wellness program, period. It is now an employee benefit, like group life insurance. The CFO does not believe the ROI numbers and never will. But since it is now basically a requirement, the majority will opt for the cheapest program out there and follow the norm, with little regard for the unbelievable ROI claims. Wellness already is a commodity. If as an industry, we focused on real results, this may change. But, that’s not where the easy money is, is it? It’s much easier to create a useless online program, that has one more bell or whistle then the other guy.

  • Bravo Mike

    The article is essentially describing first generation wellness programs that have not lived up to expectations. The market is becoming far more savvy and sophisticated. If your wellness program does not offer personalized goals for each employee with real financial consequences tied to the failure, or achievement, of reasonable life style controlled clinical outcomes that the CDC says are the cause of 75% of chronic care in this country (BMI, BP, Glucose, LDL, Tobacco-use), then you are in fact investing in a failed design. Also, if you’re wellness program does not correlate the changes in biometric results with changes in how your employees are accessing the healthcare system thru robust claim analytics, please move on. Unfortunately, the article gives little insight to what direction.

  • http://www.facebook.com/adam.friedman.81 Adam Friedman

    I’ve got to agree with @facebook-593236089:disqus on this one. Sure, this author Al Lewis can point the finger at “wellness” — yet another manifestation of our bloated health care industry — but why can’t he step back and figure out how to break the backs of the health insurance, big pharma, and medical device industries? You know, the lobbying powerhouses that force employers to scramble so desperately for snake-oil savings in the first place? There is a medical doctor that has closely scrutinized the REAL COSTS of common prescription drugs and hospital tests and procedures. The mark-up for consumers is sometimes 1000%. This will blow your mind: http://truecostofhealthcare.org/

  • Mike Q

    Until recently I ran a company and wellness companies were hounding us. Due to the expense and the incentives they wanted us to put in, I didn’t delegate the decision to HR but rather interviewed the salesperson, who told us how much our costs would fall. We are in health care, so I have a list of our health care categories (a rather standard list of diagnoses and procedures) ranked by medical spending. I asked which of these categories would go down? He looked at the list. He had obviously never seen one before and had no clue what he was even looking at, and said “all of them.” I said, “we’re going to have fewer babies?” He said, “Just the most expensive categories.” I said, “So, we’re going to have fewer baboies, because our biggest expense is birth events.” He said, “you must be spending a lot of money on heart attacks.” In fact, because of our size and workforce composition we had never had one. I showed him the door.

  • Reasonable?

    I agree that cost need to be shifted to consumers.

    Wellness is generally in the right direction because it confonts people with the risks and cost of their behaviors. However the savings are likely medium to long term instead of short term.

  • Sam

    We get $35 per pay period to do these surveys so we fill them out but no one I know takes them seriously. But for almost 1000 bucks a year you go along. How do people not already know these things without a computer telling you

  • Sandy Springer

    These programs are a joke. We all laugh at them and fill them out and collect our discounts. No surprise they don’t save money. Our human resources people almost told us to lie, like ” Just get them in. No one knows who you are or what you say so say whatever you want. but get them in. ” The thing I’m worried about is next year they are going to draw our blood, or else our insurance goes up $500

  • Jal

    This article is beyond ridiculous. Not only has the author picked out a short sighted item involved in all wellness programs, but then compounds his mistake by encasing it in something he likes to call “math”. First, all consultants offering programs to corporate businesses overstate the program’s advantages. Does the author really believe corporate executives do not realize the company is still paying for its wellness program? Or that the author is the only one who is sharp enough to see this? Grow up, Lewis. Second, the purpose of the wellness programs are all long term (as has been pointed out in several comments). Thus precise tit for tat analyses for this type of program are pointless. Is the author really suggesting skipping all efforts to create wellness programs or wellness attitudes, because the initial cost is not exactly equal to the initial benefit? All wellness program (government or private) are committed to establishing an wellness attitude that will generate many kinds of savings (not just financial) for the whole country. It is plainly obvious the author’s real purpose is to pick out a “shocking” detail, then cherry-pick some pieces of data in order to get some media source excited enough to print his “horrible expose”. Why did I waste my ten minutes on this self-serving drivel?

    • http://www.facebook.com/alfred.lewis.395 Alfred Lewis

      Jal, thank you for your thoughtful and reasoned reply. There actually are quite a number of people who are “Sharp enough to see this”, including several wellness vendors who have elected to tell the truth about ROI in wellness. They are posted on my website. Several consultants as well. I would recommend my 1/16 article in Health Affairs, which nobody was able to refute. The refutation was “yes, the authors are right but there are other companies that are good,” but no one has found a wellness company that measures outcomes using standard metrics that they teach in biostatistics 101 to measure savings. If they wanted to provide the same programs they provide now and say “these don’t save any money and you’re throwing your incentives away but we thinkg your employees will like them,” I say, go fot it. And employers should offer these servies to anyone, just not bribe people to pretend to participate. For instance, your employer might wantto offer an anger management class.

    • Mike

      I concur with the author, because I work in this industry and have similar data that demonstrates the same result – wellness does not save money, it adds to an organization’s healthcare expenses. HR managers spend undocumented time and effort, and as well have to hire additional staff to manage these programs – all of which is not included in ROI calculations. Ethereal “productivity gains” cited by Health Affairs never result in actual dollar reductions or gains. If productivity does increase (no data shows this by the way), it is quickly reallocated by the organization which is what oft happens when new technology is introduced as a way to “increase efficiency and reduce costs”. You may hate this author, but I can tell you from first hand experience of years working in this industry that wellness does not reduce healthcare costs.

  • Susan

    I agree with all your comments, except that I think the term “consumers” was misconstrued here. The example he gives is that the business providing the health coverage should take back 1% of the funds from their Wellness program to better provide for morale and “use it to clean the restrooms more often.”

    I read this to mean that the “consumer” he was discussing was the business, not the employee participants.

    • http://www.facebook.com/alfred.lewis.395 Alfred Lewis

      Hi, Susan, just to clarify, I meant there was no easy way to reduce health spending except shifting costs to consumers. That was the answer to that question. This is not to say I support that, not at all. The question was not: Do you support shifting costs to consumers?” I would have said “no.” I do also support office-based wellness activities and food choices and voluntary things, but I don’t think $520/person is the right about of moeny to use to pay people to act in their own best interest if they don’t want to, any more than you could end up with the right spouse by offering to pay someone to marry you

  • Morgan Leighton

    It may very well be true that new vendors in the “wellness industry” are selling a bad product, that they don’t have the data to back up their claims, and that employers should be very careful to look at what they are paying for in a wellness program. But Mr. Lewis claims that “in fact the large majority of money in chronic disease is already being spent on some level of prevention.” His examples? Asthma medications, cardiac drugs, procedures, and tests. None of which are prevention. Drugs are, by definition, treating a condition that already exists, eg. asthma or heart disease. Maybe they are helping prevent emergency room visits due to asthma attacks, or heart attacks due to clogged arteries, but this is NOT preventative medicine.
    True prevention involves lifestyle changes by individuals, like smoking cessation, weight loss, healthier food choices, as well as public health interventions like better community education about food choices, family planning, and healthy lifestyles, access to clean water, clean air, and public space for exercise. This is what wellness programs are supposed to do. He’s probably right that they’re not all doing this, but don’t tell me that if we did, in fact, put money into all these things we wouldn’t see a return in both lower health care costs and a healthier population with a higher quality of life.

    • Mike

      Actually, the use of pharmaceuticals for chronic diseases is preventative medicine and termed “medical management” in the medical industry. It helps prevent the need for surgical interventions that might arise from uncontrolled chronic condition progression (to the point of physiological crisis). Preventive interventions can be applied at any point along the axiom of one’s life or subsequent condition depending on its stage of development, whether it be very early before a condition arises or very late in its progression. Wellness programs do not constitute a full lifestyle management regimen for healthy living, they are usually only temporal during a period of one’s employment and thus not effective in reducing healthcare costs over the continuum of one’s life.

  • MathLover

    A wellness program that encourages workers to eat more immune-building, cancer-fighting green veggies, antioxidant-containing colorful fruits and vegetables, etc., might actually help reduce medical costs.

  • Steve

    I agree that filling out a questionnaire does little to help reduce health costs, but I don’t see Lewis’ argument that the modest spending (my employer pays $400) is a waste if coupled with real incentives to improve health, such as fitness programs. I’ve seen my cholesterol and triglyceride numbers tumble as a direct result of dieting and exercise. My cholesterol numbers were too high and I did not know what they were until I was incentivised to report these through the program. Now I look forward to reviewing these annually as I report them through the progam.

  • http://www.facebook.com/hoytdrayer Hoyt Drayer

    “…and if you want to make a really big impact, you have to shift a bunch of costs back to consumers.”

    Say
    what? Passing more costs onto consumers is what private health
    insurance has been doing since the 70s. The rising cost of health care
    has mostly to do with the rising prices for-profit vendors and
    contractors are charging non-profit hospitals, who pass those costs to
    insurers, who pass them onto the customers, be they higher rates for
    existing plans or new plans with fewer benefits.

    Do you want to
    see the source of the rising cost of health care, try looking at a
    typical bill and figure out why a 20 dollar surgical gown costs 200
    dollars, a 50-cent syringe 50 dollars, and/or 5,000 dollars for 20
    minutes in an MRI.

    Doctors, nurses, and other hospital staff
    are barely earning enough to pay back their college loans, and
    meanwhile, the corporations that manufacture medical equipment have
    turned American health care into a gold mine. The way to address the
    rising cost of health care is to rein in the asinine prices being
    charged to hospitals for the basic supplies they need to function.

  • Pat

    It’s hard not to be roused to debate by irascible mega-generalizera who think everyone else is stupid–”drinking the kool-aid”–or corrupt. But I’ll say 2 things: 1) my university’s wellness program offered a one-time $50 bonus for filling out an anonymous questionnaire (many were too busy to do it but it seems like useful data for rough-scale budget forecasting): that’s well short of $460 per person. 2) Everything my “wellness coach” told me to do was something that, as a person “of a certain age” with health issues and a wise physician, I’d already started to do re: diet and exercise, or couldn’t do (university teaching jobs preclude normal sleep). So though she had nothing new to teach me specifically, I know that her advice works, lastingly. I cut my cholesterol and triglyceride almost in half, reached the ideal weight for my height (w/out “going on a diet”), quit smoking, conquered disabling fatigue and joint pain. I teach more students in more programs, serve on more committees, publish more, walk farther. I can now manage (if not happily!) the punishing work hours of my profession. How does that not add to productivity? Most 5th-graders good at math want to push beyond the 5th grade level. Not sure why it impresses this author. In a town like Boston he could easily have checked in with some 9th-grade math whizzes to see if Mr. Lewis missed anything.

    • jeff

      So…despite your premise, your conclusion seems to concur with the author’s. Wellness programs aren’t working for you.

      • Pat

        ??? What anger, against whom or what, is simmering in that remark? I didn’t need our Wellness program because as a person of 60 with two chronic health conditions that require careful watching and lifestyle regulation, I was already doing much of what they were there to teach us. It works. If we’d had the program 15 years ago I’d have gotten a much earlier start on what I needed to do, and spared myself years of fatigue and pain.

        • http://www.facebook.com/alfred.lewis.395 Alfred Lewis

          What Jeff is saying is, you said she had nothing new to teach you. One of the observations I’ve made is that workplaces are divided into people who already know these things and people who don’t, with very few in the middle for whom wellness coaches and surveys could have an impact. A very astute observation, I would concur. This is not to say the wellness coach was wrong, just that you were already on the right track.

  • paula

    First Lady Michelle Obama,Disease Management Expert Al Lewis-THE DREAM TEAM!