We are actually doing our “Day Jobs” today, which means we are digging into our Greatest Hits Collection rather than, in the immortal words of the great philosophers in ABC’s sports department, spanning the globe to find the Agony of Defeat. (Truth be told, we don’t have to span anything except our keyboards for that.) Here is one of our favorites, Wellnet. Besides the usual wellness vendor numerical creativity (check the y-axis on both graphs), Wellnet features “undetected claims costs.” If, despite all your years in the benefits business, you’ve never heard of “undetected claims costs,” you might want to google on that phrase. You will find two sets of references to “undetected claims costs”:
(2) Us making fun of Wellnet.
We asked them a number of questions, which naturally they refused to answer. So before we published Why Nobody Believes the Numbers, we hired a well-known team of investigators to answer them for us. This is what they found.
‘‘Holmes, Wellnet saved $4 million in ‘undetected claims cost’ just on the highest-cost Cumulus employees. That is very impressive.’’
‘‘Watson, you see but you do not observe. The most common mistake in wellness is to present conclusions that are mathematically or epidemiologically impossible. The distinction is clear. Wellnet’s website says that the most expensive 2 percent of the employees of Cumulus Media avoided about $72,000 apiece—in so-called ‘undetected claims cost.’ This has Moriarty’s fingerprints all over it. Claims costs that don’t get incurred because they aren’t detected. No doubt those claims are making their way into Moriarty’s pocket.’’
‘‘You cannot detect them, Holmes? But you are the world’s greatest detective.’’
‘‘Indeed perhaps I am not, if I cannot detect undetected claims cost and Wellnet can. Or at least Wellnet has benefits consultants and HR executives believing that impossible arithmetic is possible. If Moriarty has invented a way to control our wellness industry through Wellnet so that benefits managers believe impossible results, he is making new rules of math. He could rewrite all the textbooks used in Grade 1 to Grade 6, in whatever those schools are called.’’
‘‘Elementary, my dear Holmes.’’
‘‘Watson, now what do you have for me?’’
‘‘Holmes, I have a lot of questions about how Wellnet detects undetected claims cost. Could they be using those gadgets for finding coins on the beach? Or do the employees have to pass through a scanner every day, like Karen Silkwood or Meryl Streep? And if Wellnet did not avoid all those undetected claims, how would employees get reimbursed for them? Would they fill out claims forms using invisible ink?’’
‘‘I’ll ask the questions, Watson. You get me the data. I can’t make my bricks without clay. Tell me, Watson, what is the data?’’
‘‘The data, Holmes, is that they also avoid $37,000 apiece in ‘undetected claims cost’ for the medium-risk members. Quite an impressive wellness company.’’
‘‘Watson, you ignorant slut. You see everything, but you fail to reason from what you see. $72,000 is much more than the top 2 percent of a company’s employees would be predicted to spend in avoidable expenses in the year following their inclusion in the top 2 percent, and equates to about four avoided hospitalizations apiece. Add to that about $37,000 in ‘undetected claims cost’ avoided for the medium-risk members, and Wellnet is avoiding $21 million of ‘undetected claims cost’ for Cumulus Media.
‘‘Here’s the rub, Watson: Cumulus Media’s total healthcare spending is only about $6 million/year. Therefore they can’t have saved $21 million. When you have eliminated the impossible, whatever remains, however improbable, must be the truth. Another case solved. Another Moriarty plot foiled. Math is saved for future generations to enjoy.’’
‘‘Brilliant, Holmes. How do you do it?’’
‘‘You know my method, Watson. It is founded upon the observation of trifles, a little cocaine, and an occasional allusion to Saturday Night Live.’’