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Catasys wants you to buy their stock. (In other words, I’m ba-ack!)

Last week I posted linkedin comments praising three very fine (and honest) vendors: Limeade, Redbrick, and Imagine Health. I was concerned this flurry of distinctly out-of-character activity might cause people to worry that pods had taken over my body.  I then posted an assurance that was not the case. However, as someone subsequently pointed out, if pods had taken over my body, it’s quite unlikely they would admit it.


Point well taken.

Since my own protestations would therefore go for naught, the only way to put people’s minds at ease that I’m not a “pod person” would be to profile another vendor–in this case, Catasys. Catasys is in the depression wellness/disease management business.  Here’s the way that business works: if you are a health plan customer of theirs, you round up your depressed members and try to convince them to use Catasys’ therapy.

If I were depressed, I doubt the first thing to come to my mind would be: “How can my health plan arrange some therapy for me with a vendor?” But maybe that’s just me. And I also doubt I would insist that said vendor be nearly bankrupt. (Once again, a preference for working with viable entities might just be a personal foible.)

The reason I know they are nearly bankrupt is that they say so in their 10-K (“substantial doubt as to our ability to continue as a going concern”). Yes, they file with the SEC because, yes, they are publicly traded — and that is what provides the inspiration for this post.

Specifically, one of their executives recently pitched their stock on Linkedin.  You don’t see executives pitch stock on Linkedin in their own companies very often, or for that matter at all. Indeed, after I posted my comments, she removed “If you’re looking into investing in Catasys” from her post. Instead the posting now says only:


The $CATS got her tongue maybe because, oh, I dunno, it’s illegal for company insiders to solicit marks on Linkedin to buy their stock? Just a guess…

Nonetheless I decided to take her up on the offer.  What I “learned” was that they still have a market value of $60MM, even though the stock has fallen about 2/3 from its IPO price. Notwithstanding this decline, shares sell at about 10x revenue, which, though so high as to be ridiculous, is not unusual in this field, where ridiculous is the new stupid. What is unusual is that for every dollar in revenue, they lose about $5. You can’t make that up in volume–and indeed, the more they’ve reported in revenues every year, the more they’ve lost every year.

Consequently, in order to claw their way to $5 million in annual revenue after 12 years in business, they’ve lost a cumulative $278 million dollars, a figure exceeding the GDP of several Pacific Island nations. The latter at least have the excuse that they are now largely underwater, though I guess that’s true of Catasys as well.

Don’t believe anyone could lose that much in this field?  Here is the screenshot, keeping in mind that these quantities are expressed in $000:


As for their offering, naturally all their savings figures are made up. When they tried to pitch a client of mine several years ago, I checked them out, as is my wont when representing potential prospects against vendors. (It’s a strategy that benefits consultants should try someday. Oh, I know it sounds crazy but it just might work.)

I concluded that they must have read Why Nobody Believes the Numbers backwards, in order to learn how to use every sleight-of-hand measurement technique to create the appearance of saving money.

Their business model is to find the members with the highest claims that include depression or substance abuse and see if they are interested in participation. If they are, Catasys then interviews them to decide who is likely to improve the most through their intervention.  Lucky depressed members who survive the interview qualify for the 52-week intervention.  Some fraction of those lucky depressed survivors make it all the way through the program.

And that, finally, is the subset on which Catasys measures and reports savings.

Sure enough — leaving nothing to chance through regression to the mean, favorable selection bias and self-selection bias, and ignoring dropouts — Catasys shows savings of 50%. (What’s amazing, given all those biases, is that their alleged savings is only 50%.)

So next time someone approaches you with an offer to “learn” how to invest in Catasys, here is my recommendation:


However, there is a way to make some money on the stock.

The way the rules work is, you can lie about savings all you want to benefits consultants, brokers and prospects, but here’s where you can’t lie: in SEC filings. And yet, right on page 3 of the 10K:


Lying on SEC filings can get you sent to jail — if the lies aren’t disclosed.  Disclosing “risk factors” solves just about every problem there is, for public companies. For instance, if your company’s C-Suite consists totally of convicted embezzlers, shareholders can’t sue you and you can’t go to jail if indeed your 10K discloses “hiring convicted embezzlers” as a “risk factor.”

Catasys’ 10K lists a whopping thirty-seven risk factors, many of which are pretty scary, including fee-splitting. Having read these risk factors, were I a shareholder, I’d be spooked enough to swap ’em all for a few swindlers for the corner offices.

And yet nowhere in this extensive “Risk Factors” section does it say anything like:

Our savings claims are the result of totally hilariously obvious fallacies. We know this because we were on the conference call when Al Lewis showed our half-witted Milliman consultant who had “validated” us exactly how and why our savings were total crap, but we chose to keep measuring this way anyway in order to look good. So a risk factor is that Mr. Lewis might blog about us if his panties get sufficiently in a bunch.

Back to the money-making part. You short the stock, announce that you are shocked, shocked that all their savings are fabricated, and then inform the SEC, which presumably will be equally shocked…


…and whose investigation will send shareholders running for the exits:


Come heckle Al Lewis.

Here is a clip-and-save posting with some of my presentations open to the public this year, starting next month. T

Because all will offer extensive Q&A, they provide a chance for the wellness empire to strike back, but if history is any indication, the only direction in which they will strike is out. (There are, of course, exceptions, some great wellness vendors, that we will highlight in upcoming postings.)

March 27th, Philadelphia, PA.

17th Annual Population Health Colloquium.  This interactive workshop will provide the opportunity to not just listen to me drone on, side by side with Linda Riddell, but also to tackle some squirrelly outcomes reports (is there any other kind?) yourselves, in a team-building exercise like no other.  I’ll play the role of the vendor, and you play the role of me and demonstrate how dishonest my reports are.  In this roleplay, you’ll point out why I should be completely ashamed of myself for lying. But, since I’m playing the vendor, I won’t apologize even after I’ve been caught.

This session also provides the most cost-effective near-term opportunity for earning Critical Outcomes Report Analysis certification from the Validation Institute.

And stay tuned for more upcoming opportunities…

May 18, Canton Ohio. the Employers Health Coalition is hosting its annual symposium. I’ll be doing “Wellness Outcomes for Dummies…and Smarties.”

September 12, also in Philadelphia as luck would have it, for the Greater Philadelphia Business Coalition on Health’s Annual Wellness Summit. (Philadelphia is apparently a hotbed of validity.)  Watch this space.  This will be an entertaining event, featuring a healthcare trivia contest and possibly a wellness presentation as well.

September 27th.  The Rock Stars of Health Summit. This is going to be an amazing show, featuring an appearance by a guy who should be and probably will be in the Rock and Roll Hall of Fame, to be held at the picturesque campus of the University of Montana, in Missoula.  I’ll be doing both a complete long-version Wellness Outcomes for Dummies…and Smarties workshop as well as a Quizzify trivia contest-and-presentation.  If you really want to heckle me, this is the place, because Montana is open-carry.

October 2 and October 3, Los Angeles, CA. The Employee Healthcare and Benefits Congress, courtesy of the Corporate Health and Wellness Association.  Those who attended last year’s conference in DC were treated to a great show. (Plus if you played your cards right all your meals were free.)  Once again, it appears there’s going to be a twofer — both a trivia contest and a (possible) in-depth precon on wellness outcomes measurement.


Is Optum Alternative-Facting?

Wellness vendors were into alternative facts before alternative facts were cool.  They even expanded the domain to include alternative math, like Wellsteps showing that costs had increased and decreased at the same time.

Is Optum (United Healthcare) going a step further, into alternative ethics?  Here are two Optum claims, which appear to be exactly the opposite of each other.  Now, we aren’t going to call anyone an alternative fact-er, but we would invite them to explain — and we’ll provide equal time — how both these seemingly incompatible statements can be true.

First, the head of their wellness group, Seth Serxner, acknowledged that biometric screening is supposed to be done in accordance with guidelines.  (The guidelines are reproduced below, by the way, since he seems to have trouble remembering them when he’s approving marketing materials.)

He insisted, on tape, that the only reason Optum flouts screening guidelines is because employers make them do it: “Many clients won’t let us [screen appropriately],” he said.  The full tape can be downloaded from that link, but it is tough to find the audio. (The time stamps appear to vary by download. However, it is towards the end and you can manually sync by following The Great Debate in total, which starts here.)

So, on Seth’s planet, Optum begs employers to pay them less money by screening their employees at longer, more appropriate, age-adjusted intervals…and employers refuse.

However, it appears, based on the marketing material below, that the reason employers refuse to let Optum screen appropriately is that Optum requires employers to screen inappropriately.  You read that right: “participation in our wellness program…is a requirement.” And that decidedly includes screening…which employers must pay extra for in order to get the “savings” on their premium.


They then go on to quote — you guessed it — Kate Baicker’s 7-year-old study based on alternative data that even she appears not to believe any more.  The second alternative quote is attributed to WELCOA, a quote which WELCOA’s CEO, Ryan Picarella, assures me he never made, nor did anyone currently in his organization, and that he doesn’t believe.

Update: It was observed on Linkedin that the reason they do this (for their fully insured business) could be as an ACA play. You don’t mind if spending on claims increases because you need to get to 80% (or 85%, depending on size) loss ratio anyway. The screening isn’t counted towards the 85% because it’s not a claim, so you make money there too by charging separately. Brilliant!  United Healthcare’s shareholders should be very impressed.

Here are the USPSTF guidelines, by the way, also reproduced below, albeit badly.  (There is nothing wrong with your TV set. Do not attempt to adjust the picture.)  This is actually the version published by “Choosing Wisely”  (a joint project of Consumer Reports and the Society of General Internal Medicine), and they don’t totally sync with USPSTF, but whatever the minor differences are, neither looks anything like what Optum and their alternative friends advocate.







How to Plausibility-Test Wellness Outcomes (not as boring as it sounds)

Suppose your family is enjoying dinner one night and your daughter’s cell phone rings. She excuses herself, goes in the other room for a few minutes, comes back out and announces: ‘‘Mom, Dad, I’m going over to Jason’s house tonight to do homework.’’

No doubt you reply, ‘‘Okay, bye. Have a nice time.’’

Ha, ha, good one, Al. Obviously, you don’t say that. You say: ‘‘Wait a second. Who’s Jason? What subject? Are his parents home?’’ Then you call over to the house to make sure that:

  1. adults answer the phone; and
  2. the adults who answer the phone do indeed have a son named Jason.

You are applying a “plausibility test” to your daughter’s statement so instinctively that you don’t even think, let alone, say: ‘‘Honey, I think we need to test the plausibility of this story.’’ That’s everyday life. Plausibility-testing would be defined as:

Using screamingly obvious parental techniques to check whether your kids are trying to get away with something.

The general definition of plausibility-testing in wellness

Not so in wellness, where employers never test plausibility.  (It’s amazing employer families don’t have a higher teen pregnancy rate.)  In wellness, plausibility-testing is defined as:

Using screamingly obvious fifth-grade arithmetic to check whether the vendor is trying to get away with something.

You might say: “Hey, I majored in biostatistics and I don’t remember learning about plausibility-testing or seeing that definition.” Well, that’s because until population health came along, plausibility testing didn’t exist because there was no need for it in real grownup-type biostatistics.  In real biostatistics studies, critics could “challenge the data.” They could show how the experiment was designed badly, was contaminated, had confounders, had investigator bias, etc. and therefore the conclusion should be thrown out.

The best example might be The Big Fat Surprise, by Nina Teicholz, in which she systematically eviscerates virtually every major study implicating saturated fat as a major cause of heart attacks, and raises the spectre of sugar as the main culprit. This was two years before it was discovered that the Harvard School of Public Health had indeed been paid off by the sugar lobby to do exactly what she had inferred they were doing.

What makes wellness uniquely suited to plausibility-testing is because, unlike Nina, you aren’t objecting to the data or methods, as in the case of every other debate about research findings. Rather, in wellness plausibility-testing, you typically accept the raw data or methods — but then observe they prove exactly the opposite of what the wellness promoter intended.  You do this even though the raw data and methods are usually suspect as well. For instance, dropouts are not only uncounted, and unaccounted for, in almost all wellness data. Indeed with the exception of Iver Juster poking the HERO bear in its own den, their existence is generally not even acknowledged. As an Argentinian would say, they’ve been disappeared.

Flunking plausibility is part of wellness industry DNA, the hilarity of which has been covered at length on this site, as recently as last week with (you guessed it) Ron Goetzel. I did have to give him some credit this time, though: usually a plausibility test requires 5 minutes to demonstrate he proved the opposite of what he intended to prove. This time it took 10.

And of course the best example was Wellsteps, where all you had to do was add up their own numbers to figure out they harmed Boise’s employees. You didn’t have to “challenge the data,” by saying they omitted non-participants and dropouts, that many people would likely have cheated on the weigh-ins etc. All those would be true, but they wouldn’t face-invalidate the conclusion the way that plausibility test did.

The specific definition of plausibility-testing using wellness-sensitive medical admissions

All of what you are about to read below, plus the story about Jennifer (which ends happily — it turned out Jason was home, they did do homework…and later on they got married and had kids of their own, whose plausibility they routinely check), is covered in Chapter 2 in Why Nobody Believes the Numbers. This adds the part about the ICD10s.

There is also a very specific plausibility test, in which you contrast reductions in wellness-sensitive medical event diagnosis codes with vendor savings claims, to see if they bear any relationship to each other.  The idea, as foreign as it may seem to wellness vendors, is that if you are running a program designed to reduce wellness-sensitive hospitalizations and ER visits, you should actually reduce wellness-sensitive hospitalizations and ER visits. Hence that is what you measure. Oh, I know it sounds crazy but it just might work.

And it’s not just us. The Validation Institute requires this specific analysis for member-facing organizations. They were adopted for a major Health Affairs case study on wellness (that didn’t get any attention because it showed wellness loses money even when a population is head-scratching unhealthy to begin with). And even the Health Enhancement Research Organization supported this methodology, before they realized the measuring validly was only a good strategy if you wanted to show losses.

Quizzify plausibility-tests its results in this manner and guarantees improvements, but because Quizzify reduces many more codes than just wellness-sensitive ones, the list of diagnosis codes below would be much-expanded. But the concept is the same.

The remainder of this post and (barring a “news” event in the interim) the next posting will show how to do a plausibility test. Today we’ll start with which codes to look at. Part 2 will be how to avoid common mistakes. Then we’ll cover how to compare your results to benchmarks.  Finally, we’ll show how to estimate the “savings” and ROI.

Codes to be used in a plausibility test

Start by identifying codes that are somewhat closely associated with lifestyle-related conditions and/or can be addressed through disease management.  These are the ones where, in theory at least, savings can be found.  Here are some sample ICD9s and ICD10s. In order to save space since this source data doesn’t reproduce well in WordPress, I can’t put the codes next to the conditions. Instead, I’ll stack ’em in the following order:

  1. asthma
  2. CAD
  3. CHF and other lifestyle cardio-related events
  4. COPD
  5. diabetes

ICD9s are stacked in the same order:

493.xx (excluding 493.2x*)
491.xx, 492.xx, 493.2x, 494.xx, 496.xx, 506.4x
410, 411, 413, 414 (all .xx)
249, 250, 251.1x, 252.2x, 357.2x, 362, 366.41, 681.1x, 682.6, 682.7, 785.4x , 707,  731.8x
398.90. 398.91, 398.99, 402.01, 402.11, 402.91,  404.01,  404.03, 404.11, 404.13, 404.91, 404.93, 422.0, 422.9x, 425.xx, 428.xx, 429.xx

ICD10s, ditto in order, are:

J40, J41, J42, J43, J44, J47, J68.4
i20, i21, i22, i23, i24, i25.1, i25.5, i25.6, i25.7
E08, E10, E11.0-E11.9, e16.1, e16.2, e08.42, e09.42, e10.42, e11.42, e13.42, e08.36, e09.36, e10.36, e11.311, e11.319, e11.329, e11.339, e11.349, e11.359, e11.36, e13.36, L03.119, L03.129, i96, E09.621, E09.622, E11.621, E11.622, E13.621, E13.622, L97
i50, i10, i11, i12, i13

The ICD9s and ICD10s are not a perfect match for each other. If ICD10s matched ICD9s, there would be no need for ICD10s. If you try to construct an events trendline crossing October 1 2015, when the ICD10s were adopted, you might find a bump. More on that another time.

Coming up next: So now that you have these ICD9s, what do you do with them?

The following is an unpaid apolitical announcement

We live in an era which can’t exactly be characterized as bipartisan, but every review shows — and as you can confirm by playing the game yourself — all members of every party agree on one thing: Quizzify.

Why? Because employee health literacy is a huge issue. You can’t achieve a culture of health without achieving a culture of health literacy.  And quite literally the only company that addresses it — in an engaging Jeopardy-meets-health education-meets-Comedy Central format, no less — is Quizzify. Literally, the only company of any note. Try googling on “employee health literacy” if you want to see for yourself.

Put another way, why wouldn’t you want to improve health literacy? Is there an argument for keeping employees in the dark, when for about $1 PEPM you could enlighten them? Wiser employees make healthier decisions…and it’s your money they’re making those decisions with.

Or, viewed yet another way, a three-part question:

  1. What is the only expense your employees are allowed to spend unlimited amounts of your money on?
  2. What is the only expense employees can spend your money on without training in how to spend it?
  3. How do your answers to those two questions make any sense in combination, or even individually?

The specific occasion for this posting is a terrific article in Workforce about Quizzify, featuring one of Quizzify’s many valued customers (and such a power-user that Quizzify routinely incorporates her edits into the main question database), Debbie Youngblood of the Hilliard City Board of Education.  While we encourage reading the article in its entirety, here are a couple of tidbits, starting with a quote from Debbie:

“I’ve always felt that there was a need to have more [information] available to people as they go through their stages of life,” she said. “It always surprises me that we expect people to know how to achieve overall well-being. We’ve given them very little opportunity to know, understand and practice the things that might be beneficial…”

She also believes it’s valuable to educate adults on health-related topics because it drives conversation. She sees employees discussing topics and questioning the information gained through their health literacy program.

To summarize…

Employees are talking about Quizzify.  About what they learned, what surprised them, and what they would do differently now. By contrast, employee comments about conventional wellness can’t be repeated in a family publication like TSW. Here are some of the more printable ones.  Oh, yeah, and don’t forget these.  (To be fair, occasionally an employee does benefit.)

Another tidbit in the article describes (in as many words) how Quizzify and Hilliard have morphed “cheating” into “learning.” Employees are encouraged to look up the answers in order to improve their scores. That’s how they learn — which of course is exactly what Ms. Youngblood and Quizzify want them to do. So employees brag about what they’ve learned, whereas in other wellness programs they brag about how they cheat.

Consequently, companies that think they’re creating a culture of health are instead creating a culture of deceit. Call us wacky idealists, but for $1 PEPY (in lieu of the likely much higher fee you are paying now), you could replace that culture of deceit with a culture of health literacy. Why wouldn’t you?

TSW principals, while not salaried by Quizzify, have an ownership interest in it. However, this site is not affiliated with Quizzify and opinions expressed in this blog are our own. Except this one, which seems to be shared by everyone.

Wellness program quote of the day

An uberfit Ultimate Frisbee teammate of mine reported that his company’s wellness vendor asked if his doctor had measured his waist size.

“No,” my friend replied. “He’s not a tailor.”

Is there ever a good reason to flout US Preventive Services Task Force guidelines?

This is the second part in the series on wellness vendors and the US Preventive Services Task Force (USPSTF).

Q: Why do vendors ignore or flout the USPSTF?

There are five reasons, three of which are unfortunate:

  1. Many vendors don’t understand the entire concept of screening, neither the science nor the arithmetic described in Part 1.   Healthcare is hard, and the USPSTF can’t be expected to dumb themselves down so that wellness vendors, for whom simple math is a challenge and who don’t have to meet any educational or licensing requirements other than eight days of training, can understand it.
  2. Obviously, the more vendors screen, the more money they make. Guidelines propose infrequent screening for fewer blood values than most vendors do. That means vendors who abide by guidelines can collect much less money from employers than those who charge what the market will bear. Examples of companies screening the stuffing out of employees include Total Wellness, Interactive Health, Star Wellness, Healthfair, and Healthfairs USA. Needless to say they make a lot of money. (Quizzify is very jealous! Doing the right thing and guaranteeing savings isn’t remotely as profitable as ripping off employers.)
  3. Many wellness vendors are dishonest. We’ve already pointed out that Wellsteps bragged about how they screen every Boise employee every year for everything, with no mention of USPSTF guidelines. But after they got caught, they admitted they knew that the guidelines say the opposite. And Optum’s Seth Serxner insisted — out loud, on tape, that they would be happy to screen according to guidelines, if only employers would let them.  And yet, here is Optum’s ad, saying exactly the opposite: if you want us not to raise your rates as much on insurance, it’s a “requirement” to pay us even more than you would save on insurance, to do annual screens.  (Naturally they are quoting two sources that they know to be false as well.)


Q; Those are three bad reasons. What are the two good reasons?

I would like to credit Pete Arens for bigly influencing my answer on this.  It’s rare that someone does that, and even rarer that I admit it. However, in this case, huge credit where credit is due. Pete’s the man.

USPSTF publishes guidelines, not requirements.  It is perfectly OK not to follow them — as long as you have a good reason. The reasons above — ignorance, dishonesty and greed — would clearly not qualify.  However, here are some excellent examples of reasons that would:

  1. You work in a high-stress environment, like a law firm. Making blood pressure screening available easily and much more frequently than once a year, even having some discreetly placed cuffs, might be a good idea. (Some maintain that stress doesn’t cause high blood pressure. Perhaps not, but to them I say, watch Episode 5 of The People vs. OJ Simpson.)
  2. Your workforce is largely outdoors. Skin cancer and Lyme Disease screens might be indicated.
  3. You have alternatives to screening (like Quizzify) for younger employees, but encourage and educate older employees and other employees at high risk to get screened. The USPSTF doesn’t say, “no screens.” It says screens should be age- and risk-appropriate. You offer both to everyone (that’s the law) but steer some employees one way and some the other.
  4. Your company is in the chemical dye or railroad industries. A bladder cancer screen or at least educational session to raise awareness might be advisable. (Bladder cancer can be identified and easily treated very early.)

Mr. Arens raised the question specifically of obesity screens. Are they appropriate at all, especially in a workplace? And that brings us to the other good reason to flout the guidelines: you think they’re wrong.  In that situation, make your case.  But it has to be a real case, and obesity screening could very well be such a case:

  • The Employee Health and Wellness Code of Conduct specifically says, don’t embarrass or single out employees. This would be a perfect example doing exactly that;
  • You are unable to find any meaningful literature or technique that is even remotely shown to successfully address obesity for more than a short, clinically meaningless period of time, so why screen for something you can’t address?
  • To the extent you, in a corporate setting, do want to make your workplace healthier, you don’t need screens to do that. Encouraging exercise and avoidance of sugary foods at work would have the same impact.

Read carefully: we aren’t saying specifically you have to pass on obesity screens for those reasons. We are saying that if you differ with USPSTF on any screen, disclose the reasons and/or cite the literature, so it looks like a thoughtful decision.  This is an example in which we would differ with guidelines.

Q: What would be a funny example of a vendor who tries to attack the USPSTF but falls on its sword?

Glad you asked. That would be Healthmine, whose credibility, um, collapsed as a result.  Rule of thumb: to attack USPSTF credibly, a good start would be spelling their name right.  We’re just sayin’…

Q: What would be a funny example of a vendor who flouts the USPSTF recommendations?

You’re asking all the right questions.  That would be Angioscreen. The only screen they offer, for carotid artery disease, is D-rated by USPSTF.

Carotid stenosis D

Q: I don’t see what’s so funny about that. Stupid, yes. Harmful, yes. Expensive, yes. But what makes them so funny?

They admit right on their website that employees shouldn’t get these screens.

angioscreen screenshot

Honestly, I’m not sure which of those two things is dumber — offering the screen or admitting working-age people shouldn’t get it. But at least no one can accuse them of lying.

Q: They also can’t spell “New England Journal of Medicine.”

Good point. I didn’t even notice that until you brought it up. Maybe their head of their advisory board can help them with spelling, since “quality control is extremely important” to them.

angioscreen quality control

Q: What does the USPSTF think of the wellness industry?

Their guidelines are intended for use by real doctors and medical practitioners. My guess is that they are horrified by the idea of an entire industry, unsupervised and uneducated, “playing doctor” with employees.  Meanwhile, the National Business Group on Health, a vendor-fest if ever there was one, lobbies against the USPSTF for not understanding the importance of screening the stuffing out of employees.

Q: Why do employers go along with overscreening?

That’s a great question. They need only look at their own hospitalization rates to see that hospitalizations from diseases they are trying to prevent by screening, like diabetes and heart attacks, are already ridiculously low. However, rather than look at their own data, they prefer to spout the “86% of illness is caused by chronic disease”  meme, which was already discredited when it was 75%, before the CDC decided to jump it up to 86%.

Anybody who reads that article can see that either is an impossibly stupid statistic.  Most hospitalizations at most employers have something to do with birth events, and most expense at most employers can be traced to one-time items not addressable through eating more broccoli (neonates, transplants, cancer) or employees who either have a rare disease or more likely have a dependent with a rare disease.

Q: Maybe This isn’t fair, and vendors screen more than guidelines because they don’t think cost should be an issue and that employees should get all the prevention they can possibly use regardless of price

Actually, the USPSTF specifically does not include cost in its analysis.  It balances harms and benefits, not costs and benefits.  Screening according to guidelines will therefore lose money, as Ron Goetzel just admitted, even if over the long run more employees may benefit from screens than are harmed.

Quite the opposite. Tons of vendors obsess with hyperprevention because they are totally ignorant of the science and math involved. Our favorite is one called: “HEALTHIER is WEALTHIER and ASSOCIATES.” Along with the usually assortment of wellness industry THC-infused folderol (“our program, if followed diligently for a year, will decrease your employee health cost by as much as $24 for every pound of weight loss, an amount quoted by Dr Michael Roisen [sic] MD, Chief Wellness Officer and Chairman, Cleveland Clinic Wellness Institute”), they want to screen employees every three months. Don’t believe us?


Stay tuned for Part 3: Vendors who understand the USPSTF

Ron Goetzel proves, definitively, that screening loses money–and lots of it.

There is a saying: “In wellness, you don’t have to challenge the data to invalidate it.  You merely have to read the data.  It will invalidate itself.” Indeed, if there is one thing you can take to the bank in this field, it’s that articles intending to prove that wellness works inevitably prove the opposite. Another saying is that the biggest enemies of Ron Goetzel and his friends are facts, data, arithmetic, and their own words.

And Mr. Goetzel, writing in this month’s Health Affairs,  [behind a paywall] is Exhibit A in support of the paragraph above.  The “overscreening today, overscreening tomorrow, overscreening forever” gravy train of the wellness industry is officially dead. He killed it, not me.  In one article he managed to do what I’ve been trying to do for five years. (It can now be replaced with a health literacy tool such as, to use one random example, Quizzify. No one will ever invalidate health literacy. And we still support screening according to US Preventive Services Task Force guidelines, even though it won’t save money.)

No, not because of his conclusion that companies with lower risk factors spend more than companies with higher risk factors. That by itself would be worthy of a headline, of course, since it’s quite at variance with the massive savings shown in the Koop Awards he gives to his friends.  But there is much, much bigger news, though in this case he “buried the lead,” in a sleight-of-hand that he knew Health Affairs‘ peer reviewers wouldn’t notice.

The Death of the Wellness Industry is Not Exaggerated At All

Here’s what he did — very clever, but not clever enough not to get caught. He and his co-authors pegged average spending on cardiac at a perfectly plausible $329 per employee per year. However, they decided not to split that average of $329 out into “bad” spending (specifically, spending on events, like heart attacks), vs. “good” spending (prevention expense — things being done to avoid heart attacks).


How big a rookie mistake is combining these two opposites, prevention expense with event expense and calling it “average payment for all CVD claims”?  It would be like saying the average human is a hermaphrodite.

If they had split that average out into its two opposite components, they would have been forced to reveal that spending on actual avoidable events is less than spending on wellness programs to avoid those events.  That, of course, is exactly right, and was what we showed about 14 months ago.

Let’s do the math

How much do employers spend on heart attacks? Well, here is the number of heart attacks. I’m spelling it out so that people can replicate this using the HCUP database for 2014, for all the heart attack DRGs:

  1. DRG 280 — 12,825
  2. DRG 281 — 15,404
  3. DRG 282 — 18,365
  4. DRG 283 — 1,800
  5. DRG 284 — 275
  6. DRG 285 — 160

This totals to 48,829.  There are about 100,000,000 adults 18-64 insured through their employers, meaning that about 1 in 2000 will have a heart attack in any given year.  I had thought it was 1 in 1000, and my own data — from roughly 30 commercial health plans and large employers for which I measure event rates — backs that up, so let’s totally give Ron the benefit of the doubt (the wellness industry’s business model is based on being given the benefit of the doubt) and double the HCUP figure, to 1 in 1000.

Now assume $50,000 per heart attack all-in. That is high, but once again, benefit of the doubt. So of the $329 PEPY that Ron calculated for prevention and events combined, only $50 is events.  The rest is prevention and management expense, like putting people on statins, diuretics etc., doctor visits, lab tests etc.  Not avoidable, and not even reducible through wellness. Just the opposite– these wellness people are always wanting to close “gaps in care” by doing more of this stuff.

How this invalidates screening

According to Mr. Goetzel’s own data, a wellness program — health risk assessments, screening, portals etc. — costs about $150 per employee per year.  An industry that spends $150 PEPY to get what Ron estimates to be a 1% to 2% reduction in a $50 PEPY expense can’t survive on merit, which explains all the lying about savings, not to mention lying about me.

Anyone care to claim the $2-million reward I’m offering for showing wellness saves money?  I didn’t think so…


Breaking News: Is Ron Goetzel about to admit wellness loses money?

This article is now mooted — the Health Affairs piece did come out…and it’s much much worse (meaning, better) than I thought. Skip to it now.

Rumor has it that within the next couple of days Health Affairs is going to release a paper in which Ron Goetzel admits that — even with his finger on the scale as it always is (along with the other nine and all his toes) — wellness loses money.  This is total vindication for the years in which he has preferred to simply fabricate large savings, based on trivial risk impact, and then accuse me of “outrageous inaccuracies” and other such fanciful tales for observing — accurately, as it turns out — that all his savings are made up.

Yes, I know I’ve said he has admitted wellness loses money several times before, like in his HERO Guidebook, or in STATNews, or in the Chicago Tribune.  But those were all gaffes. (A gaffe is defined as “accidentally telling the truth.”)  The difference is, this time it’s deliberate.

And, no, he hasn’t sworn off lying.  Lying is a thing these days.  He was way ahead of the curve on that. Mind you, I have not seen the article, and I wasn’t allowed to peer review it. (Health Affairs allows authors to rule out certain peer reviewers, so he ruled me out — despite admitting not too long ago that I am the best peer reviewer in the field.)  However, I anticipated that, given his level of integrity, he would use the completely invalid participants-vs-non-participants methodology, and so I invalidated it for him ahead of time, not that he didn’t already know.

Despite admitting losses, he still holds to the fiction that somehow risk factors decline, a claim which I intend to examine once I see the article.  I suspect he didn’t plausibility-test the outcomes (even though his HERO guidebook says to do that) and/or he didn’t count dropouts and non-participants.  But we’ll know soon enough.

However, by admitting wellness loses money even if risk factors improve, he just invalidated every single Koop Award he has ever bestowed on any of his buddies.  The reason is that in those award-winning situations, risk factors either only improve a trifle (Staywell, 2014 and Nebraska, 2012), don’t decline at all (McKesson, 2015), or increase (Wellsteps and Boise, 2016).  None of these non-improvements acknowledges dropouts, of course.

Stay tuned…

PS  Remember my $2-million reward for showing wellness saves money?  Let’s make it $3-million.





News flash: wellness needs an ROI, and here’s why

A rising chorus of people (the usual suspects — Goetzel, O’Donnell etc.) say you don’t need an ROI from wellness, but here is an essay in Employee Benefit News pointing out why you do, citing three distinct reasons, each sufficient on its own.

By contrast to these three strong arguments in favor of demanding an ROI, the best argument against demanding an ROI from wellness is that you can’t get one, which explains the opposition from those usual suspects.  They were all about ROIs before it was proven that you can’t get one, but that was then and this is now.

Here is one thing that doesn’t need an ROI: screening according to US Preventive Services Task Force guidelines. Ironically, that’s also the one thing that those very same usual suspects are opposed to.  For them, it’s overscreening today, overscreening tomorrow, overscreening forever.



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