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Employers are very fortunate that so many wellness vendors cover so many market niches, to satisfy an employer’s every need. Want to harm your employees? Wellsteps has you covered. If insurance fraud is your thing, there’s Healthfairs USA. Suppose you really have it in for the US Preventive Services Task Force, maybe because you have a repressed childhood memory of being bitten by one of its members. As the leader in flouting USPSTF guidelines, Total Wellness can bite them back.
And, if you prefer a vendor that does nothing, Health Fitness Corporation (HFC) fits the bill:
- They won a Koop award in 2011 for saving massive amounts of money on a program (Eastman Chemical) that by their own admission didn’t exist.
- They won another Koop award for saving the lives of 514 Nebraska state employee cancer victims. Except that it turned out these employees didn’t have cancer.
Yes, when it comes to invalidating their results for doing nothing, HFC is truly a target-rich environment. HFC’s latest? They “saved” $586 per employee on a weight-loss program.
By now you’ve probably guessed that — by their own admission — in this successful weight loss program, these employees didn’t lose weight.
As befits a company that previously didn’t actually run a program but still saved money, and that didn’t actually treat cancer victims who didn’t have cancer but still claimed to save their lives — these employees actually gained 4 ounces. According to HFC, though, they would have gained 13 ounces had it not been for HFC’s Herculean efforts.
The amount employees did not gain? 9 ounces. Saving $586/employee for not gaining 9 ounces works out to $1041/pound of of savings for employee weight not gained. Extrapolating from that result, employees would have to not gain only about five or six pounds to completely wipe out healthcare spending.
This is where the magic happens…
To what does HFC attribute this incredible performance? I’ll let them put it in their own words. And these are definitely their own words. Trust me when I say no one is going to accuse them of plagiarizing these words:
More than half (58.5%) of participants that self-enrolled in the program never completed a coaching session, compared by 18.6% in the group enrolled by a health coach completing no coaching sessions.
English, of course, is one of the five things wellness vendors know the least about. (The other four are arithmetic, data, facts — and, of course, wellness.) So let me translate that into English for you: the majority of self-enrolled “participants” didn’t actually participate. To summarize, most self-enrolled employees didn’t actually participate in a program in which most participants didn’t actually lose weight.
Well, hey, at least they didn’t violate USPSTF guidelines, commit insurance fraud or harm these employees. That’s something, right? And therein lies HFC’s market niche, a positioning inspired by the immortal words of the great philosopher George Costanza: “Everyone else is doing something. We’ll do nothing.”
Wrapping up some old business…
A couple of Saturdays ago, I raised some money for folks with MS — like our colleague, Jon Robison — by climbing to the top of the Hancock Building, the tallest building in New England. This year I clocked in at 13:56, putting me in the top quartile and shaving almost 3 minutes off last year’s 17:15. You may have noticed that 13:56 is more than 3 minutes faster than 17:15, not “almost” 3 minutes faster. Before you attempt to claim your $1000 for spotting my first-ever material error, there was one fewer floor this year, which reduced average times by about 23 seconds.
Age-wise, I kicked some serious thigh.
13:56 earned me the runner-up spot in the 60-and-over cohort, among people from Massachusetts. (A small number of committed souls travel around the country doing these things. Two of them beat me as well.) Second is huge for me — the closest I’ve ever come to winning any contest that didn’t involve knowing massive amounts of useless trivia. Helps that stair-climbing doesn’t require coordination, speed or athletic ability of any kind. Just, as luck would have it, wellness.
Speaking of “closest,” congratulations to Bill McPeck, who came the closest to guessing my time, at 16:45.
And special thanks to Barry Zajac, Fred Seelig and Mitch Collins, who along with an anonymous donor, helped me approach my fundraising goal. (Anyone care to put me over the top?)
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.
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.
PS Remember my $2-million reward for showing wellness saves money? Let’s make it $3-million.
If instead of randomized control trials, the FDA simply allowed drug companies to compare the results of people who conscientiously used a drug to people who couldn’t be bothered, they could save a ton of money.
Not that I want to put ideas in their head.
But they don’t allow that, for the simple reason that active motivated people will always outperform inactive unmotivated people. Absent equal intent-to-treat — meaning comparing people actually taking the drug to people who think they are actually taking the drug — you can’t distinguish the effect of motivation from the effect of the drug.
As true as that is in drug research, it is even more true in activities, such as wellness, where motivation is paramount. And yet the standard study design –participants vs. non-participants — compares all the motivated people to all the unmotivated people.
Sure, the Wellness Ignorati will claim the groups are “matched,” and on paper maybe their demographics are the same…but you can’t “match” the state of mind between participants and non-participants, as the Ignorati well know.
This American Journal of Managed Care essay, a more formal albeit less colorful version of an earlier TSW smackdown, means that quite literally every study done using this participants-vs-non-participants design is either largely or entirely invalid.
In keeping with my New Years resolution to be more positive (and not like: “I’m positive that the board of HERO knows they are liars” — which, by the way, I am, and which they are, and which will be the subject of a future posting), I would like to recommend an outstanding posting by Romy Antoine on Linkedin. No, I didn’t know who he was either…but I do now, and you should too. He exemplifies the next generation of talent in this field.
He lists 10 reasons employees hate “pry, poke and prod” wellness programs. (Just in case you are keeping score at home, zero of those reasons would apply to Quizzify — and that’s not an accident.) I found myself nodding at every single one. You may be able to address some of these, but if there is one thing that Ron Goetzel and I agree on besides the sun rising in the east, it’s that wellness is, to use his words from our debate, very very hard to do right, which is why, to use his words again, thousands of programs fail while only 100 succeed.
Oh, and here is a reason employees might not hate your wellness program: according to Employee Benefit News: they don’t know it exists.
80% said their wellness program has had a positive effect on employee health and productivity and 70% said it has had a positive effect on health care costs. However, the data released by the Transamerica Center for Health Studies also showed a significant number of employees did not know their company had a wellness program.
Yes, I know it isn’t always about me (my first wife was quite clear on that point), and, yes, I know it isn’t always about Quizzify, but Quizzify can customize questions to educate your employees on your wellness offerings, so at least they’ll know your program exists. And hopefully they won’t hate it when they do.
They say being on the cover of Sports Illustrated jinxes you. I wouldn’t know. There is no chance of that for me, unless they run a feature story about 60-year-olds playing Ultimate Frisbee on Christmas night, when they should be playing canasta with their aunts.
That jinx may be an urban legend, but here’s a real jinx: winning a C. Everett Koop Award. The 2016 vendor got humiliated in STATNews, of course — we’ve already covered that. The 2012 awardee was embarrassed in the media as well. The vendor ended up losing their gig.
Neither of their customers (Boise or Nebraska) are public companies, though, and that’s what this article is about, because it’s the customer’s performance we are most interested in, not the vendor’s. The latter do quite well for themselves, snookering unsuspecting employers.
The most recent public company to win an award was the 2015 winner, McKesson. McKesson got clobbered in the stock market in 2016, the 14th worst performance among the S&P 500, as investors learned that only the dumbest bunch of managers would pay a cabal of vendors (that themselves are among the industry’s most clueless, like Vitality) to harass their employees. Employee Benefit News took notice of the McKesson wellness program, and pilloried them, thus triggering the sell-off.
You might say: “Wait a minute. Yes, that was a failed, hilariously mismeasured, program whose award was due to the cronyism of having 5 of their vendors and consultants connected with the Awards Committee, but how could something as trivial as a wellness program be responsible for their stock price collapse?”
The answer, of course, is that it doesn’t. Based on the amount of money these programs lose, McKesson’s wellness program was probably only responsible for 1% or so of the 27% stock price decline. And that’s precisely the point. Ron Goetzel claimed that winning a Koop Award caused a dramatic increase in stock prices. I noted that, like most of Ron’s defenses of wellness, that analysis didn’t hold water, and any observer with a calculator and access to stock price histories could see that wellness causes a dramatic decrease in stock prices.
While I won that face-off (a year later, you would have been way ahead of the game shorting Koop Award stocks and hedging with index and sector funds), neither conclusion is really valid. Both analyses have a ridiculously low signal-to-noise ratio. Many things happen in the market that overwhelm wellness. For instance, I don’t think any of the analyses of Citibank’s 2008 crash would blame their Koop Award-winning wellness program.
Instead, the negative impact on stock valuations can be shown to be pretty trivial. Let’s start out with some favorable assumptions. Assume the typical program is more successful both than the allegedly successful one most recently measured in Health Affairs and also than the award-winning so-called best-in-the-country Wellsteps program for Boise, in that it neither loses money nor harms employees. Instead, it is only worthless. So even though Ron Goetzel and Michael O’Donnell say most programs fail, let’s assume yours neither causes health spending to increase or employees to get worse.
If you pay vendors to “manage” 10,000 employees @$150, that’s $1.5 million lost. With a typical pretax P/E of 10, you reduce your market value by $15,000,000. A company with 10,000 employees might have (for example) a market value of $1.5-billion. That makes the negative impact of wellness on stock price only 1%, hardly enough to cost a CEO his job.
So the good news is that McKesson’s collapse is the exception. Screening the stuffing out of employees, lying about outcomes, winning a Koop Award, and hiring a cabal of clueless vendors will not cause your stock price to plunge. In a year in which the media gave the wellness industry little reason to cheer, costing your shareholders only 1% of their investment in your company is great news. Worthy of a celebration. Or at least a couple rounds of canasta.
This completes our year-end series on the Goofuses and Gallants of the wellness industry. See:
- Announcing the 2016 Deplorables Awards
- Wellness Industry Stars of 2016
- So Many Candidates for the Deplorables Award Countdown, So Few Numbers between 1 and 10
- Wellness Stars of 2016, Part 2.
Are you smarter than an award-winning wellness vendor? Take this quiz and find out.
Q: How is the first unlike the second?
The first, Wellsteps CEO Steve Aldana, claims that it’s bananas that provide magical powers. And unlike Popeye and spinach, he doesn’t think we need to consume massive quantities. “Even one more bite of a banana” is all it takes to reduce overall costs by fully a third, despite their admission that costs for individual employees increase by about the same amount over the same period.
Yes, you read that right, and, yes, is it mathematically impossible for a number to go up and down at the same time. I noted in Wellsteps Stumbles Onward that Wellsteps had accidentally told the truth on the second display showing increasing costs, thus totally contradicting the first. The second display subsequently disappeared.
Perhaps Wellsteps deliberately made up the first slide to fool people (in this case, the Boise School District). The more charitable explanation, which shows Wellsteps in a better light, is that they didn’t deliberately lie when they said costs increased and decreased at the same time. Instead, they were simply confused by their own stupidity.
Lying is a Business Strategy
Wellsteps’ Linkedin group is called Wellness is a Business Strategy. I was banned from posting on it, accompanied by the following invocation of the First Amendment:
“It has come to our attention that an outspoken critic has entered false data into these calculators in order to make a point. We certainly support free speech; however, we wonder how valid the point can be when it is based on false data?” [Where “false data” is defined as “any data”]
Sounds like they support free speech…except when they don’t. Speaking of supporting free speech, they claimed in bright red letters — for no apparent reason other than they were probably suffering withdrawal symptoms from having gone a whole week without lying — that they had convinced Linkedin to ban us from posting. And yet many of you clicked through from linkedin. So here we are, posting.
Stupid is a Business Strategy
Wellsteps’ ROI model doesn’t generate an ROI. It doesn’t even generate a savings projection. What does it “generate”? One number: $1359. Yes, it always gives the same answer ($1359 savings per employee) if you zero out “annual cost increases” in their model to control for inflation. So anyone can see this model simply makes no sense, notwithstanding Wellsteps’ insistence that it is “based on every ROI study ever published.”
How stupid is Wellsteps’ model? Even Ron Goetzel refused to defend it. And when Ron Goetzel won’t defend stupid data fabricated by his friends, you know it’s bad.
Harming Employees is a Business Strategy
To win the Deplorables Award, outlying and outstupiding other vendors is a dicey strategy due to all the competition trying to do the same thing. So Wellsteps decided to boldly go where no vendor has gone before: they acknowledged, even bragged about, harming employees. Sure, plenty of vendors harm employees–by enticing them into crash-dieting contests, flouting clinical guidelines or giving them worthless nutritional supplements and billing their insurers. But no one had ever documented the before-after harms of wellness as conscientiously as Wellsteps did, which I helpfully displayed in detail.
Insults are a Business Strategy
What the judges here at TSW especially liked about Wellsteps’ candidacy for the Deplorables Award was their track record of not just harms and deceit, but also insults. Very clever ones too.
For instance, Wellsteps’ rebutted my observation that all their data is fabricated by saying I’m full of “hot air.” Touche!
One would think that that this guy (Mr. Aldana’s crony) could have come up with a better counterargument, given that he claims to have spent “11 years in college.” If you’re keeping score at home, that’s four more years than Bluto Blutarski.
Here are a few more targets of their ripostes:
- Everyone who is overweight: “It’s fun to get fat. It’s fun to be lazy.” They skewered 2/3 of the population in 10 words. Bada-bing!
- Sharon Begley, arguably the best health/science journalist of our generation. Mr. Aldana called her a “lier.” Her crime? Quoting him verbatim.
- WELCOA‘s exemplary leader, Ryan Piccarello. For not wanting to harm employees, Ryan is apparently part of a “gang of bullies.”
Such brilliant repartee, in an earlier generation, would have landed them a seat at the Algonquin Roundtable.
Bananas are a Business Strategy
So, congratulations to Wellsteps for winning their first Deplorables Award. Darwin will take it from here, and maybe get them a new gig more appropriate to their capabilities.