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Dear Wellness, Diabetes, Clinic, Price Transparency, and Medication Therapy Management Vendors,
While most of you already know the majority of these tricks, there might be a few you haven’t deployed yet. So take good notes.
PS If you are an employer, just pass this along to your vendors…and watch your savings skyrocket. Or use “An Employer’s Guide to NOT being snookered” to see your savings become realistic.
Best practices for every vendor
Compare participants to non-participants. Using non-participants as a control for participants allows you to show massive savings without doing anything. This is not an overstatement. Here is a program — which naturally won an award for its brilliance from Ron Goetzel and his friends before I observed that they were a fraud according to their own data– that did just that. They separated participants from non-participants but didn’t bother to implement a program for two years—by which point the participants had already improved by 20% vs. the non-participants — without even having a program to participate in. (Note on this slide that the control and study group were set up in 2004 but the program didn’t start until 2006, when the cost separation had already reached the aforementioned 20%.)
Two other observational trials support this conclusion. Most recently, the National Bureau of Economic Research ran a controlled trial to test exactly this hypothesis. Sure enough, like the three observational trials, they found that virtually the entire outcome in wellness can be explained by that popular study design itself, rather than the intervention.
In any participation-based program, ignore dropouts. Assume that employees who drop out do so randomly, not because they are discouraged by their lack of progress or interest.
Draw a line upwards and then claim credit for the “savings” between the actual upward spending and the “trend” you drew. As Optum’s Seth Serxner stated so succinctly: “We can conclude that the choice of trend has a large impact on estimates of financial savings.”
Start with the ridiculously high utilizers, high-risk people, or people taking lots of drugs. Let the group regress to the mean, and then claim that as savings.
Never admit, like Wellsteps did, that you are familiar with regression to the mean, since most employers are not aware of it. The higher the costs/risks of the original users, the more savings you can claim. Here are two verbatim claims:
- A heavy equipment manufacturer found high use of the ER was a becoming a cost concern, so it send mailings that showed appropriate care settings to the homes of members with two or more visits to the ER in the past year. As a result, ER visits were down 59 percent those who got the mailing.
- A pharmaceutical company saw a spike in ER claims was coming from repeated use by the same people, so two mailers were sent: one to households with one ER visit in the past year; another for those with two or more visits. Following the mailings, there was a 63 percent drop in ER visits.
Pretend not to notice that low utilizers can show an increase in utilization — or especially that low-risk people can increase in risk. Focus the mark (I mean, the customer) on the high-risk people who decline in risk. Never draw graphs to scale, or your customer might notice that 2/3 of their employees are low-risk in the first place.
It doesn’t matter what your intervention is. Claim credit for the entire difference in trend. For instance, in this example, Community Care of North Carolina claimed credit for a huge reduction in PMPM costs for babies for their medical home program…but babies weren’t even included in the program. (Neonatal expenses didn’t decline either.)
Or do what Safeway did, launching the wellness craze: change to a high-deductible plan, and transfer a large chunk of costs to employees. Don’t even bother to institute a wellness program, but attribute all the savings (from the transferred deductible spending) to wellness anyway, so that you get invited to the White House. And after that blows up on you, demonstrate that your very stable genius investment in wellness was not a fluke by investing your company’s money in Theranos.
Special Instructions for transparency tool vendors
Assume that every employee who uses your tool is looking to save their bosses some money, rather than (for instance) to find the closest MRI…and that none of them would have used a lower-cost venue absent your tool.
If only 10% of employees use your transparency tool, and only 10% of events are shoppable, nonetheless take credit for the entire difference in trend across the board, and ignore the literature showing online price-comparison tools don’t work.
If people who haven’t met their deductible shop more than people who have, attribute the former’s lower cost to use of the tool, rather than to the fact that by definition people who don’t meet their deductible spend less than people who blow through it.
Special instructions for wellness and diabetes vendors
If you are a wellness or diabetes prevention/management vendor, never ever let employers know that every year since statistics have been kept, fewer than 1 in 1000 employees/dependents end up in the hospital with diabetes. (And another 1 in 1000 with a heart attack.) Always tell them how many employees are at risk and how many “newly discovered conditions” they have, and how they will all end up in the hospital, even though hospitalizations for heart attacks and diabetes in the employer-insured population have been declining for years.
Wellness vendors should always put the trivial percentage reduction in risk (for participants only, of course – and ignoring dropouts) on one page and the massive savings on another page. Most employers won’t bother to do the math to notice, for example, that Interactive Health claimed $50,000 in savings for every employee who reduced one risk factor, while the state of Nebraska won an award for claiming to save $20,000+ for every risk factor reduced, as did Staywell for British Petroleum.
If you didn’t reduce risk factors, present your outcomes in a format no one can make heads or tails of, like this one, from Wellsteps. If Wellsteps was able to snooker an entire committee of self-anointed outcomes experts to win an award for program excellence, surely you can snooker a few customers.
Claiming people lose weight is a big part of your outcome reporting, so make sure to do the following:
- Never count nonparticipants, and ignore dropouts.
- Don’t do any long-term follow-up to see who regained the weight (most participants)
- Give them time to binge before the initial weigh-in
Special instructions for diabetes vendors
In addition to measuring on active participants only, raise the bar for Hb A1c so that only people with high Hb A1c’s can be included. That belt-and-suspenders approach will ensure that you can’t fail to show savings, even if (as is likely the case) you don’t change anyone’s behavior other than the employees who were going to change anyway, which you might as well count.
Next — most diabetes vendors and a few wellness vendors have already figured this out — you can charge much more if you can submit claims, rather than just be an admin expense line item. You see, most employers focus much more on the 10% admin expense than they do the 90% medical expense, which they consider to be beyond their control. Your claims expense – which would draw attention to itself as an admin cost — won’t get noticed in the 90% of medical losses, sort of like the dirt from the tunnel sprinkled around the Stalag in The Great Escape.
Special instructions for medication therapy management vendors
Only mention “gaps in care” that you close, not the ones that open up. And, as noted in the chart below, always use percentages. So in this chart (provided by one of the major PBMs), they claimed that twice as many gaps were closed (37%) vs opened (18%), and yet, as is almost always the case with MTM vendors, nothing happened to the total number of gaps, which remained at exactly 820:
Tally all the employees who were on large numbers of meds and now take fewer. But don’t mention all the employers who were on fewer meds and now take more.
What to do if you’re asked why you aren’t validated by the Validation Institute
Here are the most popular answers to that question:
- No one has asked us to. (Quizzify didn’t need to be asked.)
- We hired our own outside actuarial firm to validate us, and they concluded we save a lot of money.
- Sure, we’ll get validated as soon as you sign the contract with us.
Arkansas recently contracted with an out-of-state vendor called Catapult Health to come in to the state’s schools and “play doctor” with the teachers, asking them personal questions, taking their blood and then telling them everything that’s wrong with them. This is a classic example of a “pry, poke and prod” program.
This is followed by admonishments to take more steps and eat more broccoli. They then refer teachers into lifestyle and disease management programs “at record rates.”
Sounds terrible, but the good news is that this program isn’t going to cost taxpayers anything because, as Catapult Health’s website says:
Phew! At least it’s free to taxpayers because Catapult’s expenses and profits are “already in your budget” and “fees are processed through your health plan.”
Except that the state of Arkansas is its own health plan. There is no “Don’t worry. Insurance will pay for it” here. The state is self-insured, meaning they pick up the tab, not some nameless insurance company.
But, hey, at least this program will save money, right?
The return-on-investment for the state is allegedly 3.27-to-1, as shown by the so-called “Harvard Study,” conducted by Katherine Baicker.
Except that the Harvard study has been proven wrong, not just by the nonprofit, nonpartisan highly respected RAND Corporation (and I myself chimed in as well), but by an ace researcher named Damon Jones, part of the prestigious National Bureau for Economic Research. His work showed that wellness accomplishes virtually nothing other than the expenditure of money. (Don’t worry—insurance will pay for it.)
But, hey, maybe Prof. Jones is wrong. After all, why should he care what Prof. Baicker thinks, right?
Um, because he reports to her? Yep, he’s an associate professor at the exact same school of public health where she is now dean. Just guessing here, but it would seem a subordinate would have to be pretty darn sure of his findings (and they are rock solid, and completely in agreement with all the other recent research, summarized here) to publicly humiliate his own dean.
Even Prof. Baicker doesn’t defend her findings any more. She says: “It’s too early to tell.” That means she is running away from her very widely cited signature study, upon which essentially the entire wellness industry’s economic justification is based. This would be like Arthur Laffer, whose Laffer Curve created supply-side economics, which has been used to justify two tax cuts, saying “well, maybe it’s not right. I dunno. Let’s wait and see.”
But, hey, at least forced wellness improves employee health, right?
Apparently not. Forcing people to get annual wellness checkups doesn’t benefit them, according to the New York Times, the New England Journal of Medicine, the Journal of the American Medical Association, and Consumer Reports. (Before dismissing the credibility of those sources due to possible political bias, keep in mind that Newsmax, The Federalist, and Laura Ingraham hate “pry, poke and prod” programs too.)
Further, sending “record rates” of employees into lifestyle and disease management is classic hyperdiagnosis – braggadocio-fueled misunderstandings of the arithmetic of lab results, resulting in large numbers of people getting told they need coaching and care they don’t want or, in general, need. Nothing makes a wellness vendor happier than to hyperdiagnose as many employees as possible.
But, hey, maybe teachers are a special case. Maybe the impact of “pry, poke and prod” programs is different for them?
It sure is. The single school district for which the data has been compiled is Boise, Idaho. According to the wellness vendor’s own data, the health of the teachers got somewhat worse as a result of this pry, poke and prod program. (The vendor, an outfit called Wellsteps, also admitted that they flouted clinical guidelines and fabricated their only positive outcome. They also previously admitted that costs went way up as a result of their program. They later suppressed that admission. Wellness vendors are not known for their integrity.)
So the health of teachers may deteriorate, creating more medical expense. but don’t worry. Insurance will pay for it.
But, hey, at least the teachers like it, right?
According to Catapult, employees love them. Ask the employees and you might get a different impression. indeed, I was tipped off to this program by an Arkansas teacher who hates it, like most of her colleagues do — and that’s before they learn that they are actually paying for it…keep reading.
Obviously if teachers wanted to submit to a “pry, poke and prod” program, the state wouldn’t have to threaten them with massive fines – almost $1000/year, which appears to be close to a record for any pry, poke and prod program anywhere — for refusing to let a private, out-of-state corporation play doctor on them at state expense.
But, hey, at least the state taxpayers save money by fining the teachers who don’t want to play doctor, right?
Actually, wellness makes claims costs go up, probably by more than the fines. There are lots of unneeded lab tests and other tests. For instance, the state of Connecticut admitted that in addition to throwing away all its money on the actual wellness program, they spent more on health care. The state comptroller who administered the program said the increased spending was “a good thing.” I guess he wasn’t worried because insurance was paying for it.
But, hey, at least the teachers don’t pay for it.
Actually they do. The state’s human resources department brilliantly figured out that they could launder their wellness spending by hiring this outfit. By paying extra to Catapult (a multiple of what an effective wellness program would cost), the state is able to pick up the tab for wellness using the extra paperwork of a medical claim, as opposed to an outsized administrative expense in a separate line item. The latter would clearly need to be picked up by the taxpayers…and the state would have an incentive to control this highly visible figure.
By contrast, paying for “pry, poke and prod” as a medical claim will never be noticed, like Steve McQueen and David McCallum sprinkling the dirt from the tunnel around the stalag. On the other hand, it will increase overall medical spending by 2-3% (the cost of the screening plus the added hyperdiagnosis expenses).
Here comes the evil genius part: at the next contract negotiation, the state can limit wage increases (or reduce benefits) by pointing out how high the health spending is.
So the teachers get pried, poked and prodded, hyperdiagnosed with hidden illnesses most of them don’t have – all against their will…and then they have to pay for the privilege in reduced wages.
Wow…the teachers are getting screwed. But, hey, at least they can’t sue the state, right, so taxpayers won’t have to pick up that bill as well?
Starting in January, this program will be in blatant violation of two laws, the Americans with Disabilities Act and the Genetic Information Non-Discrimination Act. Those laws disallow forced wellness checkups, but allow so-called “voluntary” ones.
Until recently, “voluntary” meant “do wellness or pay a big fine” like this one. But thanks to a lawsuit by AARP, the rules are changing in January so that “voluntary” must mean voluntary, like a dictionary would define the word. (This summary has the links to all you need to know about the case.) To get these fines back, teachers will be able to sue the state, possibly even as a class action, and possibly being awarded punitive damages. Exposure to lawsuits could cost the state millions more in addition to its current expenditure on Catapult Health.
And that doesn’t even cover the costs of a possible teacher walkout, like the one in West Virginia that was spurred in part by – you guessed it – their wellness program.
But, don’t worry. Insurance will pay for it.