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Alice laughed: “There’s no use trying,” she said. “One can’t believe impossible things.”
“I daresay you haven’t had much practice,” said the Queen. “When I was younger, I always did it for half an hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.”
Six impossible things before breakfast? The wellness industry would just be getting warmed up by believing six impossible things before breakfast. They believe enough impossible things all day long to support an entire restaurant chain:
Consider the article in the current issue of BenefitsPro — forwarded to me by many members of the Welligentsia — entitled: “Can the Wellness Industry Live Up to Its Promises?” BenefitsPro rounded up some of the leaders of the wellness industry alt-stupid segment. Specifically, they interviewed US Corporate Wellness, Fitbit, Staywell, and HERO. Each is a perennial candidate for the Deplorables Awards — except US Corporate Wellness, which already secured its place in the Deplorables Hall of Fame (and Why Nobody Believes the Numbers) several years ago with these three paeans to the gods of impossibility.
In case you can’t read the key statistic — the first bullet point — it says: “Wellness program participants are 230% less likely to utilize EIB (extended illness benefit) than non-participants.” Here is some news for the Einsteins at US Corporate Wellness: You can’t be 230% less likely to do anything than anybody. For instance, even you, despite your best efforts in these three examples, can’t be 230% less likely to have a triple-digit IQ than the rest of us. Here’s a rule of math for you: a number can only be reduced by 100%. Rules of math tend to be strictly enforced, even in wellness. So the good news is, even in the worst-case scenario, you’re only 100% less likely to have a triple-digit IQ than the rest of us.
And yet, if it were possible to be 230% dumber than the rest of us, you might be. For instance, US Corporate Wellness also brought us this estimate of the massive annual savings that can be obtained just by, Seinfeld-style, doing nothing:
So assume I spent about $3500/year in healthcare 12 years ago, which is probably accurate. My modifiable risk factors were zero then and they are still zero — no increase. So my healthcare spending should have fallen by $350/year for 12 years, or $4200 since then. But that would be impossible, since I could only reduce my spending by $3500. Do you see how that works now?
To his credit, US Corporate Wellness’s CEO, Brad Cooper, is quoted in this article as saying: “Unfortunately some in the industry have exaggerated the savings numbers.” You think?
I’m pretty sure this next one is impossible too. I say “pretty sure” because I’ve never been able to quite decipher it, English being right up there with math as two subjects which apparently frustrated many a wellness vendor’s fifth grade teacher:
400% of what? Is US Corporate Wellness saying that, as compared to employees with a chronic disease like hypertension, employees who take their blood pressure pills are 400% more productive? Meaning that if they controlled their blood pressure, waiters could serve 400% more tables, doctors could see 400% more patients, pilots could fly planes 400% faster? Teachers could teach 400% more kids? Customer service recordings could tell us our calls are 400% more important to them?
Or maybe wellness vendors could make 400% more impossible claims. That would explain this BenefitsPro article.
We have been completely unable to get Fitbit to speak, but BenefitsPro couldn’t get them to shut up. Here is Fitbit’s Amy McDonough: “Measurement of a wellness program is an important part of the planning process.” Indeed it is! It’s vitally important to plan on how to fabricate impossible outcomes to measure, when in reality your product may even lead to weight gain. Here is one thing we know is impossible: you can’t achieve a 58% reduction in healthcare expenses through behavior change — especially if (as in the 133 patients they tracked in one of their studies) behavior didn’t actually change.
You can read about that gem, and others, in our recent Fitbit series here:
- Springbuk wants employees to go to the bathroom
- Fitbit throws a bit of a fit, Part 1
- Fitbit throws a bit of a fit, Part 2
Health Enhancement Research Organization (HERO) and Staywell
I’ll consider these two outfits together because people seem to bounce back and forth between them. Jessica Grossmeier is one such person. Jessica became the Neil Armstrong of impossible wellness outcomes way back in 2013. Not just any old impossible wellness outcomes — those have been around for decades. She and Staywell pioneered the concept of claiming outcomes they already knew were impossible. While at Staywell, she and her co-conspirators told British Petroleum they had saved about $17,000 per risk factor reduced. So, yes, according to Staywell, anyone who temporarily lost a little weight saved BP $17,000 — enough to clean up about 1000 gallons of oil spilled from Deepwater Horizon.
See British Petroleum’s Wellness Program Is Spewing Invalidity for the details.
Leave aside both the obvious impossibility of this claim, and also the mathematical impossibility of this claim given that employers only actually spend about $6000/person on healthcare. Jessica’s breakthrough was to also ignore the fact that this $17,000/risk factor savings figure exceeds by 100 times what her very own article claims in savings. Not by 100 percent. By 100 times.
Fast-forward to her new role at HERO. In this article she says:
The conversation has thus shifted from a focus on ROI alone to a broader value proposition that includes both the tangible and intangible benefits of improved worker health and well-being.
Her memory may have failed her here too because HERO — in addition to admitting that wellness loses money (which explains its “shift” from the “focus on ROI alone”) — also listed the “broader value proposition” elements of their pry-poke-and-prod wellness programs. The problem is the elements of the broader value proposition of screening the stuffing out of employees aren’t “benefits.” They’re costs, and lots of them:
When she says: “The conversation has shifted from a focus on ROI alone,” she means: “We all got caught making up ROIs so we need to make up a new metric.” RAND’s Soeren Mattke predicted this new spin three years ago, observing that every time the wellness industry makes claims and they get debunked, they simply make a new set of claims, and then they get debunked, and then the whole process repeats with new claims, whack-a-mole fashion, ad infinitum. Here is his specific quote:
“The industry went in with promises of 3 to 1 and 6 to 1 based on health care savings alone – then research came out that said that’s not true. Then they said: “OK, we are cost neutral.” Now, research says maybe not even cost neutral. So now they say: “But is really about productivity, which we can’t really measure but it’s an enormous return.”
While other vendors, such as Wellsteps, harm plenty of employees, Interactive Health holds the distinction of being the only wellness vendor to actually harm me. I went to a screening of theirs. In order to increase my productivity, they stretched out my calves. Indeed, I could feel my productivity soaring — until one of them went into spasm. I doubt anyone has missed this story but in case anyone has…
They also hold the distinction of being the first vendor (actually their consultant) to try to bribe me to stop pointing out how impossible their outcomes were. They were upset because I profiled them in the Wall Street Journal . The article is behind a paywall, so you probably can’t see it. Here’s the spoiler: they allegedly saved a whopping $53,000 for every risk factor reduced. In your face, Staywell!
Here is the BenefitsPro article’s quote from Interactive Health’s Jared Smith:
“There are many wellness vendors out there that claim to show ROI,” he says. “However, many of their models and methodologies are complex, based upon assumptions that do not provide sufficient quantitative evidence to substantiate their claims.”
Finally, here is a news flash for Interactive Health: sitting is not the new smoking. If anything is the “new smoking,” it’s opioid addiction, which has reached epidemic proportions in the workforce while being totally, utterly, completely, negligently, mind-blowingly, Sergeant Shultz-ily, ignored by Interactive Health and the rest of the wellness industry.
There is nothing funny about opioid addiction and the wellness industry’s failure to address it, a topic for a future blog post. The only impossibility is that it is impossible to believe that an entire industry charged with what Jessica Grossmeier calls “worker health and well-being” could have allowed this to happen. Alas, happen it did.
And, as you can see from the time-stamp on this post, except at establishments favored by the Wellness Ignorati, breakfast hasn’t even been served yet.
Paul Terry, formerly of Staywell and the Health Enhancement Research Organization, has just been appointed the new editor of the wellness industry trade publication, the American Journal of Health Promotion. He replaces Michael “Let’s Charge Employees Insurance by the Pound” O’Donnell in that role.
Mr. Terry brings exactly the type of expertise to this job that AJHP readers have come to expect, in that very few people can claim to surpass Mr. Terry’s ability to fabricate outcomes.
I first became familiar with Mr. Terry’s work when Staywell claimed mathematically impossible savings for British Petroleum’s pry-poke-and-prod wellness program, which I dutifully reported on The Health Care Blog in the posting: “BP’s Wellness Program is Spewing Invalidity.” Staywell, as a preferred vendor of Mercer, was able to “convince” Mercer to fabricate savings, when their client, BP, asked for an evaluation. Staywell pretended to have saved almost $20,000 for every risk factor reduced among active participants (meaning dropouts and nonparticipants’ failures aren’t counted).
This was quite a feat considering that the average employee only spent about $5000 during the year in which this analysis was conducted. And of course only a tiny percentage of healthcare costs in the short term are attributable to risk factor reduction anyway. (Staywell was offered the opportunity to rebut, and didn’t.)
But the smoking gun here was that Mr. Terry apparently forgot that Staywell itself only claimed to be able to save $129/risk factor reduced. Magnanimous guy that I am, I was kind enough to point out that integrity chasm for him in the article.
Most people, when they are caught fabricating data, try to deny it. But Paul Terry brags about it. In case you haven’t already done so, take a looksee at his defamatory letter to the media that he sent, along with his cronies Ron Goetzel and Seth Serxner. He insists that they made up the data I reviewed — meaning his best argument against me is that I didn’t realize he was lying. If we take him to court, he could argue that the judge should apply the legal standard for negligence — that I “knew or should have known” their data was fabricated, because all their data is fabricated.
Although ironically it turns out the data they insisted was fabricated was, this time, legitimate — meaning that he was making up his claim that HERO had made up the data. That’s a topic for another blog. Suffice it to say that, in the immortal words of the great philosopher LL Cool J, he lied about the lies he lied about.
Most importantly, if you read the letter he wrote, you’ll see that another of his arguments is that when calculating ROI, you should not compare costs to savings. And a good thing because comparing costs to savings, and other feats of arithmetic, would be the wellness industry’s second-worst nightmare (next to facts).
Refusing to acknowledge the existence of basic arithmetic makes Mr. Terry a perfect choice to be editor of the wellness industry trade publication.
When a true genius appears, you can know him by this sign: that all the dunces are in a confederacy against him.
Wellsteps’ Steve Aldana has “endorsed” a confederacy of 25 wellness vendors, including his own company, Wellsteps. Alas, in the world of the Welligentsia, in which an increasing number of employers reside, an endorsement from Mr. Aldana earns about as many points in a vendor selection process as neat handwriting.
There are usually not enough hours in a week to both do my Day Job running a fast-growing company (Quizzify, which plenty of thought leaders have endorsed, so they don’t have to endorse themselves), and also play wellness-meets-whack-a-mole with the Ignorati. Fortunately, this week does have enough hours, thanks to the time change. (The wellness industry is lucky that “falling back” is not a regular occurrence.)
I haven’t heard of many members of this confederacy, but I’ve heard more than enough about the ones below. Each link takes you to our own “endorsements.”
Keas Meets Lake Wobegon: All Employees Are Above Average (in Stress). This is the best argument for requiring that wellness vendors attain a GED.
Provant: “In the Belly of the Beast” A nine-part series that one line can’t do justice to. We would simply note that you do not have to drink eight glasses of water a day. Indeed, you probably shouldn’t if you expect to get anything else done.
Staywell’s Wellness Program for British Petroleum is Spewing Invalidity. It wasn’t just that their savings claim was mathematically impossible. That’s just the threshold for wellness savings claims. Staywell also somehow saved BP 100x as much as Staywell’s own website says is possible. And because they have a “special relationship” with Mercer (meaning they pay them), Mercer “validated” this fiction for BP, at BP’s expense…
Staywell, Mercer, and British Petroleum Meet Groundhog Day. They won a Koop Award. Since Staywell and Mercer are both on the Koop Committee and their results are completely invalid and they are obviously lying, they satisfy all the award criteria.
Total Wellness’s Total Package of Totally Inappropriate Tests. They could lose their license for subjecting employees to this panoply of US Preventive Services Task Force D-rated quackery, except that in wellness the only license you need is a license to steal from unsuspecting HR directors. This leads to…
…Total Wellness: The Best Argument for Regulating the Wellness Industry. Total Wellness isn’t about to lose this Race to the Bottom without a fight. Watch as they try to out-stupid Star Wellness in their quest for that prize.
US Corporate Wellness Saves Money on People Who Don’t Cost Money. We call this Seinfeld-meets-wellness, because it’s about nothing: even if you have absolutely no risk factors, these Einsteins will still save you a fortune. And someone should also tell them you can’t reduce a number by more than 100% no matter how hard you try.
Vitality’s Glass House: Their Own Program Fails Their Own Employees. These people might have more luck selling you a crash-dieting program if they could get their own employees to lose weight.
Wellness Corporate Solutions Gives Us a Dose of Much-Needed Criticism. We don’t want to spoil the punchline.
And that brings us to Wellsteps itself, which earns its “endorsement” from its own CEO by making so many appearances on this list that there is barely enough room for the rest of the confederacy. If you only have time for the Executive Summary, this is the one to read. But squeezing it all into one place requires sacrificing the laugh lines, and if there is one thing Wellsteps excels at, it’s providing laugh lines.
Wellsteps ROI Calculator Doesn’t Calculate an ROI…and That’s the Good News. Watch what happens when Wellsteps meets Fischer-Price. No matter what variables you enter in this model, you get the same result.
Wellsteps Stumbles Onward: Costs Go Up and Down at the Same Time. This isn’t possible even using wellness arithmetic. Eventually Wellsteps solved this problem by simply deleting one of the slides. But because we long ago learned that doctoring/suppressing data is one of the wellness industry’s signature moves, we took a screenshot before we did our expose.
Prediction: Wellsteps Wins Koop Award. In 2015, I went out on a limb to make this prediction, noting Wellsteps’ perfect Koop Award storm of invalidity, incompetence, and cronyism.
Wellsteps: “It’s Fun to Get Fat. It’s Fun to Be Lazy.” This one was penned by Dr. Aldana’s waterboy, Troy Adams, who apparently during his self-proclaimed “11 years of college” never learned that “fat” and “lazy” aren’t synonyms. Paraphrasing the immortal words of the great philosopher Bluto Blutarski, 11 years of college down the drain.
Does Wellsteps Understand Wellness? They are demonizing even the slightest consumption of alcohol, among many other misunderstandings. Shame on me for enjoying a glass of wine on a Saturday night!
The Back Story of the Scathing STATNews Smackdown of Wellsteps and the Koop Committee. This one leads to several other links.
The Koop Committee Raises Lying to an Art Form. It turns out Steve Aldana is not stupid: he apparently has heard of regression to the mean, but just pretended he hadn’t so he could take credit for it with the Boise Schools, who were not familiar with the concept.
if Wellsteps Isn’t Lying, I’ll Pay Them $1 Million but let’s just say I’m not taking out a second mortgage just yet.
An Honorable Mention goes to another vendor on this list, in the form of the Don Draper Award, for this advertising gem, aimed at ensuring that even the stupidest member of the Ignorati, and/or HERO Board members, can catch their name:
To quote the immortal words of the great philosopher Rick Perry, even a stopped clock is right once a day.* And, yes, on that Wellsteps list there is one standout vendor, US Preventive Medicine. It has validation from the Validation Institute. As you read their validation, note that while they show an enviable reduction in wellness-sensitive medical events, they don’t claim an ROI. This is testament to the integrity of both USPM and the Validation Institute.
*If you are a regular reader and didn’t find this quote amusing, read it again. If you are a wellness vendor, find a smart person to explain it to you.
As our more alert readers may possibly have noticed just a little bit, there is a battle taking place between advocates of doing wellness to employees (wellness vendors) vs. advocates of doing wellness for employees (the rest of the inhabited solar system). There are also those who want to do both, what my colleague Jon Robison calls “paradigm straddling”. This latter group consists of vendors who want to check off the culture-of-wellness box so they sound relevant and supportive and au courant, while continuing to charge employers large sums to screen the stuffing out of their employees. The most hilarious example of the last is Total Wellness. If you haven’t already read their “profile,” it’s well worth the wear and tear on your keypad to click through.
Now, along comes Stanford University’s Emma Seppala, writing “Good Bosses Create More Wellness than Wellness Plans Do” in Harvard Business Review, to draw a bright-line distinction between the two approaches.
Her first paragraph:
In the name of employee wellness, and in response to insurance company demands, corporations are offering well-being initiatives with financial incentives. Complete this cholesterol screening, say, and you’ll get $100 added to your paycheck; participate in some number of wellness programs, and you’ll receive another bonus. In this quest to increase employee wellness, however, organizations are often unwittingly making things worse. Is it any surprise that initial studies on wellness programs are showing they don’t lead to any visible results?
As an aside, even our less alert readers may recall that I got in a lot of trouble with the HERO crowd (Ron Goetzel, Staywell, and Seth Serxner) just for the crime of noticing that their own numbers in their own guidebook showed wellness loses money. Apparently, Ms. Seppala noticed the same thing, because the link in her article in support of the “wellness programs don’t lead to any visible results” comment goes directly to their report. I guess she’s going to be placed on their Enemies List as well, and she can probably also expect them to circulate a “poison pen” letter about her as well, perhaps using the one they wrote about me as a template. Congratulations, Emma! You’ve arrived.
These programs “can actually cause more stress,” she writes. And she notes that those employees who do take time off for the corporate yoga class etc. get dirty looks from colleagues who need to pick up their slack.
What to Do Instead
It won’t surprise even our least alert readers that Ms. Seppala advocates a Dee Edington-type “culture of wellness,” starting with the work environment itself:
A workplace characterized by humanity. An organizational culture characterized by forgiveness, kindness, trust, respect, and inspiration… Leaders set the tone for their organization, and their behavior determines whether interactions in their organization are characterized by trust, forgiveness, understanding, empathy, generosity, and respect.
I’ll leave the rest for you to read.
Where Does This Leave the Wellness Industry?
You’ll see a lot more paradigm-straddling. Once again, the wellness industry comes through with the quintessential example: a Pulse post from a wellness vendor called Dacadoo. (There are so many wellness vendors that I guess all the other names have been taken.)
Talking about all the “fun things” that a wellness culture can provide, Dacadoo writes:
[Health fairs] are professionally run events that are designed to provide education and basic medical screening at usually little cost or no cost for the employees. At these fairs employees can undertake some screening tests such as blood pressure, glucose cholesterol, height and weight, anemia, etc.
Speaking of the solar system, anyone from another planet would interpret this passage as employees thinking: “Wow, my employer can weigh me and test me for both ‘glucose cholesterol’ and anemia! At little or no cost to me? How cool is that?”
And I bet if employees are willing to pay them just a tiny bit more, Dacadoo will also allow them to paint their fence.
In an earlier column we indicated that we had gotten wind of a “poison pen” letter that the Health Enhancement Research Organization (HERO) board members (Paul Terry, Johns Hopkins’ Ron Goetzel and Optum’s Seth Serxner, among others) sent around to members of the media. We just weren’t sure to whom it was sent or what exactly it said.
Eventually my attorney pried it out of them, after they first refused to admit this letter existed.
My attorney said he had never had a client who wanted to republish a defamatory letter written about him. I replied: “In the wellness industry, a defamation from HERO is, in the immortal words of the great philosopher Kenny Banya, ‘Gold, Jerry. Gold.’” Indeed, this letter is the closest I’m ever going to come to achieving my boyhood dream of appearing on Nixon’s Enemies List.
Here are a few excerpts–along with my annotations in italics.
“The featured variables from the HERO report that these authors cites [sic] as ‘evidence’ begin with a statement that ‘HERO calculates gross wellness program savings of $0.99.’ As is obvious to even the most uninitiated reader of our report, the $0.99 amount is taken from page 23 of an 87 page report in a section which is clearly labeled as one example wherein the sum savings derives from a fabricated scenario…The authors go on to suggest that the HERO report provides ‘evidence’ of a negative return on investment from wellness programs because our ‘report estimates wellness programs costs at $1.50 pmpm.'”
Our math (meaning your own math in your “fabricated scenario”) is correct. True, we never in a million years realized that wellness economics are so hilariously poor that even when you “fabricate a scenario” in your own guidebook, you still manage to lose money. And in any event, even though you never asked us to, we did correct that inaccuracy—by showing how much more money wellness loses if we substitute real numbers from HERO Committee members’ own writings for the “fabricated” ones.
“This variable is taken from page 15 of our report and the report’s authors in no way associated the two numbers. Furthermore, the cost number is again derived from a fabricated illustrative example…”
So you’re saying that your report’s authors put these two numbers (costs=$1.50 PEPM and savings=$0.99 PEPM) in the very same chapter but readers aren’t supposed to compare them? Bad readers! Shame on you for being discerning!
By the way, the example isn’t “fabricated.” Messrs. Goetzel, Serxner and Terry are now, in the immortal words of the great philosopher LL Cool J, lying about the lies they lied about. This is not a “fabricated illustrative example.” It is a reproduction of an actual report, which is why Page 22 calls it a report and describes what it shows:
“The authors seem to indicate that their findings from these distinctly unassociated variables is an inventive disclosure of a negative ROI for wellness on their part by writing that ‘this loss was not an intentional finding in this document.'”
Leaving aside that both these “distinctly unassociated variables” appear in the exact same chapter, how can costs be “distinctly unassociated” with revenues? Isn’t that what business is all about, associating revenues and costs? Example: Suppose your revenues are $2. That’s GOOD if your costs are $1 but BAD if your costs are $3.
I’ll use a sports analogy so that even the dumbest member of the HERO board can follow the logic. If my team scores 5 runs, we WIN the game if your team scores 4 runs. But we LOSE the game if your team scores 6. It doesn’t do any good just to know my team scored 5 runs. The number we score MUST be “distinctly associated” with the number you score to get a meaningful result.
Am I going too fast for you, Mr. Goetzel?
“We are confident that any discerning reader of our report would instead conclude that associating the variables as they were in this blog post was an absurd, mischievous and potentially harmful misrepresentation of our data.”
We took screenshots of your figures. I’m not quite sure how we could misrepresent screenshots. In any event, we don’t have to “misrepresent your data.” As Yogi Berra might say, you misrepresented it just fine all by yourselves. A trade association dissing its own product, and now bragging about fabricating data? One doesn’t see that very often.
“A cursory vetting of these authors would have revealed a litany of inaccurate and outrageous writings over several years.”
Yikes! We apologize! We had no idea that we’ve been publishing “a litany of inaccurate and outrageous writings.” We have published about 450,000 words — more than all of Shakespeare’s tragedies combined. Possibly a few inaccurate words slipped in. Surely in order to make such an otherwise libelous statement, you have a list of these “inaccurate and outrageous writings.” A cynic would say you’re deliberately lying, but all we’d like to know is…
Since we are in the “integrity segment” of wellness, we would like to see this list, so we can acknowledge and correct any errors.
Alternatively, if there are no inaccuracies, then you are endorsing the accuracy of our work, which we will announce in an upcoming post. So please get back to us within seven days with the list. Otherwise, we thank you very kindly for your endorsement of our accuracy. Additionally, we would like a written apology if you want to avoid a lawsuit.
You may remember our series on the HERO Outcomes Guidelines Report. We had observed that their own numbers showed wellness loses money. Specifically, they showed a program costing $18/person/year or $1.50 PMPM:
Gross savings were pegged at $0.99 PMPM:
Silly ol’ me reasoned that if a program costs $0.51 more per month than it saves, that annual net losses would exceed $6.00. Of course, that’s before counting all the other costs that the HERO Guidebook listed (pp 10-11) but conveniently overlooked in their actual cost calculation:
Silly ol’ me also assumed these cost and savings figures had been approved by the 60 “subject matter experts” who reached “consensus” in this report, consensus being a word that appears 16 times. The report itself required “two years and countless hours of collaboration.” (p. 3)
Hopefully you can see how I might have been inadvertently misled into thinking the report actually did represent expert consensus, reached after two years and countless hours of collaboration.
I’ve since learned that the nice people at HERO are very upset with me for falsely assuming that the information in their report represents the information in their report.
They call my lapse of integrity “outrageous.” This adjective was contained in a letter read but not sent to me by a member of the HERO Board. (At the risk of blowing his cover, this is a guy known for his integrity.) Staywell’s Paul Terry, whose own escapades have been well-chronicled on The Health Care Blog, had apparently circulated this letter around a while back on behalf of HERO.
Specifically, Terry stated it was “outrageous” that I had failed to mention that this money-losing scenario in the HERO Report was just one example of a wellness outcome. For some unknown reason, HERO elected to illustrate the financial benefits of wellness with an example that loses money. That would be like a tobacco company illustrating the health benefits of smoking with this example:
Piling on, Ron Goetzel also disavowed the HERO report’s figures during our debate, stating that his numbers are “wildly different” from the ones in the report he co-authored.
Apology and Atonement
To atone, I will substitute Ron’s recommended “wildly different” wellness budget of $150 per employee per year for the report’s $18 PEPY. Then let’s adjust the $0.99 PEPM savings in reduced wellness-sensitive medical event (WSME) spending for the natural decline in WSMEs that occurred over the same period, according to Truven. Truven is Ron’s employer and hence is presumably the source of Ron’s “wildly different” figures for WSMEs.
If you can’t read Truven’s numbers above, they show a decline in WSMEs in the working-age insured population between 2009 and 2012 of 23%. This actually greater than the 17% (3.14 down to 2.62 “potentially preventable hospitalizations” per 1000) decline in the HERO example over the same period:
But we’ll give HERO the benefit of the doubt and say doing wellness reduced wellness-sensitive events as much as not doing wellness would have reduced them.
That actually is the “benefit of the doubt” because a review of all the Truven data compiled for the government shows that indeed WSMEs have consistently trended more favorably in the non-exposed populations than in the”privately insured” population below (in green), much of which was exposed to wellness.
Adjusting for the benefit-of-the-doubt secular decline in WSMEs wipes out gross savings — even without counting all the following claims costs that HERO says should actually increase:
Or maybe those cost increases also only happen in this one rogue example in this one rogue chapter. And maybe this one rogue chapter (Chapter 1) just contains a terrible, horrible, no good, very bad example that somehow accidentally found its way into the HERO Guidelines Report even though none of the 60 subject matter experts believe it. Or maybe two years wasn’t enough time for these experts to review it, though my review required only five minutes. Perhaps that’s because when I read, I don’t move my lips.
Per HERO’s and Ron’s request, I’ll replace their original estimate of $6 in annual losses PEPY with Ron’s new net loss estimate of $150 PEPY. And that’s without the multitudinous added costs that they also listed but never counted.
All in, my original estimate was off by almost two decimal points. However, I take responsibility only for the magnitude of the error, not for the delay in correcting it. If HERO had told me last year to substitute these real figures for their rogue example, I would have corrected the figures posthaste.
And my lips would have morphed into a great big smile.
A good rule of thumb is that when Ron Goetzel publishes something, you should reach the opposite conclusion. TEASER: In this case, had you done the opposite 5 years ago of what he (retrospectively) recommends now, you’d be sitting on a pile of cash.
Yesterday, the Journal of Occupational and Environmental Medicine, fresh off its Aetna wellness DNA collection debacle (which, in all fairness, one of their board members did candidly admit should never have passed peer review — see the comments), published Ron Goetzel’s article claiming that Koop Award-winning companies outperform the averages, thus showing that outstanding wellness programs “favorably affect a company’s stock valuation.”
Try telling that to Gary Loveman. He was the head of the Business Roundtable’s Health and Wellness Committee. As such, he was the biggest supporter of wellness among all corporate CEOs. He even leveraged the Business Roundtable’s formidable financial resources to convince a bunch of senators to take time off from their real jobs in order to host a fact-finding committee hearing with the title: “Employer Wellness Programs: Better Health Outcomes and Lower Costs.”
Ask Mr. Loveman how his company, Caesar’s Entertainment, is enjoying their bankruptcy proceedings. (He might not know because he is no longer allowed to run the company.)
But we digress…
Let’s look at what happens if you had invested in other companies with “outstanding” wellness programs five years ago. Below is the entirety of companies that have won Koop Awards since 2010 — all of which made up their outcomes, as we’ve noted — that are also publicly traded. (There might be 1 or 2 more. The Koop website is down this morning, so I am going off the list I have.) In each case we tracked 5 years of stock prices ending yesterday, and compared to industry indexes. We’ve linked to the indexes.
2010 — Pfizer.
Pfizer stock has risen about 85% — but simply investing in a drug company index would have made you a 156% return.
Highlight of their wellness program: participating employees lost 3 ounces over a year while non-participants gained 2 ounces. Or maybe it was the other way around.
2011 — Eastman Chemical
Eastman Chemical has outperformed the chemical industry index by 33% over this period.
Highlight of their wellness program: Ron Goetzel doctored the original application recently and then covered it up, because this was the company that “showed savings” 2 years before the program even started. Removing the embarrassingly accurate x-axis labels of the original while claiming “the original is still online and available for review” would have been a very effective cover-up had we not kept a screenshot of the original original.
2013 — Dell (the 2012 winners are not publicly traded)
Dell underperformed the tech stock index by 31% before it stopped trading in October of 2013. (We don’t comment on their wellness program so as not to embarrass them, so there aren’t highlights.)
2014 — British Petroleum
Long after underperforming due to the oil spill before this most recent 5-year period, they continued to underperform the oil stock index by 13%.
Highlight of their wellness program: Mercer “validating” outcomes that were not only mathematically impossible, but were also 100 times greater than what the vendor itself, Staywell, had said was possible. Staywell never explained this discrepancy, shockingly.
2015 — McKesson
There is no good drug distribution stock price index, but McKesson did outperform the drug stock price index by 12%. The closest thing to an “index” might be its close competitor, Cardinal Health. McKesson outperformed them over the 5-year period, but over the most recent 3-year period, Cardinal did somewhat better.
Highlight of their program: They boast one of the highest tobacco use rates in the country, but that didn’t stop them from winning an award because employees who attended a bevy of Weight Watchers meetings lost a few ounces.
Put it all together, and you would have been much better off shorting these companies and hedging with the industry index than actually buying stock in them. As noted at the beginning of this article, had you done this hedge, you’d be sitting on a pile of money right now. As they say in the stock market, the only person as valuable as the person who is always right is the person who is always wrong. Perhaps Mr. Goetzel has a future in securities analysis.