Healthcare Business News
Tom Emerick, coauthor, Cracking Health Costs

On the warpath against wellness

Authors say companies should focus on outliers, not corporate programs

By Modern Healthcare
Posted: July 27, 2013 - 12:01 am ET

Despite the growing debate over the value of corporate wellness programs, major employers continue to invest time and money in setting them up. A recent RAND Corp. study showed that while they may generate savings in the long run, there was little evidence to suggest most wellness programs have an immediate impact.Some employers are beginning to ask questions about their value. Intel recently moved to a narrow network health insurance plan after admitting its wellness program had failed to constrain costs. The authors of a recent book on the subject say more should follow in their footsteps. Modern Healthcare Editor Merrill Goozner recently interviewed Tom Emerick, an independent consultant whose corporate experience includes 15 years in benefit design for Wal-Mart Stores, and Al Lewis, author of Why Nobody Believes the Numbers and president of the Disease Management Purchasing Consortium, about the radical advice they are offering corporate benefit managers in Cracking Health Costs, published by Wiley.

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Modern Healthcare: You're on the warpath against wellness. What got you started on this?

Al Lewis: I had a wellness client. As part of the evaluation, I completed a health risk assessment. When I got it back, I could not believe what they told me to do: get a PSA test, get an EKG, get a physical, even though I was low-risk on all the factors. I put down I was on seven or more meds. Yet they didn't even mention it. I just put it down to see if they would catch it.

MH: Yet a lot of the vendors designing wellness programs claim they get big savings. Are they being disingenuous?

Tom Emerick: I saw a number of well-designed wellness programs, but if you looked at it after three years, it was as if you never did it. They can't possibly be getting the results they claim they're getting.

MH: But isn't it helping companies identify potential health problems in their workers before they evolve to serious conditions?

Lewis: Employers are trying to create wellness by telling people they are sick. One program in Nebraska told 40% of the people who were screened that they were sick.

Emerick: A lot of what we're doing in wellness today is increasing stress on workers. We're creating the worried well in organizations through the monthly notices like blood pressure the silent killer; strokes the silent killer; cancer the silent killer. This is just stressing people.

MH: So what should companies be doing?

Emerick: There are things that companies can do to improve the health of their workers. But so many are dedicated to doing this that it is keeping them from doing the right thing. Companies see what they want to see.

Al Lewis, coauthor. Cracking Health Costs
MH: What is the right thing?

Emerick: There's been a sea change in who spends the corporate healthcare dollar. About 6% of the members are now spending 80% of the dollars. About 10% to 20% of those outliers are completely misdiagnosed and about 40% have inadequate and incomplete treatment plans. Companies are spending 90% of their effort managing people who aren't causing the problems.

If your 6% outliers are spending 80%, and 10% are being misdiagnosed, that means 8% of your plan spending—far more than anyone could achieve with wellness—is being wasted on people who won't benefit.

MH: One in 10 people are misdiagnosed? That seems awfully high.

Emerick: There are numerous examples. Women are different than men. When they report having atypical angina, it's in the middle back. More and more women are being diagnosed with having a musculoskeletal problem when they have a blocked artery. We need to focus on people getting the right diagnosis, and getting people to places that focus on appropriate medicine and not on money-driven medicine.

MH: Can employers influence providers at that level?

Emerick: This wasn't possible when 30% of the people caused 80% of the spending. If they were to focus a fraction of what they spend on wellness on the outliers, they could have a major influence over providers. They could start by sending your high-cost patients with back problems or heart problems to centers of excellence. Wal-Mart and other companies are doing that. Hospitals will have to figure out how to become a center of excellence rather than being a loser.

MH: What defines a center of excellence?

Emerick: The ones that do it right have a number of things in common. First, the doctors are accountable. They won't let doctors sit around doing inappropriate surgery. That's the hallmark of a Mayo or Cleveland Clinic. The doctors are salaried. They're evaluated on having the best patient outcomes and they use the safest and least invasive options, not the most invasive and riskiest options.

Lewis: It is a necessary but not sufficient condition to excel at what you do and compensate your doctors not according to the number of surgeries but on the basis of outcomes.

MH: It sounds like you're blaming the doctors.

Lewis: We're blaming the hospitals because they're not taking the tough steps needed to bring the docs on board. If you attend conferences where they talk about what to do to become an ACO, it's all about blaming the patients for noncompliance and their need to lead healthier lifestyles instead of showing gumption and getting the doctors within their four walls to stop overdiagnosing and stop overtreating. Instead they point outwards.

MH: There doesn't seem to be a lot of evidence that employers are dropping the wellness programs in favor of aggressive management of high-cost employees.

Emerick: Intel is a first sign. We will see the end game in wellness when employers start doing two things. One is to stop doing things to your employees in the name of wellness that are ineffective and start doing things for your people.

Lewis: We like the well-being concept. It's more comprehensive. If your productivity is low one day, it could be any number of things that are bothering you. It could be your boss.

A wellness program is the difference between a deodorant and taking a shower. You have to figure out what is stressing your people out. If you are a general leading troops into battle, would you rather have soldiers with low morale or soldiers with low cholesterol?

Follow Modern Healthcare on Twitter: @Modrnhealthcr

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