If you don’t have time to read this now, remember one thing: do NOT fine women $1200 for refusing to disclose on an HRA whether they intend to become pregnant. Perhaps you think that is obvious but it isn’t to Penn State, which is doing exactly that
Until recently, human resources (HR) departments couldn’t get enough wellness programs. They have been a gold mine for brokers, too, because high volumes of business have driven commissions that are not even subject to disclosure requirements. Vendors of wellness programs competed with each other to see who could offer the highest payouts to brokers and were not shy about admitting how aggressively they were trying to find new customers, even though every metric shows that wellness programs don’t work.
All that changed when Penn State got into the wellness business. Advised by Highmark and Truven Health Analytics’ Ron Goetzel, who oversees the now-discredited C. Everett Koop award, Penn State implemented perhaps the most unpopular wellness program in history. The program triggered a change.org petition and coverage in the Wall Street Journal , every HR department’s worst nightmare-- except perhaps for unionization, which is now also on the table, partly because faculty were so upset about the onerous requirements imposed on them in the name of their health.
The program is laid out in Harvard Business Review, along with some sample reaction in the way of comments, so we won’t repeat that posting here. Instead, the goal of this posting is the next step: provide some lessons from Penn State for brokers and consultants, so that the problems at Penn State don’t happen to you.
Lesson One: Employees matter in wellness.
Don’t assume that the HR department speaks for the employees. In this case, the anti-HR outrage was overwhelming and could easily have been anticipated. Think twice before recommending a program that punishes employees if they don’t follow rules for improving their health—and that employees will hate. If your client is considering this type of program, ask which the company would rather have: employees with high morale or employees with low cholesterol?
Lesson Two: Forcing employees to “do wellness” will backfire.
Never recommend a program where completing forms avoids a forfeiture of a large sum of money. People will just lie. At Penn State, a memo went around encouraging people to lie. So, instead of creating a culture of wellness, you’d be creating a culture of deceit.
In particular, as mentioned in the summary, Penn State decided it would be a good idea to fine women $1200 for declining to disclose to Highmark whether they intend to become pregnant. This is the ultimate in “forced wellness.” Indeed it is probably the worst idea in the history of wellness, and we mention it here only because if a large employer, well-known health plan, and prominent consultant can come up with this scheme, it ’s not beyond the realm of possibility that others might too.
Lesson Three: Wellness numbers don’t add up. Don’t pretend they do.
Wellness should be undertaken on its own merits. If you, like Penn State and its advisors, cite the discredited bromide that 75% of cost is caused by chronic disease, you’re setting your client up to fail, as it is easy enough to find proofs that such a statement is meaningless. Wellness actually increases costs, because biometric screens and “preventive” physicals have very negative ROIs.
So what should you do instead? Cracking Health Costs offers many solutions. Chief among them would be narrow networks focused on a few safe, ethical national centers of excellence such as Mercy in Springfield (MO), where 80% of patients referred for back surgery are prescribed conservative treatment instead. Also, coordinate care to manage employees who really do get sick, the so-called ”Quantum Health Model.” Specifically, in lieu of conventional and ineffective wellness programs, pursue a well-being program of the type pioneered by Healthways.
A combination of those initiatives should reduce your client’s spending while also keeping them out of the newspaper.