Tag Archives: healthways

Three Lessons on How to Chase Away Clients

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.

Five Principles For Cracking Health Costs, Dave Ramsey-Style

Dave Ramsey is a Tennessee-based Christian author and talk-radio host, who advises on personal finance. As Jewish Northeasterners, my husband and I aren’t exactly his target demographic, but we have remained devoted fans for over eight years. Ramsey takes a common sense approach to managing money, as he puts it “we give you the same financial advice your grandmother would, only we keep our teeth in.”

It’s time we applied such common sense to healthcare spending, and a much-discussed new book does just that: Cracking Health Costs: How to Cut Your Company’s Costs and Provide Employees Better Care, by Tom Emerick and Al Lewis. This book should be required reading for every CEO and HR executive in the country.  I’ve gleaned the following five commonsense principles from the book and from Ramsey’s radio show.

1. Give Every Dollar A Job

Ramsey says every household should have a budget and know where your money is going. Cracking Health Costs says that companies should get and count results for every dollar they invest in healthcare. The book gives a checklist of some of the numbers that employers should ask their vendors to report on, such as: inpatient days fallen, imaging tests reduced, wellness-sensitive medical events declined. You should know what your pharmacy benefit manager makes in profit and what discounts you get.

That sounds simple enough, but far too often vendors obscure their results with fancy reports showing all kinds of supposed savings, even when the math doesn’t add up. The reports often leave employers scratching their heads, wondering why despite all this elaborate “savings” they are still spending more money than they did last year. Don’t put up with that, says Emerick and Lewis. The book has some great advice on spotting phony numbers and asking the right questions.

2. Cut Your Spending

Ramsey says you should get fired up to attack wasted spending and reach your financial goals. Your family will be better off if you direct your dollars toward your priorities.

Emerick and Lewis also say you should attack waste and spend less – and your employees will be better off if you do it right.

Believe it or not, this is unusual advice. Most advice to business leaders worried about health costs focuses on creative ways to spend more money. Vendor PowerPoints are filled with new ideas for employer spendfests aimed at reducing costs: new prevention programs, expanded primary care, bonuses for performance, etc.

Cracking Health Costs points out the largest item on most company’s healthcare expense reports and suggests you start cutting spending there: hospital costs. The authors detail two approaches.  First, give your employees and dependents the opportunity to travel to preferred hospitals for your highest-risk, highest-cost procedures. Author Emerick helped some Fortune 100 companies pursue this strategy with good result, identifying “company-sponsored centers of excellence” with a propensity for correct diagnosis, appropriate care plans and top quality care.

Second, demand safety and quality from all the hospitals in your network, and make that available to your employees. Of course, I was pleased to read the book’s suggestion that purchasers use my purchaser-driven nonprofit, Leapfrog, as the (free) source of information on hospital quality and safety, including an app and search engine grading hospitals.  But employers can also work with Leapfrog and business coalitions to apply pressure on hospitals to improve. Emerick and Lewis point to Leapfrog’s calculator of the hidden surcharge Americans pay for hospital errors to get a sense of how much money is on the table for them. Here’s a warning for the faint of heart: the amount of your wasted dollars will likely have nine figures.

Don’t shy away from the Emerick/Lewis strategies for managing your hospital spend: estimates are that inappropriate treatment, misdiagnosis, errors, and poor quality care may account for as much as a third of health costs in the U.S.

3. Avoid Get-Rich-Quick Schemes

Ramsey warns: if it sounds too good to be true, it probably is. Do the research.

Cracking Health Costs skewers the pay-now-save-later schemes sold to employers every day.

Some of those too-good-to-be-true ideas sound both good and true — or none of us would ever fall for them. Cracking Health Costs cautions employers on a number of programs that, structured poorly, can cost employers money, save nothing and produce zero demonstrable health advantages to employees. This includes certain kinds of screening programs, triage phone lines, health coaching and health risk assessments (HRAs) with incentives for participation.

Many of the very same vendors selling these programs know the truth about their ROI. As the authors point out, “Not one single publicly held company in the business of controlling medical care expenses actually provides financial incentives for their own commercially insured members to complete HRAs and talk to coaches.”

4. Be Generous and Giving

Ramsey advises people to set aside money for charity – even on a tight budget.

Cracking Health Costs proposes that companies focus on proving to their employees that they care about them — through generosity and actions that demonstrate concern.

There’s research behind this. The authors point to the Gallup-Healthways Well-Being Index and studies suggesting that companies that improve performance on the index can correlate with improved company performance. Healthways is a leader in this emerging field. And it appears from the research that a caring employer can significantly impact employee well-being.

Indeed, Ramsey too recommends a similar business strategy. He’s as hard-nosed a businessman as you get, but his book EntreLeadership attributes his company’s success to a culture of generosity and caring.

Ironically, poorly-executed wellness programs can undermine employee well-being. In part because of new provisions in Obamacare, today many employers are requiring that employees pay extra for their healthcare premiums if they refuse to participate in wellness programs.  Like it or not this sends a nefarious message from employer to employee: you, dear employee, are a depreciating asset, a drain to the bottom line, too stupid to know how to take care of yourself so we have to pay you to do it. This, of course, contradicts the message known to promote employee well-being, that your employer cares about you and values your service.

Penn State is learning this the hard way. They invested in an employee wellness program and withheld dollars from those who refuse to participate, no doubt hoping to show employees how deeply they care about their health. That’s not the message employees heard: they see it as Exhibit A of the pernicious motives of their employer—and this is an employer that really doesn’t need bad publicity right now.

Indeed, talented employees don’t depreciate over time, their contributions to the company improve as they accumulate experience. Talent is a precious asset to companies, the key to competitive advantage and essential to success—it should never be squandered to save a few (phantom) bucks on future healthcare premiums.

5. Your Best Financial Hope — And Your Greatest Financial Obstacle – Is In The Mirror 

Let’s face it, most of us at least once failed to stick to a budget or blew money on a dubious idea. How do we overcome our human tendency to defy common sense? Ramsey’s advice: Get fed up with yourself.  Get mad.  Passion is the key to change.

Similarly, Cracking Health Costs urges benefits executives to get mad. You are being taken to the cleaners. And worse, your employees may be suffering harm as a result. To succeed, benefits executives must not delegate their leadership to the usual bevy of vendors and health plans any more than you let your credit cards and bank supervise your personal finances. Executives that seize control of their health spending – and apply common sense – will honor their employees and thus help their companies succeed.