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The Value of Workplace Wellness

The recent blog post by Al Lewis, Vik Khanna and Shana Montrose titled, “Workplace Wellness Produces No Savings,” has triggered much interest and media attention. It highlights the controversy surrounding the value of workplace health promotion programs that 22 authors addressed in an article published in the September 2014 issue of the Journal of Occupational and Environmental Medicine, titled, “Do Workplace Health Promotion (Wellness) Programs Work?” That article also inspired several follow-up discussions and media reports, including one published by New York Times columnists Frakt and Carroll, who answered the above question with: “usually not.”

There are certainly many points of contention and areas for continued discussion on this topic. It turns out that Lewis et al. and I agree on many things, and there are other areas where we see things differently.

Where we agree…

Biometric screenings. Biometric screenings are important for collection of baseline health risk data and are often viewed as an added value by employees participating in workplace health promotion programs. Lewis et al. and I agree that employers should screen their workers for health risks in accordance with guidelines recommended by the U.S. Preventive Services Task Force (USPSTF). These guidelines are clear about the necessity and periodicity of biometric screenings for high blood pressure, obesity, cholesterol, glucose, triglycerides, cervical cancer, colon cancer, breast cancer and other conditions.

We agree that over-testing people is not a good idea and may lead to false positives, as well as unnecessary medical interventions that are costly and add little value. For readers seeking guidance on biometric screenings in a workplace setting, I refer them to a peer-reviewed article published in the October 2013 issue of the Journal of Occupational and Environmental Medicine.

Incentives. Workplace health promotion programs are not the same as incentive programs. “Smart” incentives are part of a well-designed program, but such programs need to be embedded in healthy company cultures where employers encourage and reward healthy behaviors. Comprehensive wellness programs often use financial incentives to attract participation and, in some instances, encourage behaviors that lead to risk reduction.

Most experts in workplace health promotion agree that creating intrinsic motivation for health improvement is an essential component of an effective program. As Daniel Pink points out in his book Drive, people are motivated to behave a certain way when they feel a sense of autonomy, when they are able to master certain skills needed to change a behavior and when they can connect changing that behavior to a larger purpose in life. This applies to individuals wishing to achieve certain health goals, such as quitting smoking, being more physically active and eating a healthier diet.

Paying people to improve their health in an unhealthy work environment is a futile strategy. Workers will expect higher payments each year, will view “non-compliance” as a penalty and will mistrust their employer for trying to do things to them instead of with them.

To summarize, incentives need to be practical, ethical and legal. The Affordable Care Act (ACA) legislation should not be used as a vehicle or excuse for “blaming” workers for poor health habits, or to penalize them financially for not achieving certain health outcomes. Employers share responsibility for the health and well-being of workers and can do much to create a healthy company culture.

For readers interested in a more in-depth discussion of health promotion incentive programs, I refer them to a series of Health Affairs blog posts and a guidance document prepared by the Health Enhancement Research Organization, American College of Occupational and Environmental Medicine, American Cancer Society and American Cancer Society Cancer Action Network, American Diabetes Association and American Heart Association.

Culture of health. We also agree that effective workplace health promotion programs need to be embedded within a culture of health that respects workers’ rights to make informed choices about personal health matters. Without question, workplaces need to be safe, and employees need to be treated with respect and dignity. Workers also have a right to be in a healthy work environment where positive health behaviors are encouraged and supported. That means making healthy food available in vending machines and cafeterias, encouraging physical activity, prohibiting on-site smoking, offering vaccination programs and providing health insurance.

The list of programs, policies and environmental supports for a healthy workplace is long, and there are hundreds of environmental and policy interventions available to employers who wish to send a clear message that the company encourages and supports good health. For a more complete discussion of how companies can achieve a healthy culture, see the May 2013 issue of The Art of Health Promotion.

The importance of studying “wellness-sensitive” events…in addition to overall utilization and costs. Lewis et al. highlight the need to focus on “wellness-sensitive” medical events when conducting cost analyses. I agree but ask the authors: What are these events? Where have descriptions been published? Who has reviewed them? Why do they only apply to in-patient claims? Are there not any “wellness-sensitive” events that would appear in out-patient settings?

The idea of analyzing claims for conditions likely to be most readily influenced by health promotion programs is sensible. In many of our studies, we have analyzed utilization and cost patterns for what we call “lifestyle diagnosis groups,” or LDGs. For example, in a 1998 peer-reviewed study, we evaluated Procter & Gamble’s health promotion program and found a 36% difference in lifestyle-related costs in the third study year when comparing 3,993 program participants with 4,341 non-participants.

Although it’s important to analyze a subset of diagnoses when evaluating wellness programs, it is equally important to analyze utilization and costs for all conditions. After all, one’s actual well-being and perception of well-being influences health holistically, not just any one particular organ or body system.

Where we disagree…

Whether only randomized trials can determine whether workplace programs are effective. Health services research and the field of epidemiology have a long track record of studying naturally occurring phenomena and drawing conclusions from observations of those phenomena. That’s how we have learned what causes hospital-acquired infections. We have also learned from long-lasting epidemiological investigations like the Framingham studies that a sedentary lifestyle, smoking and obesity are causes of heart disease, diabetes and cancers.

These “natural experiments” inform the scientific community about what happens to individuals or groups “exposed” to a condition, where others are not. Natural experiments are employed when a randomized controlled trial (RCT) is impractical or unethical.

How does this apply to evaluation of workplace health promotion programs? Imagine trying to convince the head of human resources of a company to approve a double-blinded randomized trial that would test the effectiveness of a wellness program, over three to five years, by randomly assigning some workers to a comprehensive health promotion program that includes health coaching on smoking cessation, weight management, physical activity and stress reduction while other workers are denied access to the program. Not only that, the HR executive would be asked to allow the researcher to administer a series of blood tests to participants and non-participants, access their medical claims and ask workers to complete periodic health surveys. The employer would also be prohibited from instituting organizational policies promoting health while this experiment is underway.

It’s hard to imagine a situation in which a company executive would allow this, never mind an institutional review board at a university.

Alternatively, when health services researchers conduct natural experiments, care is taken to control for any confounding variables and address alternative hypotheses. In our research, we use statistical techniques such as propensity score matching and multivariate regression to compare the health and cost experience of “treatment” workers (those offered health-promotion programs) and “comparison” workers (those not offered the programs). Most often, when comparing participants with non-participants, we match entire populations exposed to a program (whether or not individuals participate in that program) and those not exposed. In that regard, we are investigating program impacts on population health and not only comparing outcomes for motivated participants in programs compared with less motivated non-participants.

We publish our analyses in peer-reviewed journals so that the scientific community can review and critique our methods. We are also transparent about the limitations to our research in these peer-reviewed articles.

By the way, there are experimental studies focused on large populations (not necessarily at the workplace) demonstrating the value of health-promotion programs. One such trial was recently concluded by the Centers for Medicare and Medicaid Services (CMS) as part of the senior risk reduction demonstration (SRRD). Two vendors were involved in the demonstration, which lasted two to three years.  Beneficiaries participating in Vendor A’s risk-reduction programs achieved statistically significant improvements in stress, general well-being and overall risk, and beneficiaries participating in Vendor B’s program achieved statistically significant improvements in back care, nutrition, physical activity, stress, general well-being and overall risk.

Interestingly, the interventions were determined to be “cost-neutral,” meaning that Medicare spending for participants in the intervention group was not statistically different from spending for participants in the control group. This was a large-scale study where about 50,000 beneficiaries were recruited and approximately 20,000 participated in the health-promotion program in any given year. The bottom line: Significant health improvements were achieved at no cost to the government.

Interpreting the data. Lewis et al. highlight errors in others’ presentation of results. I have no argument with that. That is, after all, what a peer review process is all about: Conduct the study, subject it to peer review and publish the findings. The problem is that Lewis et al. have not (yet) published any studies in which their interventions are evaluated, nor have their methods been subject to peer review. That is unfortunate because I believe (truly) that all of us can learn from vetted research studies and apply that knowledge to future evaluations.

I am the first to admit that the methods we use to evaluate wellness programs have evolved over time and are still undergoing revisions as we learn from our mistakes. I invite Lewis et al. to reveal their methods for evaluating workplace programs and to publish those methods in peer-reviewed publications — we can all benefit from that intelligence.

Lewis et al. point to a study conducted by Health Fitness Corp. (HFC) for Eastman Chemical, which earned the company the C. Everett Koop Award. (In the spirit of full disclosure, I am the president and CEO of the Health Project. which annually confers the Koop prize to organizations able to clearly and unambiguously document health improvements and cost savings for their employees.) Eastman Chemical’s application is online and subject to review.

In their analysis of the Eastman Chemical application, Lewis at al. complain that costs for participants and non-participants diverged in the baseline years of the program; therefore, it was not the program that explains cost savings. Here’s the real story: Eastman Chemical’s program has been in place since the early 1990s. The chart found on the website (unfortunately mislabeled) shows participant and non-participant medical costs at baseline (2004), in subsequent years and in the final year of the study (2008).

The study compares medical and drug claims for minimally engaged (non-participant) and engaged (participant) employees matched at baseline (using propensity score matching) on age, gender, employee status, insurance plan, medical costs and other variables. No significant differences were found between participant and non-participant costs at baseline, but their claims experience differed significantly at follow up. Although not a perfect study, the economic results, coupled with significant and positive health improvements in many of the health behaviors and risk factors examined for a multi-year cohort of employees, convinced the Health Project board that Eastman Chemical earned the C. Everett Koop prize in 2011.

Whether return-on-investment (ROI) is the only metric for evaluating workplace health promotion programs. It seems that too much of the debate and controversy surrounding workplace health promotion is focused narrowly on whether these programs save money. If that were the aperture by which we judged medical care, in general, we would withhold treatment from almost every patient and for almost every procedure, with the exception of a few preventive services that are either cost-neutral or minimally cost-saving. That makes no sense for a compassionate society.

In a February 2009 Health Affairs article, I argued that prevention should not be held to a higher standard than treatment; both should be evaluated on their relative cost-effectiveness (not cost-benefit) in achieving positive health outcomes and improved quality of life.

Take a simple example of two employees. One has just suffered a heart attack and undergoes a coronary bypass. If the individual is willing, he is then engaged in counseling that encourages him to quit smoking, become more physically active, eat a healthy diet, manage stress, take medications to control blood pressure and see the doctor for regularly scheduled preventive visits. For that individual, I would be surprised if an employer providing medical coverage would demand a positive ROI.

How about a second employee? That person is overweight, smokes cigarettes, eats an unhealthy diet, is sedentary, experiences stress at work and has hypertension. He has not (yet) suffered a heart attack, although most would agree he is at high risk. To justify a health promotion program for that employee and others in the company, many employers insist on a positive ROI. Why is that a requirement? If a well-designed program can achieve population health improvement (as demonstrated using valid measures and an appropriate study design), and the program is cost-neutral or relatively inexpensive, why wouldn’t an employer invest in a wellness program, especially if is viewed as high value to both workers and their organization?

It’s time to change the metric for success. Instead of demanding a high ROI, employers should require data supporting high engagement rates by workers, satisfaction with program components, population health improvement, an ability to attract and retain top talent, fewer safety incidents, higher productivity and perceived organizational support for one’s health and well-being. That’s where program evaluations should be focused, not simply on achieving a positive ROI.

I appreciate the reality that some employers may still require an ROI result. Fortunately, there is evidence, published in peer-reviewed journals, that well-designed and effectively executed programs, founded on best practices and behavior change theory, can achieve a positive ROI. I won’t re-litigate this point, other than to point newcomers to a large body of literature showing significant health improvements and net cost savings from workplace heath promotion programs. (See, for example, studies for Johnson & JohnsonHighmark and Citibank and several literature reviews on the topic).

I challenge proponents and opponents of workplace wellness to direct their energy away from proving an ROI to measuring one or several of the important outcomes of interest to employers. Achievement of these outcomes is only possible when management and labor work toward a mutually beneficial goal — creating a healthy workplace environment. Health promotion programs require time to take root and be self-sustaining, but the benefits to employees and their organizations are worth the effort.

Wellness Industry’s Terrible, Horrible, No-Good, Very Bad Week

Just as the Bear Stearns implosion presaged the 2008 financial crisis, the events of the last few days, building on earlier events, are presaging the collapse of the “pry, poke, prod and punish” wellness industry.

For those readers still living in Biosphere 2, here is a brief review of how we got here:

First was Honeywell’s self-immolation with the Equal Employment Opportunity Commission (EEOC). We’re not sure how Honeywell’s benefits consultants failed to advise that all the company needed to do was offer a simple wellness program alternative that didn’t require medical exams, and there would be no way Honeywell would get hit with an  EEOC lawsuit. But they didn’t.

Second, the Business Roundtable (BRT) decided to go to the mat with the president over this EEOC-wellness issue. It is possible that there is some conspiracy at work here, where large companies really want to retain the ability to shame and fine overweight employees into quitting (because you can’t fire people for being overweight). But we lean toward a less sensationalistic interpretation: that the BRT is simply getting lousy advice, likely from consultants whose business model depends on more companies doing wellness. Because the BRT’s member CEOs have actual day jobs, they can be excused for taking the BRT’s word for the benefits of wellness and not investigating this industry on their own; if they did, they would find that the wellness industry attracts more than its share of well-intentioned innumerates and outright scoundrels, perhaps because the industry lacks adult supervision.

Third was our popular Health Affairs posting, which spurred see-we-told-you-so pickups by the Incidental Economist and Los Angeles Times, the latter of which helpfully added the word “scam” to the discussion.

Thus, we bore witness to a perfect storm, the first-ever lay media feeding frenzy on wellness, from both the right-leaning Federalist and the, uh, non-right-leaning All Things Considered. Those would be the first times wellness in general (as opposed to specific programs like, for instance, the Truven/Highmark Penn State debacle or Nebraska’s falsified outcomes) has attracted the lay media. Additionally, the comments, even on the typically erudite All Things Considered, were merciless. Skeptics that we are, we still underestimated employee resentment of forced screenings and risk assessments.

The wellness true believers’ rebuttals were quite in character. As we say in Surviving Workplace Wellness, in this field you don’t have to challenge the data to invalidate it. You merely have to read the data. It will invalidate itself. Because most of the true believers’ “A Team” are ethically compromised, they had to go to their bench to find a rebutter. Against all those eviscerations in the major national media, they countered with: Siyan Baxter, a graduate student at the University of Tasmania, who claimed a positive return on investment (ROI) for wellness. She wrote in a journal that contains the words “health promotion” in its very title and has never once published a negative article about wellness savings. Publication bias, anyone? That isn’t even the punchline. The punchline is that, as our book predicted, Ms. Baxter self-invalidated. She says, right in the article: “Randomized controlled trials show negative ROIs.”

How did she still come up with a positive assessment of wellness? Because she “averaged” those ROIs with studies she herself describes as low quality, to get a positive ROI. (These 5- to 30-year-old studies were conducted in an era when, as the award-winning book The Big Fat Surprise observes, the American Heart Association bestowed a “heart-healthy” endorsement on every box of Kellogg’s Frosted Flakes.)

Her approach is, of course, is like averaging Ptolemy and Copernicus to conclude that the earth revolves halfway around the sun.

The other rebuttal was from Professor Katherine Baicker, who is considered a deity in this field because she basically launched it with a claim, published five years ago in Health Affairs, that wellness achieves a very precise 3.27-to-1 ROI. (As with Baxter, the wellness programs where Baicker found savings were conducted during the era when the AHA apparently conflated Tony the Tiger with Dean Ornish). Having recently stated she no longer had interest in wellness and having more recently blamed readers for relying on the headline “Workplace Wellness Can Generate Savings” and not reading the fine print, she nonetheless decided to defend her legacy.

Her defense on NPR is worth reviewing. Baicker said: “There are very few studies that have reliable data on the costs and benefits.” That, of course, is not the case – the wellness true believers’ own meta-analysis above shows that in well-designed assessments, the programs lose money. Baicker also said: “It could be that when the full set of evidence comes in, it will have huge returns on investment, and the billions we’re spending on it are warranted.”

This all sounds a little different from the three significant digits of: “Wellness achieves a 3.27-to-1 ROI.” And it is invalid because, as any epidemiologist knows – and as Dr. Gilbert Welch elegantly explained in Overdiagnosed — if an impact is truly meaningful, it would show up in a small or medium-sized sample. This means that, if indeed there were “billions” to be saved, we’d know it based on the hundreds of millions of employee-years that have been subjected to wellness in the last 10 years.

The “full set of evidence” is already in….and it’s game, set and match to the skeptics.

Inoculating Your Wellness Program Against the EEOC

Two months ago, a posting appeared in this column titled: Are Obamacare Wellness Programs Soon to be Outlawed? Truthfully, that headline was picked for its sky-is-falling value, treating one EEOC lawsuit against one wacky wellness program as a risk for wellness programs everywhere.

As luck would have it, the sky just fell yesterday — right on the head of Honeywell — and the EEOC is indicating more lawsuits are to come.

The scary part: Unlike the wacky wellness program described in the column two months ago, Honeywell was in compliance with the Affordable Care Act. Compliance with the ACA doesn’t seem to get you a free pass on the EEOC’s own “business necessity” requirement. Essentially, the Honeywell lawsuit means no company doing invasive biometric screenings and mandating doctor visits or measuring health outcomes is immune to prosecution, even if it is in compliance with ACA.

The even scarier part: The EEOC is correct that, as this column has noted for almost two years now, wellness programs mandating overscreening and annual checkups have no business necessity. In fact, these “employer playing doctor” programs can harm employees, because:

  • A workplace screen can find heart attacks… but at the cost of a million dollars apiece, when emotionally draining false positives and potentially hazardous overtreatment are taken into account;
  • The Journal of the American Medical Association recommends against mandatory checkups;
  • An embargoed, peer-reviewed article that will be published soon in a major journal concludes that the costs and unintended health hazards of weight control programs generally overwhelm the benefits.

Companies could still claim business necessity if, indeed, these programs save money despite the harm to employees. (OSHA might raise issues, but those are hypothetical whereas EEOC is an elephant in the room.) And a few of you might ask: “Didn’t Seth Serxner of Optum and Ron Goetzel of Truven just write a journal article and show a webinar saying: ‘The overwhelming majority of published studies show positive results’?”

Unfortunately, those “positive results” — as is well-known to the presenters, who, after all, have access to the Internet — fail any sniff test.

These two true believers continue to cite Professor Katherine Baicker even though she has stepped back three times from her old (2009) conclusion that wellness provided a significant return on investment (ROI), including a “no comment” to ITL’s own Paul Carroll. More recently, she has, with great justification, blamed overzealous readers for selectively interpreting her findings. Goetzel also continues to cite the state of Nebraska, which his committee gave an award to as a “best practice” despite the revelations that the state’s vendor lied about saving the lives of cancer victims and that the vendor also paid off his award committee with a sponsorship. Likewise, Goetzel’s misinterpretation of a RAND study has drawn a rebuke from the author of the study, in a coming letter to the editor. [Editor’s Note: ITL emailed a link to this article to the press offices at both Truven and Optum on Oct. 30 offering them a chance to respond to the author’s allegations. Both were told that they could either comment at length in this article or could write separate articles that would lay out their position and that ITL would publish. Neither company has yet responded.]

Clearly, the EEOC is on to something about a lack of business necessity, when even the alleged best-and-brightest wellness defenders are forced to rely on misstatements and half-truths. Not to mention selective omissions — the presentation’s extensive section on “critics” had no mention of me, despite a recent cover story citing me as the field’s leading critic, because both these two presenters know my math is irrefutable. These industry defenders also have spotty memories, as when they claim that it is valid to compare the performance of active, willing participants against a control group of unmotivated non-participants and dropouts — forgetting that they gave out a Koop Award to one of their sponsors who showed exactly the reverse.

Inoculating Your Programs

A problem with the EEOC does not have to happen to you or your clients (if you are a broker). Taking three steps — the first of which is free and the second of which costs only in the four figures — essentially guarantees that you will not end up on the hot seat with Honeywell.

First, sign and adhere to the Workplace Wellness Code of Conduct.  This will allow you and any clients to focus your own efforts on avoiding employee harm and creating a framework for business necessity. This document is provided gratis for ITL readers, from the author.

Second, employers who sign this and get at least one vendor/carrier to sign and implement its counterpart, the Workplace Wellness Vendor Code of Conduct, can have their own outcomes validated by the GE-Intel Validation Institute (itself the subject of a forthcoming ITL posting), to create an audit trail that, in fact, outcomes are being measured.

Third, I personally — along with colleagues — will do an in-depth  walkthrough to see if, indeed, your wellness program complies with U.S. Preventive Services Task Force guidelines. If not, we will provide a list of next steps to get into compliance.

The inoculation? A six-figure guarantee that you (or your client, if you’re a broker) will not be the subject of a successful EEOC lawsuit. Besides providing some protection on its own, this level of financial commitment may create a self-fulfilling prophecy. Your actions will be a pretty convincing piece of evidence that business necessity and employee health are the goals, as measured by an objective and qualified third party.

Yes, I know it’s not always about me; you can protect yourself in other ways. My ex was quite clear on the subject of whether it’s always about me.

However, in this case, my ex would seem to be wrong. It appears that every screening vendor, every alleged wellness expert and most of those in large benefits consulting firms have done just the opposite of what I’m suggesting: They have proposed massive wellness programs with hefty financial incentives or penalties that get companies into fine messes like Honeywell’s. But, in case I’m wrong, I welcome names, websites and contact information of other consultants taking the same approach that I am. Please note them in the comments boxes below.  All will be published.

PEX Water Pipes: 6 Ways Insurers Must Manage Risks

Second to a building fire, water system failures are the most expensive perils in the construction insurer’s risk portfolio.  But there is little incentive for anyone to protect the insurer: After the engineering design for a plumbing system is done, the contractors are only liable for workmanship, and the manufacturer is only liable for materials. The insurer is liable for everything else.

The insurer must be aware of the pitfalls of a water system installation to both write the exclusions and investigate for liable cause in the event of a failure.

This article discusses a very popular plumbing material commonly referred to as PEX and addresses issues that may not be found in the actuarial tables.

PEX stands for “cross-linked polyethylene.” It is a relatively new material (less than 20 years) that has gained widespread acceptance in new construction piping and renovation re-piping for potable water systems. The reasons are obvious – PEX has flex; it is inexpensive; and the installation is fast, simple and reliable. Also, PEX will not burst in freezing conditions like CPVC or copper. PEX installations older than 30 years are common in Europe, with an excellent reliability record. PEX is especially desirable on re-pipes because it can greatly reduce the size of intrusions into walls, as plumbers can snake the material across smaller openings.

Unfortunately, there is some vulnerability that the insurer needs to be aware of. While we would always recommend obtaining a professional engineering opinion for assessing a PEX system, this short article will help the insurer understand what PEX is and how to evaluate the big vulnerabilities to using it: brass fittings, UV exposure, water quality and even vermin!.

Advantages

Cross-linked polyethylene is a modification of polyethylene plastic commonly found in children’s playground equipment. Cross-linking means that the individual “mers” in the “polymer” are bunched up into knots instead of aligned in one direction. This knotting allows the material to return to its original size and shape after being stretched. This is great for holding on to fittings, bending around corners and expanding under pressure, heat or even freezing conditions.

PEX is very fast to install and can be threaded through walls without having to necessarily cut out large sections of wallboard. Connections can be inspected visually with great reliability, and precise measurement is not as critical as it is with materials such as copper and CPVC. PEX has been widely used for several decades, with broad acceptance in the market and universal familiarity in the plumbing trade. Many different companies support PEX products with accessories and connectors such as manifolds, hangers and specialty adapters.

Concerns — and Answers

PEX is clearly not without its own problems. Fortunately, many of them may be avoidable. In the engineering profession, we understand that it is rare for one single problem to cause a failure; rather, it is the combination of two or more problems that lead to the major accidents. Many times, accidents occur when one party does not communicate with another. With PEX, the owner, contractors, builders, maintenance personnel, etc. must be aware of the system configuration and have a plan for interacting with the system.

An insurer can have a strong impact in this area by specifying full disclosure of the hazards. For this reason, engineering counsel is often warranted in a complex system, to assist in assessing risks. Here are six areas that need to be addressed:

— One risk is dezincification of the brass used in fittings. When the zinc content in the brass (an alloy of copper and zinc) is too high, it can corrode away. That leaves a weak and porous copper shell, which can lead to failure conditions ranging from persistent leaks to catastrophic breach of a pressurized line.  At least one class action was filed against the makers of a particular brass fitting that was failing in service and causing substantial property damage. The root cause was found to be the dezincification of fittings (generally purchased in big box hardware stores and made cheaply overseas). This suit was settled for $90 million.

The problem of dezincification is now easily avoidable. The owner of a building should specify low-zinc brass fittings or use “engineered plastic” fitting components.

— PEX was also suspected of leaching controversial chemicals such as MBTA, TBA and BPA that are considered toxic. While we cannot testify to the specifics of this claim, the state of California has banned PEX in many buildings. Given the segmented nature of permitting jurisdictions in the U.S., insurers should be aware of these concerns.

It is generally accepted that of the three types of PEX (called type A, B and C), type B is the only formulation that does not have any leaching considerations. Leaching concerns can be avoided by giving proper attention to leaching considerations as well as strength and temperature ratings among the three varieties. Insurers should be diligent about knowing what type of PEX is being used.

— The stabilizers in PEX are highly vulnerable to breaking down under UV radiation — while some sources may claim that some UV exposure is acceptable, we advise that all precautions should be taken to shield this material from UV rays. Even fluorescent lamps and CFLs are to be avoided, especially where piping is routed through a ceiling and may interact with recessed fluorescent lighting. There are many shielding products available to solve this problem. However, PEX is best-suited to total darkness. An insurer can easily specify protection from UV.

— PEX is also known to be slightly vulnerable to chlorinated water and possibly copper ions, resulting from copper corrosion upstream. The temperature rating of the water must be strictly adhered to. Alone, these factors may not be worrisome in many applications. However, when combined with other aggravating factors, the aggressiveness of the water may amplify hazard potential. A test of water chemistry is advisable.

— Most reputable builders will shield a PEX installation to keep a future owner or contractor from, say, hammering a nail into the wall and hitting the PEX. Homeowners should be aware of the potential to cause a leak by intruding through a wall with a nail or saw. Some contractors will use a thermal measurement device to identify water piping before cutting into a wall for any other reason. It is important for everyone who can interface with the system to know where PEX pipes are before cutting into a wall.

— We have seen several instances where mysterious leaks appear in PEX installations when rodents are exterminated. The poison that is often used to kill small animals causes them to become very thirsty and seek water. Rats appear to be especially clever and can discern the sound of water flowing through PEX pipes – then rapidly chew through the PEX to access water. Make sure that all hired contractors — from electricians to exterminators — are licensed and experienced when interacting with a building that has a PEX system.

Conclusion

It can be seen that failures will most likely occur from the combination of two or more seemingly unrelated problems. It is rare that any single person or contractor is aware – on a scientific basis – of all these factors and the way that they can interact with each other. The owner of a building or maintenance personnel cannot be expected to know all of these details – they just install what they buy at the supply shop. It is important that the insurer is aware and able to assess or mitigate the vulnerabilities of PEX and watch the installation closely. A vigilant insurer will retain engineering counsel to oversee building specifications, construction, maintenance and forensics.