Tag Archives: wellness program

Working From Home Poses Tricky Issues

There’s no shortage of evidence that homeworkers appear to make happy employees, because of, among other things, flexibility, empowerment and better time management. According to experts (http://globalworkplaceanalytics.com/resources/people-telecommute), an estimated three million American professionals never set foot in an office outside of their own home, and 54% say they are happier that way. But what about the 46% who aren’t happier?

Almost 12 months ago, I wrote (http://www.riskandinsurance.com/struggling-stress/) on the topic of stress, and how the increased use of homeworking might be good for productivity, but not necessarily so good for the employee. Isolation, work insecurity and lack of personal contact are good ingredients for increased work-related anxiety. Beyond this are the issues of poor working conditions, bad posture, working through sickness and substance abuse (which may be as simple as excessive caffeine but could be worse, much worse).

Employers usually seek to discharge their obligations by providing guidelines to homeworkers, and the better ones also encourage self-appraisals, which are shared with managers. But to what degree are these processes merely lip service? Isn’t self-appraisal a dodgy process at the best of times? To what extent would a homeworker be candid about a medical or emotional condition, which might hurt their bosses’ view of them? Are homeworkers really best placed to comment on their own posture? What other risks might emerge from homeworking, which don’t feature in a self-appraisal, such as tripping over the dog?

Legislation places a duty of care on employers. Losses arising because of failure in discharging that duty of care give rise to liabilities that may be covered under an insurance policy. It’s a fine balance between an organization empowering its employees, and leaving itself open to liability, and there’s little doubt that homeworking carries with it a significant amount of trust.

There’s no clear answer. Some suggest that answers might rest in site visits, furniture provided by the employer, enforced breaks, fixed working hours and wellness programs as an integral part of an employment contract. But don’t options like these create other issues?

How does the idea of fixed working hours apply to individuals working across multiple time-zones, which often result in exceptionally long days? In the absence of fixed working hours, could an employee successfully argue that almost any injury in the home has occurred during the course of their work?

How proactive can and should employers be? Providing office furniture that allows an employee to sit, stand or even walk brings new risks, especially where ergonomic experts cite potential injury problems. Wellness programs can compensate for sedentary lifestyles, and normally injuries that occur through work-funded wellness programs are not a matter for insurers as they have occurred outside normal working hours – but what if the wellness program has been mandated by the employer as part of an employment contract?

It’s clear that employers cannot contract out of their obligations, and, with the number of homeworkers predicted to rise by 63% in the next five years, doesn’t the insurance industry need to think more about this particular aspect of the future? Is there a role for technology as part of the solution? Perhaps some form of workforce analytics has a part to play – maybe even telematics for teleworkers – but were such a thing to emerge, wouldn’t the concept of “home” and “work” as two separate entities disappear completely?

2 Studies of Why Wellness Fails

Henry David Thoreau famously said, “Most men lead lives of quiet desperation…”

People who lead desperate lives don’t make good subjects for wellness programs, nor, for that matter, lifestyle advice from doctors. Below are two real life examples of ordinary people I’ve chatted with about matters of personal health. After both of these conversations, I was quite humbled.

Case 1

I had a chance conversation with a pleasant but overweight woman I’ll call Donna, a cashier in a big city grocery store, who was about 50 years old. We were having a nice chat, and I asked her if she had opportunities to exercise after work. Donna said that, after being on her feet all day, she had to go home and put her feet up. That prevented her from having much of a social life, too. Donna said she would never have a better job, that she’d never buy a new car, nor afford vacations or holiday trips. Her rent was so high, it was all she could do to makes ends meet. Donna said her only fun in life was buying a take-home pizza and a six pack of beer once or twice a week. Take that away, and Donna said she had nothing. Truthfully, and sadly, in my heart I could not blame her.

Case 2

A few years ago I had a lengthy cab ride in Baltimore and struck up a good conversation with the cab driver, a friendly, middle-aged man I’ll call George. He asked what I did for living, which resulted in a good chat about personal health. George smoked, had high blood pressure and diabetes and was overweight. He said he’d tried to get those things under control but just couldn’t. The interesting part of the story is why he couldn’t control his health risks. George said he’d lived in Baltimore all his life and had the same set of friends since grade school. One night a week, they’d go bowling, eat huge meals and drink way too much beer. Also, once a week or so they’d go to a sports bar and do the same thing. George truly believed he’d have to give up his lifelong friends if he were to cut out that lifestyle. He knew it was slowly killing him, but he just wasn’t willing give up. It was hard to blame him either.

Those are two true stories of people trapped in a lifestyle they can’t or won’t willingly forfeit. Huge numbers of people are in the same boat.

Some people are going to comply with doctor suggestions on lifestyle without any help at work. But, if Thoreau is right, there are many people out there like Donna and George.

Bad lifestyle choices can be terribly complex. They virtually never arise from the lack of the kind of information that wellness vendors push as the solution.

New Wellness Scam: Value on Investment

What do you do if your entire industry has a negative ROI? If your industry and its lack of ROI have been skewered in the media? If even RAND, which is the most neutral, grownup organization in all of healthcare, now says your industry, wellness, produces no savings and no reduction in utilization of healthcare services? If your leadership group accidentally proved their own industry loses money for its customers? If, on this very site, Insurance Thought Leadership, your patron saint, Harvard professor Katherine Baicker, professes to have no interest in wellness any more, now that her work has been eviscerated?

What do you do if there is a proof that saving through wellness is impossible, and another proof that, even if savings were possible, there haven’t been any? If these proofs are backed with a $1 million reward for anyone who can disprove them?

Here’s what you do: You change the rules so ROI doesn’t matter any more.

The new mantra is “value on investment,” or VOI. The Willis Health and Productivity Survey published this week claims that 64% of employers do wellness for VOI – specifically, “employee morale” and “worksite productivity.” (The survey also mentions “workplace safety.” I guess the workplace is safer if no one is working because they are all out getting checkups.)

But the darnedest thing is, all the data shows that the best way to really get value on your investment is to cancel your “pry, poke, prod and punish” wellness program.

Employee Morale

Have you ever seen employees demand more blood tests? More Health Risk Assessments (HRAs)? More weigh-ins? Quite the opposite. This shouldn’t be a newsflash, but employees hate wellness programs, except for the part where they get to collect employers’ money. As a CEO myself (of Quizzify), I pride myself on our corporate culture. The last thing I would do is force my employees into a wellness program. It would destroy the camaraderie we’ve established.

Obviously, if employees liked wellness, you wouldn’t need large and growing incentives/penalties to get people to participate. Employees dislike wellness programs so much that collectively they’ve forfeited billions of dollars just to avoid these programs.

Anecdotes often speak more loudly than data, and employee morale anecdotes are easy to come by. Simply look at the “comments” on quite literally any article in the lay media involving wellness programs. It’s usually about 10-to-1 against wellness, with the “1” being someone who says: “Why should I pay for someone who’s fat?” or something similar. Or the positive comment comes from a wellness vendor or consultant. You know an industry is bogus when the only people who defend it are people who profit on it.

The weight-shaming involved in wellness programs is, of course, a huge fallacy. Among other things, except at both extremes, there is only a slight correlation between weight and health expense in the under-65 population — the problems associated with weight show up later, typically after people leave the workforce. Assuming major differences among employees would lead to underwriting every individual-marathoners who might get injured, women who might get pregnant, etc. Take the fallacy out, and there is nothing that the American public-left, right and center – is more unified on than detesting wellness.

Workplace Productivity

You’re already pulling people off the line to do the “pry, poke and prod” programs and send them for checkups that are more likely to harm employees than benefit them. So productivity takes a hit to begin with. Add to that the weight-shaming and ineffectiveness of corporate weight-loss programs.

Most importantly, it turns out – according to the Integrated Benefits Institute, a wellness industry association – that the major contributor to low productivity is depression:

chart

Maybe this is just me, but if I were running a company where workers were depressed, I probably wouldn’t try to address depression by implementing a program that workers were going to hate, which is sort of a “the beatings will continue until morale improves” approach to management. I’m just sayin’…

The other noteworthy observation? Anxiety has a big impact on productivity. Wellness programs pride themselves on how many diseases they find. This practice is called hyperdiagnosis. The goal is to scare as many employees as possible into thinking they’re sick. The C. Everett Koop-award-winning Nebraska state wellness program, for example, bragged about how it found that 40% of employees were at risk. However, the program didn’t do anything about the finding, and a year later only 161 employees in the entire state had reduced a risk factor. The vendor, Health Fitness Corporation, also bragged about all the cancer cases it found and all the lives it saved, until admitting the whole thing was made up.

Once again, it’s not clear how a wellness program would reduce anxiety and increase productivity. Or maybe I’m wrong. Maybe there’s nothing like being told you are at risk of dying to really focus you on clearing your inbox before you croak.

Conclusion

Pretending there is a VOI looks to be even sillier than pretending there is an ROI, because wellness neither increases morale nor improves productivity.

All of this brings us back to what we’ve been saying for years-especially on this site, which was willing to post our stuff long before it was popular to do so: Do wellness for your employees and not to them.

The latter doesn’t work no matter what initials you use. But if you want to improve morale and productivity, up your game for perks, subsidize healthier options for food and maybe even directly subsidize a portion of gym memberships. And maybe teach your employees how to spend their healthcare dollars more wisely. (Disclosure: That is the business we are in.)

What do you do if your entire industry has a negative ROI? If your industry and its lack of ROI have been skewered in the media? If even RAND, which is the most neutral, grownup organization in all of healthcare, now says your industry, wellness, produces no savings and no reduction in utilization of healthcare services? If your leadership group accidentally proved their own industry loses money for its customers? If, on this very site, Insurance Thought Leadership, your patron saint, Harvard professor Katherine Baicker, professes to have no interest in wellness any more, now that her work has been eviscerated?

What do you do if there is a proof that saving through wellness is impossible, and another proof that, even if savings were possible, there haven’t been any? If these proofs are backed with a $1 million reward for anyone who can disprove them?

Here’s what you do: You change the rules so ROI doesn’t matter any more.

The new mantra is “value on investment,” or VOI. The Willis Health and Productivity Survey published this week claims that 64% of employers do wellness for VOI – specifically, “employee morale” and “worksite productivity.” (The survey also mentions “workplace safety.” I guess the workplace is safer if no one is working because they are all out getting checkups.)

But the darnedest thing is, all the data shows that the best way to really get value on your investment is to cancel your “pry, poke, prod and punish” wellness program.

Employee Morale

Have you ever seen employees demand more blood tests? More Health Risk Assessments (HRAs)? More weigh-ins? Quite the opposite. This shouldn’t be a newsflash, but employees hate wellness programs, except for the part where they get to collect employers’ money. As a CEO myself (of Quizzify), I pride myself on our corporate culture. The last thing I would do is force my employees into a wellness program. It would destroy the camaraderie we’ve established.

Obviously, if employees liked wellness, you wouldn’t need large and growing incentives/penalties to get people to participate. Employees dislike wellness programs so much that collectively they’ve forfeited billions of dollars just to avoid these programs.

Anecdotes often speak more loudly than data, and employee morale anecdotes are easy to come by. Simply look at the “comments” on quite literally any article in the lay media involving wellness programs. It’s usually about 10-to-1 against wellness, with the “1” being someone who says: “Why should I pay for someone who’s fat?” or something similar. Or the positive comment comes from a wellness vendor or consultant. You know an industry is bogus when the only people who defend it are people who profit on it.

The weight-shaming involved in wellness programs is, of course, a huge fallacy. Among other things, except at both extremes, there is only a slight correlation between weight and health expense in the under-65 population — the problems associated with weight show up later, typically after people leave the workforce. Assuming major differences among employees would lead to underwriting every individual-marathoners who might get injured, women who might get pregnant, etc. Take the fallacy out, and there is nothing that the American public-left, right and center – is more unified on than detesting wellness.

Workplace Productivity

You’re already pulling people off the line to do the “pry, poke and prod” programs and send them for checkups that are more likely to harm employees than benefit them. So productivity takes a hit to begin with. Add to that the weight-shaming and ineffectiveness of corporate weight-loss programs.

Most importantly, it turns out – according to the Integrated Benefits Institute, a wellness industry association – that the major contributor to low productivity is depression:

chart

Maybe this is just me, but if I were running a company where workers were depressed, I probably wouldn’t try to address depression by implementing a program that workers were going to hate, which is sort of a “the beatings will continue until morale improves” approach to management. I’m just sayin’…

The other noteworthy observation? Anxiety has a big impact on productivity. Wellness programs pride themselves on how many diseases they find. This practice is called hyperdiagnosis. The goal is to scare as many employees as possible into thinking they’re sick. The C. Everett Koop-award-winning Nebraska state wellness program, for example, bragged about how it found that 40% of employees were at risk. However, the program didn’t do anything about the finding, and a year later only 161 employees in the entire state had reduced a risk factor. The vendor, Health Fitness Corporation, also bragged about all the cancer cases it found and all the lives it saved, until admitting the whole thing was made up.

Once again, it’s not clear how a wellness program would reduce anxiety and increase productivity. Or maybe I’m wrong. Maybe there’s nothing like being told you are at risk of dying to really focus you on clearing your inbox before you croak.

Conclusion

Pretending there is a VOI looks to be even sillier than pretending there is an ROI, because wellness neither increases morale nor improves productivity.

All of this brings us back to what we’ve been saying for years-especially on this site, which was willing to post our stuff long before it was popular to do so: Do wellness for your employees and not to them.

The latter doesn’t work no matter what initials you use. But if you want to improve morale and productivity, up your game for perks, subsidize healthier options for food and maybe even directly subsidize a portion of gym memberships. And maybe teach your employees how to spend their healthcare dollars more wisely. (Disclosure: That is the business we are in.)

Tips on Evaluating a Wellness Program

This is news you can use.

If you want to evaluate the cost/benefit ratio of a wellness program, the following is a list of costs that are almost always overlooked in wellness evaluations. These are not the only things that need to be evaluated, just the ones most commonly overlooked.

When the items in the following list are fully considered, wellness evaluations can look entirely different.

1. The cost of staff hired to manage the program. A rule of thumb is to multiply their salary times two to account for FICA, benefits, office space, training, workers comp, management, etc.

2. The cost of wages for workers while attending wellness events at work. One company I looked at was spending about $175 per employee per year on this, not a trivial sum.

3. The opportunity cost of the HR staff running the program.

4. The full cost of wellness communications. Sending wellness communications to people at work has a wage cost. See #2 above.

5. The total cost to evaluate the program periodically.

6. The cost of false positives, which come from sending employees to doctors when they’re not sick. This is especially pernicious if you’re paying for wellness exams for employees. At one company, the cost of the false positives, sometimes as high as $80,000 per event, nearly cost more than the physical exams themselves. You have to examine claims data to see this.

7. If you have a fitness center, you need to take into account sports injuries for users. (Understanding this also involves access to claims data.) I’ve evaluated the impact of fitness centers for three very large companies. Taking into account sports injuries, etc., you could not make the case for an ROI for any of the three of them. In one company, we examined claims data on a) moderate or occasional fitness center users, b) people who used the fitness center regularly, and c) nonusers. Nonusers had the lowest average medical costs. Moderate users had higher medical costs than nonusers and regular users had the highest medical costs, a perfect reverse correlation.

Surveys of employees are notoriously unreliable. They measure employee opinions, at best, and opinions are not facts. As we all know, sometimes in employee surveys people will say what they think the surveyor wants to hear.

Medical claims and sick pay data are about the most meaningful ways to measure wellness outcomes. Short- and long-term disability data can be useful, too, as can life claims experience when compared with norms. If you only use employee surveys and other surrogate data, too bad.

I met an actuary who spoke at a conference on this topic and used the measurements above to evaluate wellness programs. He said he’d never seen one that had a positive ROI, except ones that used payroll deduction penalties.

Wellness War Is Over; Wellness Lost

What if we told you that “pry, poke, prod and punish” wellness programs are bad for morale, damage corporate reputations and cost more money than they save?

You’d say: “Al, you, Tom Emerick and more recently Vik Khanna have been telling us that for years.” You might add: “And while your opinions are usually well-reasoned and based on good data, we’d have to hear the true believers’ side of the story.”

But what if we told you: “That is the true believers’ side of the story”?

Yep, the wellness industry’s leading luminaries – 39 of them, representing 27 vendors and one consulting firm (Mercer) — have all gotten together under the aegis of both their trade associations – Health Enhancement Research Organization (HERO) and Population Health Alliance (PHA) — and reached that “consensus.”

We don’t know if they simply didn’t read their own report before reaching this consensus, or whether they just all decided to tell the truth. Frankly, we’re fine either way. (This is also the second time in five months that a major wellness true believer admitted wellness doesn’t save money. The first time was a meta-analysis in the American Journal of Health Promotion that concluded that “randomized clinical trials show a negative ROI.” After we started quoting the analysis, the editor wrote a 2,000-word essay walking it back.)

Because our claim that we are laying out “the true believers’ side of the story” would otherwise require a certain suspension of disbelief, we are going to rely more heavily than usual on screenshots. We also recommend reading the report itself, or at a minimum our analyses of it. (Our analyses are going to be a 10-part cycle. Make sure to “follow” the website They Said What? to not miss a single episode.)

Page 10 of the report lists 12 elements of cost. The first element itself contains about 12 elements, making this a list of 23 elements of cost. (Add consulting fees, which were overlooked even though three Mercer consultants sat on the committee and even though page 14 calls for use of “consulting expertise,” and you get 24.)

You’ll see damage to employee morale and corporate reputations listed as “tangential costs.” But, as two people who run a company, we would call damage to those intangibles much more than tangential. Our company runs on morale. Pulling people away from their workstations to poke them with needles, weigh them, measure their waists and test to see if they are lying about their smoking habits couldn’t possibly be good for morale.

We are equally curious about the blithe dismissal of legal challenges as a tangential cost. No firm wants its name dragged across the wire services because it is being sued for its wellness program (just ask CVS and Honeywell). Getting dragged into the courts (and, hence, the media) for running a wellness program isn’t a tangential cost — and it’s an unforced error.

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On Page 15, as the report discusses how to measure the return on investment, the authors select only one of those 24 costs – vendor fees – as the basis for comparison. Omitting the other 23 costs, plus incentives, makes it easier to show an ROI. The fees are listed as “$1.50 per employee per month,” or $18 a year, even though the rule of thumb is that wellness programs cost many hundreds of dollars per employee per year.

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Further in, on page 23, the authors list the related savings: $0.99 per “potentially preventable hospitalization,” abbreviated as PPH. (The fact that we have to do the math on our own by comparing figures across pages suggests this admission of losses was a gaffe rather than deliberate honesty.)

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The savings figures are based on reductions in event rates that (1) are about twice what typically gets achieved; and (2) somehow overlook the natural decline of 3% to 5% a year in cardiac events even without a wellness program.

Even without adjusting for those two mistakes, savings fall $0.51 PMPM short of vendors fees alone.

And losing $0.51 per employee per month is the best-case scenario. The “savings” includes benefits from disease management (which is not covered by the $1.50 PMPM in vendors fees), and omits the offsetting costs of all the extra doctor visits that come from overdiagnosis and overtreatment.

So, here are the two conclusions:

  • According to proponents’ own consensus, wellness loses money.
  • Even worse, their savings are wildly overstated (yes, according to government data), and their costs, by their own admission on page 10, are wildly understated.

Don’t take our word for either of these. Write to us, and we will send you an ROI spreadsheet that you can use to do your own calculations.

One way or the other, what RAND’s Soeren Mattke called the wellness wars are over. Wellness has surrendered.

How Will the Wellness Industry Respond?

HERO and its assembled luminaries will probably ignore this gaffe, to prevent a news cycle that their customers might notice. However, if the problem gets covered broadly, they will respond. This was their modus operandi the last time they got “outed.” We had shown them in 2011 that one of their key slides, for which they even gave themselves an award, was made up. We presented our proof many times and even put it in both our books…but it wasn’t until Health Affairs shined a bright light on it that they acknowledged wrongdoing. They said that the slide “was unfortunately mislabeled” by an as-yet-unidentified culprit, but that no one noticed for four years. (Rather than relabeling the slide in a “more fortunate” way, they took the slide off the site.)

To clarify that their position is indefensible, we have offered a reward of $1 milliion for them to simply convince a panel of Harvard mathematicians that they have any idea what they are talking about beyond the fact of the gaffe itself.  Their refusal to claim this reward speaks volumes.

Implications for Brokers

The implications for brokers are profound. First, stop placing wellness programs — or at a minimum get a “release” from your clients saying that they’ve read this article but want to proceed anyway. The disclosure by the wellness industry’s own trade association that wellness loses money increases your liability because you “knew or should have known” that losses were to be expected. Second, you can probably offer your client the chance to abrogate vendor contracts, especially if the vendor was one of the 27 that reached this “consensus.” That might reduce your revenue in the short term but will cement your relationship. And you want your clients to find out about wellness’ problems from you, not from the media.

But whatever else you do, follow future installments here on Insurance Thought Leadership as we plow through this report and deconstruct more of not just their crowd-sourced math but also of their crowd-sourced alternative to reality, in which prying into employees’ personal lives, poking them with needles in blatant disregard for government guidelines, prodding them to get worthless checkups and punishing them when they don’t is all somehow going to save employers millions of dollars.