March 3, 2014
Wellness: An Industry Conceived in Lies, Retractions and Hypocrisy
by Al Lewis
The wellness provision of the Affordable Care Act was based on the success story at Safeway and a seminal article in Health Affairs -- both of which turn out to be made up.
Wellness has failed. Get used to it.
Understanding why wellness has failed requires a brief history lesson of the wellness provision of the Affordable Care Act (ACA). The wellness provision was based on the success story at Safeway and a seminal article in Health Affairs — both of which turn out to be made up.
To begin this series on the failure of wellness programs, let’s look at Safeway, which is so central to the ACA wellness provision that the provision is sometimes called the Safeway Amendment. The Safeway CEO, Steven Burd, claimed to have reduced healthcare spending by 40% using a wellness program. He wrote an op-ed in the Wall Street Journal, testified before Congress and became friends with President Obama even as Sen. John McCain also cited Safeway as a role model. The slight problem with all of this: Safeway’s claim was absolutely, unequivocally, made up.
A front-page article in the Washington Post pointed out that the wellness program didn’t even exist at the time Safeway’s healthcare costs fell. Instead, the decline in corporate spending was because of the implementation of a high-deductible plan, shifting cost to employees. (Curiously, once Safeway actually did implement a wellness program, its health spending rose faster than average. This was probably a coincidence because, even today, only a small fraction of Safeway’s workplace participates in the program.
Next came the seminal article in the prestigious journal Health Affairs, written by equally prestigious Harvard economists Katherine Baicker and David Cutler. The article was titled, “Workplace Wellness Programs Can Generate Savings.” Not “could possibly generate savings” or “may generate savings on a good day,” but “can generate savings.” These economists reviewed all the published evidence and reported quite a definitive “3.27-to-1” return on investment from wellness.
This article is easily invalidated on two points. First, the overriding rule of a study is that it must be replicable. This article was published four years ago and has yet to be replicated. Quite the opposite: Every subsequent article in Health Affairs has shown that even with the most generous assumptions imaginable, like leaving many elements of cost out of the ROI calculation, wellness doesn’t save money.
Second, in July, lead author Baicker had enough sense to walk back the article’s conclusion, saying on NPR’s Marketplace that “it’s too early to tell” if there are savings. She also said that employers need to “experiment” to “see what happens with weight and blood pressure.”
Besides the retraction, two other things about this interview invalidate wellness:
- Biostatistics 101 states that the smaller the effect, the larger the population needed to show it. To admit after decades of wellness programs involving millions of people that “it’s too early to tell” means that whatever effect there is (if any) would be very subtle, so subtle that it couldn’t possibly merit an entire industry and significant workplace disruption to achieve it.
- Except at the extremes, for which a companywide wellness program isn’t needed, “weight and blood pressure” have almost no effect on corporate healthcare spending. Corporate spending on overweight people, during their working years, may be greater than for thinner people (the evidence is mixed), but there is no evidence that weight loss across an employee population can be maintained, and the reverse is usually true—most people who lose weight regain it. Controlling blood pressure is far more likely to increase corporate spending than reduce it. Rates of stroke in the working-age population are disappearingly low to begin with, and the cost of a stroke is far lower than the cost of controlling the blood pressure of 1,000 employees to prevent one. (Some companies will say they are “medicalizing their workplaces” for humanitarian reasons and not to save money, which is laudable…though, as subsequent installments in this series will show, misguided. In any event, the article was about saving money.)
Along with Safeway’s lie and Baicker’s retraction comes the Business Roundtable’s hypocrisy. The Business Roundtable was and is the major lobbying force in favor of wellness. Claiming they want to “help people” and “foster a culture of health” for “employees and their families” while opposing ACA and the minimum-wage increase is not even the hypocrisy here. The hypocrisy is that the head of the Business Roundtable’s health committee, Gary Loveman, is also the CEO of Caesars Entertainment. In that “day job” running a chain of casinos, he poisons more employees with second-hand smoke than any other CEO in the U.S.
Perhaps he feels that health hazard is more than offset by the meaningless seven-point reduction in blood pressure that he says wellness has achieved for the small segment of active participants committed enough to stay with the program. (He didn’t measure the dropouts and non-participants, whose results may not have supported his narrative.) A skeptic might therefore conclude that Business Roundtable CEOs support wellness only because it provides an excuse to dock some workers 30% of their health premium, and pocket it themselves.
To wrap up Part One, the entire premise of employers “playing doctor” by medicalizing their workplaces is invalid. It is no wonder, then, that the science and outcomes are made up, as well – those are topics for future installments. However, if you stay with this series (or cut to the chase and read the book), you’ll find that there are solutions, and those solutions incorporate everything that wellness doesn’t – science, morale and cost-effectiveness – while emphasizing the role of the broker and consultant in designing the benefit.