Recently we promised a Part 2 to our original proof that wellness savings are mathematically impossible. Commenters said: “How can you have a Part 2 to a proof? You just proved it.”
The previous proof showed wellness can’t save money, even if programs were perfect. This installment proves that even if wellness could save money, it hasn’t. Meaning even if wellness were free, it couldn’t pay for itself. So this proof is independent of the previous proof. For wellness to save money, the wellness true believers would have to find fallacies in both proofs. Either is sufficient to make our case…but we have both.
Quite literally, forcing employees to “do wellness” or lose money has avoided basically zero wellness-sensitive medical events in the 13 years ending 2013 (2014 data isn’t in yet), according to the federal government. If the name “federal government” sounds familiar, it’s because it’s the very same federal government that has passed a law encouraging vendors to pitch “pry, poke and prod” programs to you despite their complete lack of evidence basis, lack of effectiveness, and potential for harm.
Here is the way our analysis was done. We used the government database called the Healthcare Cost and Utilization Project, or HCUP. That database tracks all hospitalizations due to all causes, by population. So it is possible to focus on just the commercially insured population, which they call “privately insured.”
The privately insured population is 100% sensitive, meaning everyone whose workplace “offers” wellness is in that database. The database isn’t specific, meaning plenty of people in it do not have access to wellness. Nonetheless, the dramatic increase over the 13 years in the number of people whose employers push wellness should produce an equally dramatic decrease in wellness-sensitive medical events. While wellness was rare at the start of this analysis in 2001, today most large companies, nonprofits, and governments have wellness. In total, one can project from the Kaiser Family Foundation data that about 75-million people (or roughly half of all privately insured people) are subject to what Jon Robison has termed wellness-or-else.
Keep in mind that all hospitalizations have been declining over this 13-year period, due to shifts to outpatient, better usual care, etc. So the question is not whether WSMEs have been declining, but whether they have been declining faster than the rates of all other hospitalizations in combination.
Instead, as you can see, these WSME admissions have trended essentially flat over the period, as a percentage of all admissions. In other words, there is no difference between the decline in admissions for WSMEs – despite $7-billion/year being spent on vendors to prevent them – and the declines in every other category of hospitalization. 13 years ago about 6.9% of events were wellness-sensitive. Now it’s about 7.0%. (This is 2013. 2014 is also in, for our customers for whom we track WSMEs, and shows no change.)
This is based on ICD9s 401-405, 410, 430-438, and 250 — strokes, hypertensive events, heart attacks, and diabetes events.
Prima facie, the debate is over, again, just like it was over after our last proof.
Needless to say, the true believers aren’t about to give up their revenue stream just because we’ve double-proved they’re fabricating savings. They will make two arguments against this proof of their own ineffectiveness. First, they’ll argue that wellness reduces all events and other costs equally, so really we should credit wellness for the total cost reduction, not the reduction in just wellness-sensitive admissions. This might seem like a pollyannish view of wellness, but wellness true believers attribute everything that’s good to wellness. True believer Bruce Sherman has even argued that wellness actually reduces industrial waste, so to a wellness true believer, eating more spinach makes every employee a Popeye.
Unfortunately for Bruce and others, the wellness industry’s own HERO report says wellness can only reduce WSMEs. Other costs go up, it says:
Second, one could argue that there isn’t enough penetration of wellness yet to bend this trend, since the HCUP privately insured population includes tons of people without access to wellness, and even many people with wellness access refuse to participate.
Unfortunately, that argument self-immolates. Vendor fees are $7 billion. All these WSME ICD9s combined (using the HERO-estimated admission cost of $22,500) amount to about $11.3 billion. That $11.3 billion includes the half of privately insured people who don’t have access to wellness. Already, when you cut that figure in half to account for those employees with employers who’ve decided not to “do wellness” to them, the $7 billion size of the wellness industry exceeds the size of avoidable events ($5.7 billion). This is consistent with our first proof, which showed the same thing, but on an individual company level. Now—assuming participation is 50%, you need to cut the WSME hospitalization total in half once again. You’re down to $2.85 billion in potentially avoidable events — that companies are spending $7 billion on vendors to avoid.
So, no matter how you look at it, “pry, poke and prod” programs have been singularly ineffective in reducing WSMEs. And if the HERO Guide is right that these are the only admissions wellness can avoid (while other costs increase, as they admit), wellness does not and cannot save money.
Instead, wellness-or-else is basically a pile of, um, industrial waste.
Anyone still want to try to claim the million-dollar reward for showing pry, poke and prod programs aren’t a total waste of resources? I didn’t think so.
Note: This graphical analysis is copyright 2015 to Quizzify. However, any disinterested researcher or journalist may request a copy of the backup material from us.