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A vendor’s guide to snookering self-insured employers

Dear Wellness, Diabetes, Clinic, Price Transparency, and Medication Therapy Management Vendors,

While most of you already know the majority of these tricks, there might be a few you haven’t deployed yet. So take good notes.

Sincerely,

Al Lewis

PS If you are an employer, just pass this along to your vendors…and watch your savings skyrocket. Or use “An Employer’s Guide to NOT being snookered” to see your savings become realistic.


Best practices for every vendor

Compare participants to non-participants. Using non-participants as a control for participants allows you to show massive savings without doing anything. This is not an overstatement. Here is a program — which naturally won an award for its brilliance from Ron Goetzel and his friends before I observed that they were a fraud according to their own data– that did just that. They separated participants from non-participants but didn’t bother to implement a program for two years—by which point the participants had already improved by 20% vs. the non-participants — without even having a program to participate in. (Note on this slide that the control and study group were set up in 2004 but the program didn’t start until 2006, when the cost separation had already reached the aforementioned 20%.)

Two other observational trials support this conclusion. Most recently, the National Bureau of Economic Research ran a controlled trial to test exactly this hypothesis. Sure enough, like the three observational trials, they found that virtually the entire outcome in wellness can be explained by that popular study design itself, rather than the intervention.

In any participation-based program, ignore dropouts. Assume that employees who drop out do so randomly, not because they are discouraged by their lack of progress or interest.

Draw a line upwards and then claim credit for the “savings” between the actual upward spending and the “trend” you drew. As Optum’s Seth Serxner stated so succinctly: “We can conclude that the choice of trend has a large impact on estimates of financial savings.”

Start with the ridiculously high utilizers, high-risk people, or people taking lots of drugs. Let the group regress to the mean, and then claim that as savings.

Never admit, like Wellsteps did, that you are familiar with regression to the mean, since most employers are not aware of it.  The higher the costs/risks of the original users, the more savings you can claim. Here are two verbatim claims:

  • A heavy equipment manufacturer found high use of the ER was a becoming a cost concern, so it send mailings that showed appropriate care settings to the homes of members with two or more visits to the ER in the past year. As a result, ER visits were down 59 percent those who got the mailing.
  • A pharmaceutical company saw a spike in ER claims was coming from repeated use by the same people, so two mailers were sent: one to households with one ER visit in the past year; another for those with two or more visits. Following the mailings, there was a 63 percent drop in ER visits.

Pretend not to notice that low utilizers can show an increase in utilization — or especially that low-risk people can increase in risk. Focus the mark (I mean, the customer) on the high-risk people who decline in risk. Never draw graphs to scale, or your customer might notice that 2/3 of their employees are low-risk in the first place.

Cigna chart

It doesn’t matter what your intervention is. Claim credit for the entire difference in trend. For instance, in this example, Community Care of North Carolina claimed credit for a huge reduction in PMPM costs for babies for their medical home program…but babies weren’t even included in the program. (Neonatal expenses didn’t decline either.)

Or do what Safeway did, launching the wellness craze: change to a high-deductible plan, and transfer a large chunk of costs to employees. Don’t even bother to institute a wellness program, but attribute all the savings (from the transferred deductible spending) to wellness anyway, so that you get invited to the White House.  And after that blows up on you, demonstrate that your very stable genius investment in wellness was not a fluke by investing your company’s money in Theranos.


Special Instructions for transparency tool vendors

Assume that every employee who uses your tool is looking to save their bosses some money, rather than (for instance) to find the closest MRI…and that none of them would have used a lower-cost venue absent your tool.

If only 10% of employees use your transparency tool, and only 10% of events are shoppable, nonetheless take credit for the entire difference in trend across the board, and ignore the literature showing online price-comparison tools don’t work.

If people who haven’t met their deductible shop more than people who have, attribute the former’s lower cost to use of the tool, rather than to the fact that by definition people who don’t meet their deductible spend less than people who blow through it.


Special instructions for wellness and diabetes vendors

If you are a wellness or diabetes prevention/management vendor, never ever let employers know that every year since statistics have been kept, fewer than 1 in 1000 employees/dependents end up in the hospital with diabetes.  (And another 1 in 1000 with a heart attack.) Always tell them how many employees are at risk and how many “newly discovered conditions” they have, and how they will all end up in the hospital, even though hospitalizations for heart attacks and diabetes in the employer-insured population have been declining for years.

Wellness vendors should always put the trivial percentage reduction in risk (for participants only, of course – and ignoring dropouts) on one page and the massive savings on another page. Most employers won’t bother to do the math to notice, for example, that Interactive Health claimed $50,000 in savings for every employee who reduced one risk factor, while the state of Nebraska won an award for claiming to save $20,000+ for every risk factor reduced, as did Staywell for British Petroleum.

If you didn’t reduce risk factors, present your outcomes in a format no one can make heads or tails of, like this one, from Wellsteps. If Wellsteps was able to snooker an entire committee of self-anointed outcomes experts to win an award for program excellence, surely you can snooker a few customers.

Claiming people lose weight is a big part of your outcome reporting, so make sure to do the following:

  1. Never count nonparticipants, and ignore dropouts.
  2. Don’t do any long-term follow-up to see who regained the weight (most participants)
  3. Give them time to binge before the initial weigh-in

Special instructions for diabetes vendors

In addition to measuring on active participants only, raise the bar for Hb A1c so that only people with high Hb A1c’s can be included. That belt-and-suspenders approach will ensure that you can’t fail to show savings, even if (as is likely the case) you don’t change anyone’s behavior other than the employees who were going to change anyway, which you might as well count.

Next — most diabetes vendors and a few wellness vendors have already figured this out — you can charge much more if you can submit claims, rather than just be an admin expense line item. You see, most employers focus much more on the 10% admin expense than they do the 90% medical expense, which they consider to be beyond their control.  Your claims expense – which would draw attention to itself as an admin cost — won’t get noticed in the 90% of medical losses, sort of like the dirt from the tunnel sprinkled around the Stalag in The Great Escape.


Special instructions for medication therapy management vendors

Only mention “gaps in care” that you close, not the ones that open up. And, as noted in the chart below, always use percentages. So in this chart (provided by one of the major PBMs), they claimed that twice as many gaps were closed (37%) vs opened (18%), and yet, as is almost always the case with MTM vendors, nothing happened to the total number of gaps, which remained at exactly 820:

 

Tally all the employees who were on large numbers of meds and now take fewer. But don’t mention all the employers who were on fewer meds and now take more.


What to do if you’re asked why you aren’t validated by the Validation Institute

Here are the most popular answers to that question:

  1. No one has asked us to. (Quizzify didn’t need to be asked.)
  2. We hired our own outside actuarial firm to validate us, and they concluded we save a lot of money.
  3. Sure, we’ll get validated as soon as you sign the contract with us.

 

Wellsteps stumbles into the truth

Seems like half our postings involve three vendors. These three very stable vendors — Interactive Health, Bravo and Wellsteps — constitute the wellness industry’s “Axis of Genius.”


 

In a recent video that we urge everyone to watch, Steve Aldana of Wellsteps (proud recipient of the 2016 Deplorables Award) recently admitted that “wellness is the most researched topic in healthcare.”

He is absolutely right about that. There are dozens of studies showing that wellness loses money and often harms employees.

And he would know because he has produced a ream of research showing that Wellsteps’ very own program is arguably the worst program on the planet. I say “arguably” because Wellsteps’ Boise program may not be the worst program on the planet. It is only the worst program on the planet according to its own documented findings.  I never thought I would say this, but I applaud Mr. Aldana! His willingness to tell the truth is admirable.

Funny thing about the wellness industry. Every other industry’s “research” always make their product look good. For years, cigarettes were safe–according to the tobacco industry. The oil and gas industry often publishes research showing there is no global warming.  And Monsanto executives are probably the only people on earth who think Agent Orange is harmless.

Sure, critics can and do “challenge the data” those other trade groups publish, but to the credit of those organizations, at least they don’t accidentally disprove their own message in their own “findings.”

Quite the opposite in wellness. About 40 seconds in, Mr. Aldana says: “Critics of the wellness industry say that the studies are flawed.” No, Mr. Aldana, we are not accusing you of being “flawed,” or even of lying. We are accusing you of telling the truth, for once. The wellness industry is unique in that its own data is its own worst enemy.  Remember the saying: “In wellness, you don’t have to challenge the data to invalidate it. You merely have to read the data. It will invalidate itself.”

While he showed great integrity by reporting the Boise outcomes accurately (and even exposed his results to a wider audience, albeit under duress), that display of integrity turns out to be out of character. Alternative fact-tellers need to have long memories, and his is apparently quite short. When he first reported the financial results, he made the impossible claim that Boise’s healthcare costs fell by a third, due to his forced wellness program even though flouting clinical guidelines and giving out questionable advice also caused a 20% increase in risk factors:

But his report was so long that by the time he got to the end of it, he had completely forgotten this alleged savings claim…and accidentally admitted costs actually increased. (He later suppressed the latter finding, but I always anticipate cover-ups by wellness vendors so I take screenshots before posting anything. It’s been said that the beginning of the end of “pry, poke and prod” was the day a millennial taught me how to capture a screenshot.)


Yes, you might note, the participants did marginally better than the non-participants (though the latter seem to have the momentum). And that brings us to his next claim in the video, where he laments the lack of randomized clinical trials. Actually, there have been two, the most recent one highlighted in the New York Times recently.  And, yes, of course, they show “pry, poke and prod” has no impact. The NYT article specifically demonstrated that participants-vs-non-participants is an invalid methodology that will always show savings even if nothing happens.  A vendor called Newtopia also did an RCT…and showed the same thing. 100% of savings was caused by the act of separating the two groups based on motivation…and when you re-combined them, there was no savings.

The wellness trade magazine had also previously admitted this, though as noted Mr. Aldana has a short memory.

Mr. Aldana closes by claiming that if I am right about wellness losing money, then all these CEOs and CFOs who still think it saves money are “idiots.”  Well, if he says so. And this is not the first time he has dissed his own clients. When he was caught flouting clinical guidelines, he claimed his customer made him do it.

This statement — that “we must be right or else we would have been outed before” — is akin to Paul Manafort’s original defense to tax fraud charges: “If he was committing such large-scale fraud, why didn’t the IRS audit him?” Manafort’s attorney quickly backed off that defense. Like Paul Manafort and the IRS, the only thing that a company still using one of these vendors in the “Axis of Genius” proves is that the wellness industry excels in snookering them.

Please feel free to email a colleague about Mr Aldana. Not because we are asking you to, but because he is:

 

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