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Hey, How Come Wellness Needs an ROI But Real Healthcare Doesn’t?

Now that the myth that there is any ROI in wellness is thoroughly both debunked and also even acknowledged by the wellness industry, vendors often fall back on the “argument” that nothing else in healthcare needs an ROI.  Why should workplace wellness be singled out?  The editor of the American Journal of Health Promotion, Michael O’Donnell, even asked: “Who cares about an ROI anyway?”

The answer to Michael’s question?  Everyone should care. And everyone should insist on an ROI from wellness, for three distinct reasons.  Each reason is sufficient on its own.  So even if there were a fallacy in two of the reasons (and there isn’t), the remaining reason would still be definitive.

First, consider an employee with appendicitis. You don’t calculate an ROI. You call an ambulance. But suppose a vendor says to you: “If an employee’s appendix bursts, the cost could be $100,000.  So we propose taking out everyone’s appendix preventively.”

You’d ask:  “What’s the rate of burst appendixes and how much do appendectomies cost?”  While that’s an extreme example (and we didn’t mean to give these people any ideas), this is basically the calculation you should make when vendors propose screens. Here’s how to do the calculation. You’ll be shocked at how much it costs to avoid even one event by screening everyone.

Second, wellness is the only thing in healthcare that employees are forced to do, subject to a financial forfeiture of penalties or lost incentives.  Other activities which people are penalized for not doing include: wearing helmets/life jackets/seat belts and getting kids vaccinated.  In each case, the clinical evidence/science overwhelms considerations of personal choice.  (Even then, in some states personal choice still rules.)

By contrast, the only thing that’s overwhelming about wellness evidence/science is how overwhelmingly the evidence eviscerates wellness, which of course is what this site is all about.  Unfortunately, wellness vendors don’t understand evidence — or for that matter healthcare itself. Many vendors have no knowledge of basics like clinical guidelines, or even arithmetic.  One wonders how they can do their jobs as wellness vendors without understanding healthcare. And that brings us to the third reason that wellness (unlike healthcare) needs an ROI, which is…

Wellness isn’t healthcare.  Quite literally every other provider of physical healthcare–from heart surgeons to  acupuncturists–needs to train, pass a test, get a license, take continuing education, and be subject to review by an oversight board.  Not wellness vendors.  You can become a wellness vendor for $67,000. “Up to” eight days of classroom and on-the-job-training are also included in that $67,000.  (To put that in perspective, Four Seasons housekeepers get ten days of training.) The vendor that offers these franchises, Star Wellness, brags about how no healthcare background is needed to be a wellness vendor. A background in “sales or municipal administration” is perfectly sufficient.

So if you’re wondering why wellness vendors know so little about wellness, there’s your answer:  they aren’t required to know anything about wellness. Knowing just a little exceeds the minimum requirement.

Quizzify Q in B and W

Quizzify does have an ROI…and it’s guaranteed.

To conclude, here is our advice to workplace wellness vendors trying to justify what popular healthcare blogger Paul Levy calls the “wellness tax“: shut up and just be happy you still get to collect it, and that the authorities haven’t shut you down. (A doctor doing all this overscreening and billing for it would have been shut down.)

Don’t try to justify your hyperdiagnostic jihad on the basis of ROI or any other purpose other than enriching your bank accounts. Every time you try, you provide yet another reason why whatever college gave you a degree in anything other than advanced idiocy should lose its accreditation.

American Journal of Health Promotion Admits Massive Wellness Losses

RAND’s Soeren Mattke said it best:

The industry went in with promises of 3-to-1 and 6-to-1 ROIs based on health care savings alone.  Then research came out that said that’s not true.  They said, “Fine, we are cost-neutral.” Now research says:  “Maybe not even cost-neutral.”  So they say:  “It’s really about productivity, which we can’t really measure, but it’s an enormous return.”

In other words, whenever you invalidate one metric, they come up with another one. We then have to shoot that one down, and the cycle repeats.  It’s invalidity-meets-Whack-A-Mole.  After the healthcare spending ROI fiction imploded, Michael O’Donnell, editor of the wellness industry trade journal, asked dismissively: “Who cares about ROI anyway?”

Since ROI wasn’t working, they then tried value-on-investment (VOI), which turned out to show even greater losses than a straight ROI calculation.

Continuing that tradition, Michael O’Donnell of the American Journal of Health Promotion presents: Return on Allocated Resources, or ROAR.  ROAR counts everything, including productivity. By counting everything, ROAR shows far greater losses than VOI.

Michael says that a 1% increase in productivity is worth $1933:

ajhp productivity 1

However, a much greater 3.75% (90 minutes of a 40-hour workweek) reduction in productivity only costs $2184:

ajhp productivity 2

How did he accomplish this sleight-of-hand, where a 1% increase in productivity practically offsets a 3.75% decrease?  Simple: by putting both thumbs and every other appendage on the scale. He accounts for lost work time at an employee’s hourly rate. So far so good. However, he then applies a magic multiplier to the hourly rate to calculate increases in productivity based on hypothetically enhanced corporate revenues due to the productivity increase.  So if payroll is 30% of revenues, and productivity climbs 1%, then revenues would also automatically climb 1%. That means in dollar terms revenues climb more than three times faster than productivity.

Had he used the same revenue multiplier for the certain 3.75% productivity decrease due to wellness-induced lost work time that he used for his speculative 1% productivity increase, his time-off-for-wellness scheme would cost a whopping $7143/employee/year.

And wellness vendors wonder why line managers are so reluctant to allow employees to work out on company time.

So while per-employee losses from wellness based purely on added healthcare spending and program expense are “only” in the three figures, the net reduction in productivity from a (speculative) 1% increase less a (certain) 3.75% decrease due to lost work time amount to a mind-boggling $5210/year.

And that is probably an understatement.  The 3.75% lost work time due to wellness doesn’t include the time employees spend changing clothes after their workouts, lying on HRAs, standing in line to be screened and “coached,” complaining to HR that they haven’t received their incentive checks yet, and hanging out at the water cooler dissing the program.

If you’re keeping score at home, this is the third time Michael O’Donnell has strayed off message.  Just like some people are convinced that Donald Trump is a closet Democrat trying to torpedo the GOP, you would be excused for thinking that Michael O’Donnell is a member of our Welligentsia group, trying to sow chaos amongst the Wellness Ignorati.

He isn’t, but nonetheless I count him among our greatest assets.  First, he admitted that up to 95% of wellness programs don’t work.  Then he admitted that studies done using randomized control trials lose money.  And now this one, detailing — using his own math — by far the greatest losses that a wellness metric has ever shown.

Quizzify Q in B and W

Quizzify’s guarantee numbers add up (source: Intel-GE Validation Institute)

Ron Goetzel is probably tearing his hair out over his crony’s unforced errors on the eve of our debate.  Or, in the immortal words of the great philosopher Warren G. Harding: “I can handle my enemies.  It’s my friends who have me pacing the floor at night.”

Dan Ariely on how the Wellness Industry Crowdsources Reality

sierra-club-pants-on-fire-imageWe recommend that everyone listen to Dan Ariely’s interview on NPR and TED talk “Why We Lie.”  It explains exactly why the Wellness Ignorati could decide to collectively self-publish an entire guidebook full of misinformation and disinformation designed specifically to increase the revenues of wellness vendors.

Here are our take-aways from Professor Ariely’s TED Talk.

Like Walter White in Breaking Bad, the Ignorati started out honest. They genuinely believed that wellness saved money and that they were doing good.   It was very counter-intuitive to believe otherwise.  If you look at page 201 of Why Nobody Believes the Numbers, you’ll see I even mildly supported biometric screens. I hadn’t done the math. I just assumed early detection was a good thing and that Ron Goetzel and others was telling the truth, for which on page 83 I professed my admiration.  As another example, ShapeUp’s CEO Rajiv Kumar would never have attacked us (largely for refusing to believe Kate Baicker, who even RAND now dismisses and who herself no longer appears to believe her own claim) if he had realized his own outcomes claims were false.

Like Walter White, it was easy to justify the first transgressions.  Since the Wellness Ignorati genuinely believed in what they were doing, when the numbers didn’t add up, they either justified to themselves that it was OK to fudge them (like ShapeUp’s now-retracted claims about Highmark) or ignored glaring invalidating mistakes. The best example of the latter: Ron Goetzel finally recanting Health Fitness Corporation’s infamous participants-vs-non-participants self-immolation after years of ignoring it.

Or wellness vendors create a parallel universe where numbers don’t have to add up (like Keas), or completely misquote industry experts saying the opposite (like Vitality).

Like Walter White, they don’t actually believe they are bad people. Ariely calls this a “personal fudge factor.” With the possible exception of Wellsteps’ Steve Aldana (who may be honest but simply unable to recognize that no matter what numbers you enter into his model you get the same answer), they really think what they are doing is OK—even though the math clearly dictates otherwise.

Also like Walter White, they kept getting drawn deeper in. The more they lied, the more they have to keep lying. They needed to continue to defend what was looking increasingly indefensible.  After giving Nebraska’s program a much-publicized and ironically named C. Everett Koop Award, it’s hard for Ron Goetzel and his committee to say “We goofed—we need to take it back because they made up the data and defrauded the state”  even after the vendor, Health Fitness Corporation, admitted it.

Quizzify 4

Quizzify…truth serum for wellness.

Like Walter White, the Wellness Ignorati “suspend reality” (to use Ariely’s term) and “buy into a new reality.”  Essentially the Ignorati crowdsource reality. They peer-review one another’s work, give themselves awards, and decide (to use Michael O’Donnell’s term) that anyone who challenges them lacks the “credentials” to do so.  Or, as Ariely says: “If you were getting well-paid by Enron, wouldn’t you want to see reality as they present it?”

Avoiding the media is an excellent strategy. Once again, like Walter White, the Wellness Ignorati want to keep a low profile. Exposure is bad if the facts all go the other way. That explains Ron Goetzel’s refusal to debate, ever, and the Ignorati’s characterization of us as name-calling bullies when all we do is ask questions.

Yep, you can read this site up, down and sideways. The fact is no names are called other than the “Wellness Ignorati.”  We’ve offered them the opportunity to propose a different name for their practice of denying facts, which they’ve declined. We do use the term “pretzel” to describe the very impressive twists and turns that Mr. Goetzel uses to wriggle out when he’s been caught calling failed or fraudulent programs “best practies” because they are run by friends, sponsors or clients. The alternative word for what one would be called when all your claims are made up is less flattering, and we’ve never used it with respect to Ron.

This explains why the Ignorati steadfastly refused to answer questions for a $1000 honorarium. Once again, like Walter White, they have so much as stake that $1000 is chicken feed. At Enron, if you questioned Ken Lay at an analyst conference, he would accuse you or not understanding their business, and cut you off from future meetings, rather than answer the question. We of course were not invited to participate in or even listen to the “discussion” about the HERO report.

Like Walter White, at some point the Wellness Ignorati needed to commit to their chosen path. The Wellness Ignorati have gone too far in their insistence that wellness saves money. There is no turning back.  The existence of this site makes turning back even harder because retracting their lies means acknowledging them. And as soon as they do that, we do what we do best other than invalidate the Ignorati’s misstatements, which is: gloat.

Like Walter White, they are now doubling down.  Examples: Ron Goetzel calling Nebraska a best practice after they admitted lying about saving the lives of cancer victims, in order to justify his original award to them. Steve Aldana can’t create a real ROI model now without admitting that his original model was not “based on every ROI study ever published” as he has maintained, but rather always yields a savings of $1359/employee no matter what inflation-adjusted figures you enter.

As the house of cards collapses, people on the fringes who were sucked in (in this case HR and some brokers and consultants) wake up and ask: “How could I have believed what these people were saying?”   Many major and mid-level figures connected with Enron did exactly this. We see this every week in wellness, as people come to us and say: “I get it. I can’t believe I fell for this.”

So thank you to Dan Ariely. In one 8-minute TED talk, he explained the entire alternative crowdsourced reality of the Wellness Ignorati – without once even mentioning them by name.  But I’m sure the Ignorati nonetheless think he bullied them.


As a hot-off-the-presses example of what Professor Ariely is talking about, Wellsteps just updated their model so that now instead of saving $1359 per person in 2019, they save $1359 per person in 2020. As with previous iterations of their model, the success of the wellness program is irrelevant to the outcome of the model. Just enter a 0% inflation rate and “1” for covered people (“1” so you can see the $1359 reveal itself without having to do division) — and then whatever figures you want to enter for spending, obesity and smoking.

Here you started out with astronomical healthcare costs and got a 99% reduction in smoking and obesity…and saved $1359

wellsteps2

 

Here you save $1359 without changing smoking or obesity at all:

wellsteps1

And here you saved $1359 even though there was nothing to save. The costs are as low as the model will allow you to enter (until they got caught, you could enter figures low enough that they model would calculate negative costs), and there was no smoking or obesity to reduce:

wellsteps3

Naturally, Wellsteps is prominent both on the Koop Award Committee and the HERO Report Committee.  Wellsteps’ “back story” is here.

Lewis and Goetzel: A Brief Prequel

Note: This is not as clever as our usual stuff.  The sequel (in this case, prequel) is never as good as the original.  Nonetheless, it’s important to know how we got to where we are and how the now-viral “Open Apology to Ron Goetzel” came to be.

u_can__t_handle_the_truth_cat_by_vmanga-d3d1rjbI was just called “mean-spirited” by Michael O’Donnell regarding Ron Goetzel, so I thought a little background might be in order.  Some people no doubt think Vik and I just popped up out of the blue and started insulting people.  Michael O’Donnell’s editorial says we haven’t been willing to engage in “respectful debates” and all sorts of other stuff.  So let’s climb into the Wayback Machine and set the dial for 2011.  I submitted the final manuscript of Why Nobody Believes the Numbers to the publisher, John Wiley & Sons, for June 2012 publication.  For those of you whose consultants and vendors haven’t told you about it (for obvious reasons), this was an award-winning trade-bestselling book on outcomes measurement, that is used in at least 5 graduate-level classrooms.

Despite being almost 3 years old, it is quite relevant today, as a new “official” welness outcomes measurement guide compiled by many of the people profiled on this site recommends 7 approaches to measurement, 5 of which my book had already completely invalidated.

Page 82-83 contain the following lines.  I am using screen shots because, as is usual, no one would believe me if I just quoted text.

whynobodybelievesGoetzel

whynobodybelievespart2

I genuinely believed that he was seeking the truth and that his analysis was “much better than mine.”  I was the Boxer to his Snowball.

But then, over the following years, a funny thing happened.  I reluctantly realized that the entire Wellness Ignorati cabal — the Koop Committee, WELCOA etc. — had no interest in facts.  They simply wanted to perpetuate their existence at the expense of their customers.  I had originally been very polite.  for instance, when I displayed the infamous Health Fitness Corporation slide (now disowned) on p 85 of Why Nobody Believes, I didn’t name names:

hfc unnamed

And I know Ron read p. 85, because he copied pages 82-83 and used it in his own presentations until Wiley made him stop.

But you know what happened after Ron read that HFC’s award-winning slide had self-invalidated?  No “respectful debates.”  Nothing.  (We’re still not sure how he didn’t notice in the first place.)  HFC didn’t apologize and didn’t stop using the slide.  Ron didn’t retract their Koop Award.  (It wasn’t until our Health Affairs  expose almost three years later, that Ron was shocked, shocked to discover that that infamous and highly visible slide was, to use his choice of the passive voice, “unfortunately mislabeled.”  It is still a mystery who did the mislabeling.  No one has stepped forward.  We think it might have been the North Koreans.)

The same thing kept happening — Nebraska, Staywell, Mercer, Milliman, Wellsteps etc.   Basically most of the Koop Committee and plenty of others  All of them had mistakes quietly pointed out…and none of them did anything to correct them. Politeness failed.  When a “mistake” is pointed out and not fixed, it becomes a lie.  In retrospect, what we did was as naive as if Rachel Carson had brought her findings to Monsanto and asked them to please stop selling DDT.

Quizzify 3

Jeopardy meets Comedy Central meets healthcare.

That’s why and when we started blowing the whistle, which has been interpreted as bullying.  Leave a comment:  what you would have done?  The health of employees all over the country is being jeopardized by overscreening, overdiagnosis and overdoctoring, the evidence is being ignored by the perpetrators…what choice did we have?

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