• Wellness programs don’t save money

    If I had all the time in the world, I’d read the following three, new papers in Health Affairs. But, the abstracts say enough to get the gist. In general, wellness programs have not been shown to be money savers. That alone isn’t a reason not to implement them, provided they at least do other things with net positive value.

    If you read the papers (or something else) and want to argue the point, the comments, as usual, are open. All emphasis below is mine.

    Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers, by Jill R. Horwitz, Brenna D. Kelly, and John E. DiNardo

    The Affordable Care Act encourages workplace wellness programs, chiefly by promoting programs that reward employees for changing health-related behavior or improving measurable health outcomes. Recognizing the risk that unhealthy employees might be punished rather than helped by such programs, the act also forbids health-based discrimination. We reviewed results of randomized controlled trials and identified challenges for workplace wellness programs to function as the act intends. For example, research results raise doubts that employees with health risk factors, such as obesity and tobacco use, spend more on medical care than others. Such groups may not be especially promising targets for financial incentives meant to save costs through health improvement. Although there may be other valid reasons, beyond lowering costs, to institute workplace wellness programs, we found little evidence that such programs can easily save costs through health improvement without being discriminatory. Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees—those from lower socioeconomic strata with the most health risks—probably bearing greater costs that in effect subsidize their healthier colleagues. 

    A Hospital System’s Wellness Program Linked To Health Plan Enrollment Cut Hospitalizations But Not Overall Costs, by Gautam Gowrisankaran, Karen Norberg, Steven Kymes, Michael E. Chernew, Dustin Stwalley, Leah Kemper, and William Peck

    Many policy makers believe that health status would be improved and health care spending reduced if people managed their health better. This study examined the effectiveness of a program put in place by BJC HealthCare, a hospital system based in St. Louis, Missouri, that tied employees’ eligibility to participate in the system’s most generous health plan with participation in a wellness program. The intervention, which began in 2005, was associated with a 41 percent decrease, relative to a comparison group, in hospitalizations for conditions targeted by the wellness program but with no significant decrease in other hospitalizations. We found reductions in inpatient costs but similar increases in non-inpatient costs. Therefore, we conclude that although the program did cut some hospitalizations, it did not save money for the employer in the short term. This finding underscores that wellness program incentives under the Affordable Care Act are unlikely to greatly reduce health care spending over the short run.

    Medicaid Incentive Programs To Encourage Healthy Behavior Show Mixed Results To Date And Should Be Studied And Improved, by Karen J. Blumenthal, Kathryn A. Saulsgiver, Laurie Norton, Andrea B. Troxel, Joseph P. Anarella, Foster C. Gesten, Michael E. Chernew, and Kevin G. Volpp

    In September 2011 the Centers for Medicare and Medicaid Services awarded $85 million in grants to ten states to test financial incentive programs to encourage healthy behavior among Medicaid enrollees with chronic diseases. There is little published evidence about the effectiveness of such incentives within the Medicaid program. We evaluated the available research from three earlier Medicaid incentive programs and found mixed results. On the one hand, in Florida only about half of the $41.3 million in available credits was “claimed” by enrollees between 2006 and 2011. On the other, Idaho’s incentive program was credited with improving the proportion of children who were up-to-date on well-child visits. Our findings suggest that Medicaid incentive programs should be designed so that enrollees can understand them and so that the incentives are attractive enough to motivate participation. Medicaid incentive programs also should be subject to rigorous evaluation to more clearly establish their effectiveness.


    • I love your blog but man it can get depressing. If we look at the two main goals of health care: saving lives and (arguably) doing so at a reasonable costs, it seems very little works. The conflicting data on what makes us healthy is insane and impossible for the average American to understand- never mind implement. Being fat is bad but wait, being a little fat is probably good, for example. Huh? I understand the point made but… And saving money and doing health care in a prudently fiscal manner?

      Good luck with that. 50 percent or so of our health care costs are incurred by 5 percent of the population; so what do we do with them? Cut their care? Cut what pay those who provide care? Raise premiums and/or taxes? It appears blindingly obvious that all the finessing of the other 95 percent means very little without drastic action vis-a-vis the 5 percent.

      And yet we hear precious little about that problem. It reminds me of a person who has a car that is meticulously cared for: great tires, leather interior that is spotless, stunning sunroof, all the bells and whistles…yet…the engine is dead and when it works, gets 10 miles to the gallon in a land where gas is 10 dollars a gallon.

      Sometimes, I truly despair…

      • One thing to note about the wellness intervention study, though: it dropped hospital admission rates without any significant increase to total costs. That’s certainly not bad. We want to keep people out of the hospital, because being in the hospital sucks. The food is bad. People poke and prod you. You can’t get a decent night’s sleep. You come out dazed and confused. And if you had to go to the hospital in the first place, most likely something went pretty wrong.

        So maybe employers should be thinking more about wellness initiatives, if they’re constructed equitably (so as not to penalize people with poor health). This won’t rein in total health care costs by itself. But if it can keep people out of the hospital, why not?

    • A very main goal with general medical care is….WELLNESS!
      But go ahead and try to define a metric to measure that oh so elusive characteristic of health care!
      e.g. What it is worth to me to wake up in the morning without back pain? What is it worth to me to be able to do things that I cannot do, due to back pain? Not only worth as in gainful employment, but as in hobbies, and other things I might do for enjoyment.
      I would pay $1M for a new back! Not to live longer, but to live better. Someone else may value it differently.
      This and a multitude of other medical concerns occurring every day in millions of patients are some very difficult values to quantitate or put a cost on.

    • Aside from the fact that the wellness program has to be effective, it seems to me that the short time frame of the cost-benefit analysis doom wellness programs. Most serious (and expensive) hospitalizations are rare, so if you have a ameliorable risk factor, fixing it is going to cost money up front and in the end, you get a small risk reduced to a somewhat smaller one.

      In the long term, society-wide, it may be worth doing, but if you expect to get a pay back on your investment in 5 years, it’s probably hopeless. It’s hard to imagine even with the ACA patients will stick with their insurance for more than 5 years.

    • Hmmm…”Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees—those from lower socioeconomic strata with the most health risks—probably bearing greater costs that in effect subsidize their healthier colleagues.”

      Same argument can be made for cigarette taxes, no? I’d argue that while the lower income and “more vulnerable” group will take the brunt of it, they’re probably the ones who need it most — people w/lower income tend to smoke more, for instance. Reduce the number of people who smoke/have teen pregnancies/drink heavily etc….and those people live longer (add to economic growth), pay more taxes (add to revenues), and likely (though this can be debated) have lower health care costs in the future (although…if you live longer you probably are more likely to have chronic conditions).

    • I’m shocked, shocked I say, to discover that health care plan designers are using wellness programs to select out the healthiest subscribers. Shocked, I say.

    • On a more serious note, I was working as a life actuary back when HMO’s first became widely available. Those over 50 will remember that their ‘premium’ was less than traditional plans, and the claim was that they would make up the difference by promoting wellness rather than by treating sickness.

      I remember reading a study back in 1985 or 1986 which examined that claim, and found, instead, that by giving free well-baby visits and very low cost maternity care, all the potential mothers and fathers in the groups selected the HMO as opposed to the indemnity plan. Who just happened to be the healthiest sub group. So, the HMO’s cost savings (which were real) were all explained by the demographics of their subscribers.

      • Differences in 4-Year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO and Fee-for-Service Systems

        John E. Ware, Jr JAMA 1996

        Objective.–To compare physical and mental health outcomes of chronically ill adults, including elderly and poor subgroups, treated in health maintenance organization (HMO) and fee-for-service (FFS) systems.

        Conclusions.–During the study period, elderly and poor chronically ill patients had worse physical health outcomes in HMOs than in FFS systems;

        Today the administration and many healthcare pundits hang their hats on ACO’s that are nothing more than HMO’s on steroids where some of the court decisions against HMO’s have been defanged. ACO’s are another failure in the making.

    • This is an interesting topic and a fun and enlightening book to read on it is: Why Nobody Believes the Numbers: Distinguishing Fact from Fiction in Population Health Management by Al Lewis. (I’d suggest reading the last more encouraging chapters before the first rather discouraging ones, but the whole thing is worth reading.)

    • The Barnes Study, though showing no savings, nonetheless probably overstated the savings through ways not mentioned in the article.

      First, the admits per 1000 were about 94 in the baseline, which was far higher than a health system population’s average of 65-70.

      Second, the particular diagnoses studied in the baseline had about 2.5x more admissions than a typical population would have. Once again, no reason for this is given.

      Third. the massiveness of the declines in diabetes and CAD is unprecedented and violates the rules of plausibility laid out in my book Why Nobody Believes the Numbers. Most diabetes admissions are either due to long-term complications not addressable simply by promising to eat better and exercise more, or due to accidental miscalibrations of insulin. Either way, an 80% decline is not .plausible.