Wellness Programs Report Key Findings

One of the major ways employers are trying to control their health care costs is through the implementation of wellness programs. However, there are many questions and issues concerning both their implementation and their cost effectiveness. The Center for Studying Health System Change has just released a report (http://www.nihcr.org/Employer-Wellness-Initiatives.html) that had the following key findings about these programs:

Programs need to be customized to suit the culture and situation of a particular employer: One-size-fits-all programs purchased off-the-shelf from health plans and wellness vendors are unlikely to make a significant impact either in participation or outcomes. Least likely to make an impact are programs consisting only of online HRAs and Web-based educational tools, with no individualized follow-up activities to engage employees.

Clarity from senior leadership in linking wellness to the organization’s business strategy is important: Organizations with successful programs tend to have senior leaders whose championing of wellness is tempered by reasonable expectations and accompanied by an ability to communicate clearly and honestly with employees about shared goals and responsibilities of health and wellness. In contrast, selling wellness to employees as initiatives for their sole benefit, or selling wellness in an environment of discord or financial turmoil, are likely to be futile. Mutual trust is key to effective wellness programs.

Effective, ongoing communication is essential at several levels: In addition to strong messaging from senior leadership, successful programs tend to have both dedicated wellness staff and informal champions within the company who are able to raise awareness, boost enthusiasm and provide peer support. Communication must be both ongoing and updated to keep the message fresh and keep employees engaged. Effective communication typically cannot be outsourced to a vendor.

Programs that are comprehensive, integrated and diversified stand the best chance of success: Behavior modification programs offered in isolation don’t have a strong track record. Participants who quit smoking or lose weight often revert to former behaviors. Without broader interventions to change the work environment and promote a culture of health, wellness programs are unlikely to make a lasting impact. Because most employers have diverse workforces and because individual needs and preferences differ, wellness programs work best when they span a wide range of activities.

Most believe financial incentives are essential, but compelling exceptions exist: The consensus in the wellness industry was that substantial cash incentives are needed to achieve strong participation, and these incentives should be designed to incrementally reward discrete activities that improve or maintain health. However, some employers operate successful programs with minimal or no cash rewards attached and believe such rewards to be counterproductive in causing employees to focus on the incentive rather than on health. Employers with successful programs emphasized the importance of non-financial incentives, such as corporate and peer recognition for wellness achievements.

Return on investment is uncertain and measurement poses many challenges: Employers should expect to invest in wellness for several years before achieving a positive ROI, if at all. Employers looking to wellness as a quick fix for high health costs are those least likely to see positive returns, as they are also the least likely to have undertaken the measures to gain true employee engagement in health. There are many challenges in accurately capturing ROI or alternative measures of impact, and because wellness programs are often implemented simultaneously with other benefit changes, isolating the impact of wellness programs on an employer’s cost trends may not be possible.

The most interesting of these to me are that cash rewards are not always necessary to have employees participate and how critical it is to have senior management involved in stressing the importance of the initiative. It just cannot come from HR.

Aetna Raises Its 2010 Profit Projections

Aetna has invested hundreds of millions of dollars in its "data mining" capability to help reduce the medical costs of its members. The big question of course is this investment actually paying off? In an earlier post I mentioned that BC of California gained substantial business from Aetna in January because its promised savings in managing care were not realized. The known savings from the superior BC provider discounts trumped the supposed ones from Aetna's ability to better manage its medical costs.

Given this Aetna's announcement today of higher profitability was of interest. Part of the reason according to the press release was:

the company improved pricing and management of medical costs, said Fred Laberge, an Aetna spokesman, in a telephone interview. “It’s working with the data and the physician groups and the hospitals to have a better understanding of what to expect.”

I wonder how much of the changed forecast was due to improved pricing versus management of medical costs. Stay tuned for future announcements from Aetna on this.

Like Teachers, Docs Don't Like Being Graded

Physician groups are reacting negatively to the increasing trend of tiered or high performing networks:

Doctor groups are slamming insurers for increasingly using rankings "to steer patients toward certain physicians based on cost or quality," The Wall Street Journal reports.

A letter, sent Monday "by several organizations including the American Medical Association, is the latest shot by doctors at such grading efforts, which have led to years of tensions between physicians and health plans. Insurers, for their part, said they are already working with doctors to ensure their ratings are accurate and transparent."

The ratings may be used to divide "doctors into tiers based on factors such as quality and cost. For example, doctors deemed to be more efficient than average, perhaps because they order fewer questionable imaging scans, might rank in a higher tier. Performance, including favorable patient outcomes, also could boost a doctor's rating. In such 'tiered,' or 'limited,' network setups, consumers may get lower out-of-pocket charges if they see a doctor in a preferred ranking. Patients would typically pay more out of pocket to see doctors who are ranked lower. At the most extreme, consumers may have to pay the full cost of seeing a physician who doesn't make the favorable list." But in their letter, doctors cite a study suggesting that the ratings are unreliable and often inaccurate (Mathews, 7/20).

The New York Times: "Citing research from Rand, the physician groups ... argue that the methods are too flawed to be used to direct patients to individual doctors. 'Physicians' reputations are being unfairly tarnished using unscientific methodologies and calculations,' the societies said." The research, "which looked at physician profiling by commercial insurers in Massachusetts, points out numerous shortcomings. The researchers conclude that 'the work strongly suggests that current methods of physician-cost-profiling are not ready for prime time'" (Abelson, 7/19).

I know every time I mentioned developing these networks at my former health plan employer owned by providers, the network director would run away. She did not want to deal with the politics of it. But it can be done. Priority Health in Michigan has had such a network in place for at least 6 yrs. And it is provider owned.

Good Follow_up to My Last Post

This was in the comments section to the report I just mentioned:

Other than cancer decedents, time of death is essentially unpredictable. About 20% of the elderly will die from cancer. For those individuals, there typically is some period of predictable decline toward death.

Most of the rest of us will die from slowly progressive organ system failures: Congestive heart failure, chronic obstructive pulmonary disease, and similar. For those individuals, time to death is virtually impossible to predict, even for physicians with substantial experience with dying patients.

So people really do know when they are in their "final" year. Therefore controlling the health care costs in this "final" year is impossible. But we still can do a better job of making sure people's wishes are followed. The percentage of living wills ignored by medical professionals is appalling.

An Amazing Statistic

This is incredible. You have to ask what the super-wealthy are getting for their $94,000+ worth of care their last year of life.

The study estimated that out-of-pocket health care spending in the last year of life amounted to $11,618 on average, with the 90th percentile equal to $29,335, the 95th percentile $49,907, and the 99th equal to $94,310.

Yes, you read that correctly: Health care spending in the last year of life by the top 1 percent of Americans is nearly twice the annual income of the typical American household.

Spending in the last year of life varies by age of death, too. Here’s a look at total out-of-pocket expenditures by both wealth quintile and age at death:

Source: “The Risk of Out-of-Pocket Health Care Expenditure at End of Life“

The findings are based on data from the Health and Retirement Study from
1998-2006.

Things Get Messier in Massachusetts

I have blogged several times about the health insurance situation in Massachusetts. To briefly recap state regulators denied premium increase requests made by the major carriers in the state. The carriers appealed this decision which led the governor to impose arbitrary rate caps in April. Recently an appeals panel overturned the rate caps for Harvard Pilgrim which of course makes one wonder if the caps will be overturned for all he carriers.

There is also strong disagreement within the DOI over the rate caps. From the Boston Globe:

The decision by the appeals panel of three department lawyers — Susan L. Donegan, Jean F. Farrington, and Stephen M. Sumner — highlighted a widening rift in the Division of Insurance over the rate caps. The dissension first came to light earlier this month when the division released e-mails from Robert G. Dynan, deputy commissioner for financial analysis, who warned rate caps could lead to a “train wreck’’ in the insurance industry. The division is responsible both for approving rate increases and for ensuring the financial health of state health insurance carriers, goals that can sometimes be at cross purposes.

Rate caps really are at best a temporary solution. Health care costs need to be contained and care needs to be provided more efficiently. Unfortunately the health care system is not there yet.