Health News Digest

December 9, 2013

Obamacare And Wellness…If Only

By Michael D. Shaw

“Wellness,” used as the opposite of “illness,” dates back to the 1650s, according to the Oxford English Dictionary. Nearly 300 years later, the World Health Organization would throw down this gauntlet: “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.”

Many proponents of this concept have emerged, including physicians Halbert L. Dunn and John W. Travis. Dunn is considered to be the Father of the Wellness Movement, famed for his 1959 paper entitled “High Level Wellness For Man And Society.”

Surely, wellness is a lofty goal, but how do we achieve it—especially within an environment that has put far more money into disease than into health? The Affordable Care Act (Obamacare) addresses this through a relatively obscure provision known as the “Safeway Amendment.”

Widely hailed as virtually the only bi-partisan provision of a law that did not garner a single Republican vote when it was passed in 2010, the amendment was named in honor of the grocery company’s then legendary ability to control health care costs. Alas, like many legends this would prove to have a few holes in it, but why let facts get in the way of a good story?

In a Wall Street Journal article from June, 2009, Safeway CEO Steven A. Burd described his incentive program:

Our plan utilizes a provision in the 1996 Health Insurance Portability and Accountability Act that permits employers to differentiate premiums based on behaviors. Currently we are focused on tobacco usage, healthy weight, blood pressure and cholesterol levels.

Safeway’s Healthy Measures program is completely voluntary and currently covers 74% of the insured nonunion work force. Employees are tested for the four measures cited above and receive premium discounts off a base level premium for each test they pass. Data is collected by outside parties and not shared with company management. If they pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families. Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.

Burd became famous because Safeway’s health costs declined by 12.5% in 2006. However, as was pointed out by a number of commentators, his employee incentive program did not roll out until 2009! Thus, not only were these highly touted savings unrelated to Healthy Measures, the 2006 cost lowering was due to Safeway restructuring its benefits. Adding insult to injury, upon its inception, only 11,000 of the 200,000 employees were eligible to participate, so even a drastic improvement in that cohort would have had small overall consequences.

As you will see, the use of smoke and mirrors to inflate the success of corporate wellness programs is not exactly a rare occurrence. Al Lewis, president of the Disease Management Purchasing Consortium, offers up a few examples:

Marketing materials for US Corporate Wellness proclaim that participants in its wellness program at Denver Children’s Hospital are “230% less likely” to use the hospital’s extended illness benefit. (100%, of course, would have been the maximum.)

Another firm, Interactive Health, refers to a case study in which the (unnamed) client was able to save the equivalent of $54,000 for each of those reduced-risk participants in 2011 alone. But, says Lewis, the average annual corporate medical expenditure is about $6,000 per person. Now, that’s a neat trick.

The State of Nebraska had a program that included cancer screenings. Incredibly, more than 10 percent of those participating were diagnosed with “early-stage” cancers—an absurd number that should have been rejected on its face. In nearly all cases, these were false positives (never mind the emotional drain on the employees), that resulted in untold pointless expense, mostly covered by the State. Yet, this fiasco was reported as a savings of $4.2 million.

There are dozens of similar horror stories. Likewise, there is plenty of scholarly literature shredding typical wellness incentive programs.

Nonetheless, starting January 1, 2014, Obamacare will dramatically expand the ability of companies to penalize employees for lifestyle issues, including being overweight or smoking, in the name of “wellness incentives.” Overweight and obese employees may now face financial penalties of up to 30% of the cost of their health plan, and up to 50% of the cost of their health plan if they smoke.

I recently spoke with David Roddenberry, co-founder of HealthyWage, a company that develops and administers health incentive programs that make weight loss more fun and successful. Simply put, participants can win money by losing weight. Best of all, there is no charge to the employer. HealthyWage is also available to consumers who do not participate through a company. He told me…

Obamacare incentives are discriminatory and regressive as obesity rates are highest among minorities and lower paid employees. Obesity rates are highest among non-Hispanic blacks (49.5%), compared with Mexican Americans (40.4%), all Hispanics (39.1%) and whites (34.3%).

Alternatively, an effective wellness incentive program is one that’s voluntary and grounded in the best practices literature around behavior change. HealthyWage’s market-proven programs are completely voluntary and provide carefully-structured systems of rewards based on discrete behavior-change goals and time frames. In the company’s fun and engaging challenges, participants put in a nominal amount of their own money, with the amount at their own discretion, and compete either individually or in teams to lose weight and win up to $10,000.

Imagine, encouraging people to take ownership of their own health. What a concept.