The “Safeway Amendment” to the Affordable Care Act allows employers to tie a large chunk of health insurance premiums to various wellness initiatives.
Its inclusion in the ACA, with almost unanimous bipartisan support and no debate, can be attributed to two factors: First, Safeway, the supermarket chain the amendment is named after, reported saving 40% in its own highly publicized program. Second, three pro-ACA Harvard faculty members had just published a seminal article in Health Affairs showing the famously precise 3.27-to-1 ROI.
Industry leaders piled on. Ron Goetzel, senior scientist and director of the Institute for Health and Productivity Studies at the Johns Hopkins Bloomberg School of Public Health, estimated an ROI from two to four times, while manufacturing company Navistar International claimed a 400-to-1 ROI. Wellness, in other words, was destined to become the ACA’s win-win, an ROI machine to help employers finance their new employee insurance coverage responsibility.
In the immortal word of the great philosopher former Texas Gov. Rick Perry: “Oops.”
See also: 2016 in review: The year in wellness
It turned out Safeway’s program didn’t exist at the time. The lead author of the 3.27-to-1 ROI, facing withering criticism from nonprofit global policy think tank RAND and others, backtracked by saying “employers need to experiment on employees” and denied any further interest in wellness. Navistar’s accounting was exposed as fraudulent. Goetzel backed off, and now targets only a 1% to 2% risk reduction after several years.
“The industry went in with promises of 3-to-1 and 6-to-1… Then research said that’s not true,” says Soeren Mattke, managing director of RAND Health Advisory Services. “Then they said, “OK, we are cost neutral.” And now research says maybe not even cost neutral.”
The ROI meme having been eviscerated and the industry is changing its story. Apparently ROI doesn’t matter anymore.
One trade group wrote, “Critics propose a standard of evidence that doesn’t exist for other workplace investments.”
Susan Dentzer, of the relentlessly pro-wellness Robert Wood Johnson Foundation, now asks, “Why would we demand an ROI from wellness programs?”
The former editor of the American Journal of Health Promotion Michael O’Donnell attempted to moot the whole savings debate with a single rhetorical question: "Who cares about an ROI anyway?”
Do you need an ROI or not?
Everyone should care about ROI and insist on one, for three distinct and individually sufficient reasons.
First, preventing events is different from addressing events. If an employee has appendicitis, you don't calculate an ROI. You call an ambulance. But suppose a vendor says, “A burst appendix could cost you $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, this is basically how you should evaluate screening economics. You'll be shocked at the cost to avoid even one event by screening.
Second, wellness is the only healthcare intervention employees are “forced” to submit to, subject to a financial forfeiture of penalties or lost incentives. Contrast wellness to other activities that people are penalized for not doing: wearing helmets and life jackets, using seat belts, and getting kids vaccinated. In each case, the clinical evidence overwhelms considerations of personal choice in most states.
See also: Why wellness needs to be personal
By contrast, annual screenings and checkups may not benefit and may even harm employees.
As Optum and Healthmine have admitted, vendors routinely ignore guidelines for screenings designed to avoid the harms of overdiagnosis. Annual checkups are also more likely to harm than benefit most working-age people.
There is an important exception: An ROI justification would not apply to screening, according to guidelines established by the United States Preventive Services Task Force. That level of screening can instead be justified by concern for employee health. Recommending specific screens at certain age- and health-dependent intervals is the charter of the USPSTF. However, many programs screen much more often than guidelines recommend, even when vendors know over-screening creates false positives and overtreatment.
These harms are not theoretical. Health and science journalist Sharon Begley found that the winner of the 2016 C. Everett Koop National Health Award likely harmed employees under its care because biometrics and self-rated health deteriorated, while Employee Benefit News questioned the allegations of health improvements in the 2015 award winner McKesson. And these are the allegedly best programs! No wonder so few vendors have adopted the Employee Health Program Code of Conduct while others actively oppose it; they are not willing to promise not to harm your employees.
Third, wellness isn’t healthcare. Quite literally every other healthcare provider, 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 and eight days of training. By contrast, Four Seasons housekeepers train for 10 days.
Instead, wellness should be classified as an optional business proposition, and, like other optional business propositions, needs a financial justification.
See also: Wellness ROI comes under fire
Job security: An excellent reason to demand an ROI
Wellness needs an ROI, so it’s best to be prepared. What if a resentful employee complains to a senior executive? Employee resentment is common. Just read employee comments following articles about wellness.
What if not just any employee but rather a senior executive dislikes the program? What if he or she asks, “Employees seem to dislike this program, but at least it’s saving money, right?”
You’ll need an answer or an updated resume.
Three steps will get you to the former. First, insist in any vendor selection process that savings or ROI metrics be validated by the Validation Institute. For example, my company, Quizzify, uses validated contractual metrics to guarantee a 2-to-1 ROI on its employee health literacy tool. Quantum Health also has the Validation Institute’s imprimatur, as does U.S. Preventive Medicine, Medecentive and It Starts with Me. For all 27 validated vendors and health plans, though, make sure your contract language incorporates the exact validation language.
Second, multiple employers describe the Validation Institute as a very useful tool to winnow the hundreds of vendors who come calling. They tell the salesperson, “Sounds great. Go get validation and then let’s talk.” Only a small number, the ones who can, follow up.
Third, protect yourself by taking the Validation Institute’s unique course in Critical Outcomes Report Analysis. You’ll suddenly see vendor reports much differently, ask much tougher questions and ultimately get better outcomes.
And perhaps you’ll keep your job or even receive a promotion, if a senior executive discovers this article and others like it. You’ll have an answer to the ROI question that starts out with “I’m glad you asked.”
Can you really say you have that today?
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