What your employer might not know but you’ll want to — The myth of cost-saving wellness programs

Employers are increasingly compelling employees to participate in “wellness” programs at work; complete insurer “health risk assessments” to record their family health history, personal medical problems, and lifestyle behaviors like diet and exercise; and agree to screenings, physicals and disease management of their heath indices, such as blood pressure, cholesterol levels, blood sugars and body weights. Employers pay insurers for subsequent profiles on their employees’ health indices and purchase wellness programs. In return for their workers’ participation, employers are promised lower health insurance premiums.

Employers are being convinced by intense marketing that these interventions mean healthier, more productive employees and, most importantly, will lower healthcare costs for their companies. The source of most such claims come from lobbying organizations such as the National Business Group on Health and its Institute on the Costs and Health Effects of Obesity. (Discussed here.) Last month, for example, a medical director with Pitney Bowes, Founding Board member of NBGH’s obesity institute, said in the trade magazine The Manufacturer, that for every dollar spent on health improvement programs, there are returns of $2 to $3 in health and productivity costs for the company.

But employers are not getting the full story.

It is well known among disease management professionals, and within the health management industry, that disease management programs actually cost more money and the evidence for their effectiveness and eventual cost savings is less definitive and more contradictory than most employers realize. With their focus on saving costs (or making money) for a health plan or pharmaceutical industry, such health programs also may not determine what’s best for individual patients.

Employers and the public are probably unaware that much of the information concerning health and wellness programs that appears in company benefit publications and advertisements bears little resemblance to the medical literature. What little evidence is cited by insurer and human resource sources is woefully problematic, not to mention typically refers to disease management programs that have traditionally addressed a very select group of the most critical and costly conditions — and, in the absence of other evidence, it’s being used to extrapolate to the broader health and wellness preventive promotions being sold.

A confidential analysis, “Disease Management Effectiveness Project,” conducted for members of the Pacific Business Group on Health found that most health plans cited anecdotal evidence in support for their educational and screening programs, but the medical literature does not show impressive results. It concluded: “There is currently a lack of credible and comparable population-based outcomes data on which to evaluate plans’ disease management programs.”

A 2004 “Analysis of the Literature on Disease Management Programs” by the Congressional Budget Office examined programs that combined enhanced screenings, monitoring, education, coordination of care, and were designed to use best medical practices to identify and treat diseases most effectively and slow the progression of diseases. While the presumption is that improving health will mitigate health care costs, it did not follow. They found:

On the basis of its examination of peer-reviewed studies of disease management programs for congestive heart failure, coronary artery disease and diabetes and the conclusions reached by other reviews of the relevant literature published in major medical journals, CBO finds that there is insufficient evidence to conclude that disease management programs can generally reduce the overall costs of health care services.

They found limited evidence to support cost savings and noted that “the few studies reporting cost savings generally do not account for all health care costs, including the cost of the intervention itself.”

An Issue Brief by the Center on an Aging Society at Georgetown University reported that “to date studies that have found substantial cost savings are generally confined to a short duration of time and are typically based on the experience of a single plan or program.... disease management programs are still relatively new and it is too early to determine whether or not they are cost effective in the long run.” To encourage participation and compliance among consumers and providers, they suggested financial incentives would be necessary. This is not to say that specific condition management programs for select populations, providing support from highly-trained healthcare professionals, haven't reported good results, such as prenatal programs for high-risk pregnancies in helping to reduce preterm births. But such successes cannot be generalized.

Since heart disease is a primary cause of death and chronic illness, programs focused on people at risk for heart disease might be expected to be especially beneficial. But a long-term clinical trial among a large, randomized population with heart failure, led by researchers at the University of Texas Health Science Center, San Antonio, and published in Circulation, found “healthcare utilization was not reduced by disease management, and it conferred no cost savings.”

Even smoking cessation, which would seem a no-brainer in saving medical costs, has been a topic in health literature for years because of the higher medical costs seen for former smokers as compared to current or never smokers. Researchers in the November/December 2003 issue of the American Journal of Health Promotion tried to flesh out these seeming disconnects. Examining the medical charges for more than 20,000 employees, they found that it took a decade or more after quitting before former smokers’ medical charges began to approach those of never smokers. Other studies on lifetime costs have proposed that because smokers die early and use fewer years of medical care and Social Security, it offset any higher medical costs while they were alive.

Looking just at cost savings, of course, also doesn’t address the question of if disease management programs are effective in improving actual health outcomes. While that might seem intuitive, looking closely at the studies claiming to support effectiveness finds they don’t actually examine improved long-term health among participants, but typically use intermediary measures and look at the success of a program’s interventions.

For example, a UCLA School of Public Health study published last July in the Annals of Internal Medicine examined comprehensive diabetes disease management programs practiced by 63 physician groups from 11 health plans and found that while they led to more screening and testing, they did not lead to improved control of blood sugars or lesser diabetes complications.

The few peer-reviewed studies claiming a return on investment from health promotion programs come from sources with vested interests and a careful look finds most are based on speculative estimates of cost savings and short-term results. About such studies, an insightful report in the December issue of Health Affairs said: “Close reading reveals substantial methodological flaws, including the absence of randomization and control groups. Lacking a firm base of evidence, claims of substantial payoff from these programs are questionable.”

Only 14% of employers said disease management was very effective in containing costs. Bear in mind that disease management address programs for the most costly and serious health conditions.

Health Affairs authors noted that data from high-risk populations, such as Medicare studies looking at emergency room usage and hospitalization for people with serious diseases, couldn’t be extrapolated to employee populations with lower incidences of chronic diseases. Still, it’s not uncommon to find claims for healthy lifestyle prevention programs inappropriately supported by data from disease interventions. And considering the dismal financial returns disease management programs have generally shown, it’s not surprising that the evidence for real cost savings by promoting “wellness” and preventive health among general employee populations is considerably less compelling.

As Health Affairs reported, many employers have been led to believe that by focusing on prevention, health risk appraisals and disease management, they can keep people healthy and prevent health conditions from reaching higher levels of acuity and hence, save the accompanying higher expenses. However, this appears to actually not be the case.

While the far-reaching goal for health promotion and prevention measures would seem to make fiscal sense, their failure is understandable because they’re largely founded on misconceptions about health and disease. Certainly there are classic examples of public health programs, such as mass immunizations, that have had significant benefit in preventing disease, and saving lives and long-term healthcare costs. But few diseases can be eradicated like polio or smallpox. The fact of the matter is that most chronic diseases that we die from today are the result of aging, genetics and the luck of the draw, with a notable influence of societal status. While the public has largely been sold on the idea that aging and chronic diseases are under our control and can be diverted through “healthy lifestyles” and control of certain “risk factors,” many such beliefs exceed the evidence.

An examination on the myth “An ounce of prevention buys a pound of cure” was conducted by the nonprofit organization, Canadian Health Services Research Foundation based in Ottawa, as part of their Mythbusters series on the research evidence behind healthcare debates.

They concluded that the cost-savings argument for most health promotion and disease prevention measures cannot be made “because the evidence is simply not there.” Taking physical activity as an example of an initiative used in claims that “spending less now means we will spend more in the future,” they noted that public health officials in the U.S. and Canada suggest that millions of dollars in direct medical costs could be saved every year if people were as active as their federal guidelines advise. They found, however, that studies often fail to account for implementation costs, the costs of treating injuries associated with exercise, the cost of treating people for other conditions as they live longer, and that they often simply promote activity among those already inclined to be active. As a result, “the health and cost benefits of these programs remain largely anecdotal.”

The benefits even remain illusive, they found, for prevention programs directed towards clinical conditions, such as hypertension that if controlled or treated would seem to prevent serious consequences like heart attacks. Unfortunately, they said, screening involves creating undue anxiety in people, multiple costly tests and addressing the problem of false positives. False positives alone can be significant, they reported. For example, between 80 and 93 percent of the suspicious or positive results from mammography screening are false positives, they reported, resulting in needless biopsies and surgeries, and risks of treating cancers that would not have become clinically evidence in a patient’s lifetime. The Canadian epidemiologists in the study they cited confirmed other calculations that the “mean annual cost per life saved [with mammography] is around $1-2 million” (in 1995 dollars). They added:

Treatment for hypertension usually involves many doctors’ visits, lab tests, and medication that patients must take for the rest of their lives. This can cost the system a lot — one ... review shows hypertension drugs can cost anywhere from $3,800 to $93,000 per life-year saved. And while this is certainly cost-effective for older patients, it is a bit more questionable for a forty-year-old with only mild hypertension.

Do insurers know what's best for individuals and are they in a better position to manage patients' care than their doctors? As insurers monitor compliance to their programs among both members and providers, and physician reimbursements and reviews are tied to compliance, this is a growing concern. Costs aside, there is considerable debate within the medical community as to the efficacy of popular health management initiatives and insurer clinical guidelines mandating specific health screenings, treatment goals and ideal health indices (measures) for all populations. The evidence, for example, to support tight control of blood glucose levels, blood pressure, and blood lipids, let alone body mass index, within ever-lowering parameters that can only be achieved with medications for the vast majority of adults is rife with vested interests and flaws. And this, in the best interests of patients, is why all of this matters. And it's why quality evidence is so important. [Stay tuned for more on health indices.]

The benefits of aggressive treatment of specific serious conditions and extremely abnormally high values, for example, are often used to suggest similar benefits for those with modest or borderline numbers which are often within ranges normal for most adults. Evidence on whether the progression of a disease is actually slowed or halted, or if lifespan is actually extended, is often wanting. Interventions and screenings typically benefit only a few, while all participants are subjected to the risks for harm; yet the adverse effects are rarely mentioned. Pharmaceutical interventions in studies are rarely compared to doing nothing at all, but are compared to competing medications.

Even heightened screening and early detection and treatment for cancers might seem a good thing but that isn’t always the case and is much more complicated than is popularly believed. An excellent review of the evidence and “the various types of bias that can lead to an exaggeration of the efficacy of screening” was written by Thomas J. Gates, M.D., associate director of family practice residency at Lancaster General Hospital in Lancaster, PA, in the February 1, 2001 issue of the American Family Physician. As he carefully explained for healthcare providers, the evidence remains controversial for screenings “for cancers of the cervix, lung, colon, breast and prostate, which together account for more than 50 percent of cancer deaths in the United States.”

Businesses bottom lines

Employers and employees are understandably concerned with the financial strength of their companies and they’ve been sold on the health and wellness programs from insurers even though, as we’ve seen, they don’t actually make sense for companies’ bottom lines.

Health Affairs added that “wellness” and preventive health programs are expensive for employers. Health Risk Appraisals utilized by insurers and charged to employers can cost up to $250 per employee per year, alone — money that “a firm could invest...in research and development or in growing its sales force.”

Finally, Health Affairs noted that focusing on an employee’s health status distorts its impact on costs because, while reducing the burden from a particular condition might lower disease-specific spending and appear to save money, it is unlikely to lower overall health care costs. For example, spending money on diabetes might generate other costs from other conditions such as injuries from increased exercise or complications of hypoglycemia.

And will the employees still be at the company decades down the road when potential mortality or morbidity benefits might be realized?

The link between an individual’s health and a company’s profitablity are uncertain and many other things a firm might do could also gain them far more economic benefit, they noted:

Disease management programs share many of the shortcomings we have outlined for health promotion programs, including high implementation costs and benefits that might accrue only in the long term, often without any payback to the firm offering the program...Proponents of disease management argue that the indirect costs from poorly treated diseases are even more burdensome than direct, claims-related costs. In this line of reasoning, better-managed diseases result in less absenteeism and more ‘presenteeism,’ meaning that employees with better health will be more productive. This should result in more output per employee and improved profitability for a firm. Yet medical care is only one of several contributors to improved performance.

This concurs with a growing body of evidence finding that the factors accounting for the largest proportion of medical costs at the workplace are not biomedical risk factors such as blood pressure, cholesterol, weight or heart disease, but less easily-measured things, such as related to stress and depression. For example, a prospective study on workplace back injuries published in the journal Spine found that the single best predictor of medical claims for back injuries is not weight, fitness or ergonomics, but worker satisfaction and how they felt about their supervisor. Workplace initiatives addressing factors such as job satisfaction, stress and work-home balance have appeared more profitable in reducing medical costs, job absenteeism and turnover.

When one realizes the other sides of the evidence that few employers are probably hearing, one almost feels sorry for companies who’ve been taken in by the cost savings myth.

Employers are being led to think they’re “between a rock and a hard place” and must manage employee health or not be able to afford to offer health care benefits at all. But note who is trying to convince them of this. They are being used as vehicles for managed care through insurers in the guise of "wellness" programs that they pay for, yet are not in their best interests, nor necessarily best for all employees.

The solution for them and employees could be the easiest of all. Of course, employers leaving individual employees’ healthcare to their doctors and the private lifestyle choices of their employees to the employees, also means there would be no insurer health screening and expensive health and wellness programs, medications or treatments to sell to employers and for them to pay for.

But think of all of those freed-up healthcare resources that could be put to use for things that might actually do the most good...especially if they were based on good evidence.

© 2007 Sandy Szwarc