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The ROI of Wellness

In our latest 2012 Study, Iowa employers were asked about Health and Wellness initiatives they are offering to their employees. As demonstrated below, organizations with less than 250 employees are far less likely to have wellness initiatives in place at their worksite. A few major reasons for this great chasm deal mostly with cost and time. Smaller employers have fewer resources (both in time and money) and desire to spend such resources on other pressing issues.

David P. Lind Benchmark

Employers were asked what type of “return on investment” (ROI) did they observe over the last two years of having a wellness program. As the next slide demonstrates, this response varies wildly based on organization size. Most likely, larger employers spend a great deal more time attempting to assess the ROI on such programs, and they appear to be more bullish on the results compared to their smaller counterparts. As you might imagine, there are many different ways to calculate a return on investment with wellness programs – in fact, the specific process used will determine the outcome. I believe the slide below is more about the “perception” Iowa employers have when assessing the payout of such programs. Keep in mind that a return of $1 simply means a “breakeven.” Any reported amount beyond $1 means the program provides a positive return.

David P. Lind Benchmark

The questions for this particular module of our Study were developed in collaboration with the University of Iowa Healthier Workforce Center for Excellence. This module attempts to learn if Iowa employers are achieving what the Institute of Medicine in 2005 proposed under its Employee Total Health Management Program.

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Proposed Rules on ACA

David P. Lind BenchmarkJust two days before Thanksgiving, the Department of Health and Human Services released three newly proposed health care rules that are created by the Affordable Care Act (ACA). The regulations provided are not yet final – there is a 60-day comment period for the Wellness Program rules and a 30-day comment period for the other two rules. The comment period begins after date of publication in the Federal Register (November 26, 2012). The rules, combined with the turkey and the trimmings may have caused many to reach for the Tums!

The rules relate to the following:

  1. Health Insurance Market
  2. Essential Health Benefits, Actuarial Value, and Accreditation Standards
  3. Wellness Programs

Totaling over 330 pages, the three-part rules provide guidelines for online exchanges specifically prohibiting insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Insurance companies are allowed to vary premiums within a limited basis on age, tobacco use, family size and geography. In addition, companies are prohibited from charging higher insurance premiums to certain enrolled persons because of their current or past health problems, gender, occupation, and small employer size or industry. The proposed rules also address fair health insurance premiums, risk pools and non-group market catastrophic plans.

The proposed rules also outline “essential health benefits” (EHB), a core set of benefits that will hopefully allow consumers to consistently compare health plans within the exchange for both individual and small group markets. EHBs must be included in all plans offered, which consists of 10 statutory benefit categories of coverage, such as hospitalization, maternity and newborn care, prescription drugs, and so on. Each plan offered through the exchange will be required to meet specific actuarial values (Bronze, Silver, Gold and Platinum).

Finally, rules have been established for wellness programs offered by employers, making sure that such plans do not discriminate against people with physical and mental conditions. Wellness programs must be reasonably designed to promote health or prevent disease – meaning programs must have a reasonable chance of improving health or preventing disease and not be overly burdensome for individuals. In addition, programs must be reasonably designed and be available to all similarly-situated individuals, which would allow for “reasonable alternative means of qualifying for the reward” to those individuals who have medical conditions that make it unreasonably difficult (or medically inadvisable) to meet the specified health-related standard. This proposed rule provides employers with sample notice language to give employees the opportunity to qualify for the same reward through other arrangements.

With wellness programs, the key word appears to be “reasonable”…which means employers must be very careful when devising and implementing wellness strategies.

Whew! With that, please pass the Tums!

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Taming the ‘Wild West’

I recently devoured a fascinating book that is very disturbing and yet, potentially uplifting. I sound a bit schizophrenic, don’t you think?

Allow me to explain.

The book, “Unaccountable“, is written by Dr. Martin Makary, a highly-accomplished laparoscopic surgeon at the Johns Hopkins Hospital and an international expert on patient safety. Makary is an advocate for transparency in medicine and developed The Surgical Safety Checklist which was popularized in the Atul Gawande’s best-selling book, The Checklist Manifesto. His accomplishments are extremely impressive…and so is his book, published in September of this year.

The book is full of disturbing scenarios of unintended consequences patients face while interfacing with a “fragmented health care system littered with perverse incentives.” As Makary states, our healthcare ‘system’ is “an industry that does not abide by the same principles of accountability for performance that govern other industries.” One statistic says it all to me: Medical mistakes kill enough people each week to fill four jumbo jets – yet we do not read about this on the front pages of our newspapers. FYI – there are over 400 seats in one standard Boeing 747 jumbo.

Quite disturbing.

Makary shares intimate and revealing insider information – more meaningful due to the credibility of the messenger: “Patients are encouraged to think that the health care system is a well-oiled machine, competent and all-wise. It’s not. It’s actually more like the Wild West.” The Wild West?

An inexcusable by-product that comes from our perverse health care ‘system’ was published in the prestigious New England Journal of Medicine in 2010:

As many as 25 percent of all patients are harmed by medical mistakes. What’s even less known to the public is that over the past ten years, error rates have not come down, despite numerous efforts to make medical care safer. Medical mistakes are but one costly example of how health care’s closed-door culture feeds complacency about its problems.” As Makary points out, if medical errors were a disease, they would be the sixth leading cause of death in the U.S. – just behind accidents.

No wonder our health insurance rates continue to consistently outpace inflation – we pay for medical mistakes that are extremely expensive…both in dollars and, most unfortunately, in lives. Reforming health care should really be about reforming the ACCOUNTABILITY of how health care is delivered in this country.

Now, for the uplifting portion of his book – Makary proposes that our healthcare ‘system’ can be fixed by implementing common sense solutions to empower patients with useful information when seeking appropriate medical care. Makary is passionate about the need for hospitals to make their outcomes available on the Internet so that patients can become informed and engaged “consumers.”

Hospital reporting measures would include the following:

  1. Bouncebacks: Documenting the percentage of hospitalized patients who are re-admitted to a hospital within 90 days.
  2. Complication Rates: Documenting any unexpected, adverse event that develops during or after a medical treatment or procedure.
  3. Never-Events: Documenting things that should never happen in a hospital.
  4. Safety-Culture Scores: Survey hospital workers who believe (or don’t believe) they work in safe hospitals. This reporting tool can be critical to the general public.
  5. Hospital Volumes: Number of patients with a particular type of medical condition who are treated and the frequency of each type of surgery performed annually by each hospital.
  6. Transparent Records, Open Notes, and Video Recording: Encourage hospitals to implement initiatives that allow patients to have access to written and video records following surgical procedures.

My great hope is that healthcare in this country will transition from the Wild West to the New Frontier that we all deserve – having safe, affordable and full accountability that will provide for quality and efficiency.

It cannot happen fast enough – for all of us.

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