Cracking Health Costs: How to Cut Your Company's Health Costs and Provide Employees Better Care

This book has some valuable information, worthy of the two stars that I give it, but I believe it has flaws that are structural and not incidental. In the world of workplace wellness, Al Lewis and Tom Emerick (along with Vik Khanna) have created somewhat of a cottage industry by being contrarians and iconoclasts. There is nothing wrong with that to the extent that they are right and consistent in their approach, but I don't believe that is always the case. As a matter of style, I think the book is diminished by its apparent attitude that while most of the consulting, brokerage, and wellness industry is driven by know-nothing, commission-grabbing individuals who think only of themselves and not the client, Emerick and Lewis are to be considered unbiased and pure as the wind-driven snow-- while they actively sell their books and promote their consulting practices, speaking engagements, etc.In addition, Emerick in this book blithely admits (p. xxi) that he knows nothing about topics relating to high deductible health plans, mental health, Health Savings Accounts, narrow networks and, as he puts it "[fill in your own blank here]," which are largely Insurance 101 for those in the health benefits consulting arena. What else does he not know in that arena? While Emerick's history with Fortune 100 companies surely provided him with excellent knowledge from the 30,000 foot level and with macro issues (I am certain handling the benefits for a company with two million employees was an experience not many in the profession can relate to), it appears that he may have missed out on some of the issues that consultants such as myself and HR professionals deal with on a daily basis for most of the rest of America.I give it at least two stars because I think their books (which includes the book by Al Lewis, "Why Nobody Believes the Numbers") do contain valuable information, as I said above, the industry is served by such contrarians who second guess the assumptions and numbers often given out (some of which they show are clearly wrong). Nonetheless I have found a different book--by John Torinus, Jr., "The Company that Solved Health Care"--more valuable for most employers below the Fortune 1000 level and more filled with valuable ideas on how to get employees engaged and bend the cost curve. (For the record, I have no financial interest in that book and have no personal or business connection with its author.)As a broad brush review, the Emerick|Lewis book can generally be categorized as one that believes the traditional wellness programs, health risk assessments, and biometric screenings are at best generally worthless and at worst actually harm people. After beating up on most of the industry, Emerick then tries to come up with initiatives and programs that do in fact work. One of them, using Centers of Excellence, is hardly new, but Emerick tweaks it by using the term "Company-Sponsored Centers of Excellence." (I presume that Emerick did a fine job of selecting his network and went well beyond just going with whatever organizations called themselves a Center of Excellence, which he points out can be quite deceiving.) Then, after trashing most wellness plans, he heavily promotes what they consider to be wellness that works, which focuses on the employee's "well-being." In so doing Emerick touts, for example, the wellness vendor Healthways in its efforts along those lines. He cites studies that correlate the perception of an employee's well-being to actual healthcare costs, with a higher sense of well-being leading to lower healthcare costs. Other than a reference to having a beautiful cafeteria and cleaning the bathrooms, the advice on how to actually increase the perceived well-being of the employees is conspicuously absent. The authors pillory most wellness vendors when, after performing their own analysis, they conclude the cost for those programs will not be returned in plan savings; but nowhere do they discuss the obvious issue of the cost to increase employee well-being. For that, their analytical skills suddenly are either turned off, or in the case of Lincoln Industries, one of the book's real well-being success stories, the book is egregiously awry. (Emerick in the book gave fantastic well-being success rates for Lincoln Industries, but added that "resident outcomes expert Al" had not yet reviewed their findings--but he had. The Emerick book was written in early 2013, as is clear by its 2013 cited sources, but in mid-2012 Lewis posted on the Web an attack on the supposed wellness gains at Lincoln Industries--note, he made no reference to "well-being" at Lincoln Industries--and said instead of having great savings they in fact really gained nothing according to his analysis. So how did Lincoln Industries end up as a wild well-being success story in the book?)Fortunately they gave us a clue on how to increase well-being by promoting Healthways (Lincoln Industries was a Healthways client since 2010, for example), which published its own internal white-paper studies on its website. In its perhaps landmark study, Healthways showed that an unnamed Fortune 100 organization was able to lower its costs by putting in a wellness/well-being program. (This is a study that Emerick and Lewis cite in their book.) What did Healthways have the employer do? They wrote: "During the 12 months between the baseline and follow-up assessment, the organization implemented a comprehensive well-being improvement program. The intervention included components that targeted individuals directly through the WBA [a voluntary well being health risk assessment survey given the Gold Star by Lewis] and personalized well-being plan, access to a self-directed Web portal offering resources and support, and telephonic coaching for lifestyle and chronic condition management. Other elements of the intervention, such as employee competitions, health education courses, and increased marketing and health messaging around the workplace, aimed to improve the workplace culture of well-being." In short, they put in a well-designed wellness program, apparently the kind that the authors would otherwise trash. Beyond that, while Al Lewis especially likes to drill down to analyze the data, I can find no analysis of the studies by them that show that well-being affects health care costs in a way that employers can use, beyond putting in a well-designed wellness program. For example, in such a well-being study is it surprising to learn that a cohort of higher paid employees (and thus presumably having a higher sense of their financial well-being), who are perhaps better educated and came from fairly stable upbringings (on average), might have a healthier lifestyle than lower paid, living-month-to-month employees, who are probably younger and more inclined to super-size it at lunch at the local fast food restaurant? These might be extreme, stereotypical examples, but you can see that studies on the vague and often voluntarily self-reported index of "well-being" can be very squishy if not done on a very detailed basis that filters for culture, age, income, education, and other factors. The well-being index might even be the next big thing if properly understood and promoted, but that will take a lot more critical study. It is not helped when the much-ballyhooed analytical skills of two of its chief promoters suddenly take a vacation.While this book and "Why Nobody Believes the Numbers" are presumably designed to give out the same message from the same source (with the addition of Emerick in the second book), there are disturbing inconsistencies. In the earlier book prevention was given high billing as a logical way of building over time an effective wellness strategy to save money. In one example, pp. 128-132, a testimonial is given for "the only example of transparent impact of wellness that we could find in the whole wellness industry--the only case that satisfies a plausibility test. . . . Preventive visits with primary providers or active participation in behavior-modifying lifestyle risk programs were the identified behaviors to target. First year success was defined as getting this culture of prevention in motion. The [employer's] team identified physician visits, screening tests, and possibly ER visits as near-term outcomes metrics to monitor the impact of their wellness efforts, . . ." The consultant on the case, CORA-certified no less (see below), said of the case, "The plausibility indicators for the early stages of a wellness program, screenings and doctor visits, typically carry higher costs, offset by a possible decline in ER visit. But those costs are investments in preventive health that will pay off over time in reduced medical events, bariatric surgeries, smoking-related illness and even diagnoses of new cases of diabetes, metabolic syndrome, and CAD." Compare this testimonial--of an employer investing in the health of its employees through promoting prevention and wellness--to these bald statements in "Cracking Health Costs": "Don't incentivize people to go to the doctor; they'll do plenty of it on their own. This includes so-called preventive visits, which as renowned Reuters health/science write Sharon Begley observed (January 29, 2013), don't prevent much at all. . . The medical literature does not contain one shred of evidence that preventive physician visits improve health." So is promoting prevention a fool's errand or a responsible investment in the health of the employees? Such dogmatic statements reduce the value of the book in my opinion.Finally, the "cottage industry" reference above is not a throwaway comment. The book many times references the Disease Management Purchasing Consortium (DMPC) and the designation it sponsors, Critical Outcomes Report Analysis (CORA), which they say is "the industry's only outcomes measurement certification." Since the DMPC and its designation, CORA, are both run by Al Lewis, it provides an opportunity, I believe, for Lewis and a few others to corner the market on what is and what is not legitimate wellness or well-being. It is or is not because they say so. I am not convinced that would be a good thing.

I am a employer healthcare consultant. Everyone agrees that healthcare is broken. Tom Emerick and Al Lewis are like the sober Zen Master delivering a slap to the face to help us achieve awakening: population health management is full of phony positive statistics and we need to stop kidding ourselves and soberly look at real data, not marketing data...Employers understand that healthcare is broken. But, probably too few understand how broken is the advice that they may be receiving from consultants to pursue population health management as the solution to control healthcare cost.An area that I look forward to learning more about is: can some particularly committed and effective employers succeed in it? (John Torinus, Serigraph comes to mind.) But, this would not change the authors' point that my industry regretfully and without basis sells wellness as ROI from heaven. Because population health management is not commonly led by passionate top managers who infuse its objectives into the organization.Rather, it more commonly gets tepid commitment from the C suite, and exists essentially as a feel-good initiative burdening HR and employees.However, as hard hitting as the book is on population health management, I actually found it to be progressive and positive. Please liberate me from myths for the sake of my clients, plan members and my own sanity in trying to be a part of the fix for healthcare! And there are tangible, actionable campaigns detailed in this book that employers should adopt. In fact, it has helped focus me on those initiates.Regardless of the methods employed to fix employer healthcare, Tom Emerick and Al Lewis clearly are passionate about holding them up to incisive, realistic analysis. Which they demonstrate convincingly is not the status quo approach in the consultancy industry.

The current trend seen over the past several years is for employers to drop employee health insurance as a benefit as healthcare and health insurance costs have soared. In the face of the Affordable Care Act (ACA), many employers will be now be faced with the decision of providing health insurance or paying a fine to the federal government. If the decision is made to provide insurance coverage, then employers need to make delivering the benefit as effectively and as cost consciously as possible. And this is where this book can help.The book's eleven chapters are divided into three parts. In Part 1, Emerick and Lewis look at the myths and facts associated with employee healthcare delivery and costs. Having identified the facts and myths, Part 2 is about strategies and solutions for the employer to consider. The strategies and solutions offered are based on Emerick's experience in employee benefits and Lewis' experience in disease management and wellness programs. In Part 3, the authors specifically address employer strategies in response to the ACA law.If you own a company, are a CEO, or involved in health benefits management, this book should be on your 2013 must read list. Even if you choose not to implement any of the solutions and strategies put forth, getting a clearer understanding of today's healthcare and health insurance playing field, by reading Part 1, will be time and energy well spent.