HHS finally released the RAND study it commissioned under the Affordable Care Act. As previously reported at this blog, the study shows that wellness programs don’t work.
Ironically, on the very same day HHS announced its final rule on wellness programs. Employers will be able to penalize employees who fail to meet targets on weight, cholesterol, etc., by 30% beginning next year ― up from the current 20% level. Smokers can be penalized as much as 50%. (See our previous post.) The government gives this example:
The annual premium for coverage in an employer’s group health plan is $6,000, of which the employer pays $4,500 and the employee $1,500. The employer offers a $600 discount to employees who participate in a wellness program focused on exercise, blood sugar, weight, cholesterol and blood pressure.
In addition, the employer imposes a $2,000 surcharge on premiums for employees who used tobacco in the last 12 months. The combination of rewards and penalties, $2,600, is less than half of the total premium and is acceptable, if employees can avoid the surcharge by participating in a tobacco cessation program.
Is this another scandal? Reuters is reporting on a study the administration has been keeping under wraps since last fall. (Before the election???)
The report found, for instance, that people who participate in such programs lose an average of only one pound a year for three years.
In addition, participation “was not associated with significant reductions in total cholesterol level.” And while there is some evidence that smoking-cessation programs work, they do so only “in the short term.”
…More surprisingly, workplace wellness did not catch warning signs of disease or improve health enough to prevent emergencies. “We do not detect statistically significant decreases in cost and use of emergency department and hospital care” as a result of the programs, RAND found…
Workplace wellness is a $6 billion industry in the United States, with an estimated 500 vendors now selling the programs. Fifty-one percent of employers with 50 or more workers offer one, the RAND report found. Medium-to-large companies now spend an average of $521 per employee per year on wellness incentives (gift cards for losing weight, for instance), double the $260 in 2009, according to a survey by Fidelity Investments and the National Business Group on Health released in February….
The RAND report was mandated by the Affordable Care Act, the healthcare reform law known as ObamaCare. Two sources close to the report expected it to be released publicly this past winter. Reuters read the report when it was briefly posted online by RAND on Friday before being taken down because the federal agencies were not ready to release it, said a third source with knowledge of the analysis. (Reuters)
A RAND Health study found that hospital emergency rooms are now the point of access for nearly half of all hospital admissions in the U.S. and account for almost all of the growth in admissions between 2003 and 2009. During that time, hospital admissions grew only 4% — not even keeping pace with population growth. But ER-related admissions jumped 17%. (ModernPhysician.com)
Why this is important: about half of the newly insured under ObamaCare will get insured by Medicaid, and Medicaid patients use the emergency room twice as often as privately insured patients. Also, hospitals are buying doctors, who will be pressured to admit patients once they get to the emergency room.
This is from my column today in The Wall Street Journal.
The Obama administration wants something the federal government has never done before: a computer system that connects HHS, the Internal Revenue Service, the Social Security Administration, Homeland Security and perhaps other departments as well. This is a herculean task with unclear benefits. For perspective, consider that the Veterans Administration converted to electronic medical records in 1998 and the VA and the Department of Defense have been unsuccessfully trying to share records ever since. Even though they have spent millions of dollars on the effort, it now appears that the two agencies are abandoning the goal altogether.
They cover minimal requirements such as preventive services, but often little more. Some of the plans wouldn’t cover surgery, X-rays or prenatal care at all. Others will be paired with limited packages to cover additional services, for instance, $100 a day for a hospital visit. Federal officials say this type of plan, in concept, would appear to qualify as acceptable minimum coverage under the law, and let most employers avoid an across-the-workforce $2,000-per-worker penalty for firms that offer nothing.
Larger employers, generally with more than 50 workers, need cover only preventive services, without a lifetime or annual dollar-value limit, in order to avoid the across-the-workforce penalty…Such policies would generally cost far less to provide than paying the penalty or providing more comprehensive benefits, say benefit-services firms. Some low-benefit plans would cost employers between $40 and $100 monthly per employee, according to benefit firms’ estimates.
Source: The Wall Street Journal.