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Weaponized Healthcare: How Obamacare Shifts Costs to the Poorest and Sickest

“The methods for patient gouging are complex.”

— Yves Smith

Although the Affordable Care Act (Obamacare) broadens access to health insurance through medicaid expansion and baning the pre-existing conditions exclusion, a little noticed provision worsens access for many of the 155 million who already had coverage through their employers.  Obamacare’s wellness program provisions enable employers to shift costs to the sickest employees.  These programs pose as an employee benefit, but are in fact, a regressive redistribution scheme designed to save employers money.

Wellness Programs: A  gift to corporate America

Employers who sponsor “Wellness” programs (>50% of large employers) can offload 30% of healthcare costs to employees who do not participate in, or fail to successfully complete  these programs. They can shift 50% of costs if the employee develops a tobacco related condition.

Wellness programs start by employee screening to identify risk factors and bad health habits. Next comes behavior change plans that “nudge” employees to improve their diet, exercise levels, tobacco and alcohol use,  and other habits related to health risks. Smartphone apps, Apple watches and other devices monitor program compliance. Finally, employees who successfully complete the program are rewarded and those who fail or don’t participate are penalized. Losers can end up paying more for healthcare in the form of higher premiums, deductibles or copayments.

The wellness industry is booming under Obamacare.  Revenue ballooned from $1 billion in 2011 to $6.8 billion in 2016.  Last year almost a quarter of employers increased their wellness offerings.

Wellness Program as Neoliberal Fairytale

The star of the wellness fairytale is the caring employer who is committed to the health and well-being of his employees. Grateful employees happily participate in the new, seemingly free, benefit. Attractive incentives keep motivation high.  Employee health improves and healthcare costs decline.  Savings are shared by employer and employees. The virtuous circle is complete as happier, healthier employees become more productive and the company thrives.

Let’s see how this narrative holds up? We’ll review the evidence for each element of this tale saving the employer motivation for last.

Are wellness programs a free added benefit?

Many are mandatory or de facto mandatory. Here is how a West Virginia teacher described the Go365 wellness program to a NY Times reporter:

“They implemented Go365, which is an app that I’m supposed to download on my phone, to track my steps, to earn points through this app. If I don’t earn enough points, and if I choose not to use the app, then I’m penalized $500 at the end of the year. People felt that was very invasive, to have to download that app and to be forced into turning over sensitive information.”

“Optional” programs coerce cooperation. How many teachers, most of whom are living paycheck to paycheck, can afford not to participate when it means taking a $500 hit?

Also note the invasion of employees’ free time as they try to meet exercise goals, or refrain from smoking or drinking; and the invasion of privacy as their daily activities are tracked and sensitive health information becomes part of the wellness program database.

Do Wellness programs improve health?

The short answer is no.  A recent (2017) randomized control study from the University of Illinois showed no benefit from wellness program participation. Unsurprisingly, industry promoters cite proprietary evidence to suggest dramatic success.  But, whole books have been written on how the wellness industry uses duplicitous statistics to make claims that are not supported by evidence.

Do incentives work?

When it comes to changing health habits, incentives lead to only temporary improvement. A mountain of research shows that once incentives are taken away, the employee reverts to their old habits. And the temporary changes are not necessarily robust.  Rand Corporation did an analysis of a weight loss program and found that it took $10 in incentives to achieve 0.03 pounds of weight loss. At that rate, a company would need to spend $10,000 to get an overweight employee to lose 30 pounds.

Do wellness programs reduce healthcare costs? 

Not according to a government sponsored 2012 analysis by the RAND. They were unable to detect any statistically significant reduction in health care costs from wellness initiatives .  .  The University of Illinois study cited above, actually found that those who didn’t participate in wellness programs had lower healthcare costs than those who did!

So, why do employers sponsor wellness programs?

Health Affairs concluded that whatever cost savings are achieved “from wellness programs may come from cost shifting, with the most vulnerable employees—those from lower socioeconomic strata with the most health risks—probably bearing greater costs that in effect subsidize their healthier colleagues.”

In other words, the primary motive behind employers adoption of wellness programs is financial.

Wellness Programs are a Neoliberal Scam

Wellness programs erode worker solidarity.  Employees who are penalized are incented to find employment elsewhere and young, healthy workers who benefit financially, lose sympathy for their older, sicker colleagues who drive up costs.

The case for wellness programs is informed by the neoliberal notion that you are the cause of your health problems and that you can choose to be well!

This perspective ignores the social context of health.  For instance, lower income people and minorities have worse health status (higher mortality, more chronic illness, more depression, and “diseases of despair” such as opioid addiction) than more economically secure groups.  And, the precariousness of job tenure and relentless erosion of income has led to higher stress levels which negatively affects health and well-being.

Wellness programs are not a serious effort to improve population or workforce health. Like so many neoliberal initiatives they are complex, opaque programs that participants are encouraged to “choose” for their own betterment.  A sheen of paternalistic caring hides their real intent which is to increase the income, power and wealth of corporations by fobbing off health care costs on the poor and the sick.

The methods of patient gouging are indeed complex—and evil as well.

 

 

 

 

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