Outcomes Distortion

Let's say a company has 1000 employees and decides to offer a wellness program focused on weight management, tobacco cessation, and physical activity.

Let's pretend 100 people actively engage in the overall program (10%).  Just for fun, let's say that 75 of them either lose weight, quit smoking, or increase their physical activity.  So what have you got? 

If you're the wellness company charging a per-member-per-month fee, you proclaim that 75% of participants had a positive outcome, and try to convince the client that 10% participation is a terrific number and that a renewal increase is justified.

If you're the savvy employer, you realize that what you really have is just 10% of your employees participating, with a measly 7.5% of them experiencing a positive outcome, even though you're paying fees for 100% of the group.

Prevent outcomes distortion

There are 2 main choices for employers.  They should either purchase a wellness program that engages more than 10% of employees, or pay for services on a case rate basis.

A case rate is a cost per participant per year, much like a disease management pricing model.  Many large (1,000 or more employees) savvy employers demand case rates on services such as telephonic coaching, biometric testing, and health risk assessments.   Since these types of services typically appeal to a small cross-section of employees, it often makes more sense to pay per participant rather than per eligible member per month.