Mohsen Bayati is an associate
professor of operations, information,
and technology at Stanford GSB.
Chronic conditions like heart disease and
diabetes have been on the rise for decades.
They’re the number-one cause of death and
disability in the U.S. today and one reason
why health care costs are out of control.
So identifying people at risk for chronic
conditions before they get sick makes
a lot of sense. At the very least, early
intervention can often slow the pace of
disease and improve patients’ quality of life
— and in doing so, potentially save billions
of dollars in medical costs.
That’s why many employers — some
50%, according to a RAND report —
sponsor incentivized wellness programs for
their workers. Along with gym discounts,
these programs typically include a health-risk assessment in the form of lab tests used
to calculate each person’s risk factors for
common diseases. Those at risk are then
offered extra preventive care and oversight.
Unfortunately, the expected benefits
don’t always materialize, says Mohsen
Bayati, an associate professor of operations,
information, and technology at Stanford
GSB. Several studies have found that such
programs can end up costing more money
than they save. One likely reason, he says, is
that the risk assessments themselves aren’t
all that accurate.
“If you wrongly identify someone as high
risk — a so-called ‘false positive’ — you pay
for unnecessary services,” Bayati says. “And
if you miss someone who truly is at risk —
a false negative — then you still get hit with
those huge medical bills in the future.”
One solution, he says, would be to run
a more elaborate panel of tests. But that
would also increase cost. “Lab tests are
expensive. Companies are doing this for lots
of employees, so they look at a fairly small
set of standard biomarkers. And then the
detection ability isn’t very strong.”
More information isn’t necessarily better
in health care — or business.
BY LEE SIMMONS
SPRING 2019 STANFORD BUSINESS ORGANIZATIONS 40
Illustration by Angelica Alzona