Until today the Intelligent Design Awards Committee thought they had lost the ability to be shocked by the math-defying feats routinely reported in wellness, disease management and patient-centered medical homes.

Then along came Wellnet, with its second appearance on the charts in as many months, once again hitching their star to the regression-to-the-mean wagon, this time with Cumulus Media (CMLS on NASDAQ).

First, they claimed a reduction of more than $72,000 apiece for the 2% of high-risk members. This would be the equivalent of avoiding about 4 hospitalizations each for every one of these people with no offsetting cost for preventive care.

Second, for the 18% of the population that is medium risk, they are saving more than $37,000 apiece, which of course exceeds what medium-risk members incur in health care claims in total. Alleging savings in excess of 100% of spending qualifies Wellnet for membership in the prestigious "100 Club,"

But wait...there's more

Wellnet is claiming $21 million in savings -- what they call "undetected claims cost" on these two sets of members combined. yet Cumulus health care spending is only about $6 million in total.

We're still not done

Cumulus only made about $33 million last year, of which apparently, if the attached is to be believed, $21 million is due to Wellnet's efforts. To give an idea of the credibility of this claim, the $21 million in cost savings from Wellnet doesn't even get mentioned in the Cumulus 10K despite its obvious materiality if true:

"Station operating expenses for the year ended December 31, 2010 decreased $5.9 million, or 3.5%, to $159.8 million compared to $165.7 million for the year ended December 31, 2009 primarily due to a $3.2 million decrease in programming expense and a $2.8 million decrease in sales expense. We will continue to monitor all our operating costs and to the extent we are able to identify any additional cost saving measures."

Why wouldn't it get mentioned? Simple. Unlike in Wellnet's cost savings reports, statements made in 10Ks subject the corporate officers to criminal charges if knowingly false. So given a choice between repeating Wellnet's claims vs. staying out of jail, Cumulus executives decided on the latter.

The people who should go to jail are the people in charge of drawing the Y axes on their bar charts. First the hash marks -- all drawn at equal intervals -- represent $1-million. Then there is a mysterious, Watergate tape-like gap where the "$5 million" hash mark should be. The axis goes right from $4-million to $6-million. Towards the top, the hash marks represent $100,000 apiece, so that saving roughly 7% in claims cost allows the second bar to be drawn half the size of the first one. Hence the saying: "He who controls the Y axis controls the world."

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