BCHD Gallup Research Report Analysis

1. BCHD Gallup Research Report Analysis: Introduction

Background

Beach Cities Health District (Redondo Beach, CA) is currently fronting a $30M bond issue on the November ballot.  It consists of $9M to double the building construction budget for allcove Beach Cities (allcove BCHD) and $21M for early demolition of the 514 N Prospect Hospital and subsequent repair to damage caused to the land and parking lots. BCHD is blocked by State law from spending money promoting its $30M bond. (https://drive.google.com/file/d/1Mjc4hu0c79ax3KrauyzI5Pe2ciJqNk03/view?usp=sharing)

Incident

On August 15, 2024, Gallup Inc. (privately held, for-profit company) published a public relations post that attempts to establish healthcare savings of $182M annually in the three Beach Cites and to link the $182M to BCHD actions. It appears to be a workaround so that BCHD gets a dollar-denominated press release to support their $30M bond. (https://news.gallup.com/poll/648008/good-health-saves-california-beach-cities-millions-yearly.aspx)

Appearance of Conflict of Interest by Gallup

Gallup, a management consulting firm, is a long-time consultant to the District with a current $400,000 contract. It is estimated that Gallup’s total take of District taxpayer funding is in the millions. Further, Gallup, Inc (privately held corporation), Blue Zones LLC of MN (privately held corporation), Blue Zones LLC of DE (privately held corporation), and Sharecare, Inc (publicly held for profit corporation) all collaborate or subcontract in support of the Blue Zones program, sales of Blue Zones to cities and organizations, and provide Blue Zones work to BCHD.

(Sources: BCHD data responses, DE and MN Sec of State, Wikipedia, NASDAQ)

As a result, it appears Gallup has every reason to continue its cash stream from BCHD by providing pre-election support PR.

Gallup PR Post is Short on Citations and Methodology

Gallup refused to provide the citations for its work. It alludes to secondary data (typically peer-reviewed journal articles with full citations) but refuses to provide sources. Gallup also asserts that it is “likely in part” that the $182M is the work of BCHD. Again, no facts, no cites, no methodology, and no support.

BCHD Issued a Defective Contract without Right to Details from Gallup

When confronted with a data request for more information about the $400,000 taxpayer funded contract expense and study, BCHD indicated that Gallup didn’t provide any details. Following review of the contract, BCHD failed to protect taxpayer payments by not providing requirements for Gallup to provide detailed work for vetting. CEO Bakaly has previously shown disdain for private sector methods in his comments in BCHD Board offsites regarding “private sector mentality” requiring accounting “to the penny”.

(Sources: BCHD data responses, Transcript of BCHD Board Offsite)

BCHD’s Repost of the Gallup PR Post and Attempt to Link

BCHD posted two back-to-back promotions on the BCHD.org website, the first regarding the so-called savings of $182M annually and the second a discussion of the $30M bond.

2. BCHD Gallup Research Report Analysis: Gallup Study Concerns and Defects

Background

Gallup compared the obesity rates, smoking rates, and diabetes rates between the US average and the Beach Cities. Further, Gallup assigned a monetized value to the difference in disease levels. Gallup asserted that BCHD was “likely” responsible “in part” for the reduced healthcare costs. As stated above, Gallup provides a thin fact base with no citations.

Concerns about Gallup’s Study Theory

Gallup is proposing a theory of relevance for the valid comparison of disease rates between disparate socioeconomic, demographic, and geographic groups without the use of statistical control methods. Furthermore, Gallup is monetizing the value of the differences in disease rates and then attempting to credit them to BCHD with any further analysis. There are many causative differences in health conditions between the average US resident and the wealthier, Whiter, younger, better insured Beach Cities that Gallup deliberately avoids. That maximizes the value that BCHD can allude to producing.

As a simple example, the average height in the US of a male is 5’-9” while the average height of a male in California is 5’-10”. According to various peer reviewed studies, taller men earn more money. In fact, one study found that for each additional inch, men earned about $900 per year. Using the Gallup theory, the difference between the height of a California man and a US Average man provides $9,000,000,000 ($9 billion) of value to California men. That $9B valuation is just as useless as Gallup’s $182M assertion regarding the Beach Cities “savings” from different rates of disease incidence.

(http://www.timothy-judge.com/Height%20paper--JAP%20published.pdf)

Defects to Taxpayer Ability to Review and Vet BCHD’s Report from Gallup

Due to BCHD’s defective contract that prohibits taxpayer access to details of Gallup’s study, taxpayers are forced to rely on the Gallup press release.  It is defective as a study report.

Gallup asserts that the incremental annual costs of diabetes, smoking and obesity are taken from secondary studies. Yet, Gallup refuses to provide those study references.

Gallup asserts that this comparison is valid yet Gallup provides no secondary studies or other references supporting the methodology.

Gallup asserts that “likely” BCHD is “in part” responsible for the unvetted, undocumented monetized result. Gally provides no justification nor quantitative results demonstrating BCHD programs created the savings.  Furthermore, Dan Witters, Director of Gallup Research, stated during BCHD Board Meetings that Gallups research for BCHD is not intended to measure the value of any programs. 

We are left with a defective contract from BCHD that fails to provide any access to the details needed for taxpayers to vet an assertion of $182M in savings. Taxpayers have paid over a quarter of a billion dollars in property taxes to BCHD in current day dollars and deserve better accounting and vetting of taxpayer expenditures than BCHD required from Gallup.

3. BCHD Gallup Research Report Analysis: Step 1 – Determine the Beach Cities Peer Group

Background

For the purposes of valuing healthcare and disease rate differences and savings, Gallup asserts that the average US resident is the appropriate peer group for the high income, well insured, well educated Beach Cites. That is Gallup’s unsupported assertion.

Alternatively, the myriads of external control characteristics of being a California resident, or an LA County resident or a high income LA County city resident are far more similar and relevant to each other than the average US resident.

Selection of Comparison Peer/Control Groups

We selected California, LA County, and a subset of the LA County Top 30 Income Cities as potential control groups for quantifying the healthcare and disease differences from being a Beach Cites resident. All Californians benefit form common laws, regulations, generally favorable climate, and generally accessible healthcare with support from California Department of Public Health (CADPH). LA County residents have additional benefits from the extensive LA County infrastructure, such as LA County Department of Public Health (LACDPH).

The Beach Cities (Manhattan Beach, income rank #6, Hermosa Beach, income rank #16 and Redondo Beach, income rank #22) are the only cities in the Top 30 income levels in LA County with a Health District. As such, the other cities, especially at or below income ranking, are valid comparators to determine if there are BCHD differences in healthcare outcomes.

Determination of Data Availability

Gallup’s taxpayer-purchased work is proprietary and covers only the Beach Cities. As such it is not useful for comparison. If Gallup provides data for a valid sample subset of the Top 50 income level cities in the LA County, then the Gallup data could be utilized. (https://datacommons.techsoup.org/ranking/Median_Income_Household/City/geoId/06037?h=geoId%2F0620746&unit=%24)

Instead, LA County Department of Public Health has a relatively complete health outcomes dataset dating from 2018. While it may not be as current as Gallup, it is much more complete. Further, we do not know if Gallup identified BCHD as the client during data collection. If so, then the Gallup data would require significant bias analysis. (https://apps.gis.lacounty.gov/static/DPH/community-profiles/?Geo_ID=la_county)

Based on the availability of complete data, the following four Cities listed below were available for comparison use and aggregated into the Top 50 group, in the same manner as the three Beach Cities were aggregated into an average Beach Cities (BC) group.

Rancho Palos Verdes #13

Walnut #27

South Pasadena #29

Santa Monica #47

Summary of Key Data Characteristics Using Public CADPH and LACDPH

Using consistent 2018 data whenever available, the health outcome characteristics of the various groups were computed and presented below.

As one can easily conclude by inspection, the average US rates of obesity and smoking are much greater than for California or LA County. Diabetes rates and very similar for all three, despite the one-third lower levels of obesity in California and LA County.

The rates of obesity, diabetes and smoking are slightly lower in the Santa Monica/South Pasadena/Walnut/Rancho Palos Verdes group than the Beach Cities as of 2018. The data are consistent and sourced from LACDPH.  This provides more evidence of potential bias in the Gallup work caused by identifying BCHD as the client (if that occurred).

Demographically, the Beach Cities and Top50 four city group are similar with the Beach Cities having a higher average income level.

4. BCHD Gallup Research Report Analysis: Conclusions

No Further Analysis or Information from Gallup is Needed

Public, unbiased, non-proprietary data from LA County shows that Beach Cities residents’ health outcomes are similar to, or slightly worse than, other cities with similar outcomes, demographics, etc. in LA County.

The Beach Cities Have Similar Health Outcomes as Other High Income LA County Cities

Very unexpectedly, we have no reason to further review the Gallup methodology or citations due to the lack of any preferential disease levels in the Beach Cities compared to the four City comparator of Santa Monica/Walnut/South Pasadena/Rancho Palos Verdes. The data do not support any reduced levels of disease in the Beach Cities compared to other similarly situated LA County Top 50 income cities. In fact, BCHD may be performing worse in the Beach Cities than no Health District service at all. That moots the need to review the dollar value assumptions and citations of Gallup.

BCHD’s Use of Proprietary Gallup Data Denies Access to Taxpayer Funded Study Work

BCHDs failure to write a contract with full disclosure, coupled with BCHDs lack of analysis of surrounding relevant cities creates the illusion of BCHD performance. When compared to a proper comparator group using unbiased, public data from LA County Department of Public Health, BCHD performance is the same or slightly worse than having no Health District.

Gallup Should Provide Details on BCHD Studies to Correct the Contract Defects

Gallup should correct for its client’s error or lack of transparency by providing full details on any further BCHD studies.

Gallup’s $182M “Savings” Level Relative to the US Average Health is Meaningless

While it may be accurate given the methods and data of Gallup (we have not pursued that issue given the outcome that Beach Cities residents have the same or worse health outcomes as the Top50/4-City residents) it has no relevance. The Beach Cities perform as expected relative to their demographics, location, income, education levels, and other factors.

There is No Positive Health District Effect

Health outcomes in the 4-city group of Walnut/Santa Monica/South Pasadena/Rancho Palos Verdes are the same or superior without any Health District taxation or services.