Meeting ROI Expectations in Health Management

Thursday, August 13th, 2009
This post was written by Melanie Matthews

Craig Nelson, M.D., director of health services research for American Specialty Health, which provides telephonic coaching programs for weight management, tobacco cessation and general fitness, describes the challenges of meeting expectations of wellness program purchasers.

“What’s the ROI?” is a direct quotation from virtually every client, potential client, broker and health plan to whom we might offer our services. This question might be the first question they ask — or the second or the third or the last — but inevitably they will want an answer to that question. Our challenge is to provide an answer that is credible and generalizable and can be applied to more than just one employer or health plan. The answer must also be timely — people don’t want to wait two, three or four years for an answer to this — and practical; it must be an answer that can be provided with the data and resources that are available.

Why should we expect an ROI? The clinical logic is well understood by everyone. We have modifiable risk factors — most notably diets, tobacco use, exercise and stress. These modifiable risk factors will affect biometric variables like blood pressure, serum glucose, and serum cholesterol and ultimately lead to changes in health status. Those changes in health status will result in increased healthcare costs and reduced productivity. Our program and others intervene at this level of modifiable risk factors to alter the trajectory of this cascade.

That very simple model has been expanded in a much more complex way by the Disease Management Association of America (DMAA). The DMAA’s wellness outcomes workgroup has found that health and behavior risks and associated behavior change in areas of nutrition, exercise, tobacco, medication adherence, etc., will lead to changes in health and clinical outcomes and ultimately to changes in utilization and medical costs. While this time line is not very precise, it does suggest that some of these changes may take place over years and months, so we don’t necessarily expect an instantaneous result from a program that changes some of these behaviors.

Expectations by purchasers of wellness programs regarding programs are supported by science and by vendor claims that a workplace wellness program will reduce morbidity and associated healthcare costs. Further, the expectation is that these cost savings will more than offset program costs and thus generate a positive ROI. This expectation is entirely warranted. Frankly, there wouldn’t be a market for these programs if this wasn’t the logic behind them. We can hardly cry foul if purchasers are asking us to provide them with information about the ROI of our programs; this is entirely a legitimate and sensible thing to ask.

Our first challenge as a provider of these services is to deliver on the actual program results of reducing risks, improving health and saving money. Further, the challenge is to measure all of those results. Frankly, the latter is in some ways more problematic than actually delivering the outcomes. The measurement is part of the problem.

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