How do you know if your population health efforts are working?
Is it as simple as saving money on healthcare costs? Or is there more to it?
The most effective wellness programs measure success in two ways: Return on Investment (ROI) and Value on Investment (VOI).
Together, these two population health metrics create a powerful combination that will improve the health of your population and increase the overall effectiveness of your wellness program.
But if you're unsure of the role each metric plays--or how to use them--you could be limiting your wellness program’s success.
Return on Investment
ROI measures the monetary return of your wellness investment. It's the financial benefit.
For employers, it includes money saved on insurance premiums and healthcare-related costs. For health plans, it’s measuring reduction in expenses such as out-of-network urgent care utilization or chronic illness diagnoses.
The benefit of using ROI as a key performance metric is that it captures--in monetary terms--the direct impact of your wellness program in relation to the money you've put in. It answers the question, "Is this worth the money?"
When your organization isn't seeing healthcare-related costs decrease with a wellness program in place, this measurement lets you know.
Effective ROI metrics include:
- Employee absenteeism
- Medical claims costs
- Employee insurance costs
- Disability claims
- Worker’s Compensation claims
But relying on ROI alone won't give you the full benefit of an effective wellness program. A common criticism of wellness programs is that ROI is notoriously hard to measure. Because of this, most organizations are reevaluating how they measure the effectiveness of their wellness programs. In fact, you might be surprised to learn that only 46% of employers measure the ROI of their wellness programs.
However, there's much more to population health wellness than dollars on a balance sheet. That’s where VOI comes in.
Value on Investment
VOI includes ROI plus all of the intangible assets that add value to an organization’s performance.
According to a study by The International Foundation of Employee Benefit Plans, the most popular measures of VOI include:
- Health risk assessment data
- Employee engagement
- Overall financials and growth
- Disability/workers’ compensation claims
Population management VOI metrics include measuring improved life expectancy, greater ability to function, reduced disability, improved psychological state, fewer unhealthy days, lower utilization of healthcare services including reduced readmissions, increased compliance with recommended interventions, and improved patient experience and overall satisfaction.
As you can see from above, VOI measures wellness in a holistic way; one where overall wellbeing is the focus. Under VOI, abstract elements of wellness programs such as improvements in workplace culture or employee morale become major indicators of success or failure. It asks questions such as, "How is this increasing our employee morale and productivity?" Population health managers might ask, “What percent of our members are current with recommended health screenings?” and “Have we seen a reduction in the number of poor clinical outcomes linked to unhealthy habits (e.g., sedentary lifestyle, obesity)?”
The benefits of a culture of wellness are well documented, resulting in everything from increased engagement to a reduction in turnover.
And as wellness programs grow in popularity, more and more employers are catching on. In fact, a study by The National Business Group on Health and Optum found that 91% of employers report offering wellness programs for reasons beyond medical costs savings.
Some of the top reasons for wellness programs include:
- Increasing engagement
- Improving daily health decisions
- Improving health outcomes
- Decreasing unnecessary healthcare utilization
- Improving employee job satisfaction
- Attracting and retaining talented employees
- Improving employee morale or member loyalty
- Enhancing quality of life
- Improving health perception
The benefits of including VOI in a wellness program go well beyond dollars and cents. VOI helps you measure the more abstract benefits that ROI would miss altogether.
Getting the most out of ROI and VOI population health metrics
How can you use ROI and VOI to get the most out of your wellness program?
The first step is to make sure that the program you choose includes both metrics. Most programs will already include standard ROI measures that look for a reduction in healthcare costs and insurance claims. Finding a program that includes effective VOI measures can be a little trickier.
When looking for a program with VOI metrics, your best bet is to use a health risk assessment focused on prevention and predictive wellness. With a health risk assessment, you’re able to capture a participant’s self-perceived health status, which provides a fuller picture than current or past health metrics. This will allow you to be able to track changes in culture while also accounting for important ROI measures.
The Wellsource Health and Research team conducted a systematic review of published studies that evaluated the cost-effectiveness of HRAs. The healthcare cost savings used in the calculation of the return on investment are based on a study of a health assessment program that included administering a health questionnaire, tailored feedback and messaging, online resources, and quarterly wellness campaigns—mirroring the way Wellsource clients commonly use the Wellcomplete HRA.