Is ROI the Best Measure of Success for Worksite Clinics?

Written by: Phillip Berry

In a recent meeting, a worksite clinic Nurse Practitioner told me that she helped a diabetic patient avoid a foot amputation with a combination of assessment, testing, counseling, and medications. It was a jolt to me as I considered the implications of her statement. We were discussing the impact of the worksite clinic and its role in the health of employee patients. As she described her example, I wondered aloud, how do you measure the value of saving an employee’s foot?

On one level, you might calculate the cost of the avoided procedure – $40,000 to $60,000. A formerly fully mobile and productive employee is now disabled and may or may not be able to do the work he formerly did. Reduced mobility puts him at higher risk of future adverse events. If he continues to work, the employer must find a way to accommodate his new limitation. If he does not continue to work, he will likely be on long-term disability of some sort. From an employer perspective, this is a clear hit to the bottom line. From an employee perspective, the impact is incalculable.

Much has been written about calculating ROI (return on investment) for healthcare expenditures. Workplace wellness programs and onsite/nearsite clinics have grown in popularity as a way for employers to directly impact employee healthcare expenses. A ten year Rand Corp. study found that employers saw a $3.80 return for every $1.00 spent on disease management programs. That looks pretty good on paper but it doesn’t quite capture the compelling power of a case in which a patient’s foot was saved.

There are many great ways to approach the measurement of an employer’s healthcare ROI as it relates to employee health. In this post, Dr. Jonathan Spero suggests some great do’s and don’ts to measuring ROI effectively. Don’t fall for biased studies and research sponsored by vendors. Do focus on real savings linked to claims data. Don’t use projected savings. Do focus on key performance indicators looking for before and after costs. To even get to a good ROI discussion, you have to make sure the fundamental approach and measures are sound. This is a rational approach and serves to give us a sense of comfort that our money is being well spent.

The problem comes when we isolate snippets of data, make erroneous assumptions, make “apples” and “oranges” comparisons of data points, or fail to invest the time to properly understand the measures we’re seeing. In this way, ROI becomes just another mechanism for justifying a decision we made or want to make rather than helping us make the right decision.

Another approach to measurement centers on value, VOI (value on investment). Dr. Stephen Aldana offers some interesting perspective on VOI as an effective measure of worksite wellness and has invested significant time and effort into quantifying the “softer” impact points of a “wellbeing” program. Some of the value measures he offers center on employee morale, satisfaction, productivity, energy, “presenteeism,” and even fun. Aldana argues that VOI and ROI are not mutually exclusive and should both be used to assess the impact of a wellness program on the organization, however, he goes on to state that many organizations shift from ROI to VOI as they recognize the impact of the “softer” benefits to the organization.

Though quantifying impact should be an important part of assessing the value of a worksite health and wellness initiative, quantification is not an end unto itself. I heard a highly regarded expert in the worksite health space recently describe the original vision for pushing toward universal EMR adoption. The push for EMR was centered on data collection: patient demographics, tests, meds, procedures, vitals, etc. All of this data would help practitioners make better clinical decisions and ultimately provide guidance in population health management. The problem came when our transaction-centric system rewarded activity/utilization rather than outcomes and practitioners ultimately had less time to use the massive amounts of data to help the patient. The conclusion: the systemization of data collection was not a bad thing but the original vision was not realized. Big data ends up being dumb data if we don’t (or can’t) invest the time to properly sift through it.

So, is ROI the right measurement of success for you worksite clinic? Not by itself. Not if done incorrectly. Not if built upon incomplete or inaccurate data. Value continues to exist in the eye-of-the-beholder but seems to indicate a better path. What is the value of an avoided amputation? That depends on who you are asking. What is a good investment? That also will depend on who you ask. Ultimately ROI is incomplete as a measure of success. A better approach focuses on what it’s worth. What’s it worth to save an employees foot? What’s it worth to provide access to health for your employees? What’s it worth to have a healthy workforce?

To a large degree, employers have decided that it is worth a lot. In fact, it is considered very strategic. If that is the case, the question isn’t really about ROI, it’s about optimization of dollars spent. Every employer will value employee health a bit differently. But whatever that value, how to get the most for the dollars invested will continue to be the big question. Quantification comes down to baselining health versus spend and trending from there. Once you determine if your efforts and investment are moving the dial, the next question is how much further can you move the dial and what will that cost.

The reality is that we are at an inflection point in our health system and the future shows two paths for us: privately funded or employer sponsored healthcare versus government managed healthcare. Your investment in a worksite clinic is a bet placed on the American tradition of innovative, market-driven solutions to vexing problems. However, ROI is a blunt instrument for measurement when the value can far exceed straight cost-based results. Healthcare is not a production system. Look for ways to optimize dollars spent by measuring outcomes over time. What is the value of an employee who is able to continue to work? Or one who is happy in his job? Or one who feels healthy? Or one who takes her meds? Or one who believes you care?

As worksite clinics continue to evolve as a nexus for employee health and a hedge against rising healthcare costs for employers, the pursuit of the best way to measure success will continue to remain a part of the conversation. Well-structured ROI calculations can play a part in assessing worksite impact. However, employers will be better served focusing on overall spend relative to specific outcomes objectives coupled with the broader value story associated with “soft” impact points. In this way, eye-of-the-beholder value stays center-stage as the employer avoids the trap of one-size-fits-all systemization of a very intimate benefit for employees.

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