It's no secret that budget-constrained corporate benefits departments are under increasing pressure from senior management to justify the value of health and wellness programs in a timely manner. Determining the return on investment for these programs has long been a vexing challenge.
Recent innovations in program evaluation, however, are helping employers quantify that value more quickly. Beyond measuring a program's financial benefit, these new methods show broader promise for containing costs by enabling companies to focus on those aspects of their wellness programs that generate the most medical cost savings.
Traditional Approaches to Wellness Programs
Most employers today look at monthly engagement rates while waiting for a claims data analysis. While engagement rates provide a quick understanding of the number of employees participating, they lack insight into the specific interactions between program participants and health management services - and the value that can be expected from these interactions.
Outcome analysis through claims data requires large populations to prove value. What's more, it can take up to 18 months to receive a full evaluation of the program's performance. This long lag time for claims-based results means it's often too late to correct ineffective programs, which can negatively impact return on investment.
Employers Want Financial Assessment
Clearly, traditional program evaluation methods are lacking. Employers tell us that they expect their vendors to do a better job at assessing the financial impact of health management programs. To better gauge employer sentiment, Optum recently commissioned GfK Custom Research to conduct a survey of over 400 benefits professionals at companies across a broad spectrum of industries.
All the companies offered disease management or wellness programs, or both.The results were startling. Nearly one-third said they don't receive return on investment reporting, and another 22 percent said they didn't know if they receive such estimates. Nearly half said they don't receive any productivity estimates or were unsure if they did.
Survey respondents also said they don't want to wait months to find out if their health management programs are generating savings. Nearly one-half reported that they receive infrequent reports on medical cost savings and productivity improvements.
And more than one-half said that current reporting takes too long, is too difficult to understand or is not credible. Clearly companies are expecting vendors to look beyond mere engagement numbers when determining program success.
More than three-quarters of the survey respondents were interested in reporting that shows gaps in care that result in higher costs - and specific actions that can lead to cost savings.
Timely reporting containing trustworthy claims, productivity estimates and easy-to-understand calculations is the gold standard. Three out of four of those surveyed agreed that having access to timely reporting would help:
- Gain senior management support.
- Optimize the mix of programs.
- Prioritize communications.
A New Measurement
Health management programs traditionally focus on populations with a specific chronic condition. This approach of "condition-based outreach" is very often reactive and narrowly focused on the condition in question, rather than all of the individual's underlying issues. This results in missed opportunities to improve health and capture additional value.
A new, more innovative strategy that uses evidence-based medicine goes further to identify gaps in care outside of the specific condition in question. This approach estimates the impact of closing individual gaps in care that may be both preventive and reactive in nature.
This provides a holistic view of an employee's needs and helps better target upstream opportunities to address the root causes of illness and high health care costs. An essential ingredient of this new approach is a reporting tool that provides real-time indicators of value.
It identifies gaps in care by building a consumer profile that consolidates information about areas where an employee can improve his or her health, demographic details, clinical data such as lab results and biometric screenings, and results from a health risk assessment.
This profile helps highlight opportunities - known as "value drivers" - for actions taken by patients, coaches, clinical support staff or providers to improve the individual's health. Tracking value drivers helps assess the monetary value of key interactions.
Measuring the Right Things
Value drivers can provide a quick and clear understanding of potential savings that will be generated from clinical interventions by measuring four key areas that drive return on investment:
- Right treatment - getting appropriate treatment.
- Right lifestyle - making healthy lifestyle modifications.
- Right medication - receiving and adhering to correct medications.
- Right provider - seeing appropriate providers.
Thus, when appropriate, value drivers can help shift employees away from expensive, unnecessary procedures without compromising the quality of care.
Examples of Value Drivers
Some value drivers help the employee better navigate the health care system or become more knowledgeable about his or her health. Examples include referrals to providers who generate fewer gaps in care by practicing more evidence-based, cost-effective medicine; reviewing details of a treatment plan; or assessing the individual's quality of life and developing an action plan tailored to his or her situation.
A traditional, reactive approach might, for example, welcome an employee home from surgery and discuss ways to prevent a readmission. With this new value drivers strategy however, interventions would begin long before the surgery ever took place.
The employee would be educated early on about various treatment options to help him assess whether medication, surgery or another choice would provide the highest-quality, most cost-effective outcome. Take back surgery for example: In some cases, conservative treatment instead of surgery can yield a savings of greater than $20,000, with the same or better outcome for the patient.
Other value drivers relate more directly to an employee's current health status. Such value drivers could include coaching an employee with high blood pressure to maintain normal blood pressure or blood glucose levels, reviewing details of a treatment plan or assessing quality of life.
As an example, imagine a nurse and employee discussing the employee's heart condition. The nurse suggests that adherence to a beta-blocker medication prescribed by his physician might help ward off future heart attacks. Based on clinical research, it is estimated that $1,500 a year alone can be saved just by initiating beta-blocker therapy for individuals with heart failure.
The value driver strategy is grounded in a methodical approach. Consider the example of an employee with sickle cell anaemia who, because she doesn't regularly take her medication, frequently goes to the hospital emergency room for treatment and is periodically admitted on an in-patient basis.
Her case manager reviews a checklist containing several value drivers which, when completed, can help reduce unnecessary hospital trips, better manage medical costs and improve the employee's health:
- Review and document physician-prescribed dosage frequency.
- Confirm employee understands when to take medications.
- Determine how employee fills her prescriptions.
- Ensure employee understands and can reiterate treatment plan.
- Direct employee to cost-saving opportunity, such as mail-order program, half-tab program, pill-splitting or generic substitutes.
- Contact physician for treatment plan. If added, log in medication list. If discontinued, log side effects and contraindications.
- Identify medication reminder options for employee.
- Reinforce behavior modification and/or direct to online/audio tools.
- Explore with employee why she is not compliant with prescribed medications.
In this case, the cost of increasing adherence to the medication is subtracted from the average cost of emergency room visits and inpatient admissions. The result? Even with the increase in prescription drug costs (and the cost of the key drug in sickle cell anemia, hydroxyuria, is very cheap), nearly $8,000 in annual savings can be realized. While some value drivers may increase costs in the short term, they are likely to improve health over time.
More Timely, Clear Reporting
The value driver-based approach also helps reduce the widespread lag in reporting by providing near real-time information to operational teams, helping them more quickly understand the financial impact of interventions and clinical treatments. Periodic reports explain how much value is expected. A good example would be facilitating the visit (when appropriate) of an employee with typical or uncomplicated low back pain to a chiropractor or primary care physician for treatment instead of an orthopedic specialist.
There are well established savings associated with such a provider switch. Armed with specific data, a health management vendor can more quickly adjust its programs based on real value, not just participation data. Customers can gain much timelier insights into the value of the programs than the historical time frames it takes to complete claims-based results.
In short, value drivers give employers an indication of how health management programs are faring much sooner than do traditional evaluation methods. While they don't replace reviews of claims data and population health improvement over time, they are a validated real-time measurement of changes in employee behavior that can be confirmed later by analysis of those longer-term trends.
But in the interim, course corrections can be made in a more timely fashion to better manage the program. Traditional methods of assessing population health management programs are not adequate. Enrollment numbers and volume of calls don't address the key questions - is our population healthier and how does our medical spend compare with last year's? A program based upon value drivers, however, can provide timelier insights, enabling employers to better answer those questions.
About the Authors
David Czerwinski Vice President, Clinical Value, Optum As vice president of clinical value, David is tackling one of the key issues for health management purchasers today: understanding the return on investment from health and wellness programs. David leads Optum's strategy for measuring the value of health management programs and implements innovative methods that demonstrate the effect of these programs on medical expenditures, population health and productivity.
Prior to joining Optum, David worked as a finance consultant, where he provided numerous Fortune 500 companies with strategic business analysis in developing tools and analyzing solutions with a direct focus on cost and process improvement.
He brings a broad range of experience in both market assessment and health care management and can strategically apply cost-saving methodologies with go-to-market strategies to achieve organizational objectives. David holds a bachelor's degree in finance from the University of Minnesota's Carlson School of Management. He serves on the board of an animal rescue organization in the Twin Cities.
Jess Lewis Vice President, Health Management Solutions, Optum Jess Lewis draws upon his vast experience to instill innovation in Optum services and products and stay ahead of the curve in an industry that is constantly changing. As vice president, health management solutions, he leads the company's efforts toward a ground-breaking total population management approach, which focuses on the whole person and improves overall engagement and value delivered.
Jess previously led the strategy and architecture for the development of Optum's eSync technology platform, which provides the foundation for many of Optum's health and wellness offerings. Jess has been with UnitedHealth Group, Optum's parent company, for more than 13 years, serving in such areas as technology, venture capital, and mergers and acquisitions.
Prior to joining UnitedHealth Group, Jess was a senior manager with Andersen Consulting (now Accenture), designing business solutions in the health care, telecommunications and airline industries.Jess holds a bachelor's degree in computer science from Luther College.