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Limitations of ROI

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					               ROI on ROI
“Winning a lottery ticket has an ROI of many millions
                       percent.
     Is playing the lottery a good investment?”
                                       - Marty Schmidt, Solution Matrix
                                   Improving Health – Reducing Costs


Defining Objectives – Defining Expectations




                    Cutting costs
                         vs.
                   Containing costs
                                               Improving Health – Reducing Costs


Measuring Effectiveness
•   Stand alone effects

•   In correlation with other health promotion and health management
    programs
                                                Improving Health – Reducing Costs


WorldDoc Multiple Functions


                                 Intervention



      Preventive Services                            Disease Mgmt.
                                  Health
                                 eValuation



Demand Mgmt.        PES™                         Rx              Cost Control




                                  Evidence
                                   Based
                                  Medicine
               Quality Control                   Cost Mgmt.
                                                Improving Health – Reducing Costs


What to Measure?
•   Direct impact on health care costs
•   Productivity improvement
     – Are there proper measurements in place
•   Decrease in absenteeism
•   Increased employee retention
•   All of them
•   Some of them
                                              Improving Health – Reducing Costs


Limitations of ROI
•   Limited time frame
•   If used a priori requires many assumptions
•   Selection bias (which variables to include)
•   Confounding variables
•   Separation from other elements influencing changes in employees
    health behaviors
                                                   Improving Health – Reducing Costs


Demand Management - Success Determinants
•   Program promotion / employee education
•   Employer’s engagement level
•   Presence and type of the incentive programs
•   Behavioral/demographic characteristics of the employee population
    (willingness and predisposition to change behaviors)
•   The extent, to which utilization data are used for further healthcare cost-
    taming actions
                                                             Improving Health – Reducing Costs


ROI Healthy vs. Ill Person
Well Person




       PES™, Health eValuations:   Telephone Advice Nurse,           Evidence-based Treatment
         Demand Management         Disease Management                Evaluations
               Self-care           Pharmacy Discounts/ PBM           Hospital Quality
          Health Promotion         Interventions                     Comparisons




Chronically Ill Person
                                          Improving Health – Reducing Costs


Integrated Approach to Health Decision Support

                                                            LIFE
 ROUTINE    FUNCTIONAL     CHRONIC         ACUTE          ALTERING
  CARE      IMPAIRMENT    CONDITIONS     CONDITIONS      CONDITIONS



                      DEMAND MANAGEMENT

                                DISEASE MANAGEMENT

           INTERACTIVE SELF MANAGEMENT

                           EVIDENCE-BASED TREATMENT RATINGS

                           FACILITY PERFORMANCE EVALUATIONS
                                                                 Improving Health – Reducing Costs


One Program, Two Firms, Two ROI
      COMPARING TWO POPULATION PROFILES - OTHER FACTORS CONSTANT



                               FIRM 1                                 FIRM 2
                               (young, single employees)              (older employees, with kids)

 Average # of
 doctor visits*                             2                                     6

 # of potential visits**                    2,000                                 6,000

 # of avoided visits***                     500                                   1,500

 Potential savings****                      $5,000                                $150,000

 Cost of WorldDoc **                        $24,000                               $24,000

 ROI                                        $2:1                                  $6:1
                     *     at the national average of 4 doctor visits a year
                    **     population size 1,000 WorldDoc participants
                    ***    from the customer survey (avoided at lease one doctor visit)
                    ****   at the national average cost of office visit $100
                                                  Improving Health – Reducing Costs


Time Issues
•   Short-term perspective
     – Decrease in number of doctor visits
     – Decrease in costs due to active selection of quality care and lower
       cost drugs
     – Decrease in absenteeism

•   Long-term perspective (successful implementation of prevention and
    intervention programs, changes in lifestyles, adoption of disease self-
    management programs… effects after 10-20 years)
     – Decrease in healthcare costs (48% of costs attributed to chronic
       diseases)
     – Decrease in absenteeism
     – Increase in productivity
                                                            Improving Health – Reducing Costs


  Who is credited with the ROI ?
                                                                Doctor diagnoses
Employee has an              PESTM points out possibility       tachyarrhythmia
abnormal heart beat,         of arrhythmia and advises          and prescribes
and uses WorldDoc PESTM      employee to contact                anti-arrhythmic drug
to evaluate the symptoms     the doctor                         as a treatment

                             WorldDoc mentions
                             radiofrequency catheter
Employee, back at home,      ablation and quotes evidence-based         Employee, shares
researches WorldDoc          reports claiming greater improvement       the findings with
for information about this   in symptoms and quality of life            the doctor and doctor
and other available          for patients treated with                  agrees to change
treatments                   radiofrequency catheter ablation           the treatment
                             than for those treated
                             with anti-arrhythmic drugs


                                                            Should the ROI be
 As a result, patients
 recovery is faster,
                                                    calculated for PESTM, WorldDoc as
 care was less expensive     QUESTION               a whole, doctor skills / care quality,
 and provided overall                                     new medical treatment
 better outcome                                             or all of the above?
                                                            Improving Health – Reducing Costs

    Projected Benefits (based on national averages)

                   SAMPLE GROUP                        WORLDDOC effects

                                                   • $24/employee/yr cost
•     1,000 families                                  – $24,000/yr for WD
       – 3,000 beneficiaries                       • 25% of beneficiaries use WorldDoc= 750
•     $9,000/family                                • Save 1 Dr. visit/3 users/yr (Lab, X-ray, Rx)
       – $9 million premium                           – 250X$100= $25,000
•     9,000 doctor visits                          • Replace 1 non-urgent ER
                                                    with office visit/4 users/yr
       – $100/doctor visit (with lab, X-ray, Rx)
                                                      – 39x$600=$23,400
•     1,170 E.R. visits
                                                   • Save 1 ER visit/6 users/yr (w/tests, Rx)
       – $700/E.R. visit
                                                      – 125x$700=$87,500
•     750 OP surg./admits                          • Save 1 OPS/50 users/yr
       – $4,200/OPS or admit                          – 15x$4,200=$63,000
Source: National Center for Health Statistics
                                         Improving Health – Reducing Costs


Estimated Savings




                     Total savings= $199,000
               ROI= $199,000/$24,000 = 8.3 to 1
                Savings among users= 8.8%
               Savings on total premium= 2.2%
                    Savings/employee/yr= $199

				
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posted:2/4/2010
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