ROI Bullseye
How A Small Measure Of Success Can Yield A Big ROI
Take a small portion of success. Add a dash of persistence. Mix both parts with time and resources. Enjoy a rich ROI!
Despite the best of intentions, in most settings, fewer than half of employees will voluntarily return an annual health risk assessment (HRA), less than a quarter of high risk respondents will attempt to change behavior, and only a minority of those who try will actually change. Faced with those percentages, some people dismiss health promotion programs as ineffective. Veterans of public health and health promotion grow accustomed to questions about the value of what they do. How can this stuff do any good, they are asked, when so many people fail?
While discouraging, the question is a valid one. Logic and common sense suggest that low success rates may not justify good intentions—and significant investments—in population-based health management programs. It is important that health professionals confirm the value of what they do—if not for their own peace of mind—to help inform those who remain skeptical, and to justify the time and money spent on health improvement.
You Say Tomato…
A big part of the problem is with the perception of what constitutes a successful intervention. Success means different things in different situations. A common surgical procedure that achieves a positive outcome in fewer than half of patients would not be considered successful. A medicine that improves symptoms in only one quarter of patients might not be considered successful treatment either. As humans, we like obvious, dependable outcomes. We like to see clear evidence that something works.
One illustration of the importance of differences in perception comes from a story about why physicians at a clinic weren’t encouraging patients to quit smoking. Evidence indicated that about 8% of patients who received quitting advice from their doctors quit successfully. Public health officials were ecstatic about a quit rate that was 100% higher than the normal 4% quit rate without advice. The extra 4% translated into 18 million fewer smokers nation wide! Doctors, on the other hand, didn’t think it was worth talking to patients when more than nine out of ten patients ignored their advice. Doctors saw the size of the failure rate. Public health saw the dramatic increase in success rates.
When it comes to evaluating the success or failure of an intervention, the real question comes down to whether the impact is “good enough” to warrant the time and money spent on the effort. To do that, we need to confirm that health promotion improves health—and reduces costs—enough to warrant investing in the intervention.
Lessons Learned
If we look at evidence from the last 15 years, many questions have been answered about the burden of poor health and our ability to encourage behavior change. Let’s consider how this past experience adds up to make a solid case for population health management.
Lesson 1: Health Risks Are A Significant, Identifiable Problem Worth Addressing
Strong evidence has accumulated in this area. Health risks increase the likelihood of the most common chronic illnesses and causes of death. Health risks contribute significantly (and cumulatively) to health care costs1,2 and workers compensation costs 3. Health risks also are correlated with greater infirmity and disability as we age, lowering functional status eight years sooner for high-risk individuals than low-risk individuals 4. Overall, the contribution of individual and combined health risks to negative outcomes is convincing and overwhelming.
Lesson 2: Behavioral Targeting & Tailoring Helps Move People Along
What we have learned about readiness to change and individualized educational message tailoring has advanced the field. Evidence indicates that the proportion of successful changers increases as readiness advances 5. Until an individual has moved along the readiness continuum sufficiently to prepare for change, action oriented interventions are less effective. Further, educational messages tailored to the individual’s readiness will facilitate change more successfully than generic messages 6. These advances confirm our ability to expedite positive change and increase the likelihood of successful change.
Lesson 3: Participation Is Vital
In order to provide the right programs and support, it is critical to have as much information as possible about as much of the population as possible. Until a person engages in a health assessment process, he or she will have little chance of being part of the “success” story. Given that the proportions of respondents who will attempt or succeed at changing are far below 100% even with the best program, the key determinant for success rates is how many people are identified in the first place. While there is evidence that incentives can increase participation substantially, more information is needed to help practitioners determine what types of incentives work in various settings. We also need to know more about optimizing the cost-effectiveness of incentives so we don’t invest any more in them than we need to.
Lesson 4: Small Changes Are A BIG Deal!
Interestingly, the positive ROI from health promotion interventions results from surprisingly small behavior change effects (successful change of just 3-5% of total risks across the population) 7,8. This happens because of the high excess costs produced by each risk (up to hundreds of dollars annually for each risk), and the much higher additive excess costs of multiple risks in the same person (close to $2,000 annually in health care costs per high risk person). The size of these differences points to a very favorable value ratio. Just one person becoming $2,000 less expensive per year covers program costs for ten participants at $200 per person, or 40 participants at $50 per person.
Another way that small changes matter a lot is when the entire population changes its level of risk even a tiny bit. A simulation study on the Union Pacific population demonstrated this phenomenon very well 9. Their projections showed that the natural increasing trend in risk factors that occurs with aging would produce a 26% increase in health care costs ($99 million) over the next ten years, excluding the additional effects of medical cost inflation. However, a tiny decrease in risk levels across the population (one tenth of one percent per year!) lessened the cost trend by $21 million and resulted in a “break-even” for the program. Even tiny changes across a large group will shift health status in measurable ways. A still modest rate of change of 1% per year in risks—realistic based on Union Pacific’s risk trend data—lessened the cost trend by $77 million and resulted in an ROI of $4.07 per dollar invested in health management.
Although the high value of each successful change in risk is very advantageous in achieving a positive ROI, there is another important consideration to keep in mind. The value of success applies to the NET change in risks—meaning that more people must move from high risk to low risk than vice versa. Also, the high value of a single success will not compensate for a program that is overly expensive or poorly administered. A program that costs $20 more and engages 20% fewer participants may be enough to shift a program from a positive ROI to spending more that you save.
Tomorrow’s Research—Today
Health promotion researchers continue to document more economic outcomes associated with risk reduction, including absenteeism, disability days, and on-the-job productivity. A recent publication by the University of Michigan illustrated a positive ROI (2.3 to 1) from health promotion participation based on reduced disability days alone 10. Combining medical dollars, lost time, and improved productivity will further enhance the economic argument in favor of population health management. It is quite possible that—when all the costs are quantified—low-risk employees will have an average of $4,000 to $5,000 lower annual health and productivity costs than their high-risk counterparts.
Seeing The Glass A Tenth Full
Working through the logic helps illustrate how a few successes can lead to a very positive overall economic outcome. It may also help practitioners remember that their efforts are worthwhile on especially frustrating days. However, the perception that “wellness doesn’t work” is a very real concern that needs to be changed for population health management to grow.
Keep in mind that—in a narrow and ultimately irrelevant sense—the perception is true. After all, how many other activities fail at this rate and are still valuable? For this reason, setting appropriate expectations about participation and success rates is vital. Because it is unlikely that decision-makers will conclude intuitively that a three to five percent risk change is valuable enough to justify the intervention, they also need to have a clear understanding of the economic impact.
Perceptions are hard to change. Just like the doctors who saw 92 failures instead of eight successes, many will see health promotion efforts as mostly ineffective. Help them with evidence. Track the successes. Demonstrate a higher rate of high-to-low migration than the reverse. Keep track of the research showing the impact of risks on health-related costs, absences, and productivity.
The evidence may not be as obvious as we would like—but it is there in a growing body of research documenting the ROI in health management 11. Indeed, the ROI glass is well over half full and getting fuller with each new study!
To view the reference list for this article, click here.
About Wendy D. Lynch, PhD
For over 15 years, Dr. Wendy Lynch has been making the connection between employee health and business outcomes. As co-director of the Academy for Health and Productivity Measurement, Wendy focuses her work on absence and performance assessment, program evaluation and business strategy consulting.
