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Why Bother Waiting? Do it Now! ROI Estimation Versus ROI Studies? (Dr. Joel Bennett presentation; July, 2009)--folks have asked for this presentation so here it is
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Dr. Joel Bennett (817-921-4260) 8/12/2009
Why Bother Waiting?
Do it Now! ROI
Estimation Versus ROI Studies?
ADVANCED WORKSITE ACADEMY
MONDAY, JULY 20, 2009
NATIONAL WELLNESS INSTITUTE
Joel B. Bennett, PhD
Organizational Wellness & Learning Systems
Overview
• Return on Investment (ROI) estimation models
can offer a lower-cost alternative to expensive
analysis of financial data.
• Helpful to know online ROI and health-cost
estimation tools that can estimate potential
employer costs of various health conditions.
• Then show the potential savings from
reducing those costs with well-developed
health promotion strategies.
Dr. Joel Bennett (817-921-4260) 8/12/2009
Objectives
• Participants will know which tools are
available and how to find them
• Participants will experience the logic and
mathematical aspects of conducting a simple
ROI
• Participants will work through a simulation of
a cost or ROI tool
PARTS
• PART 1: Perspective and Caveats
• PART 2: Recent Estimation Studies
• PART 3: Logic and Math
• PART 4: Review of online calculators (most just
at cost)
Dr. Joel Bennett (817-921-4260) 8/12/2009
Adapted From Ken Wilber (All Quadrants, All Levels)
PERSPECTIVE
Adapted From Ken Wilber (All Quadrants, All Levels)
The Bean CounterThe Bean Counter
PERSPECTIVE
Dr. Joel Bennett (817-921-4260) 8/12/2009
What is your Philosophy of ROI?
Is it really just about numbers?• Is wellness only a commodity?
– Create stock markets for reduction of particular diseases? (e.g., by stock for STRESS, OBESITY, ALCOHOL reduction)
• Is it only about changing life-style (behavior)?– When all you have is a hammer
everything else looks like nail
• Should we neglect the Interior?– INDIVIDUAL: Holistic health, Mind-body
therapy, complementary & alternative medicine, spiritual health, YOU
– COLLECTIVE: Research on work culture, peer-to-peer, mentoring, social networking, leadership, social health, community interventions, YOUR TEAM
Its all about Its all about
the bottomthe bottom--
lineline
Get Get emem to to
stop the riskstop the risk
behaviorbehavior
PERSPECTIVE
Caveats
• In reviewing ROI estimates remember to not
mistake the numbers for the reality
• The thing measured is not the thing itself
• Always think “what do the numbers really
represent?”
• What do the numbers NOT capture?
• Do not place any more credence in the $ than
you should
Dr. Joel Bennett (817-921-4260) 8/12/2009
PARTS
• PART 1: Perspective and Caveats
• PART 2: Recent Estimation Studies
• PART 3: Logic and Math
• PART 4: Review of online calculators (most just
at cost)
Two Key References (Obesity ROI)
(JOEM) Journal of Occupational and Environment Medicine
• Using a Return-On-Investment Estimation Model to Evaluate Outcomes From an Obesity Management Worksite Health Promotion Program (Baker, Goetzel, et al.)
• VOLUME 50, Number 9, September 2008, 981-990
• American Specialty Health, HealthyRoads Obesity Management
Dr. Joel Bennett (817-921-4260) 8/12/2009
(JOEM) Journal of Occupational and Environment Medicine•A Return-On-Investment Simulation Model of Workplace Obesity InterventionsVolume 51(7):751-8, July 2009Trogdon J, Finkelstein EA, Reyes M, Dietz WH.
General Simulation Model
Application of Model to Different
Interventions for Weight Loss
Representative Published
Interventions
Potential Savings based on
estimator
CDC Community Guide
(included nutrition
education, financial
incentives, and on-site
exercise facilities)
STUDY 1: If can reach and sustain
5 lb loss than savings likely.
STUDY 2: Weight loss
competitions can save if sustained
Weight Watchers Not profitable for employers to
cover full cost (but subsidize for 3-
5% weight loss � saves)
Prescription Drug Coverage Does not have a positive ROI
Dr. Joel Bennett (817-921-4260) 8/12/2009
Conclusions
• Positive ROI is a high threshold for
interventions to meet. Medical
interventions improve health but
increase costs.
• Even moderately effective workplace
interventions would need to be relatively
inexpensive to generate a positive ROI.
PARTS
• PART 1: Perspective and Caveats
• PART 2: Recent Estimation Studies
• PART 3: Logic and Math
• PART 4: Review of online calculators (most just
at cost)
Dr. Joel Bennett (817-921-4260) 8/12/2009
THE BASICS
SAMPLE ESTIMATION
Logic and Math
GUIDED ESTIMATION
(BASE FORMULA)
(PrevalencePrevalence X Cost of DiseaseCost of Disease) – (Reduction in DiseaseReduction in Disease)
Cost of ProgramCost of Program
• DISEASE/RISK PREVALENCE: What is the estimated
prevalence of the disease in the worksite?
• COST OF DISEASE (RISK) BURDEN: What is the expected cost
of the disease (per employee)?
• REDUCTION OF DISEASE (SAVINGS): What is the expected
reduction in disease prevalence, reasonably obtained?
• COST OF PROGRAM: What is the expected cost of delivering
the program (per employee or per group)?
Note. These questions ignore various parameters that can significantly influence the outcomes of
estimation: gender, age, employee migration (turnover), comorbidity, time to intervene, time to follow-up,
failures to take into consideration hidden costs and hidden benefits, and a host of contextual factors (e.g.,
leadership support, work culture, unknown incentive costs—THE WE AND THE I)
Dr. Joel Bennett (817-921-4260) 8/12/2009
Pause
The answers to the following questions are WITHIN you
Personal Coaching
Queries
DISEASE/RISK
PREVALENCE
I know how many
workers may
develop the disease
or risk if NOTHING
is doneN L S GD VM
1 2 3 4 5
1=N-Not at all 2=L-A little
3=S-Some
4=GD-A good deal 5=VM-very much
COST OF DISEASE
(RISK) BURDEN
I know how much it
costs for any
employee to have
the DISEASE or RISKN L S GD VM
1 2 3 4 5
COST OF
PROGRAM
I know how much I
am going to spend
delivering the
programN L S GD VM
1 2 3 4 5
REDUCTION OF
DISEASE (SAVINGS)
I know how many I
will be able to
reach who will
benefit from the
programN L S GD VM
1 2 3 4 5
Dr. Joel Bennett (817-921-4260) 8/12/2009
1
N = 10
$ Medical
$ Productivity
$ Absenteeism
2
$4000 (year)
310
X $4000
$40,000
5
60%
6 7
Dr. Joel Bennett (817-921-4260) 8/12/2009
(Prevalence X Cost of Disease) – (Reduction in Disease)
Cost of Program
(10 X $4000) – ($16,000)
$13,000
10
X $4000
$40,000
60%
Dr. Joel Bennett (817-921-4260) 8/12/2009
Maximizing ROI
(Prevalence X Cost of Disease) – (Reduction in Disease)
Cost of Program
• Change Paradigm (context, culture � I & WE (not just ITS)
To increase ROI:
•• Lower the Denominator (lower cost)Lower the Denominator (lower cost)
Cost of ProgramCost of Program
• Increase the Numerator (increase reduction)
• Find PREVALENT diseases that COST a lot
• Selected, Indicated, Universal
(PrevalencePrevalence X CostCost (Reduction in DiseaseReduction in Disease)
• Find programs that are highly impactful in REDUCING
• Evidence-based (confident they work)
Dr. Joel Bennett (817-921-4260) 8/12/2009
Lower the Denominator?
(Prevalence X Cost of Disease) – (Reduction in Disease)
Cost of ProgramCost of Program
Employee Assistance Programs Good Example
• Recent national survey shows that most employers
spend $7,983 per employee (total health benefit)
• Cost of EAPs have gone down to $12-$40 (<.003% of
overall benefit)
• YET, the literature consistently shows positive effects
of EAPs (presenteeism, absence, conflict, turnover, etc.)
Attridge, M., Amaral, T., Bjornson, T., Goplerud, E., Herlihy, P., McPherson, T., Paul R.,
Routledge, S., Sharar, D., Stephenson, D., & Teems, L. (2009). EAP effectiveness and
ROI. EASNA Research Notes, Vol. 1, No. 3. Available online from http://www.easnsa.org.
Increase the Numerator?Part 1. Strategically focus on right disease or right population
(Prevalence X Cost of Disease) – (Reduction in Disease)
Cost of Program
What are the highest cost diseases?
• Stress, depression, obesity, ??
But these vary ACROSS and WITHIN workplaces?
• Makes sense to be selective (e.g., go for moderate risk
who may be progressing to high?)
• Makes sense to be universal (e.g., vaccinations)
• But what if everyone in a work group is already
moderately healthy (may not even need an HRA)
Dr. Joel Bennett (817-921-4260) 8/12/2009
Increase the Numerator?Part 2. Strategically focus on right intervention
(Prevalence X Cost of Disease) - (Reduction in Disease)
Cost of Program
What programs are most effective? (“preference” logic)
• The ones we like?
• The ones that cost the least?
• The ones our insurer is pushing?
What programs are most effective (“science” logic)
• The ones shown to be effective (evidence-based)
• The ones that FIT within our culture
• The ones that can be sustained over time
Change the Paradigm?Consider the whole context
(Prevalence X Cost of Disease) - [Reduction in Disease + I AND WE)
Cost of Program
Dr. Joel Bennett (817-921-4260) 8/12/2009
PARTS
• PART 1: Perspective and Caveats
• PART 2: Recent Estimation Studies
• PART 3: Logic and Math
• PART 4: Review of online calculators
Sample of Disease
Cost Estimation (ROI)
Websites
Dr. Joel Bennett (817-921-4260) 8/12/2009
•Takes into account your:
• Average salary
• Gender
• Marital status
• Percent exempt
• Age
•Generatesmedical and personnel costs:
• Insomnia
•Obesity
•Diabetes
•Hypertension
•High Cholesterol
• Focus on productivity loss
• Estimates cost of absences and work
impairment
• includes turnover in estimates
•Does not generate a true ROI in terms
of a ratio (only cost savings)
Blue Printhttp://blueprint.acoem.orgThe HHC Foundation; Cheyenne, WY
• Based on a combination of costs
related to stress, results of the
Optimal Office pilot studies, and
meta-analysis studies published by
government/industry sources.
• Accounts for number of employees
and average salary
Incorporates :
• Turnover
• Absenteeism
• Healthcare cost
• Workers compensation cost
• Productivity affected by stress
• Generates percent improvement
and yearly savings (in dollars) per
employee in each of the health and
productivity components based on
improvements in work stress
• No ratio generated
Optimal Officehttp://www.logisens.com/calculatorLogisens Corp.; Ft Collins, CO
Dr. Joel Bennett (817-921-4260) 8/12/2009
Based on
• National Survey on Drug Use
and Health (n=70K) and
• National Comorbidity Study
(n= 8K)
• Screening & Brief Intervention
(SBIRT)
Alcohol Cost Calculator for:
• Business
• Kids
• Health Plans
• ROI
• Savings and Costs of Alcohol
TreatmentBased on Proportion
of Identified and Treated
Employees
• No ratio generated
Ensuring Solutions
to Alcohol Problemshttp://www.alcoholcostcalculator.org/roiThe George Washington University Medical Center
Washington,DC
• Accounts for Size of workforce
and industry, region, age, gender,
prevalence of depression and
affected employees, type of care
provided
• Gives detail of how impact is
estimated, based on absenteeism
and medical costs
• Provides three-year estimates of
savings by treating depression in
diagnosed employees
• Requires knowledge or access to
diagnosis of depression among
employees, rates of absenteeism,
and medical costs, which may be
difficult to obtain.
Productivity Impact Modelhttp://www.depressioncalculator.com/Welcome.asp
The HSM Group; Scottsdale, AZ
Dr. Joel Bennett (817-921-4260) 8/12/2009
• Use information about your
population to estimate
service delivery costs and
future financial savings of
several smoking cessation
interventions
1. "5A's" (Ask, Advise, Assess, Assist,
and Arrange) Program with:
2. Medication
3. Telephone counseling
4. Both Medication and telephone
counseling
• Generates intervention use
and cost and medical
savings for organization and
per employee
• Generates Graphs and
Tables for ROI
America’s Health
Insurance Plans (AHIP)http://www.businesscaseroi.org/roi/apps/calculat
or/calcintro.aspxAHIP; Washington, DC
Centers for Disease
Control and Preventionhttp://apps.nccd.cdc.gov/dnpaocc/co
mpanyprofile.aspxCenters for Disease Control and Prevention
Atlanta, GA
•Accounts for BMI by:
•Gender
•Age group (18-44, 45+)
•State
•Industry
•Ages
•Benefits
•Generates total annual medical
costs AND total annual work loss
costs attributable to employees with
high BMIs (workplace obesity)
•Allows the user to enter generate
savings by including information on
interventions aimed at reducing BMI
•No ratio generated
Dr. Joel Bennett (817-921-4260) 8/12/2009
Center for Health
Care Strategieshttps://www.chcsroi.org/model/Interve
ntion.aspx
Center for Health Care Strategies, Inc.
Hamilton, NJ
• Designed for Medicaid stakeholders
to assess and demonstrate a ROI
from projects to improve quality in
health care
• Users enters intervention specifics:• Strategies / Timeframe
• Target population
• Disease prevalence
• Expected enrollment rate
• Utilization / Program costs
• Cost to the organization
• Requires access to above info
• Stores forecasts for you
• Allows you to stratify risks
• Intervention ROI is not disease
specific
Review
• Perspective and Caveats
• Recent Studies in JOEM
• Logic and Math of Calculation
• Maximize ROI
• Websites
Joel B. Bennett
Organizational Wellness & Learning Systems
Fort Worth, Texas
www.organizationalwellness.com
