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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. ROI on ROI. Defining Objectives – Defining Expectations . Cutting costs vs. Containing costs . Measuring Effectiveness. Stand alone effects

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ROI on ROI

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

  2. Defining Objectives – Defining Expectations Cutting costs vs. Containing costs

  3. Measuring Effectiveness • Stand alone effects • In correlation with other health promotion and health management programs

  4. ROI ROI ROI ROI ROI WorldDoc Multiple Functions Intervention Health eValuation Preventive Services Disease Mgmt. Rx PES™ Cost Control Demand Mgmt. Evidence Based Medicine Quality Control Cost Mgmt.

  5. 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

  6. 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

  7. 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

  8. ROI Healthy vs. Ill Person Well Person Evidence-based Treatment Evaluations Hospital Quality Comparisons PES™, Health eValuations: Demand Management Self-care Health Promotion Telephone Advice Nurse, Disease Management Pharmacy Discounts/ PBM Interventions Chronically Ill Person

  9. Integrated Approach to Health Decision Support LIFE ALTERING CONDITIONS ROUTINE CARE FUNCTIONAL IMPAIRMENT CHRONIC CONDITIONS ACUTE CONDITIONS DEMAND MANAGEMENT DISEASE MANAGEMENT INTERACTIVE SELF MANAGEMENT EVIDENCE-BASED TREATMENT RATINGS FACILITY PERFORMANCE EVALUATIONS

  10. 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

  11. 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

  12. Who is credited with the ROI ? Doctor diagnoses tachyarrhythmia and prescribes anti-arrhythmic drug as a treatment Employee has an abnormal heart beat, and uses WorldDoc PESTM to evaluate the symptoms PESTM points out possibility of arrhythmia and advises employee to contact the doctor WorldDoc mentions radiofrequency catheter ablationand quotes evidence-based reports claiminggreater improvement in symptoms and quality of life for patients treated with radiofrequency catheter ablation than for those treated with anti-arrhythmic drugs Employee, back at home, researches WorldDoc for information about this and other available treatments Employee, shares the findings with the doctor and doctor agrees to change the treatment Should the ROI be calculated for PESTM, WorldDoc as a whole, doctor skills / care quality, new medical treatment or all of the above? As a result, patients recovery is faster, care was less expensive and provided overall better outcome QUESTION

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

  14. 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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