ROI vs. VOI: What’s the Best Measure for a Healthcare Investment?
BY STEPHEN FEIDER, CONTROLLER, OURHEALTH
As healthcare goes through a series of abrupt changes, many employers are now looking for ways to deliver premium healthcare experiences directly to employees without increasing costs. By 2025, experts expect that nearly $1.6 trillion of U.S. healthcare spending will be wasted dollars, with a majority of that waste being attributed to employers who sponsor employee health plans. The average employer will be paying more than $10,000 per employee per year towards health benefits.
Proactive employers are taking strides to reduce this waste by investing in onsite or near-site primary care clinics. OurHealth, a leader in this space, is helping organizations and their employees enjoy a one-stop comprehensive healthcare experience to proactively reduce waste.
Onsite and near-site clinics, in short, provide employers and their employees with:
- Better access to primary care physicians, affordable medication and labs, and healthcare guidance.
- Increased affordability of healthcare plans, insurance, and coverage rates.
- Healthier and happier patients with a renewed focus on preventive care and wellness management.
While an employer’s investment in a primary care clinic can be substantial, the ROI and VOI are tangible.
ROI (Return on Investment), as it relates to onsite and near-site primary care clinic services, is the reduction in an employer’s health insurance costs as a result of that employer’s investment in the clinic. The employer’s health insurance costs are tied to the health of its population—a healthy population is less expensive to insure, resulting in lower costs for the organization.
The ROI is measured using three primary areas:
1. High Cost Visits
Convenient access to primary care at an onsite or near-site clinic will avoid high cost visits. Examples include: visits to specialists such as orthopedics, ER visits for non-emergencies, or even low-value, high-cost procedure referrals. The per visit costs add up quickly.
2. Direct Healthcare Costs
Diagnostic laboratory tests and pharmaceuticals are two large drivers of healthcare costs. With an onsite and near-site primary care clinic independently negotiating on behalf of the employer, employees can fill prescriptions and receive lab tests at below-market prices. OurHealth, on average, negotiates medication prices that are 20% below market and runs diagnostic tests at 70% below market prices. The clear price difference both reduces the patient’s out-of-pocket cost and lowers the cost for the employer.
3. Employee Health
For employers managing a population with a prevalence of chronic conditions like diabetes, high blood pressure, or high cholesterol, onsite and near-site clinics provide an unprecedented opportunity for employers to enhance the patient experience and proactively generate healthy outcomes. From developing personalized wellness plans to incorporating more wellness-focused activities into the day-to-day workplace environment, onsite and near-site clinics deliver education, answers, and help for chronic care management.
The ROI is measured using concrete numbers (for example: for every $1 the employer invests, the onsite clinic reduces the employer’s spending by $X). Examples of health outcomes that yield financial benefit for an employer include: lower lab service rates, reduction in high-cost prescriptions, lower utilization of high-cost specialty services, and lower prevalence of chronic conditions or those at risk of chronic conditions.
An onsite or near-site clinic’s VOI (Value of Investment) varies based on the employer’s definition of success. A purely financial definition of success, for instance, will often focus on improving employee lifestyles, increasing productivity, reducing time away from work, and a focus on attracting and retaining top talent.
Below are common metrics used to measure the employer’s VOI of the onsite and near-site clinic:
- Vaccine and Health Screening Rates: Do employees understand their health and are they proactively addressing risk of viruses?
- Program Participation & Utilization: What component of the eligible population is using the onsite or near-site clinic, and to what extent? How many consider the onsite or near-site clinic their primary care provider (PCP)?
- Employee Engagement: Engaged employees are using the clinic and talking about their experiences with colleagues and peers.
- Productivity and Absenteeism: How much more productive is a healthy employee? It can take up to a half-day for employees to travel off-site for appointments. How much work time is the onsite or near-site clinic saving?
- Employee Satisfaction: Would the employees recommend the clinic, its services, or its providers to other colleagues, peers, or friends?”
VOI metrics are less concrete than ROI metrics, but are often important variables to the employer’s measurement of success.
Organizations like OurHealth are making it easy for employers to prudently manage their healthcare costs and improve the value of their investments in healthcare. A recent study from the U.S. Chamber of Commerce reported that convenient health programs can have an ROI of $2-3 per dollar spent over a 2-9 year timeframe. This goes to show that companies willing to invest in employee health can reap both ROI and VOI both in the short and long term.
Interested in measuring your organization’s return on investment? Visit ourhealth.org/roi to get a free healthcare ROI analysis and see how OurHealth’s onsite and near-site clinic solutions can yield savings and healthier outcomes.