A Return-On-Investment Estimation Model to Evaluate Outcomes of an Obesity Management Program

Craig F. Nelson, MS, DC Director Health Services Research • American Specialty Health

This Presentation
• Define the issue • Identify challenges • Offer one option for a solution

“What’s the ROI?”
Provide an answer to this question that is … • Credible • Generalizable • Timely • Practical

Logic of Wellness Program ROI Wellness Program .

• Medical expenditures are estimated to be one-fourth to one-third higher for overweight and obese employees compared with normal-weight counterparts. decreased presenteeism. . • Obesity has been attributed to increased absenteeism.Obesity Costs • The estimated obesity-related cost burden to employers is substantial. and increased utilization of short-term disability.

Total/HDL Ratio) Blood Glucose Blood Pressure III. (Web. HDL. Process Measures Measures -. Process I. Behavior Change/Modifiable Risk Factors II.Wellness Program Impact Framework I. Productivity/ III. Cancer Screening Lipid And Glucose Screening BP Measurement BMI Assessment Immunizations Eye Exam Dental Care Physical Exam Health and Clinical Outcomes Health Status Body Mass Index (BMI ) Cholesterol (Total. Onsite) Coach. Communication.Number of Referrals Number of Referrals -. Appropriate Utilization and Medical Costs Short-Term* Doctor Visits Laboratory Preventive Care Medium-Term ER Visits Outpatient Pharmacy Long Term Hospitalizations Total Medical and RX Cost STD/Workers Comp Offsets Long Term Disability (*As a result of increased screening and preventive services) Timeframe for Impact Weeks/Months Months/Years Years/Decades .Engagement Methods Engagement Methods -. Onsite) -. Communication.# of Interventions # of Interventions (Web. LDL. Coach. Appropriate Utilization and Medical Costs IV.Etc… Etc… II. Behavior Change/Modifiable Risk Factors Psychosocial Drivers Self-Efficacy/ Confidence Readiness to Change Risky Behaviors Social Isolation Stress/Anxiety Motivation Depression Perception of Health Perceived susceptibility to and severity of illness Health Behaviors/Risk Self-Management Proper Nutrition and Exercise Tobacco Reduction/ Cessation Medication Adherence Sleep Safety Alcohol/Drug Use Screening and Preventive Svcs.Number And Types of -Number And Types of Contacts Contacts -. Triglycerides.Participation Rates Participation Rates -. Productivity/ Quality of Life Quality of Life Presenteeism Absenteeism Quality of Life IV.

but savings can be high – Conversely. ROI can be very large but savings very small – A appropriate balance must be struck between savings and ROI .The ROI Concept • How much you (expect to) save from a weight loss program..g. compared to how much you (expect to) spend or spent on it • Expressed as ratio (e. 2:1) or dollars--Net Present Value (NPV) • ROI and savings are not the same: – Savings reflect differences in $ with versus without intervention – ROI ratio = savings / program costs – ROI can be low.

• Further. is that workplace wellness programs will reduce morbidity and associated health care costs. .The Bottom Line • The expectation. supported by the science (and by vendor claims). the expectation is that the cost savings will more than offset program costs and thus generate a positive ROI.

The Challenge: • Deliver on the promise • Reduce risks • Improve health • Save money • Measure the above .

The Science of Wellness Care vs. Wellness Program Evaluation .

like any other and its effects can only be fully understood with an RCT. • Such a study would cost millions (tens?) of dollars • Would require a sample size of thousands (tens?) • Would have a duration of >5 years of the intervention . Wellness/weight management program as the independent variable and health status and health care costs as dependent variables.The Science A wellness/weight management program is a treatment. an intervention.

Program Evaluation “Default method” • Pre-post • Within group cohort study • Behavioral and biometric variables • Self-report .

Challenges to Measuring ROI in Wellness Programs • • • • Availability of claims data Variance and distribution of claims data Scope of program and effect sizes Temporal profile of effects ― Duration of program ― Impatience for an answer • Cost of evaluation versus cost of program • Sample size .

Sample Size .

. than of program success or failure.Claims-Based ROI for Wellness Programs • Given claims data variance and distribution … • And given the relatively low unit cost of wellness programs … • And given the uncertainties of trend analysis … • ROI results may be more a function of trending methodology and chance.

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Healthyroads Program • Telephonic coaching (maximum 48 sessions) • Individualized counseling on … ―Diet ―Exercise ―Stress management • Written materials to support coaches • Web-based trackers .

HERO Risk Factors • Exercise • Diet • Tobacco use • Stress • Depression • BP • Serum cholesterol • Serum glucose • Obesity • Alcohol/drug use .

HERO Risk Factors • Exercise • Diet • Tobacco use • Stress • Depression • BP • Serum cholesterol • Serum glucose • Obesity • Alcohol/drug use The Healthyroads HRA is designed to measure HERO risk factors in a manner comparable to original data collection process and operational definitions. .

• Follow-up HRA data were obtained one-year after individuals’ initial consultation with personal health coach. . – Participants represented a convenience sample with a 42.3% attrition rate from baseline to follow-up. • 1. • Baseline HRA data were obtained before or just after individuals’ initial consultation with personal health coach.Study Design Study participants • Inclusion criteria: age ≥ 18. and follow-up data. BMI ≥ 25.542 eligible participants. and presence of comorbidity associated with obesity. 890 employees provided baseline. or recommendation to program.

Study Population at Baseline Table 1.2 9.6 75.3 .4 191.6 Average or Percentage 890 44.4 76.3 0.7 3.2 6.) Body Mass Index (avg.) 0.4 30.9 0.8 3.) Female (%) Ethnicity (%) American Indian or Alaskan Native Asian Hispanic Black White Pacific Islander Multiracial or other race Unknown Overweight or obese (%) Weight (avg.2 74. Demographic characteristics of study population at baseline Demographic Characteristic N Age (avg.

adjusted to U.93).Estimation of ROI Baseline medical costs • Using MarketScan Commercial Claims and Encounters Database for 2006.6) • Productivity was monetized by multiplying total hours of productivity gained in the year by the participant’s average hourly wage ($25. derived from June 2007 Bureau of Labor Statistics.S. Productivity • Estimates of the costs of presenteeism (lost productivity at work) were derived from medical literature (Burton et al. Census Bureau 2007 Consumer Price Index values. the baseline costs were determined to be $4. Costs of Healthyroads • $300 per program participant per year incurred by employer .804/participant.

A demographic profile of target population .The user provides the risk profile of the targeted population (based on HRA data) and the actual or expected annual change in each risk factor .The Healthyroads ROI Model Two forms of input for the Healthyroads ROI estimation model: 1. A health profile of the target population .The user supplies demographic data for employees or beneficiaries and the projected annual increases or decreases for each characteristic 2.

ROI model inputs screen—demographics and financial measures .Model Inputs Figure 1.

Model Inputs Figure 2. ROI model input screen—time 1 and time 2 changes in weight and health risks for program participants .

and 0. while smoking status and depression remained unchanged. 4.8% weight reduction.Results – Health Risk Outcomes Over one year. . • Substantial reductions in poor eating habits (21.3% reduction) and inadequate physical activity (15.9% BMI reduction.1% reduction) occurred. • Overweight and obesity as measured by BMI experienced reductions at 5. Alcohol consumption significantly increased (from 13% to 16%).5 pounds reduction. participants experienced statistically significant reductions in 7 out of 10 health risk categories (Table 2).

68 0.49 0.80% Absolute ∆ 30.1 0.0001 BMI Weight 30.71 0.41 0.46 0.66 0.1 31 194.0001 P value (ttest) <.05 0.2 0.14 0.05 0.25 0.00% -1.0001 0.74 % pt ∆ -21.13 0.3763 <.0001 <.13 0.07 0.02 0.28 0.40% -2.Results – Health Risk Outcomes (Cont.06 0.03 0.1658 0.5 P value (McNamar’s Chi-Square) <.30% -15.18 0.09 0.0001 <.04 0.19 0.63 0.04 0.2 183.15 0.06 0.0005 <.0132 <.90% -5.64 0.16 0.9 29.03 0.08 0.7 29.1 188.18 0.67 0.05 0.0001 0.25 0.74 0.2 -0.) Table 2.7 .61 0.08 0.2 0.25 0.08 0.22 0.12 0.0032 0.0001 0.14 0.22 0.22 0.6 191.02 0.7 186.03 0.0001 <.69 0.4 30.48 0.30% -0.11 0.01 0.09 0.07 0.52 0.15 0. Changes in health risks factors for the cohort group Risk Factor Poor Eating Poor Exercise Former Smoker Current Smoker High Cholesterol High Glucose High Blood Pressure High Stress Depressed High Alcohol Overweight or Obese Mean 0.70% -16.06 0.79 0.45 0.06 0.04 0.20% 2.50% -6.9 190.90% -8.11 0.04 0.1 -4.76 Time 1 Time 2 Lower Upper Lower Upper CI CI Mean CI CI 0.10% -3.06 0.

Results – Financial Outcomes Total expenditures • Experienced reduction of $311.755 in one year Medical savings • 59% of reduction in total expenditures is attributable to a 4.3% reduction in medical expenditures Productivity savings • 41% of reduction in total expenditures is attributable to productivity gains Program cost • $300 per program participant per year .

. indicating employers saved a $1. • A value of $44. Projected ROI • $1. meaning that all risks need to be reduced by an average of 3.755 was realized.20.17 for every dollar invested in the program.17 to $1.Results – Financial Outcomes cont.20% points for the program to pay for itself. Net present value • Calculated as the present (discounted) value of the projected savings less the program costs. Break-even point • Determined to be 3.00.

215 $20. Year 1 Results Reference Scenario* Total Expenditure (2009-2009) Change Between Baseline and Year 1 Follow-up (%) Medical Savings Productivity Savings Total Savings Program Cost Net Present Value Return on Investment $4.029.000 $44.173 $311.998 $267.090.) Table 3.978 -0.560 0.755 $1.Results – Financial Outcomes (Cont.345 -0.782 $266.17 Break-Even Scenario** $4.000 ($2) $1.00 *No program **Risks are reduced by 3.04 $184.06 $246. .755 $267.275.582 $127.20% per year.00 Program Scenario $4.

Strengths • It is predicated on publically available published scientific data and on known relationships between risk factors and costs • It allows programs to be compared to one another • It is not sensitive to assumptions about medical cost trends • It is inexpensive to perform • It’s methodology is transparent .

Limitations • Absence of control group ―Regression to the mean ―Selection bias • Reporting bias • Self-report limitations • Limitations of the model “All models are wrong. Some are useful.” George Box Statistician .

Limitations • This evaluation and publication is not intended to be a definitive analysis of the program’s effectiveness. . it is intended to be a discussion the issue of ROI measurement in wellness programs. • Rather.

“Will You Guarantee This Result?” .

what program evaluation design is indicated such that the additional cost associated with the additional rigor is warranted and can be justified by the higher quality of data that results?” . number of participants. and given the availability (or non-availability) of claims data and of an appropriate control group. scope and duration.“Given a wellness program’s cost.

Program Evaluation Rigor: .

What Now? • Precision and certainty in wellness program ROI estimations are likely to remain elusive • Continue to advance the science of wellness care • Promote transparency • Do not put all your eggs in the ROI basket ― Process measures ― Member satisfaction ― Behavior change .