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April 26, 2017 | by Aon Hewitt, in partnership with the National Business Group on Health (The Business Group) and The Futures Company

Health Care: From ROI to VOI

Why companies should think less about health care cost avoidance and more about value creation

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Organizations have been implementing workplace health improvement programs to influence the long-term trajectory of employee health through behavior change. These initiatives have the capacity to deliver business results to the employer through improved engagement and productivity while also preventing and decreasing illness and its associated costs. As employers continue to invest in health improvement programs, there is increasing demand to understand program results and how they can be improved.

 

Historically, this evaluation focused on return on investment (ROI) to measure financial outcomes as an indicator of program effectiveness. Because the data source is merely one of many silos, this approach provides a narrow view of the organization with limited analytic value.

Accelerating change, driven by the evolution of technology and regulatory flux, is transforming the availability of data at both the personal and organizational levels. This, coupled with employers’ evolving programs to focus more holistically on well-being, signified the demand for evaluating program impact in the same holistic way. In a value-based environment, a comprehensive and multidimensional evaluation by an interdisciplinary team is critical to ensure the organization’s long-term success.

Improvements in health and well-being within an organization can cause a ripple effect and generate secondary financial returns in the form of improved qualitative measures closely related to business outcomes.

Such evaluation encompasses more than money saved or earned; it must take into account qualitative benefits, such as improved employee safety and engagement, as well as other measures. All of these measures are interdependent. Improvements in health and well-being within an organization can cause a ripple effect and generate secondary financial returns in the form of improved qualitative measures closely related to business outcomes. In failing to consider these corollary benefits, standard ROI-only evaluation models fail to deliver a holistic view of the value of an organization’s investments.

This white paper studies variations in evaluation measures by outlining recent literature and providing recommendations to guide readers toward an appropriate evaluation and measurement approach.