Shifting Gears: Steering Health Strategies from ROI to VOI 

Happy businesspeople sitting at desk in creative office, group, meeting ©biker3 -
Oct 11 2018

Early findings of Mercer’s 2018 National Survey of Employer-Sponsored Health Plans report a slowing of expected medical plan market trend, to 5.3% for 2019. Yet, employers continue to struggle with managing increases in health plan cost that exceeds increases in CPI or wages. With employees’ cost-sharing already high, it’s become harder to find ways to keep coverage affordable, but still see a return in terms of medical spend savings. Instead, more employers are shifting the balance of change to future-focused strategies, steering past ROI measured simply by lower medical spend and driving to a VOI—a Value of Investment—measured in accepted business metrics.

Benefits exist to serve our business needs: to attract and retain, to keep employees well and productive. A small rise in productivity or fall in turnover can drive business returns far beyond the savings from a typical cost-shift in medical plan design. Realizing the connection between an employer’s health programs and business results has never been more important. EBRI’s latest survey of employees identifies the health plan as the benefit that matters most in employees’ decisions about where to work. Employers are investing in health plan strategies that can improve employees’ experience and, with good engagement, can lower longer term costs—programs like telemedicine and teletherapy, high-touch advocacy, wearable apps that monitor health status and onsite/near-site primary care services. For cost management, Mercer’s 2017 National Survey reports that over 70% of large employers prioritize two areas that touch very few employees—but are driving the bulk of plan spending: complex/high-cost claimants and specialty drugs.

The business VOI connection extends beyond these health plan strategies. Over half of the large employers in Mercer’s 2017 National Survey who measured the value of their well-being programs reported a value-return of improved productivity and/or improved attraction & retention. An analysis of survey results show that the stronger employee well-being programs—promoting the physical, emotional, financial and social well-being of employees and their dependents—are correlated with lower turnover.

There was a time when wellness programs were shunned by many employers, because the ROI measured by medical plan savings were modest, took too long to emerge and were seen to benefit many employees who would leave the company before savings could be realized. Today, with employees at high pain points of affordability, traditional across-the-board cost-sharing solutions are giving ground to changes designed to drive long-term savings to the business, not only through lower medical spend, but through the tangible and intangible improvements in health, productivity, turnover and, ultimately, in culture and employee satisfaction. These changes can speak to the physical, emotional, financial and social well-being needs of our increasingly diverse workforce.

More Mercer posts

Related products for purchase
Related Solutions
Related Insights
Related Case Studies