How to present the ROI of Wellbeing Programs: Inside the Mind of Financial Decision Makers?
If you’ve been following my blogs, at this point you might be wondering how to present the ROI of Wellbeing Programs.
Professionals in the health care community expect perfection. God forbid if a study is not peer-reviewed! However, financial decision-makers are used to making decisions dealing with unknowns their whole careers.
Nevertheless, when they approve budgets, they are looking for sound logic, reasonable assumptions, and projected ROI. In other words, they want to know the worst that can happen, based on “what if” scenarios (they realize that assumptions can change over time and that results can vary.
In addition, they also want to know the impact of assumption changes. Therefore, they developed the science of Variance Analyses, which is a component of our Prevention Programs Strategic Planning services (please see the PowerPoint on our website www.wellcastroi.com for a description of our structured approach to Strategic Planning).
What are financial decision-makers thinking?
What are the questions going through the mind of a financial decision-maker when it comes to approval of prevention programs? My list would be:
- Why do you have so many programs focused on the same conditions?
- What is the impact of a program on each condition? Note: Programs can impact several conditions simultaneously.
- Why did you choose the programs you implemented? Note: based on what?
- How did you prioritize your programs? Note: there are a lot of needs, so why this one?
- Do you have a strategic plan for the prevention of conditions? Saying politely: I know you will be back asking for more money so why not tell me now that some programs take years to work.
- My favorite: why do you keep choosing the cheapest program on bids? Note: there is a tradeoff between price and quality. Don´t be shy. Pay more for better results.
- How do you measure your outcomes? Note: please convert your outcomes data to financial terms.
- What is the cost of each condition, and please separate the medical cost/premium from the economic costs? Note: I am tired of justifying programs based on premium cost savings that rarely occur.
- What is the maximum we can invest in a program and still breakeven?
- What is the minimum effectiveness rate of a program and still breakeven? Note: now we know what to keep our eyes on.
- Why do you have programs that take a long time to be effective for employees that have high turnover? Note: don´t you have programs that work faster so I can have an ROI before they leave?
- Why do all employees have the same program? Note: please tailor programs for each type of employee, as even I can see their needs are different.
How to present the ROI of Wellbeing Programs in the best way possible
Presenting the ROI of Wellbeing Programs is not as hard as you might think. The best thing to do when presenting results is to follow the same approach as other departments seeking budget approval.
Firstly, your PowerPoint should contain a few slides that explain how you translate the impact of conditions (physical and behavioral) into productivity and other cost savings, and how each assumption impacts the result.
Secondly, the next few slides should contain a list of assumptions used in your ROI calculations (be prepared to mention the source) and the last few slides should contain the ROI data, consisting of the Internal Rate of Return (IRR), the Net Present Value (NPV) and the Cost-Benefit ratio. BTW, these three indices are mathematically related-you can´t change one without changing the others.
Also, include the maximum cost you can invest and the minimum effectiveness rate of a program and still break even.
Following these steps will allow you to present the ROI of Wellbeing Programs in a much more compelling manner.
Learn more about us
Over the past 25 years, we have focused on answering the questions asked by financial decision-makers, utilizing the ROI Calculator as an important tool. Additionally, we have also developed a methodology for developing a Prevention Program Strategic Plan.
Unfortunately, it contains too many graphs to include in my blog, so please refer to our website: www.wellcastroi.com for more information.
If you find my blogs informative, please invite other benefits, HR, medical directors, procurement, and financial administrators to read my blogs.
