LMR HEALTH CASE STUDY - ROI

LMR Health Case Study - Employee Population

 

Target Population Description

 

  • Employees of a regional medical center

 

Objective/Goals

 

  • Modify lifestyle related conditions that are responsible for 30 percent of the company's medical costs

  • Reverse upward trend in health care spending

 

Linkages to Follow-up Programs

 

  • Telephonic health line for counseling on fitness, nutrition and preventive health issues and receiving general health, medical self-care information and wellness newsletters

  • Physician referral for high-risk individuals

  • Case management for smokers and overweight (20%) and underweight (20%) individuals

 

Results/Measures

 

The program was implemented at the beginning of a benefits cycle

  • 23,621 employees were covered by the company's health plan, 84 percent elected to participate in the program. (The majority of participants did not fall into a high-risk category or require referral to a physician, however everyone gained access to the interventions, education and support for healthy lifestyles)

 

After the assessment

  • 3.4 percent were identified with conditions requiring a referral to a physician

  • 13.2 percent were identified with high-risk factors that had been associated with lifestyle-related illnesses

 

After six months

  • 12.6 percent of the case managed group had met their goals by the end of year one

 

By the end of year

  • 36.3 percent had met their goals for a total of 50 percent

 

Financial Impact

  • Lifestyle related claims dropped that year by $1.1 million

  • Medical claims overall fell 9 percent, saving the company $5 million

  • Cost per employee trended downward, dropping 5 percent

  • Inpatient utilization decreased 21 percent per 1,000 lives

 

These reductions occurred in spite of additional benefits of nearly $9 million that were added to the employees health plan (i.e. prenatal, EAP, well baby care etc.) The following year's anticipated budget of $75 million was cut by $23 million to levels well below the previous years spending.

 

The annual cost for the program was $1.5 million. However, the employer actually recovered their entire $1.5 million investment in the program through contributions from non-participants. The additional $34 a month in health premiums paid by the 16 percent (3,773 employees) who elected not to participate in the program added $1,539,384 to the company's health benefits program. Through the contribution of the 16 percent the program's costs were fully recovered.

 

Discussion


The results of this study seemed to suggest that a well-planned program focused on better health risk management practices can make a systematic contribution to better health practices for the program participants. The results showed a Return on Investment (ROI) of over 400 percent based on a program cost of $1.5 million dollars and claim reductions of $6.1 million dollars.

 

 

 

 

 

 

 

 

 

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