If HR leaders and chief financial officers feel frustrated by employee benefits ROI — or lack thereof — it’s not surprising. At a macro level, headlines consistently report that the U.S. underperforms health outcomes achieved by other advanced nations. Meanwhile, payer spending for that healthcare dramatically outpaces the rest of the world.
At a micro level, for a self-insured employer, getting meaningful, measurable return from health benefits investments remains a persistent challenge as the calendar turns to a new year. From insurance carriers to point solutions to benefits administration vendors, benefits pros and CFOs continue to look for the combination of solutions and partnerships that will deliver elusive ROI.
In late November 2023, Business Group on Health described employers expecting real results from their benefits partners as one of its “trends to watch in 2024.” The organization, which counts many of the largest self-insured U.S. employers among its members, said: “Due in large part to persistent concerns about cost, quality and outcomes, many employers will be more discerning when it comes to partnerships and place increasing expectations and accountability on partners to deliver.”
Early in 2023, Quantum Health implemented a center of excellence (COE) strategy focused on improving and expanding on the results clients receive from its healthcare navigation and care coordination solution. Navigation Insider recently interviewed Chris Reed, director of Value Creation, to understand the COE’s approach and early output, and what it might mean for how value gets defined and delivered in the navigation, advocacy and concierge category.
Q: What prompted Quantum Health to establish a value creation center of excellence (COE)?
A: If I had to pinpoint one thing, it’s that we’re listening. We’re in daily dialogue with HR leaders, chief financial officers, benefits consultants and private equity investors. We know they’re feeling challenged when it comes to employee benefits ROI.
Their claims costs continue to climb. Point solutions are multiplying, but often not delivering the expected utilization and health outcomes. Meanwhile, competition for talent is growing, so employers can’t afford to strip down benefits or simply shift costs to employees. If anything, they’re striving for the opposite: comprehensive benefits, an improved benefits experience, and effective cost management versus increased cost sharing.
Q: How does the COE strategy actually work?
A: Quantum Health has delivered results for clients since we invented navigation in 1999. Our internal analysis, along with that of independent experts, consistently shows that our solution improves the member experience and population health while also generating significant and sustained claims savings.
The COE is a cross-enterprise team of our most experienced and innovative people. We’ve been charged, essentially, with raising Quantum Health’s own bar when it comes to results and ROI.
In practice, that means we’re developing hypotheses and running studies and experiments, all with the goal of testing possible innovations to our operations, processes and technologies. Any changes we make have been piloted and proven to work: Doing X or Y will boost the value clients already get from Quantum Health, or it will allow us to deliver some new, added dimension of value.
This entire initiative is informed by insights from customers. We’ve also got 100% buy-in and alignment from executive leadership. So, it’s exciting work to be part of. It feels as though almost nothing is off limits — if there’s more value to be gained on the other side.
Q: What’s an early example of something the COE has been focused on?
A: Specialty drugs. It’s no secret they’re a major cost concern for employers. Earlier this year, we double-clicked on how Quantum Health’s Pharmacy Services team helps employers manage medical specialty drug utilization.
We wanted to better understand the cost-savings value. The analysis showed it’s significant. By rigorously reviewing provider authorization requests, and guiding treatments to more cost-effective sites of care, Quantum Health helps clients reduce medical specialty drug claims by more than $2 on a per-member per-month basis.
From site-of-care management alone, we’re able to cut the average annual treatment cost by 48% and shift treatment for 30% of those cases to the convenience of the member’s home.
Q: Quantum Health recently released a cost-savings analysis, the latest in a series of studies validated by third-party actuaries. How does that fit into value creation?
A: It fits because we know rising healthcare costs and price inflation aren’t going way. Any conversation about value has to include cost savings.
In this year’s study we evolved the methodology somewhat. For starters, we focused on calendar years 2018 through 2022, so results would reflect today’s healthcare prices and market trends as much as possible. Also, instead of comparing our book of business average client’s cost trend with an industry benchmark, we compared each client’s actual claims costs with a client-specific claims projection if Quantum Health were not involved.
Interestingly, the 2023 study results were consistent with previous cost-savings analyses. In Year 1 after implementing Quantum Health, average claims savings were 5.9%. By Year 5, cumulative savings were nearly 15%. The study also shows we achieve those savings for clients of all sizes across all industries.
This year’s study also calculated a financial ROI for clients based on those claims savings, accounting for Quantum Health’s fee within the calculation. ROI in Year 1 was 3.3 to 1, and it continued to grow in subsequent years.
Q: What’s coming next from your value creation team?
A: We heard from our client advisory board that we’ve been underrepresenting our navigation services' value in improving employees’ ability to be present, focused and productive in their work. So, we’ve just wrapped up a study that — for the first time we know of — looks at the impact healthcare navigation has on workforce productivity.
Specifically, we collaborated with an independent actuary to analyze how Quantum Health’s solution influences absenteeism, presenteeism and benefits-related workload within an HR team. The analysis consistently was conservative in its methodology and assumptions. But even with that, the results are eye-opening. The study found significant productivity gains, both in terms of hours and dollars, when employers implement Quantum Health’s navigation.
Meanwhile, we’ve begun including productivity metrics in our clients’ performance reports. HR and benefits managers often tell us they believe Quantum Health’s support has these sorts of positive effects on their employees. Providing these proof points will help them show their leadership yet another dimension of value from investing in navigation and Quantum Health.
Q: How do you see the definition of that word, “value,” evolving in the healthcare navigation category?
A: Most self-insured employers have a triple aim when it comes to employee benefits ROI. They’re looking for cost savings, absolutely. But they also want employees to have a simplified, satisfying experience and — at the end of the day — better health. In fact, most organizations we work with prioritize member satisfaction and wellbeing even more than they do cost control.
Going forward, we believe employers and their advisors want that sort of holistic return from benefits investments and partners. It’s that type of value on investment, or “VOI,” that we’re excited about exploring and committed to delivering.