Connie Chen, MD, is the COO at Lyra Health, a global leader in workforce mental health. With healthcare costs rising and companies trying to balance providing quality care with tight budgets, healthcare expenses have become one of the biggest operational costs for many organizations. These costs directly impact corporate finances and employee satisfaction, retention, and productivity. However, the challenge lies in selecting the best benefits package, as many vendors over-promise on ROI and under-deliver on quality.
As a physician and executive, Connie Chen highlights the importance of understanding tangible healthcare ROI and identifying vendors who can deliver real cost savings. She emphasizes three essentials for evaluating ROI: a meaningful methodology, clinically validated outcomes, and comprehensive care for individuals with complex needs. By questioning how vendors calculate their ROI, including a full year of data and entire population, leaders can obtain a clearer picture of the vendor’s credibility and results.
Chen warns against relying on estimated clinical outcomes and utilization as indicators of ROI, as they may not necessarily reflect actual improvements in health outcomes. She stresses the need for vendors to provide concrete data showing measurable clinical improvement, especially in fields like behavioral health where clinical outcomes are critical. Cheaper, lower-quality healthcare options may seem cost-effective initially but can lead to higher relapse rates and increased long-term costs.
In healthcare, the 80/20 rule suggests that 20% of individuals generate 80% of healthcare costs, particularly in areas like behavioral health where treatment for complex issues is more costly. Employers need to ensure that vendors offer specialized support for high-need populations to see significant cost savings. Chen calls on benefits leaders to look beyond surface-level ROI and ask critical questions about methodology, outcomes data, and support for high-acuity needs to make informed decisions that benefit both employees and the organization’s financial health.
At a time when healthcare spending is on the rise and budgets are under strain, understanding tangible ROI is crucial for employers looking to optimize their investments and resources. By asking simple questions about vendors’ methodologies and outcomes data, leaders can distinguish real results from marketing fluff and make decisions that enhance their organization’s well-being while maximizing financial returns. As a member of the Forbes Business Council, Chen offers valuable insights for business owners and leaders navigating the complex landscape of healthcare benefits and cost savings.