Employee Health Benefits Have Changed: Why Hasn't the Way We Measure Them?

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Fertility counseling. Menopause care. Mindfulness therapy. Weight-loss management. All can now be delivered virtually, right in the palm of your hand. These are not your father’s — or mother’s — employee benefits.

The bar for modern, consumer-driven health and wellness benefits has risen over the years. From what you’re told, these new benefit investments are meeting employees' evolving needs, encouraging retention, and attracting talent. But I challenge employers to pause and reflect on how your benefits offerings have changed — from app-based wellness platforms to virtual care solutions, wearables, and more. Then consider this: how has your approach to measuring the impact of these evolving benefits changed?

From my conversations with employers large and small, very few have updated their measurements to assess how virtual care options improve health outcomes for workers compared to traditional care.

What’s more, the old criteria aren’t enough to evaluate their overall value. Put bluntly, your VOI (value of investment) is lagging behind operations. Understanding the true value of your investment requires knowing who is engaged, how they engage, and the outcomes they achieve.

Employers need to rethink how they measure — not just the return — but the long-term value of their benefits programs.

Redefining Outcomes with Holistic Frameworks

In 2021, the American Medical Association (AMA) introduced the holistic Return on Health framework to capture the comprehensive value virtual care programs provide. This framework consists of five “value streams”:

1. Clinical outcomes, quality, and safety.
2. Access to care.
3. Member experience.
4. Care team experience.
5. Impact on healthcare cost and utilization.

Health equity serves as an integral component, intentionally embedded throughout these value streams.

For employers, understanding the value of virtual care benefits is critical, especially since businesses provide healthcare coverage for about half of the U.S. population. A Deloitte analysis found that investing in employee health and wellness — including digital health solutions like self-management tools, coaching access, and personalized health nudges —could increase the average U.S. lifespan by 12 years and save the healthcare system $4 trillion by 2040.

This comprehensive approach is consistent with the AMA’s framework and represents a model for the future of care delivery.

Narrow ROI Definitions Limit Progress

Despite these advancements, many companies still rely on narrow definitions of ROI. For instance, organizations like the Peterson Health Technology Institute (PHTI) are creating frameworks to rigorously evaluate digital health technologies for making benefits decisions. However, PHTI’s report on digital diabetes management tools focused solely on healthcare cost savings from improved A1C levels.

While savings and specific health metrics like A1C reduction are important, they don’t tell the whole story. For example, traditional in-person care often measures controlled glucose levels, not just lowered A1C. And while a lower A1C signifies improvement, it doesn’t necessarily reflect the employee's overall health.

Steps to Better Measurements

We cannot assess the total value of care through a single metric or by merely tracking costs. Here are some actionable steps:

1. Start with Engagement
   Develop a plan with clear goals for employee participation in your benefits programs. Broad engagement is key to seeing results at scale. Establish success metrics, whether they are cultural (e.g., participation in a 10,000-step challenge) or economic (e.g., reductions in absenteeism). Viewing these as lead indicators will help pave the way for long-term success.
2. Align Measurement Across Care Modalities
   Virtual and in-person care often receive different measurement criteria, which can distort value assessments. Virtual care utilization may even outpace in-person visits, a trend that traditional metrics may not properly reflect. Measuring user experience in virtual care could be a critical indicator of future success.
   A personalized, accessible virtual solution is more likely to see consistent engagement and corresponding outcomes. By adopting thoughtful and thorough evaluations, companies can reliably measure improvements in outcomes, access, satisfaction, and equity.
3. Define Relevant Time Horizons
   Decide whether it’s important to see returns within a year or better to measure results over two or more years. For example, what is the average tenure of employees with chronic conditions like diabetes or high blood pressure? If it’s over three years, focusing on long-term career benefits, rather than a single-year program, makes more sense.
   Adjusting expectations to a multi-year ROI can reveal significantly greater savings. For instance, while year-one results may appear modest, year-three numbers could demonstrate compounding benefits.
4. Beware Claims That Seem Too Good to Be True
   Programs claiming a one-year ROI for chronic conditions should be treated with caution. Chronic conditions evolve over long periods, and so do their associated financial and health impacts. Patience is key to seeing meaningful and realistic changes over time.

Tailoring Measurements to Your Needs

With customized goals in place, businesses can more objectively assess the benefits they’ve implemented and ensure they align with specific needs. Partner with organizations that offer transparency in reporting and adapt measurements to reflect value over time.

Employers who can demonstrate value using both immediate and long-term benchmarks will be best positioned to achieve lasting success. By doing so, they’ll unlock the full potential of employee health and wellness investments — not just for the organization, but for the workforce as a whole.

Wei-Li Shao is the president of Omada, a virtual-first healthcare provider that nurtures lifelong health across employers; Shao has over 20 years of experience building and leading businesses in the United States, New Zealand, China, and Taiwan.