Why Net ROI Belongs Front and Center in Your Next EAP RFP

Employee Assistance Programs (EAPs) have come a long way. Once used primarily for acute mental health stressors, they've evolved quickly over the past few years. Today's employees frequently turn to their EAPs first when seeking mental health and well-being support. 

As a result, more robust EAP solutions have emerged and are making transformative impacts on people’s lives.

While many employers have experienced the benefit of these solutions and want to ensure their employees have access to quality well-being benefits, they also have budgets to manage. They want to know if there’s a return on that investment to commit additional budget. Therefore, there's an important nuance to explore regarding net return on investment (ROI) questions in the request for proposal (RFP) process.

My background is in data science and health tech. For two and a half years, I’ve led Spring Health’s customer-facing data science team as the head of customer analytics, so showing ROI on an EAP is a passion of mine. My goal is to help organizations understand how their business and people are getting value from their EAP. So, let’s dig in.

The importance of net ROI 

Traditionally, EAP vendors respond to ROI questions in RFPs by touting financial savings. But here's what they often gloss over: the cost of delivering those savings. 

It's like talking about how much money you saved at the grocery store without mentioning how much you spent buying groceries. How do you know you’re saving without factoring in cost?

Similarly, there’s more to the equation in the EAP space than gross ROI. Effective EAPs provide fast access to quality care, producing positive outcomes that yield savings in health plan and EAP spending and improve employees’ lives.

So, what should HR leaders and employers ask in their RFPs? Is there a way to address this disconnect? Let’s consider how net ROI offers a solution.

Thinking about the big picture

Net ROI goes beyond simple financial calculations and includes cost. While you want to see improvements in traditional metrics like clinical outcomes, productivity, and reduced absenteeism, it’s possible to think bigger.

What about the ripple effects on overall health plan spending? We know that untreated mental health conditions can drive up healthcare costs. 

When employees are mentally healthy, they're better equipped to manage their physical health, less likely to end up in the ER, and more inclined to use in-network services.

Whole person care is an overlooked part of ROI

Essentially, you're investing in the whole person by providing top-notch mental health support upfront. The benefits extend beyond the immediate mental healthcare an employee receives.

So, when crafting that next EAP RFP, consider asking about more than ROI. Ask about net ROI. Push vendors to demonstrate the savings and the overall value their program brings against the cost of the solution. Consider how the EAP: 

• Impacts overall healthcare costs in the long run 
• Contributes to employee well-being beyond mental health

A truly effective EAP isn't solely about saving money, but creating a healthier, happier workforce. And that's an investment that pays dividends in ways you might not have even considered.

Net ROI versus gross ROI

Not all ROI numbers are created equal. For example, take net ROI versus gross ROI.

Net ROI is like your take-home pay. It's what you're left with after all the deductions. In EAP terms, it's the return on investment after subtracting the program’s cost. Gross ROI, on the other hand, is like your salary before taxes. It may look great on paper, but it's not the whole story.

So, if an EAP saves your organization $500,000 in health plan spend, that sounds fantastic, right? However, the calculation is very different if you had to spend $1,000,000 to get that return. Net ROI gives you the full picture, helping you make smarter decisions about your mental health investments.

The benefits of using net ROI as a metric

So why else should you focus on net ROI in your next RFP? It provides a useful framework when evaluating EAP vendors, allowing you to:

1. Bridge the gap: EAP and health plan budgets have historically been treated as separate entities. Net ROI shows that they're two sides of the same coin, representing your investment in overall employee health and giving you a fuller picture.
2. Signify sustainability: An EAP solution that guarantees net ROI means you can be secure in knowing that you’re saving more than you spend year over year. In an era of ever-increasing healthcare costs, that's critical.
3. Promote transparency: Asking for net ROI in your RFPs opens the door to crucial questions about savings, costs, and how these translate to employee well-being.
4. Level the playing field: By making net ROI a more common industry standard, organizations require vendors to speak the same language. No more comparing apples to oranges when assessing different EAPs.
5. Make better decisions: Net ROI provides a comparable metric that reflects an EAP program’s financial impact and clinical benefits.

By including net ROI in your RFPs, you're not only seeking transparent financial data, but also paving the way for more informed, impactful decisions about your employees' mental health support. 

The nuts and bolts of net ROI

So, you're convinced about the value of net ROI in EAP RFPs. Great! But how do you put this into practice? 

First things first: standardization is key. When analyzing how vendors calculate net ROI, it should be clear that the methodology used is:

1. Vetted by external experts
2. Transparent, so everyone understands how vendors arrive at their conclusions
3. Comparing apples to apples, using matched cohort studies

There’s also an additional layer: the ability to prove ROI across your own employee population. This requires good methodology and the right software and technology to track and measure outcomes.

Ensuring that ROI claims are legitimate

Let’s also take a moment to talk about credibility. That’s what so much of this conversation centers on, knowing whether vendor claims are real. When assessing a vendor's ROI claims, it’s important to consider:

• Their track record with previous clients. Were they able to improve outcomes across different populations?
• Do they have endorsements from independent, objective third parties?
• The breadth of their evidence library

The gold standard is a net ROI guarantee for all customers. It eliminates the cherry-picking of results and ambiguity about whether you'll see positive outcomes in your unique employee population.

A net ROI guarantee offers security

Before we finish, let’s briefly touch on a common challenge faced during the RFP process. When seeking information about ROI and clinical results, a vendor might say, "We've seen these results elsewhere, so you'll get them too." But that's not good enough. 

A solution to this projection issue is a performance guarantee, which is essentially a promise that the vendor's solution will work for your specific population.

A performance guarantee means:

• The vendor is confident their solution drives positive ROI across various populations
• You'll have proof of net ROI a year down the road
• You can hold the vendor accountable for delivering promised outcomes

This allows you as an organization to feel confident, especially when a vendor offers a net ROI guarantee across the board, regardless of company size or industry. Hopefully, this will also lead to a shift where employers view the EAP and health plan budgets as one interconnected entity. 

A wider perspective 

When evaluating EAP upgrade options, it’s easy to get bogged down in numbers. While financial sustainability is important, net ROI speaks to something more than cost. 

It's a useful metric that describes:

• How effectively the program is creating clinical impact and, therefore, whether people’s lives are being changed for the better
• The magnitude of that impact on overall health (measured in health plan savings)
• The efficiency of delivering that impact; how many sessions does it take to see results?

Net ROI is a single metric that comprehensively describes an EAP's impact on your employee population.

So, the next time you draft an EAP RFP, consider asking for net ROI backed by a guarantee and strong methodology. Your people and your budget will thank you.

‍Ensure your investment in employee well-being delivers real value—explore how Spring Health’s net ROI performance guarantee can secure both meaningful outcomes and financial savings for your organization.