Another Wellness Program Demonstrates Value

On the heels of this Health Affairs publication on the economic value of employer sponsored wellness, we now have this "on-line" report from Population Health Management. You know it's going to be an interesting when it simultaneously involves a care management company (HealthMedia), an academic institution (University of Michigan) and a health insurer (a subsidiary of a Blue Cross Blue Shield Plan).

The manuscript is titled " The Economic Value of a Wellness and Disease Prevention Program" and was authored by Steven Schwartz, Caryn Ireland, Victor Strecher, Darren Nakao, Chun Wang and Deborah Juarez. It makes for interesting, if difficult, reading.

The Disease Management Care Blog will try to summarize.

The authors evaluated the Hawaii Medical Service Association's "HealthPass" program. This includes a health risk assessment (HRA), biometrics (like the usual lab tests, blood pressure measurements, assessments of body mass index plus the age/gender recommended screenings), counseling (which could be one-on-one, group or telephonic) and access to online awareness, education and motivational wellness support interventions with or without financial incentives. In other words, it was state-of-the-art.

In order for HMSA enrollees to be included in the study, they had to be between 18-70 years old, a member for at least 9 months between 2002-2005, not exceed $100,000 in claims per year, not have been in a nursing home and not have remained in a hospital for a prolonged period of time. Of the approximate 384,000 HMSA members, 166,201 (43%) met the criteria described above. Of this group, a total of 11,883 participated in HealthPass at some point (it looks like 11,498 in 2002, 5192 in 2003, 4247 in 2004 and 4060 in 2005, suggesting some individuals participated over multiple years). Age, gender, baseline morbidity and baseline costs were used in "propensity matching" to fashion a one-for-one non-HealthPlass comparator control group for each of the four study years.

Compared to the control group, HealthPass participants consistently had lower total average health care expenditures. What's more, those savings exceeded the yearly HealthPass costs (which ranged between $204 and $236 per year). The net savings was $34 per participant in 2003, $132 in 2004 and $124 in 2005. The calculated total "return on investment"was $1.58 in reduced claims expense for very dollar spent.

In addition, there appeared to be a "dose response" curve: more years of participation led to even greater savings. What's more, persons with higher levels of morbidity appeared to achieve greater savings. Finally, the savings appeared to hold up if two year cost trending was used to project future costs.

When the DMCB was reading this, it found it hard to understand which year's savings was being compared to which year's costs. With that caveat, it thinks this study is part of an expanding body of evidence that supports multi-component worksite wellness programs. The authors also deserve credit for correctly pointing out that there may been been ethnic, educational, psychological, attitudinal, behavioral or other unmeasured factors that were not captured by the propensity matching that could have accounted for the observed differences.

Last but not least, two of the University of Michigan authors (Drs. Schwartz and Strecher) are also affiliated with the HealthMedia care management program. Bravo, says the DMCB. It wishes more if its academic colleagues would get into fashioning and evaluating "real world" programs that are not only doing measurable good but are commercially viable. As an added bonus, you check out this video here of Dr. Strecher explaining his passion for web-based health behavior change. Watch it over lunch with your salad, tofu, yogurt or donuts. You won't be disappointed.

Image from Wikipedia

A Business Plan For Wellness: How One Company Does It (Gaming?)

Interested in checking out the business model behind an honest-to-goodness wellness company? Well, look no further than this supplement to the latest issue of the Population Health Management Journal titled “Preventive Medicine: a Ready Solution for a Health Care System in Crisis.” Written by Janice Clark R.N., it instructively describes in considerable detail how one company sells its wares. The Disease Management Care Blog thought this was interesting because there were some wrinkles to this wellness business that it had not considered before.

The product consists of a “suite” of services that include general wellness and prevention, screening/early detection, chronic condition management, senior wellness, children’s prevention and an “executive” care. Each module includes an assessment (a health risk appraisal, labs, personalized summary with recommendations and assistance with planning that includes an on-line personal health record) that ultimately generates a “personal risk analysis” with a “customized” “road-map plan.” This plan, in turn, is paired with other interventions such as access to on-line learning resources, instructional videos, telephonic coaching, access to a nurse “advocate” or, if preferred, a physician. Participants are then targeted by “Action Programs” that prompt participants to “connect” to individualized and ongoing prevention activities.

There is also the option of gaming. The games consist of “challenges and contests” that earn "points." Examples include on-line calculators that convert self-recorded activities into “miles” on a virtual Iditarod or Pony Express. As the miles build up, points can be earned that earn entry into random drawings for shopping sprees or cruise packages.

Even if gaming is not your thing, the points still count. Signing up for wellness earns a minimum of one point. As additional testing, activity participation and lifestyle changes accumulate, persons can look forward to achieving a maximum of 1000 points. They can also form teams that combine their points with other individuals in competitions that also lead to rewards such as taking possession of the coveted “Prevention Cup.” This can be intra as well as inter company.

The DMCB suspects this business is really aimed at self-insured entities, though there is little to prevent a commercial insurer from offering it to its customers on a "pass-through" basis. The company charges a fee per participant that is apparently adjusted to the service offerings described above. While all persons are automatically enrolled in its programs (which earns that one point), the company only gets paid when individuals actually participate. This gives the company an incentive to sign up as many persons as possible. While self-insured companies may be reluctant to take on the additional cost of a wellness program, there are ways around this. For example, the article describes “mid-Atlantic care dealer” that surcharged non-participating employees’ health insurance premiums that went to pay for wellness. This made its costs “budget neutral.”

So what pointers did DMCB find interesting?

When it comes to wellness, offer a lot of stuff, make it look scientific and be retail, not wholesale. While the DMCB believes it all comes down to eating less, exercising more, taking your pills and being personally engaged, the notion that this can be packaged as an individualized and sophisticated offering appears to have a special luster in the marketplace.

Turn-key scalability helps. While there may be some health insurers, CEOs, human resource managers and unions that have unique notions on how wellness should be delivered, there are other buyers who simply want the equivalent of a plug n’ play service contract. This is their answer.

At lot can be done on-line. That being said, if customers want to buy-up to human interaction (including docs), no service is too small and no fee is too big.

Gaming? Last but not least, the DMCB is intrigued by the notion that grown-ups would be actually be ensnared by the “Iditarod,” the “Pony Express” and competitions. Surely, thinks the clinically grounded DMCB, all adults should believe that wellness is for wellness’ sake, but that seems not to be the case. If this company has invested in such silliness, maybe it’s not so silly after all.

Ten Reasons Why Fully Insured Commercial Health Insurers Don't Offer Worksite Wellness Programs For Their Customers

During the Care Continuum Alliance's annual Forum10 meeting, the Disease Management Care Blog ran into yet another session presentation by another consultant on the culture changin', outcomes enhancin', money savin' and transformationalin' merits of an employer-based wellness, prevention, health promotin', and exercisin' program. If you understand employee incentives, benefit design, absenteeism, presenteeism, intranets, surveys, getting the CEOs' spouses to also participate and hiring enthusiastic worksite fitness counselors, you too can preside over a tidy positive return on an up-front PMPM employer cost that, according to Health Affairs, averages about $12 PMPM. Not a bad way to make a living.

So if the consultant says so, worksite wellness is a no brainer, right?

Yes, says the DMCB, except in the fully insured commercial market. So far, every time the DMCB runs into another glowing report about worksite wellness, it seems to involve a self-insured business setting. It seems the traditional health insurers - where an enrollee pays a premium in exchange for a commercial health insurance plan covering the cost of any illness - have either 1) decided not pay for worksite wellness programs for their customers, or 2) are not reporting on their experience. The DMCB suspects it's mostly the former: they're not paying.

The DMCB thinks that may no accident. While it was at Forum10, it asked various colleagues about this phenomenon over some beverages and solicited this list of possible explanations for your reading pleasure:

1) When an employer decides to self-insure, it's usually because its leadership believes the company has a healthier population with a lower burden of disease. This means a lower risk, which means reserving less money against any losses. That makes comparatively more money available to pay for health promotion.

2) Once the decision-making about paying for worksite health promotion is taken from conservative insurance actuaries in settings that are heavily regulated by a State Department of Insurance to independent thinking Human Resource Directors and company CEOs, there is little argument: of course health promotion reduces costs and absenteeism, health shouldn't be medicalized and investment in the well-being of a workforce is simply the right thing to do.

3) Many commercial insurers' lines of business are dominated by smaller businesses with smaller workforces. It's mathematically more difficult to demonstrate savings for a company across a smaller number of insured individuals, which makes it harder for commercial insurers to justify the expense in the first place.

4) Commercial health insurers are, well... commercial health insurers. That means disciplined underwriting, adequate premium pricing, accurate claims payment and setting appropriate reserves. Worksite wellness has little to do with insurance and is not only outside their comfort zone, they have no idea on how to do it..

5) The actuaries are in control. They rule.

6) Employers have a stable work force with little turnover, especially in today's economy. While they still manage their health insurance costs on a yearly budget basis, they can afford to take a long-term view and be more confident that they'll eventually recoup their up-front costs in reduced claims expense. Not so in the commercial insurance market, where customers flee to the competition over a few cents difference in the monthly premium. That's called churn.

7) Employers can use a variety of financial and cultural sticks and carrots on their captive employee population to encourage participation in wellness. Commercial health insurers are generally distrusted by their individual subscribers and have fewer options to encourage participation.

8) Thanks attacks by the political class, the uncertainty over the definition of the medical loss ratio and the travails of having to catch up with numerous other regulations that are part of health reform, commercial insurers are rather preoccupied. Now is not the time to worry about worksite wellness.

9) Self insured companies are willing to make time and commit other non-financial resources to making their worksite programs pay off. In contrast, buyers of commercial insurance simply expect their insurer to provide worksite wellness with little to no effort on their part. They won't make room for company wide emails, use of their corporate intranet, time off for employees to do wellness during a workshift or accomodate any other intrusions into the company's workflow. Commercial insurers know that, so why bother?

10) Commercial insurers do offer some value-added gimmicky options that are designed to look like work site wellness, like health club membership discounts or health risk assessments. Every day that these faux programs are accepted as "wellness" by their unsuspecting fully insured customers is another day gone by without a credible onsite health promotion initiative.

This makes for a significant policy challenge, despite the provisions of the recently passed Affordable Care Act. The DMCB sees little in the current law that actively translates the success of health promotion in self-insured settings into the commercial fully insured market.

The DMCB may be wrong. If so, please feel free to comment.

Are Wellness & Prevention the Solution to the High Cost of Health Care?

The laconic Disease Management Care Blog attended a business leader meeting over the weekend. There were a series of presentations (this guy truly rocked), but it wasn't until a panel discussion on the promise of genetic medicine that the curmudgeonly DMCB was unable to resist raising its hand. Noting that insurance claims expense from genetic testing can run into thousands of dollars per patient, it asked the panelists to reconcile the cost of their enthusiasm with runaway health care inflation.

The panel gave the right answers, but that isn't why the DMCB is posting this tale. During the subsequent coffee hour, it was approached by a print media executive and was asked a simple question: isn't the purpose of covering wellness and prevention in the first place to fix things so that we can afford everything else - like genetic medicine - in health care?

The DMCB was aghast. It recovered its game face, however, and answered the question "no."

There are three good reasons for the uncoupling of wellness/prevention from sickness care which, in turn, helps explain how health insurers approach issues like genetic medicine.

1. Even if $2 to $4 are saved for every dollar spent on wellness activities, the total number of dollars revolving around wellness and prevention for the average health insurer or employer pale in comparison to the short term and unbelievable amounts of money being spent on, for example, testing and treatment for cancer.

2. Even if there is an eventual long term wellness and prevention "dividend" for diseases like cancer and heart disease (which is doubtful), we have a cost trend problem in 2010 with no end in sight.

3. Last but not least, a former editor of the New England Journal of Medicine pointed out to the young DMCB that money saved in one sector of health care doesn't mean that the savings get transferred to other sectors. He was right: actuaries and CFOs don't manage insurance that way.

The DMCB doesn't necessarily agree with the Carter-esque view that the Tooth Fairy is dead. American genius will make genetic testing - and all the other good things in our future - affordable. In the meantime, the belief that we can use wellness to "save money" and use that to pay for whatever we want today regardless of cost is a pipe dream.

More on Worksite Wellness Programs and Health Care Reform

While pundits and bloggers continue to speculate on just how the House and Senate are going to get two competing health care bills passed, the Disease Management Care Blog has continued to grapple with the issue of employer wellness programs. There's this 'snarky' (a quote taken from one of the 43 comments) piece over at The Health Care Blog as well as this posting over at the Health Affairs Blog. The latter prompted a well-written response by Alan Balch, which can be found here.

Basically, the reform bill passed by the Senate would permit employers to increase the value of any worksite incentives for wellness program participation from 20% to 30% of premium. Critics charge that a large financial incentive could be used to underwrite the premium costs of persons that have already attained wellness goals, effectively shutting the door on affordable insurance for persons with chronic illness.

There are a variety of legal, regulatory, policy and real world reasons why that cannot happen, many of which are addressed in the blog postings that are linked above. However, in thinking about this, it all comes down to a paraphrased quote from the opinion page of the Wall Street Journal several weeks back: it's up to society to not only struggle against being ensnared by its vices, but by its virtues also.

If we worship human life, how should we ask our young persons to go to war? If we treasure the rule of law, should it be applied all the time every time? Those off-topic and incendiary issues are best left for other bloggers, but it's an interesting concept when it comes to heath care. If there is a lack of scientific evidence that employee premium differentials are safe all the time every time and that employers could somehow camouflage cherry-picking underwriting as a wellness program, is that reason enough to forbid the practice altogether?

The DMCB doesn't think that's reasonable and that we have the ability to develop reasonable policies and other regulations to adequately address that improbability. It hopes that if a version of health reform passes, that the Senate provision on worksite wellness survives.

An Important Health Affairs Article on Savings from Workplace Wellness Programs

None other than healthcare Obamacon rock star David Cutler has an article on the prestigious Health Affairs web site assertively titled “Workplace Wellness Programs Can Generate Savings.” Anyone interested in or in the business of worksite wellness should not only read it, they should email the link, twitter the link, download it and provide printed copies to your co-workers, your customers and your bosses. The enthusiastic Disease Management Care Blog even gave a copy to the DMCB spouse. While her excitement was inexplicably muted, the DMCB is confident that with time, she'll come to appreciate its findings.

Here’s why. Lead author Katherine Balcker, co-author Zirui Song and Dr. Cutler scoured the world’s published scientific literature on worksite wellness and pulled out a surprising number of studies (32 of tem) from an equally surprisingly wide array of employer settings, including financial services, manufacturing, school districts, universities, municipalities, utilities, telecommunications, energy, pharma and consumer product manufacturers. What was not surprising was multiple components of these programs. The majority were kicked off with a Health Risk Assessment (HRA) by an array of initiatives, including self-help education materials, individual counseling, group sessions and incentives that attacked a variety of health concerns with a special emphasis on the twin lifestyle issues of tobacco abuse and weight gain.

When the economic ‘difference in difference’ (pre-post changes over time in an intervention group versus the pre-post changes over time in a control group) are added up across the studies, the workplace wellness programs not only lead to a workforce with lower health care costs, but those savings exceed the cost of delivering the program at a rate of $3.27 for every $1 spent. And if, as a regular reader of the DMCB, you are leery of studies that are non-randomized and could be compromised by a self-selection bias, the authors noted nine of the 32 studies were randomized and showed a return on investment (ROI) of $3.36 for every $1 spent. To ice this cake, the authors also reported on the monetized impact on absenteeism for the 12 studies that had those data and found a ROI of $2.73.

Balcker et al do an excellent job of being transparent about the limitations of their study. Since only programs that are successful would be expected to appear in the scientific literature, there could be a publication bias. Since only larger employers generally have such programs, there is only limited information on whether this would work for small employers. Costs are easy to detect, while savings, especially over the long haul, may be more prone to errors in measurement. All in all however, there is a considerable body of literature from a wide variety of settings that support the economic case for implementing wellness programs in the worksite.

There may be two additional implications:

The DMCB is unaware of the current status of the call for a moratorium on the prohibition of collecting family history information in HRAs under the Genetic Information Nondiscrimination Act (GINA). The finding that the use of HRAs in the workplace prior to the implementation of this part of GINA is associated with savings is another reason for the Administration to reconsider and allow HRAs to collect the information. Family history is an important part of addressing risk, increasing health and reducing cost.

The authors correctly point out that large employers can afford the up front investment costs in worksite wellness and that that is often out of reach of small businesses. Given the degree of savings, however, the DMCB wonders if health insurers should think seriously about offering this in their small business market. It'd be a logistical challenge, but the return on investment could be quite attractive, it's worth further study and there could be a distinct competitive marketing advantage.

The Patient Centered Medical Homes and Wellness: Can Physicians Really Respond?

Check out this '...but I wouldn't want to live there' posting in the Turn to Stone blog. You might be inclined to dismiss this as another off beat critique of the Patient Centered Medical Home (PCMH), but this one is from Robert Stone. Bob is not only an experienced health care executive with years of experience in population-based care management, he's also a co-founder of the disease management company Healthways. When he speaks, the Disease Management Care Blog has learned to listen.

He raises some good points:

• 'Wellness' activities such as exercising and pursuing a healthful diet have yet to be intelligently 'medicalized' in any meaningful fashion. Consumers don't look to their local hospitals and doctors for wellness. What's more, hospitals and doctors don't have the resources (and in many instances the knowledge) to provide wellness services. Last but not least, retooling the overwelmed primary care system to adopt wellness in their busy clinics is a stretch.



• It is doubtful that today's average physician wants to be in the wellness business. After four years of medical school and additional years of postgraduate training, they are trained and socially conditioned to diagnose and treat disease.

Supporters of the PCMH would point out that their care model doesn't rely on the physician personally providing the services. Rather, their job is to be 'doctors' while simultaneously overseeing a team of health professionals that support wellness and prevention. Unfortunately, that key concept may be getting lost as the 'medical home' enters the mainstream. Early buyers of 'medical homes' may be disappointed when they're met at the PCMH door by Nurse Marcia Wellness instead of Doctor Marcus Welby.

The Disease Management Care Blog is more alarmed by Turn to Stone's second point. If docs haven't had a lot of personal professional experience to intelligently deal with nutrition, exercise and all the other forms of non-traditional medical consumerism, how in the world are they supposed to supervise it?

The answer may be to totally 'outsource it.' The DMCB wonders if docs will be inclined to do that and if companies such as Healthways will be able to serve that market.

Time will tell.

What 'Cash for Clunkers' Teaches Us About Health Club Sponsorship for Wellness by Employers or Government

The Disease Management Care Blog, like Casablanca's Captain Renault, was shocked, SHOCKED (not) to hear on NPR's All Things Considered that there are some economists who doubt whether the United States' 'cash for clunkers' program is a wise investment. These must be the same guys that told the DMCB years back that insurer or employer-based incentives for fitness club memberships was also a silly idea.

How can this nattering naysaying be possible given the widespread belief in the promotion of healthier lifestyles? What about the luster of financial incentives that can transform indolence to healthiness? What gives these self-appointed oracles an insight that's been missed by almost a third of the U.S. corporate employers that financially sponsor club memberships?

The arguments are simple and convincing. While financially supporting fitness clubs is associated with superficially gratifying uptakes in membership, there are two problems:

1) many of the persons qualifying for financial support would probably join a fitness club anyway; all you're doing is using precious premium to unnecessarily subsidize it. This was the same argument on today's NPR broadcast: there are probably many car owners with an old set of wheels that are destined for a trade-in anyway. Cash for clunkers merely helps make it happen sooner at an additional cost of up to $4500 to the U.S. Treasury, er, make that to us taxpayers.

2) many of the persons qualifying for financial support may not necessarily need to join a fitness club; the joiners are far less likely to find exercise a distasteful chore and are already active. In the meantime, the persons who could really use some exercise are unlikely to be motivated by any financial incentive. The same may be true in the 'clunkers' program: the cars being destroyed arguably still have some value, and many have acceptable if not optimal mileage. In the meantime, many other persons will have plenty of reasons - like not taking on the debt of new car payments - to keep enough really bad clunkers on the road for years to come, not help Detroit's doldrums and not reduce their carbon footprint.

The DMCB did a literature search to disprove either of these arguments. It was unable to find any.

And then there is the inevitable gaming that can go on. Persons may 'join' a fitness club, not go and keep the money, requiring the insurer to impose requirements with or without monitoring to make sure the letter and spirit of the initiative is being met. That may be one key difference vis-à-vis a Federally-run program: the 'clunkers' program seems to be quite game-able.

Cash for clunkers... meet cash for slackers.

What Are the Top Ten Features of Cost-Saving Employer Sponsored Wellness Programs?

In the second day and concluding day of the WRG Conference, we heard from WebMD’s Larry Chapman. He echoed yesterday’s comments from Emory University: there is no doubt that employer sponsored wellness programs (many of which resemble classic disease management) have a return on investment (ROI). There are multiple positive studies from disparate settings including NORTEL, Duke University, the City of Birmingham and DuPont.

What are the lessons from such successful wellness programs you ask? Good thing the Disease Management Care Blog kept notes:

1. Don’t limit ROI economic measures to just claims expense. Include turnover, absenteeism, disability, workman’s compensation and presenteeism. That may inflate the ROI, but these domains are also important to employers and they want to know,

2. Enhance risk reduction and mitigation by promoting employee awareness, increasing motivation and helping them develop new skills,

3. Use a total population health model that is ‘results oriented,’

4. Include employees’ spouses,

5. Require employee participation in an annual health risk assessment (HRA). Think about making it part of open enrollment,

6. Let the employees fund most if not all of wellness incentives through premium differential. Don’t be shy about ‘play or pay’ and ‘getting everyone on the wellness bus,’

7. Coordinate wellness with the insurance benefit, particularly with consumer directed health plans (CDHPs) and any other cost sharing approaches,

8. Promote self care. An example is promoting WebMD’s ‘symptom checker,’

9. Promote consumer education that includes not only condition but benefit management. In fact, consider requiring CDHP participants attend a ‘how to’ workshop. Furthermore, emphasize injury prevention (an example is seat belts) and provide aggressive intervention programs for enrollees with multiple health risks,

10. Offer a tiered wellness incentive with real money based on explicitly defined criteria.

Update on the WRG Conference - A Sampling of Some Interesting Stuff

What an interesting WRG conference. For your reading pleasure, below are summaries of some of the presentations that really caught the ear of the Disease Management Care Blog. More to follow tomorrow…..

Blue Cross Blue Shield of Michigan is finding that offering wellness is an increasingly critical ingredient in winning accounts. Their approach is to offer a suite of wellness and disease management options that, depending on the buyer, can be ‘dialed up’ or ‘dialed down.’ They are developing their own assessment methodology that not only calculates savings vs. costs (i.e., return on investment) but changes in ‘net savings.’

Most interesting message: As outreach progresses from high to low risk, Michigan's modeling suggests that increasing the outreach to more persons with chronic illness eventually leads to a ‘tipping point’ decline in ROI and net savings.

StayWell believes best practice elements for company wellness programs include: strong organizational commitment, identification of wellness champions, linkage to business objectives, effective communications, having fulltime dedicated staff/vendors, making employee spouses eligible, offering comprehensiveness, raising awareness company-wide, targeting special interventions for high-risk persons, maximizing accessibility, providing incentives and utilizing biometric screening.

Most interesting message: Want to incent employees to fill out that health risk assessment or show up at a wellness program offering? Employee premium differentials beat cash rewards, which beat non cash rewards. Premium differentials not only increase participation rates, the non-participants subsidize the participants – which payers/purchasers like.

Emory University says there is a rich body of occupational health literature that has been around for years that conclusively shows wellness programs have a positive return on investment. There is a methodology using a health risk assessment that can assign a ‘Risk Profile’ to an employee-participant. This profile correlates with insurance claims expense. The ready availability of ‘propensity scoring’ makes a parallel control group readily available. Between the Risk Profile and the propensity scoring, analysts can approximate return on investment without having to conduct a randomized clinical trail.

Most interesting message: It is not uncommon for ROIs to exceed 3 to 1. And we shouldn’t be embarrassed to say so.

Highmark thinks that if you’re going to offer wellness, you might as well lead with your employees. That’s what Highmark did with an in-house wellness program. Read all about it at the February 2008 issue of the Journal of Occupational and Environmental Medicine.

Most interesting message: The ROI for a wellness program may not become apparent for three years.

Aetna was mentioned in a prior DMCB post, which discussed a blog post describing the insurer’s use of a lottery with a financial award to increase medication compliance. It turns out this is more sophisticated than just a simple lottery. There is a considerable body of research that shows humans tend to overestimate their chances in such games of chance. The medication-compliance lottery is a conscious exercise in “asymmetric paternalism,” in which the insurer harnesses their enrollees’ tendency to exercise poor judgment.

Most interesting message: Persons can be incented to make the right decision using bad decision logic. We can simultaneously harness and respect a person’s right to choose - wrongly.

Return on Investment, Disease Management and Wellness

The Disease Management Care Blog is coming to you from Washington DC, where it is attending (and speaking at) a World Research Group conference focused on wellness. It intends to share the highlights of the other speakers from other settings who are embarking on new programs in future posts, so stay tuned.

One of the major themes of this confab is the perennially difficult topic of ‘return on investment.’

Some of the DMCB’s planned – and simplistic - comments for tomorrow:

If we must use the term ‘return on investment,’ its measure is generally done one of five ways. These are:

1. Compare the claims expense of either the population or a representative part of the population to a matched control. Using the population at baseline and comparing it to itself (pre-post) after the intervention is a variation on this theme. It’s better to use a parallel control. This has the advantage of being conceptually easy to understand. This may partially explain why this approach still appears, in the experience of the DMCB, to dominate the market place.

2. Examine the trend (change over time or the slope) in claims expense for the population and compare it to a control or what the expected trend should be. Trend can be more difficult to understand but it has the advantage of also being used in other health insurance calculations. As such, it is probably destined to be the ‘coin of the realm.’

3. Use ‘Other Weird Calculations’ such as measuring the relative impact of the program on the observed trend. In other words, as the claims expense goes down (or up), is there any correlation with the amount of the intervention, and if so, how much? For example, do more coaching calls translate to correspondingly fewer admissions?

4. Use anecdotes. Don’t underestimate the impact of positive or negative personal testimonials shared at an all-employee meeting or given to the head of Human Resources.

5. Rely on Quality Adjusted Life Years (QALYs), which captures the possibility that there isn’t a reduction in claims expense. If there aren’t, what gains in quality are there, and for each ‘unit’ of quality what is the cost?

The DMCB will be looking forward to hearing how others at the Conference tackle this. More to follow.