Academic journal article Health Care Financing Review

Return on Investment in Disease Management: A Review

Academic journal article Health Care Financing Review

Return on Investment in Disease Management: A Review

Article excerpt


Enthusiasm about DM programs is growing. This is evidenced by (1) the number of Medicare demonstrations underway testing alternative DM models, (2) legislative proposals that include provisions for widespread access to DM vendors, and (3) heightened interest by health plans and employers implementing these programs to improve patients' health and save health care dollars (Short, Mays, and Mittler, 2003; Lagorce, 2003; Foote, 2003).

Despite high expectations, the value of DM in controlling health care costs is still largely unknown. Recently, Foote (2003) offered a convincing argument that Medicare should strongly consider testing population-based DM programs in fee-for-service (FFS) Medicare. Foote's assertion, supported by a panel of experts assembled by the Health Insurance Reform Project, was that DM programs hold promise for improving the health of seniors, their quality of life, and their day-to-day functioning, while potentially saving Medicare money, by reducing unnecessary and expensive health care utilization. This line of thinking was also endorsed in testimony before the Senate Special Committee on Aging (Crippen, 2002).

As the DM industry continues to expand, with annual revenues increasing from $85 million in 1997 to more than $600 million in 2002 (Foote, 2003), it is important to examine the assumptions related to the financial impact of these programs on health care expenditures. As noted by Short and colleagues (2003): "In theory, disease management and intensive case management programs offer health plans and employers opportunities to reduce health care costs and improve quality without resorting to restrictive utilization management or benefit reductions. In practice, DM programs must demonstrate cost savings if they are to help slow rapidly rising health costs."

Evidence supporting the basic elements of DM has been accumulating for many years (Brown, 1990; DeBusk et al., 1994; Weingarten, et al., 2002; Bodenheimer, Wagner, and Grumbach, 2002). Reports of the actual experience with these programs are emerging in the private sector from employers and health plans. Evidence of significant improvements in quality of care and health outcomes as a result of DM can be found for several disease categories, including diabetes (Norris et al., 2002), heart failure (Roglieri et al., 1997; Rich et al., 1995), arthritis (Lorig et al., 2001), and depression (Wells et al., 2000). A literature review by the Institute of Medicine (2001) found substantial evidence that "programs providing counseling, education, information feedback, and other supports to patients with common chronic conditions are associated with improved outcomes."

Understandably, most studies have focused on whether DM programs encourage application of evidence-based clinical guidelines in the treatment of acute and chronic disease, and whether adherence to guidelines improves patient health and functioning. However, a small subset of studies have also considered financial savings from DM and, in particular, whether such programs can achieve a positive ROI.

This article examines the limited, but growing research literature on medical cost savings, and ROI attributed to DM programs in five clinical areas: asthma, CHF, diabetes, depression, and multiple risk categories. These diseases were selected because there were several financial impact studies for each disease category. The DM programs studied may not be generalizable to other disorders, but these programs (with the exception of depression) are among the most frequently offered by leading DM vendors, as reported by Health Industries Research Companies (2003). Mental health problems are addressed by DM less often, but depression is a major comorbidity of asthma, diabetes, heart disease, and other disorders, and a highly prevalent disorder in its own right (Goetzel et al., 2003).

This review is focused primarily on benefits arising from savings in medical costs. …

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