Goetzel

Businesses and nearly all their health coverage plans embrace disease management (DM) programs to reduce medical costs and help individuals manage their health. While some of these programs can save money, the evidence of their economic impact is scant, according to a new study from Cornell University and Thomson Medstat.

In a review of 44 studies analyzing the economic impact and return on investment (ROI) for DM programs, researchers found mixed results for programs targeting depression, diabetes and asthma but positive ROI for programs targeting congestive heart failure or multiple illnesses.

The study's lead author is Ron Z. Goetzel, director of the Institute for Health and Productivity Studies (IHPS) at Cornell and vice president of consulting and applied research at the health-care information company Thomson Medstat. The study is published in the summer issue of Health Care Financing Review (Vol. 26, No. 4).

The project sheds light on disease management ROI, Goetzel said, but it does not provide conclusive findings because relatively few economic analyses have been conducted. In addition, many of the studies involved a small number of subjects, and the format of DM programs that were analyzed varied significantly.

"Overall, there has been little scientifically rigorous research conducted to determine the financial impact of DM programs," Goetzel said. "That's a concern, because companies and government agencies have increasingly adopted DM to control the cost of care for individuals with chronic medical conditions -- a minority of the population responsible for a majority of health-care spending."

He said that although DM programs can deliver significant health benefits, employers and health plans still need a sound business case to continue offering DM programs; he stressed that more research on the business case is needed.

The DM industry's revenues jumped to more than $600 million in 2002 from $85 million in 1997. Typically, DM programs are designed to ensure that employees and retirees follow specific, proven clinical care guidelines. Many offer counseling and education while promoting diet, exercise, stress reduction and smoking cessation.

Goetzel advises organizations considering DM programs to require financial impact data before signing on. This should be in addition to data measuring changes in participants' health and quality of life as well as their satisfaction with the process, he said.

Some of the study's highlights follow.

• The cost of DM programs for congestive heart failure averaged about $1,400 per participant, and savings averaged almost $3,900. The average ROI, achieved in a little less than a year, was $2.78 in savings for every dollar spent. Four of the five studies that used the optimal research design produced a positive ROI.
• Many of the studies that looked at DM programs for asthma showed savings, but only two of the better-designed studies delivered enough savings to produce a positive ROI (and these studies covered very few cases).
• The results for diabetes were too variable to provide conclusions, Goetzel said.
• Among programs managing patients with multiple diseases, the ROI ranged from about $4 to almost $11 in savings for every dollar spent over an average of 1.4 years.
• DM programs targeting depression consistently cost more -- about $500 more a year -- than they saved in direct medical costs. "On the other hand," Goetzel said, "these programs may deliver a positive ROI if we factor in the impact on patients' day-to-day functioning, absenteeism and overall productivity."

Co-authors are Ronald J. Ozminkowski, associate director for IHPS and director of health and productivity research at Thomson Medstat; Victor G. Villagra, M.D., president, Health & Technology Vector Inc.; and Jennifer Duffy, a graduate student at the University of South Carolina.

IHPS was established in May 2002 in collaboration with Thomson Medstat. The institute is part of the Cornell Institute for Policy Research in Washington, D.C., a collaboration of Cornell's vice provost for research and Cornell's College of Human Ecology and School of Industrial and Labor Relations. The institute conducts research on the relationship between employee health and well-being and work-related productivity. The study was supported, in part, by the Program on Pharmaceutical Policy at Cornell, funded by the Merck Foundation.