Disease Management (DM) programs have caught on with companies across the U.S. and Canada. DM programs emphasize prevention and improved care quality. They're also expected to help employers get healthcare costs under control. But, as we discussed last week, some have started to question whether DM programs really deliver the promised economic benefits. A new study on the return of investment (ROI) of DM programs sheds some light on this question. Let's take a look at the results of that study.

The Cornell-Medstat Study

The Cornell University-Thomson Medstat study of August 4 reviews financial data from more than 100 actual DM programs covering five diseases: Asthma, congestive heart failure, depression, diabetes and multiple illnesses.

To calculate ROI, you need to know not just how much a company saved on its DM program but how much it spent to achieve those savings. Unfortunately, many of the programs studied reported only gross cost savings and omitted DM program costs. Consequently, the study uses certain financial ratios to estimate the costs of DM programs and allow for a calculation of ROI. This compromises the study's reliability, at least a little.

The Good News

DM programs for congestive heart failure and multiple illnesses had positive ROI. For example, the average cost of DM programs for congestive heart failure was $1,399 per participant. The average savings achieved was $3,884 per participant. Thus, the companies that had DM programs for congestive heart failure achieved ROI of $2.78 in savings for each dollar they invested in slightly less than a year.

The study looked at only four multiple disease DM programs. But three of them had positive ROI - of $6.65, $4.37 and $10.87. ROI couldn't be calculated for the fourth program.

The Bad News

DM programs for asthma, depression and diabetes had mixed results. All of the asthma DM programs saved their companies money. But only two of the 12 included in the study generated enough savings to offset the costs of the program and generate positive ROI.

Results from the diabetes DM programs were conflicting and inconclusive. Overall, the average ROI for such programs was $.70 per dollar invested, or $.30 less than break-even.

Worst of all were the results from the depression programs. All eight programs studied cost more - about $500 per year on average - than they saved in direct medical costs. However, "these programs may deliver positive ROI if we factor in the impact on patients' day-to-day functioning, absenteeism and overall productivity," according to the study authors.

The Factors of Success

The most important part of the study might be the section that describes the elements of financially successful DM programs. The authors didn't set out to identify these elements. But in studying the financial performance of DM programs, they couldn't help but notice that there were certain medical practices - or interventions - common to all successful programs.

The interventions with the greatest impact on financial success:

• Effective screening and triage into risk-specific interventions;
• Use of tailored materials founded on behavior change theory;
• Making patients set goals;
• Establishing separate clinics for treatment and prevention;
• Use of planned care visits for prevention; and
• Use of non-physician staff to perform prevention activities.

Conclusion

There are still no studies definitively proving that DM programs generate positive ROI. And there are no studies definitively proving that they don't. So the Cornell-Thomson study won't do much to help prove that DM programs are a good investment.

On the other hand, most companies are already sold on the DM concept - roughly 95 percent according to a recent Watson Wyatt survey of 550 major corporations in the U.S. and Canada. So for safety professionals, the issue isn't overcoming resistance to the implementation of a DM program but ensuring that it operates at peak clinical and financial efficiency. By identifying the clinical factors underlying the generation of positive ROI by a DM program, the Cornell-Thomson study might prove of great value in this regard.

$AFETY ECONOMICS

The Cost of Accidents

An accidental injury, both fatal and nonfatal, costs U.S. households an average of how much per occurrence?

a. $57
b. $570
c. $5,700
d. $57,000

Answer: c

Source: National Safety Council, Injury Facts, 2004 Edition.

THIS DAY IN HISTORY

The Miike Mine as it appears today.

November 9: The Miike Coal Mine Explosion

The most deadly coal-mine accident on record occurred on this date in 1963. An explosion caused by the ignition of coal dust killed 458 Japanese mine workers at the Mitsui Coal Mine Company. In addition, 839 workers suffered the after-effects of carbon monoxide as a result of the blast.

Company officials didn't believe that there was a danger of an explosion because there was no methane gas in the mine. But the Miike explosion demonstrated that coal dust is itself highly combustible.

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