Some disease management programs deliver ROI, others do not

March 1, 2005

THE NATIONAL controversy over the escalating cost of healthcare in the United States has increased debates over how best to contain those costs;and whether existing approaches to delivering quality healthcare are viable financially as well as medically.

THE NATIONAL controversy over the escalating cost of healthcare in the United States has increased debates over how best to contain those costs-and whether existing approaches to delivering quality healthcare are viable financially as well as medically.

One of those approaches is disease management (DM), defined by the Disease Management Association of America as a "multi-disciplinary, coordinated, continuum-based approach to healthcare delivery and communications for populations with, or at risk for, established medical conditions." While voluminous research done over the years indicates that DM is an effective approach from a medical perspective, Ron Goetzel, PhD, vice president for consulting and applied research at healthcare-information firm Thomson Medstat, says scant research has been conducted on the extent to which DM offers cost benefits.

Dr. Goetzel, who also serves as director of Cornell University's Institute for Health and Productivity Studies, is the lead author of Return on Investment in Disease Management: A Review, which has been accepted for publication in a forthcoming issue of the journal Health Care Financing Review. The paper is an assessment of existing research studies exploring medical cost savings and return-on-investment attributed to DM programs.

"Over the past few years," he adds, "the hypothesis has been that the DM industry is being driven forward not only because it's medically viable but because it's economically beneficial. Our purpose was to test the economic side of the hypothesis."

There's no question that the DM industry is, as Dr. Goetzel puts it, "driving forward." His study notes that DM-industry revenues have mushroomed from $85 million in 1997 to more than $600 million in 2002. For that reason, he writes, "it is important to examine the assumptions related to the financial impact of these programs on healthcare expenditures." Dr. Goetzel then quotes a 2003 study, which noted the theory-vs.-practice questions surrounding DM's ability to deliver cost, as well as medical, benefits: "In theory, disease management and intensive case-management programs offer health plans and employers opportunities to reduce healthcare costs and improve quality without resorting to restrictive utilization management or benefit reductions. In practice, disease management programs must demonstrate cost savings if they are to help slow rapidly rising costs."

The findings discussed in Dr. Goetzel's paper are based on data gleaned from 44 studies examining the financial impact of DM. That number is significant because it points to one of the major findings of his paper, in which he writes the following:

Almost all members of American's Health Insurance Plans report having one or more DM programs. However, we could find only 44 studies reporting enough detail to support the preliminary cost-benefit analyses we conducted. One may therefore argue that there are still too few studies describing the potential ROI from DM programs. More information should be published about existing programs, and ideally the financial results should be subject to the same level of statistical rigor applied to studies focused on health outcomes.

Dr. Goetzel's paper summarizes the results of these 44 studies on DM's financial impact in five clinical areas: asthma, congestive heart failure (CHF), diabetes, depression, and multiple condition categories.

"Our research indicates that while some DM programs appear to deliver good ROI results, others don't seem to be as effective financially," Dr. Goetzel says.

While acknowledging that the primary goal of DM programs should be to improve medical outcomes rather than to save money, Dr. Goetzel notes that funders of DM programs often require a "business case argument" to justify the cost.