Geneia CMO Challenges Focus on Cost of Care ROI When Implementing Prevention Programs

June 27, 2018
Aurel Iuga, MD, MBA, MPH, CMQ, Chief Medical Officer


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The United States lags behind every other developed country when it comes to performance on public health indicators such as infant mortality or life expectancy, despite much higher healthcare spending per capita.Reasons may include care fragmentation and healthcare disparities. However, one rationale also cited is that other developed countries have well-established primary care infrastructures with a strong focus on prevention.

What would it take to strengthen access to preventive services in our country?

The reasons and potential solutions are multi-faceted. Addressing this challenge depends at least in part on working with and encouraging self-insured employers to invest in preventive care programs. This article will take a closer look at the benefits of preventive care and challenge some of the common assumptions that affect implementation decisions.

In the US, population health interventions are often managed or depend upon support by stakeholders, such as employer groups, invested in the program’s short-term economic success. It is thus often asked what the return on investment is for various population health interventions, as a key decision point before potential implementation.

While financial analyses of the program’s cost are necessary for any business entity, focusing solely on net cost of care savings may hinder consideration of other additional benefits of preventive care programs. Among the questions that are frequently asked are:

  • Are preventive interventions cost saving in the short-term horizon typically being considered for analyses of economic return? 
  • Is this even the right question to ask?
  • Are primary or secondary preventive interventions cost saving? 
  • How about care management programs offering tertiary prevention (Table 1)? 

Table 1: Types of prevention

Types of prevention

Definition

Examples of interventions

Primary

Preempts disease

Vaccinations

Secondary

Detects disease early

Cancer screenings

Tertiary

Preempts disease complications

Treatment of hypertension

Economic modeling can be challenging due to the multitude of factors that drive the health and economic outcomes of preventive interventions. There are, however, numerous health economic studies published in peer-reviewed literature aiming to assess the cost-effectiveness of a particular health service or treatment2, and these can support the calculation of the return on investment.

Preventive Care Assumptions

When it comes to preventive services, it is often assumed, especially by professionals without experience in health economics, that prevention always saves money, even in the short term. At the population level, that is indeed the case for some interventions, such as smoking cessation counseling or childhood vaccinations.3

Other preventive services are not cost-saving at the population level, and only have economic advantages over the cost of disease treatment at the individual level. Cancer screenings, for instance, typically cost money, like any other good or service, delivering in exchange improved health outcomes for the respective age groups.

Due to the fact that a large number of people need to be screened to identify earlier a smaller number of patients at high risk of or with cancer, some screening programs, taken in isolation, tend to not be directly cost-saving. The cost of the screening test also factors into the economic outcome. In the case of cancer screenings, the cost of the test (e.g. colonoscopy) can sometimes be significant.

The economic impact of different preventive care programs will differ from one type of stakeholder to another. From an employer’s perspective, for instance, a particular service may be cost saving as opposed to a health plan’s perspective, due to the added economic benefit to employers of the increased productivity of a healthy workforce.

The time horizon being considered also has an impact, as preventive interventions are assessed during the average timeframe an employee is part of the company. This may or may not allow for the full economic benefits of a preventive care intervention to accrue, depending upon the type of preventive service and the average turnover of the employee population.

Targeting higher risk employee groups, for instance via care management support, can increase the likelihood of cost savings. Ensuring medication adherence in a population with severe hypertension has a higher likelihood to delivering cost of care savings, as this patient group will have a higher rate of preventable utilization events such as hospital stays for hypertension or stroke.4

Prevention and acute disease treatment should be held to the same economic standards.

Prevention should be assessed, however, using the same economic standards as treatment of acute disease. The latter is generally accepted to incur costs, without debate, likely due to the sense of urgency with acute illness and the more immediate health consequences of not intervening. Prevention should be held to the same standards, especially given that it benefits many and typically can be delivered at a low cost per employee.2

To conclude, delivering preventive care to improve health outcomes at the entire population level should come first, whenever resources are available. In the end, such programs have the benefit of preventing disease and ensuring longer, more productive lives. For employers, increased productivity and employee retention are immediate benefits. Targeted, custom-designed preventive care programs can lead to direct cost of care savings as well.

For more information on how to design and implement effective preventive care programs, including preventive care economic modeling, please contact Geneia’s population health consulting group at solutions@geneia.com.

 

 

Schneider EC, Sarnak DO, Squires D,  Shah A, Doty M. Mirror, Mirror 2017: International Comparison Reflects Flaws and Opportunities for Better U.S. Health Care. The Commonwealth Fund. 2 Accessed on June 12th 2018 at http://www.commonwealthfund.org/interactives/2017/july/mirror-mirror/
 Cohen JT, Neumann PJ, Weinstein MC. Does preventive care save money? Health economics and the presidential candidates. N Engl J Med. 2008 Feb 14;358(7):661-3. doi: 10.1056/NEJMp0708558. PubMed PMID: 18272889.
Maciosek MV, Coffield AB, Flottemesch TJ, Edwards NM, Solberg LI. Greater use of preventive services in U.S. health care could save lives at little or no cost.
Health Aff (Millwood). 2010 Sep;29(9):1656-60. doi: 10.1377/hlthaff.2008.0701. PubMed PMID: 20820022.
Russell LB. Preventing chronic disease: an important investment, but don't count on cost savings. Health Aff (Millwood). 2009 Jan-Feb;28(1):42-5. doi: 10.1377/hlthaff.28.1.42. PubMed PMID: 19124852.


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