Cost Savings for a Preferred Provider Organization Population with Multi-Condition Disease Management: Evaluating Program Impact Using Predictive Modeling with a Control Group

Abstract

Disease management programs have historically had difficulty demonstrating the financial value of their programs using statistically rigorous methods. This preliminary study utilized a predictive model built from a control group that consisted of individual employer groups whose benefits managers did not purchase disease management. The purpose of this evaluation was to examine the cost savings associated with Health Management Corporation's disease management program for asthma, diabetes, and coronary artery disease. Study and control group members were identified with exactly the same selection criteria as self-insured employer groups (n = 76,194) with preferred provider organization health plans that offered the disease management program. The study group consisted of members (n = 1,009) who were identified as having any of the three conditions and were eligible for the disease management program, regardless of the extent of their participation. The control group included members (n= 2,491) who were identified as having any of the same three conditions. The control group data were used to develop a predictive model designed to calculate expected medical claims costs for the study group. The gross savings of the disease management program was measured by calculating the difference between the expected medical claims costs predicted by the model and the actual medical claims costs for the study group. Preliminary analyses indicate that Health Management Corporation's disease management program produced a return on investment of $2.84: $1.00 and $1.45 gross savings per member per month.