Analysis of the Treatment Effect of Healthways' Medicare Health Support Phase 1 Pilot on Medicare Costs

Abstract

The objective of this analysis is to evaluate the treatment effect of Healthways' Medicare Health Support Pilot Program on total Medicare expenditures. Previous studies have analyzed the first 6 months of the program for all Medicare Health Support Organizations. The purpose of this analysis is to supplement and extend the previous work. The policy question addressed in this article is whether, on net, the intervention lowered total Medicare expenditures. The study was a retrospective analysis of data claims and membership databases. We used ordinary least squares regression techniques to estimate the effect of the intervention on total costs. We also stratified the data using risk scores calculated prior to the intervention. Our analysis found that the intervention consistently had little or no effect across the entire sample, but was associated with a statistically significant decrease in spending when the analysis concentrated on the sample that fully participated in the program. Overall, our analysis finds that total annual Medicare costs for the participating sample were 15.7% lower in 2007 ($3240) than for the control group, controlling for age, sex, race, and baseline risk. On balance, our analysis supports a conclusion that the program did successfully reduce costs for its target population. We find that Medicare expenditures were lower among enrollees in the program than they would have been without the intervention. This article shows that significant cost reductions among high-cost, chronically ill Medicare beneficiaries are possible. (Population Health Management 2011;14(suppl 1):S-23–S-28)