Health for life

But wheres the money?

The Disease Management Care Blog has always been leery of the "return on investment" (ROI) metric in health care. It knows that there are precious few health care interventions that actually "save" money. Many prevention, wellness and disease management programs     - depending on the analysis -  can cost money since they a) add additional resources to a system with already high fixed costs with b) a short one-year time horizon.

Yet, the good news is even if a program isnt successful in slowing the rate of cost inflation (or "bending the curve," which represents the savings), it can still represent a great value.  Thats because the additional benefit represents significant benefit for each additional dollar of spending.

Thats the message in this recent JAMA Viewpoint editorial Assessing Value in Health Care Programs authored by Kevin Volpp, George Loewenstein and David Asch. They offer up a thought experiment. Consider, they say, a state-of-the-art medication compliance campaign for heart attack victims that avoids a number of costly hospitalizations.  The price tag at $2000 has a positive "ROI" because the investment is less than the avoided cost of the hospitalizations.  However, if the price tag is $3000 and the investment is now greater than the cost of the hospitalizations, the ROI is "negative" even though the same number of patients didnt have to be hospitalized.

The DMCB recommends readers keep this manuscript/link handy the next time some Finance weenie demands an "ROI calculation."

Speaking of readers, the DMCB is happy to announce that it just hit 500 Twitter followers.  Thats in addition to more than 500 "RSS" subscribers, 461 Google Reader subscribers and thousands of return visitors per month.  The DMCB knows each was earned one person at a time.

Two points deserve emphasis:

1) Physician liability insurers (the companies that defend physicians against allegations of malpractice) are paying close attention and could use information like this in their underwriting.  It seems some are ready to conclude that bad EHRs can not only lead to patient injury, but may deserve increased premiums.

2) Nothing spurs action more than the threat of an outside or unfriendly regulator or government entity willing to independently collect this kind of information and act on it.  The DMCB wonders if that was one ingredient in the formation of this initiative.

The DMCB is looking forward to seeing the numbers in the coming months.  Stay tuned!