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Framework for Assessing the Financial Benefit of Wellness Programs

Thomas Wilson, PhD, DrPH
Trajectory Healthcare, LLC, Loveland, OH

1. Douglas W. Elmendorf/ CBO letter to Congress.  August 7, 2009.  http://www.cbo.gov/ftpdocs/104xx/doc10492/08-07-Prevention.pdf. Accessed August 16, 2009.

2. The American Recovery and Reinvestment Act of 2009 (ARRA) (Pub.L. 111-5) was enacted by the 111th United States Congress in February 2009  http://www.gpo.gov/fdsys/pkg/PLAW-111publ5/content-detail.html
Accessed August 16, 2009.

3. New York Times.  U.S. to Compare Medical Treatments. February 15, 2009

4. New York Times. Cost-Effectiveness Analysis and U.S. Health Care.
March 13, 2009.

5. Edington D. Zero Trends: Health as a Serious Economic Strategy. Health Management Research Center, Ann Arbor, MI, 2009.

6. Trust for America’s Health. Prevention for a Healthier America.  Investments in Prevention Yield Significant Savings, Stronger America.  http://healthyamericans.org/reports/prevention08/Prevention08.pdf.   
Accessed April 15, 2009

7. Agency for Health Care Research and Quality. Evaluating the Impact of Value-Based Purchasing: A Guide for Purchasers. http://www.ahrq.gov/about/cods/valuebased/ Accessed April 15, 2009; Masterson L. Bill Would Test Value-Based Insurance in Medicare. HC PRO.  Accessed May 19, 2009. http://healthplans.hcpro.com/content.cfm?
content_id=233151&topic=WS_HLM2_HEP Accessed May 19, 2009.

8. Goetzel RZ, Ozminkowski RJ. The health and cost benefits of work site health-promotion programs. Annu Rev Public Health. 2008;29:303-23.

9. There are two well-known methods used to calculate financial value of health services: Cost-effectiveness Analysis (CEA) and Cost-Benefit Analysis (CBA). In CEA the effectiveness of an intervention is generally accepted as true and programs are compared on costs alone. The latter, CBA – the focus on this paper — is used where neither cost nor benefits are known for certain. Both components are estimated and the ratio is compared between programs. Return on Investment (ROI) is a form of CBA, where costs are considered “investments” and “returns” are akin to benefit. See: Campbell DT.  Quasi-Experimental Designs for Research & Analysis Issues for Field Settings.  Chicago: Rand McNally, 1979.

10. Other standards should include variables such as length of time used to assess the cost and the length of time to receive the benefit.

11. Sculpher MJ, Pang FS, Manca A, Drummond MF, Golder S, Urdahl H, Davies LM, Eastwood A. Generalisability in economic evaluation studies in healthcare: a review and case studies. Health Technol Assess. 2004 Dec; 8(49): iii-iv, 1-192

12. Chapman L.  Methods for Determining Economic Return. The Art of Health Promotion Newsletter. Volume 4, Number 6,  January/February 2001 listed seven different methods to estimate benefit: 1) Extrapolated external study results. 2) Economic conversion of risk change; 3) Proxy utilization projections; 4) Participant pre- and post-Comparison; 5) Non-participant to participant pre and post Comparisons; 6) Use of external comparison or control Group; 7) Multiple regression analysis; 8) net present value (NPV) analysis.

13. Siderov J. Return on Investment, Disease Management and Wellness July 15, 2008. [http://diseasemanagementcareblog.blogspot.com/2008/07/return-on-investment-disease-management.html] listed five different strategies used in estimating benefit in wellness studies: “1) Examine the trend (change over time or the slope) in claims  expense for the population and compare the expected trend; 2) Measuring the relative impact of the program on the observed  trend. In other words, as the claims expense goes down (or up), is there any correlation with the amount of the intervention, and if  so, how much?; 3) Compare the claims expense of either the population or a representative part of the population to a matched control. [Challenge here is methods for finding the matched control]; 4) Quality Adjusted Life Years (QALYs); 5) Anecdotes.”

14. To see how QALYs are used go to the Bandolier web site in the U.K. http://www.medicine.ox.ac.uk/bandolier/booth/glossary/QALY.html
Accessed April 16, 2009.

15. These are usually projections based on peer-reviewed literature: It is often assumed that articles in such journals are valid, but that assumption has been challenged in the peer-reviewed literature itself (see Ioannidis JP. Contradicted and initially stronger effects in highly cited clinical research JAMA. 2005 Jul 13;294(2):218-28.) What is not challenged is the opportunity that these articles provide to examine the methods, as they must be described in some detail to appear in such journals.

16. For example see: Ward S, Lloyd Jones M, Pandor A, Holmes M, Ara R, Ryan A, Yeo W, Payne N. A systematic review and economic evaluation of statins for the prevention of coronary events. Health Technol Assess. 2007 Apr;11(14):1-160, iii-iv.

17. For example see:  Kahn R, Robertson RM, Smith R, Eddy D. The impact of prevention on reducing the burden of cardiovascular disease. Diabetes Care. 2008 Aug;31(8):1686-96.: “If everyone received the activities for which they are eligible, myocardial infarctions and strokes would be reduced by approximately 63% and 31%, respectively. If more feasible levels of performance are assumed, myocardial infarctions and strokes would be reduced approximately 36% and 20%, respectively. Implementation of all prevention activities would add approximately 221 million life-years and 244 million quality adjusted life-years to the U.S. adult population over the coming 30 years, or an average of 1.3 years of life expectancy for all adults. Of the specific prevention activities, the greatest benefits to the U.S. population come from providing aspirin to high-risk individuals, controlling pre-diabetes, weight reduction in obese individuals, lowering blood pressure in people with diabetes, and lowering LDL cholesterol in people with existing coronary artery disease (CAD).As currently delivered and at current prices, most prevention activities are expensive when considering direct medical costs; smoking cessation is the only prevention strategy that is cost-saving over 30 years.”

18 Mattke S, Balakrishnan A, Bergamo G, Newberry SJ.  Review of Methods to Measure Health-related Productivity Loss. Am J Manag Care. 2007;13: 211-217 describes three methods to measured productivity change: 1) “Salary Conversion Methods”  (which use survey responses and salary information to estimate productivity loss), “Introspective Methods” ( which use survey responses as a basis for thought experiments to give businesses an idea of the magnitude of their lost productivity), and “Firm-level Methods” (attempt to monetize productivity losses based on the cost of countermeasures used to deal with absenteeism and presenteeism)

19. Winkelman R, Mehmud S. A Comparative Analysis of Claims-Based Tools for Health Risk Assessment. Society of Actuaries, 2007. http://www.soa.org/ files/pdf/risk-assessmentc.pdf. Accessed April 16, 2009

20. Doshi JA, Glick HA, Polsky D. Analyses of cost data in economic evaluations conducted alongside randomized controlled trials. Value Health. 2006 Sep-Oct;9(5):334-40

21 Goetzel RZ, Ozminkowski RJ. The health and cost benefits of work site health-promotion programs. Annu Rev Public Health. 2008;29:303-23.   

22. Wilson TW, MacDowell M. Framework for Assessing Causality in Disease Management Programs: Principles. Disease Management. 2006. 6: 143-58.

23. McCall N, Cromwell J, Urato C, Rabiner D.. Evaluation of Phase I of the Medicare Health Support Pilot Program Under Traditional Fee-for-Service Medicare: 18-Month Interim Analysis:  Report to Congress. October 2008.  CMS Contract No. 500-00-0022 http://www.cms.hhs.gov/reports/downloads/MHS_Second_Report_to_Congress_October_2008.pdf. Accessed April 16, 2009

24. Lachenbruch PA, Wilson TW, Cohen RD.  Stratified initial value and change scores. Methods of Information in Medicine. 1993; 32: 314-6.

25. Rawlins M.  On the therapeutic value of interventions. Clin Med. 2008; 8:579–88.

26. Mills PR, Kessler RC, Cooper J, Sullivan S.  Impact of a health promotion program on employee health risks and work productivity. Am J Health Promot. 2007 Sep-Oct;22(1):45-53.

27. Naydeck, BL, Pearson, JA, ; Ozminkowski RJ; Day BT; Goetzel RZ. The Impact of the Highmark Employee Wellness Programs on 4-Year Healthcare Costs. Journal of Occupational & Environmental Medicine. 50(2):146-156, February 2008.

28. URAC. Program Evaluation Standards, Comprehensive Wellness Accreditation Program, Version 1.0, Washington, DC, 2008.

29. A number of interviews were held with individuals associated with the URAC wellness advisory committee, as well as others in the wellness marketplace. These interviews were conducted confidentially, thus the names of those contacted can not be disclosed. 

30. Wells SJ, Finding Wellness’s Return on Investment. HR Magazine. June 2008 Vol. 53, No. 6; the organization “Alliance for Wellness ROI Inc.,” announced a ROI standard in the summer of 2008” (http://www.roiwellness.org/). Accessed April 16, 2009; Milliman Report Validates Computations of Cost Savings for MedAssurant’s CCS Advantage(TM) Disease Management Program.   http://www.forbes.com/feeds/businesswire/2009/09/17/businesswire129130570.html. Accessed September
18, 2009 is a good example of the validation of calculations, and not the validation of the underlying attribution methods. As was stated this was “the validation of calculations and not the underlying program or analysis methodology. Multiple limitations and caveats to the analysis apply, including, but not limited to, the absence of a prospective matched cohort control group for comparison.”

31. Aldana SG. Financial Impact  of Health Promotion Programs: A comprehensive review of the literature. American Journal of Health Promotion. 2001; 15 [5]” 296 – 320.  

32. Lohr KN. Rating the strength of scientific evidence: relevance for quality improvement programs. International Journal for Quality in Health Care. 2004; Volume 16, Number 1 : pp. 9–18

33. Pellitier, K: A Review and Analysis of the Clinical and Cost-Effectiveness Studies of Comprehensive Health Promotion and Disease Management Programs at the Worksite: Update VI 2000–2004. JOEM. Volume 47, Number 10, October 2005. Page 1051-57

34. Wilson T, MacDowell M. Montrose G. Moving Beyond “Publication in Peer-Reviewed Journal” and “Study Type” as Measure of Quality: The Importance of Transparency & Disclosures the Usefulness of Workplace Health Promotion Studies. Journal of Health and Productivity. October 2006: 1:23-8.

35. Adapted from scoring tools such as Center for Evidence Based Medicine (www.cebm.net/levels_of_evidence.asp), the US Preventive Services Task Force (http://www.ahrq.gov/clinic/uspstf/uspstopics.htm), Consolidated Standards of Reporting Trials (CONSORT) (http://www.consort-statement.org/), the Cochrane collaboration (http://www.cochrane.org/, Transparent Reporting of Evaluations with Nonrandomized Designs (TREND). All accessed April 16, 2009.