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A method for estimating cost savings for population health management programs
Shannon M E Murphy1, John McGready, Michael E Griswold
1Research and Development, Johns Hopkins HealthCare LLC, Glen Burnie, MD 21060, USA. smurphy@jhhc.com
Health Services Research
|August 29, 2012
Summary
A new quasi-experimental method accurately estimates Population Health Management (PHM) program savings by reducing confounding factors. This approach supports ongoing program monitoring and investment decisions for healthcare payers.
Area of Science:
- Health Services Research
- Health Economics
- Population Health Management
Background:
- Estimating the financial impact of Population Health Management (PHM) programs is crucial for healthcare payers.
- Traditional methods often struggle with confounding variables and lack adaptability for continuous monitoring.
- A robust and reliable estimation method is needed to inform investment decisions.
Purpose of the Study:
- To introduce a quasi-experimental methodology for calculating PHM program savings.
- The method aims to minimize confounding, facilitate regular updates, and provide precise estimates.
- To offer a reliable tool for payers to assess PHM program value.
Main Methods:
- Utilized administrative, program, and claims data from 2005-2009, aggregated monthly per member.
- Employed mixed-model smoothing to analyze monthly medical costs in relation to PHM enrollment history and intensity.
- Compared intervention group costs against estimated trends from control groups (never enrolled, or previously enrolled PHM members).
Main Results:
- The developed method effectively addresses limitations of traditional pre-post models in observational settings.
- It allows for replication, enabling ongoing monitoring of PHM program performance.
- The approach supports basic statistical inference for savings estimation.
Conclusions:
- This novel method offers healthcare payers a reliable basis for making informed investment decisions regarding PHM programs.
- It enhances the ability to accurately quantify the financial benefits of population health initiatives.
- The methodology provides confidence in the assessment of PHM program effectiveness.
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