Guidelines for Analysis of Economic Return from Health Management Programs

Abstract

Double-digit health care inflation and an increasing focus on improving workforce productivity are substantive challenges for virtually all employers. Conventional health care cost management strategies (e.g., cost shifting, network discounting) have not been enough to stem the tide, and employers have increasingly turned to alternative strategies, such as health and productivity management, to target the root causes of these problems and achieve sustained improvements. Mercer’s 2005 National Survey of Employer Sponsored Health Plans indicates that more than 62% of large employers (500 or more employees) and 81% of jumbo employers (20,000 or more employees) view health management as a ‘‘significant’’ or ‘‘very significant’’ strategy to address increasing health care costs. The marketplace is aggressively trying to address these concerns and capitalize on the opportunity—leading to a fluid, complicated, and changing marketplace because of increased investments by employers in health and productivity management programs. As companies invest more in health management programs, a need has emerged for comprehensive evaluation of their impact on changing behaviors, improving health, and managing health costs—as well as determining their economic return and overall return on investment (ROI). Additionally, most employers and providers lack the capabilities to determine the full impact of these investments in a way that demonstrates cause-and-effect relationships, for plausible impact analyses and ROI can be hampered by real-world limitations. As health management programs become commonplace, health-and-benefits professionals, actuaries, and payers need to understand both how these programs affect medical trend and how to make the appropriate adjustments required for both shortand long-term business decisions, thus the guiding purpose for this edition of The Art of Health Promotion. For the purposes of this article, the use of the term employer connotes both employer-sponsored and health-plan–sponsored programming efforts. In this edition of The Art of Health Promotion, we will cover the following issues: