Rand Study Confirms that Comprehensive Population Health Programs Do Reduce Costs and Risks

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CCA and its members are engaged in further research that looks at the effect of various program models and the use of incentives.

Care Continuum Alliance, Voice of Population Health
The recent study confirms that implementing comprehensive, well operated population health programs that incorporate wellness and disease management, is an effective strategy to reduce overall costs and risks in a population.

The Care Continuum Alliance, the voice of the population health industry, welcomes the results of the Rand Corporation study published in this month’s issue of the journal of Health Affairs, which concludes that workplace wellness programs may reduce health risks, delay or avoid the onset of chronic disease, and lower health care costs for employees already suffering from chronic conditions.

The study, “Managing Manifest Diseases, but not Health Risks, Saved PepsiCo Money Over Seven Years,” evaluated the cost impact of the lifestyle and disease management components of PepsiCo’s wellness program, Healthy Living, which has been offered for seven years.

“We found that seven years of continuous participation in one or both components was associated with an average reduction of $30 in health care cost per member per month,” researchers wrote. “When we looked at each component individually, we found that the disease management component was associated with lower costs and that the lifestyle management component was not.”

Researchers estimated that disease management reduced health care costs by $136 per member per month, driven by a 29 percent reduction in hospital admissions.

“The recent study confirms that implementing comprehensive, well operated population health programs that incorporate wellness and disease management, is an effective strategy to reduce overall costs and risks in a population,” said Fred Goldstein, CCA interim Executive Director. “Further research is warranted to look at the effects of other components, program models and the use of incentives to identify meaningful ways to improve the health of our workforce while controlling our growing heath care spend.”

The study found that the overall return on investment of the program is about 1:1.5, so the program saved $3.78 in health care costs for every $1 invested in the program. Furthermore, the employees who participated in both, the chronic disease and the lifestyle management components had the highest savings, according to researchers.

“This study adds to a growing body of research on lifestyle and population health management, but results are still inconclusive,” said Seth A. Serxner, Chief Health Officer and Senior Vice President of Population Health, Optum, and head of the CCA Quality and Research Committee. “These results, however, show very strong support for disease management and may indicate the need to focus on the highest risk individuals for lifestyle management. They support an emerging trend to combine both disease and lifestyle management into one consumer focused health management intervention.”

Value on Investment (VOI) is one CCA’s research priorities for 2014.

“The move toward VOI is in recognition that employers are looking to a population health management value proposition that goes beyond impact on healthcare costs and extends that support of human capital initiatives such as greater workplace engagement, better business performance metrics, improved quality of life at work and home,” said Serxner. “The belief is that impact on healthcare costs is really only a small part of the total value of health management programs and moving to VOI would greatly strengthen the business case, especially as healthcare insurance shifts to exchanges.”

Read [CCA 2014 Research Agenda.

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About the Care Continuum Alliance
The Care Continuum Alliance represents more than 100 organizations and individuals and aligns all stakeholders on the care continuum toward improving population health. Through advocacy, research and education, the Care Continuum Alliance advances strategies to improve care quality and outcomes and reduce preventable costs for the well and those with and at risk of chronic conditions. Learn more at http://www.carecontinuumalliance.org.

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Isabel Estrada-Portales
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