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Practice Management > Building Your Business

Actuaries Unsure About Effects Of Disease Management

By Steve Tuckey

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Actuaries Unsure About Effects Of Disease Management

Although disease management programs promote healthier lives, their impact on health care costs remains difficult to quantify.[@@]

Researchers at the American Academy of Actuaries, Washington, draw that conclusion in a new report on the programs.

Employers and insurers are hoping disease management programs can improve the treatment of major chronic diseases while reducing the cost of medical care.

“However, there is often a gap between the favorable clinical results and a clearly identifiable financial impact,” the actuaries write in the disease management report. “Many disciplines, including the actuarial profession, are approaching consensus on how to address the many complex analytical issues inherent in assessing the financial impact of these programs.”

Too often, analysts looking at the cost savings of disease management programs take too narrow a focus on health insurance claims costs, according to the report authors.

“A precise calculation of outcomes of return on investment, or ROI, would take into account the clinical and humanistic components and the effects on other employer-provided programs, such as paid time-off, disability and workers’ compensation,” the actuaries write.

But, for practical purposes, ROI simply is measured by the cost of the program compared to the cost of medical services, the actuaries write..

“Currently, there are few published, peer-reviewed studies identifying disease management programs’ effect on medical costs, due to many complex analytical and actuarial issues associated with the evaluation,” the actuaries write.

To get valid information about a program’s effect on medical costs, researchers would have to compare the targeted population to another substantially similar population and also take many other precautions, the actuaries write.

But employers and insurers will feel more comfortable about using disease management programs if they have valid study data showing that the programs pay off financially, the actuaries write.

“An understanding of the key challenges will enable actuaries to provide valuable financial and business analysis to assist decision-makers in assessing the many disease management options available,” the actuaries conclude.

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